OIL & GAS PROPERTY TAX; MUNI TAX

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CS FOR SENATE BILL NO. 280(RES)

IN THE LEGISLATURE OF THE STATE OF ALASKA

THIRTY-FOURTH LEGISLATURE - SECOND SESSION

BY THE SENATE RESOURCES COMMITTEE

Offered: 5/18/26
Referred: Finance

Sponsor(s): SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR
A BILL

FOR AN ACT ENTITLED

"An Act relating to oil and gas; relating to the determination of the value of taxable real 1
and personal property for purposes of calculating the local contribution for public 2
school funding; relating to limitations on municipal oil and gas property taxes; relating 3
to the regulation of liquefied natural gas import facilities and utility rates approved by 4
the Regulatory Commission of Alaska; relating to the Alaska Gasline Development 5
Corporation; establishing an income tax on certain entities producing or transporting 6
oil or gas in the state; relating to the taxation of certain natural gas pipeline property 7
and related facilities; relating to the minimum production tax on oil; establishing an 8
infrastructure maintenance surcharge on oil and a related Dalton Highway pipeline 9
corridor maintenance fund; relating to an alternative volumetric throughput tax on 10
certain natural gas pipelines and related facilities; creating an Alaska gasline 11
community impact fund; and providing for an effective date." 12
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 1
* Section 1. The uncodified law of the State of Alaska is amended by adding a new section 2
to read: 3
SHORT TITLE. This Act may be known as the Supporting a Gasline for Alaskans 4
Act. 5
* Sec. 2. AS 14.17.510 is amended by adding a new subsection to read: 6
(d) In this section, the full and true value of the taxable real and personal 7
property does not include a qualified property as defined in AS 43.59.100. 8
* Sec. 3. AS 29.45.050 is amended by adding a new subsection to read: 9
(aa) A municipality may by ordinance exempt or partially exempt from 10
taxation a spur line that services a Fairbanks natural gas utility. 11
* Sec. 4. AS 29.45.080(c) is amended to read: 12
(c) A municipality may levy and collect a tax on the full and true value of that 13
portion of taxable property taxable under AS 43.56 as assessed by the Department of 14
Revenue which value, when combined with the value of property otherwise taxable by 15
the municipality, does not exceed the product of the percentage determined in (f) of 16
this section of the average per capita assessed full and true value of property in the 17
state multiplied by the number of residents of the taxing municipality. Property 18
subject to the alternative volumetric tax levied under AS 43.59.010 is not 19
included in the value of property for the purpose of making the calculation under 20
this subsection. 21
* Sec. 5. AS 29.45.080(c), as amended by sec. 4 of this Act, is amended to read: 22
(c) A municipality may levy and collect a tax on the full and true value of that 23
portion of taxable property taxable under AS 43.56 as assessed by the Department of 24
Revenue which value, when combined with the value of property otherwise taxable by 25
the municipality, does not exceed the product of the percentage determined in (f) of 26
this section of the average per capita assessed full and true value of property in the 27
state multiplied by the number of residents of the taxing municipality. [PROPERTY 28
SUBJECT TO THE ALTERNATIVE VOLUMETRIC TAX LEVIED UNDER 29
AS 43.59.010 IS NOT INCLUDED IN THE VALUE OF PROPERTY FOR THE 30
PURPOSE OF MAKING THE CALCULATION UNDER THIS SUBSECTION.] 31
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* Sec. 6. AS 29.45.080 is amended by adding a new subsection to read: 1
(g) Notwithstanding any other provision of this section, AS 29.45.090, or the 2
authority granted to a municipality under AS 29.45.050 to exempt or defer taxation, a 3
municipality may not levy a tax under this section on qualified property, as defined in 4
AS 43.59.100, if the qualified property is subject to the alternative volumetric tax 5
levied under AS 43.59.010. 6
* Sec. 7. AS 29.60.860 is amended by adding a new subsection to read: 7
(d) Amounts allocated under AS 44.33.850(c) for distribution on a per capita 8
basis shall be distributed to municipalities, reserves, and communities in the 9
unorganized borough in accordance with this section. 10
* Sec. 8. AS 29.60.860 is amended by adding a new subsection to read: 11
(e) Amounts allocated under AS 43.59.040(3) for distribution on a per capita 12
basis shall be distributed to municipalities, reserves, and communities in the 13
unorganized borough in accordance with this section. 14
* Sec. 9. AS 31.25.010 is amended to read: 15
Sec. 31.25.010. Structure. The Alaska Gasline Development Corporation is a 16
public corporation and government instrumentality acting in the best interest and as a 17
fiduciary of the state for the purposes required by AS 31.25.005, located for 18
administrative purposes in the Department of Commerce, Community, and Economic 19
Development, but having a legal existence independent of and separate from the state. 20
The corporation may not be terminated as long as it has bonds, notes, or other 21
obligations outstanding. The corporation may dissolve when no bonds, notes, or other 22
obligations of the corporation or a subsidiary of the corporation are outstanding and 23
the corporation or a subsidiary of the corporation is no longer engaged in the 24
development, financing, construction, or operation of an in-state natural gas pipeline 25
or an Alaska liquefied natural gas project. Upon termination of the corporation, its 26
rights and property pass to the state. 27
* Sec. 10. AS 31.25.030 is amended by adding a new subsection to read: 28
(f) Notwithstanding application of AS 44.62.310 - 44.62.319 (Open Meetings 29
Act) under AS 31.25.130, absent exigent circumstances, the board shall provide at 30
least 10 working days' public notice before a meeting. In the event of exigent 31
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circumstances, the board shall provide at least three working days' public notice before 1
a meeting. The board shall provide public notice of a regularly scheduled meeting 2
within 24 hours after the meeting is scheduled. In this subsection, "working day" 3
means a calendar day other than Saturday, Sunday, an official federal holiday, or an 4
official holiday of this state. 5
* Sec. 11. AS 31.25.040(b) is amended to read: 6
(b) The board shall by regulation adopted under AS 44.62 (Administrative 7
Procedure Act) adopt and publish procedures to govern the procurement by the 8
corporation of supplies, services, professional services, and construction. The 9
procurement procedures must 10
(1) reflect competitive bidding principles and provide vendors 11
reasonable and equitable opportunities to participate in the procurement 12
process; 13
(2) include procurement methods to meet emergency and 14
extraordinary circumstances; 15
(3) comply with the five percent preference under AS 36.30.321(a); 16
and 17
(4) provide for an Alaska veterans' preference that is consistent with 18
the Alaska veterans' preference in AS 36.30.175. 19
* Sec. 12. AS 31.25.080(a) is amended to read: 20
(a) In addition to other powers granted in this chapter, the corporation may 21
(1) determine the form of ownership and the operating structure of an 22
in-state natural gas pipeline developed by the corporation and may, subject to 23
AS 31.25.120(b), enter into agreements with other persons for joint ownership, joint 24
operation, or both of an in-state natural gas pipeline or an Alaska liquefied natural gas 25
project; 26
(2) plan, finance, construct, develop, acquire, maintain, and operate a 27
pipeline system and other transportation mechanism, including pipelines, compressors, 28
storage facilities, and other related facilities, equipment, and works of public 29
improvement, in the state to facilitate production, transportation, and delivery of 30
natural gas or other related natural resources to the point of consumption or to the 31
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point of distribution for consumption; 1
(3) lease or rent facilities, structures, and properties; 2
(4) exercise the power of eminent domain and file a declaration of 3
taking under AS 09.55.240 - 09.55.460 to acquire land or an interest in land that is 4
necessary for an in-state natural gas pipeline or an Alaska liquefied natural gas project; 5
the exercise of powers by the corporation under this paragraph may not exceed the 6
permissible exercise of the powers by the state; 7
(5) acquire, by purchase, lease, or gift, land, structures, real or personal 8
property, an interest in property, a right-of-way, a franchise, an easement, or other 9
interest in land, or an interest in or right to capacity in a pipeline system determined to 10
be necessary or convenient for the development, financing, construction, or operation 11
of an in-state natural gas pipeline project or an Alaska liquefied natural gas project or 12
part of an in-state natural gas pipeline project or an Alaska liquefied natural gas 13
project; 14
(6) subject to AS 31.25.120(b), transfer or otherwise dispose of all or 15
part of an in-state natural gas pipeline project, an Alaska liquefied natural gas project, 16
or an interest in an asset of the corporation; 17
(7) elect to provide transportation of natural gas as a contract carrier, 18
common carrier, or otherwise; 19
(8) provide light, water, security, and other services for property of the 20
corporation; 21
(9) conduct hearings to gather and develop data consistent with the 22
purpose and powers of the corporation; 23
(10) advocate for new pipeline capacity before the Federal Energy 24
Regulatory Commission; 25
(11) make and execute agreements, contracts, and other instruments 26
necessary or convenient in the exercise of the powers and functions of the corporation 27
under this chapter, including a contract with a person, firm, corporation, governmental 28
agency, or other entity; 29
(12) sue and be sued in its own name; 30
(13) adopt an official seal; 31
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(14) adopt bylaws for the regulation of its affairs and the conduct of its 1
business and adopt regulations and policies in connection with the performance of its 2
functions and duties; 3
(15) employ fiscal consultants, engineers, attorneys, appraisers, and 4
other consultants and employees that may, in the judgment of the corporation, be 5
required and fix and pay their compensation from funds available to the corporation; 6
(16) procure insurance against a loss in connection with its operation; 7
(17) borrow money as provided in this chapter to carry out its 8
corporate purposes and issue its obligations as evidence of borrowing; 9
(18) include in a borrowing the amounts necessary to pay financing 10
charges, to pay interest on the obligations, and to pay the interest, consultant, advisory, 11
and legal fees, and other expenses that are necessary or incident to the borrowing; 12
(19) receive, administer, and comply with the conditions and 13
requirements of an appropriation, gift, grant, or donation of property or money; 14
(20) do all acts and things necessary, convenient, or desirable to carry 15
out the powers expressly granted or necessarily implied in this chapter; 16
(21) invest or reinvest, subject to its contracts with noteholders and 17
bondholders, money or funds held by the corporation, including funds in the in-state 18
natural gas pipeline fund (AS 31.25.100) and the Alaska liquefied natural gas project 19
fund (AS 31.25.110), in obligations or other securities or investments in which banks 20
or trust companies in the state may legally invest funds held in reserves or sinking 21
funds or funds not required for immediate disbursement, and in certificates of deposit 22
or time deposits secured by obligations of, or guaranteed by, the state or the United 23
States; 24
(22) enter into, as it determines to be necessary or appropriate, any 25
swap or hedge, cap, or other contract providing for payments based on levels of or 26
changes in interest rates or indices or in the cost or price of any commodity, supply, or 27
expense expected to be used or incurred in connection with the acquisition, 28
construction, or operation of any facility or property owned, leased, or operated by the 29
corporation, or an option with respect to any of the foregoing; 30
(23) except as provided in (g) of this section, acquire an ownership or 31
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participation interest in an Alaska liquefied natural gas project, natural gas treatment 1
facilities, natural gas pipeline facilities, liquefaction facilities, marine terminal 2
facilities related to the infrastructure of an Alaska liquefied natural gas project, or an 3
entity or joint venture that has an ownership interest in or is engaged in the planning, 4
financing, acquisition, maintenance, construction, and operation of an Alaska liquefied 5
natural gas project; 6
(24) after consultation with the commissioner of revenue and the 7
commissioner of natural resources, enter into contracts relating to an Alaska liquefied 8
natural gas project, including contracts for services related to operation, marketing, 9
transportation, gas treatment, marine terminal operation, or liquefaction. 10
* Sec. 13. AS 31.25.080 is amended by adding new subsections to read: 11
(h) The corporation shall, to the maximum extent possible, use contractors and 12
suppliers in the state in order to benefit from the experience of workers and businesses 13
in the state in arctic engineering and construction. 14
(i) A gas sales agreement entered into by the corporation, or a subsidiary of 15
the corporation, 16
(1) shall require that a public utility in the state, or an entity shipping 17
gas for delivery to a public utility in the state, have priority over sales to out-of-state 18
purchasers if the transportation capacity of a gas pipeline is reduced; and 19
(2) may include other reasonable terms and conditions that are 20
consistent with this chapter and that are for the mutual benefit of the gas pipeline and 21
the public. 22
(j) A gas pipeline advanced, operated, or owned, in whole or in part, by the 23
corporation, or a subsidiary of the corporation, must include a direct spur line to serve 24
the City of Fairbanks and the Fairbanks North Star Borough. 25
(k) An owner or operator of a gas pipeline advanced, operated, or owned, in 26
whole or in part, by the corporation, or a subsidiary of the corporation, 27
(1) may not recoup cost overruns from the construction of the first 28
phase of a gas pipeline by increasing the rates charged to a utility; in this paragraph, 29
(A) "cost overrun" means a cost in excess of $15,000,000,000; 30
(B) "first phase of a gas pipeline" means at least 730 miles of 31
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42-inch pipeline constructed to transport natural gas from the North Slope and 1
deliver the natural gas to in-state consumers; 2
(2) may not charge a utility in the state more than 3
(A) $12 for each 1,000 cubic feet of natural gas after 4
completion of the gas pipeline, but before the completion of a related liquefied 5
natural gas plant; 6
(B) $5 for each 1,000 cubic feet of natural gas after completion 7
of a liquefied natural gas plant related to the gas pipeline. 8
(l) An owner or operator of a gas pipeline advanced, operated, or owned, in 9
whole or in part, by the corporation or a subsidiary of the corporation, shall ensure that 10
natural gas that is produced from the Cook Inlet sedimentary basin and available for 11
sale and transportation is transported, on commercially reasonable terms, by the gas 12
pipeline. This subsection does not apply if the commissioner of natural resources 13
determines in writing that the supply of economically recoverable natural gas available 14
for commercial sale from the Cook Inlet sedimentary basin is insufficient. 15
* Sec. 14. AS 31.25.090(f) is amended to read: 16
(f) Subject to the restrictions in this section, the [THE] corporation may 17
enter into confidentiality agreements necessary to acquire or provide information to 18
carry out its functions. If a state agency determines that a law or provision of a 19
contract to which the state agency is a party requires the state agency to preserve the 20
confidentiality of the information and that delivering the information to the 21
corporation would violate the confidentiality provision of that law or contract, the state 22
agency shall 23
(1) identify the applicable law or contract provision to the corporation; 24
and 25
(2) obtain the consent of the person who has the right to waive the 26
confidentiality of the information under the applicable law or contract provision before 27
the state agency transfers the information to the corporation. 28
* Sec. 15. AS 31.25.090 is amended by adding new subsections to read: 29
(j) The parties to a confidentiality agreement entered into under (f) of this 30
section may agree to waive confidentiality, in whole or in part, to allow the release of 31
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information to a legislator or a public agent or for publication. Information released 1
under this subsection may include reasonable redactions. Information released under 2
this subsection may include 3
(1) a contract or agreement or a specific term of a contract or 4
agreement; 5
(2) a pending contract or agreement or a specific term of a pending 6
contract or agreement; 7
(3) a record, file, or other information in possession of the corporation, 8
a subsidiary of the corporation, or an entity partnered with the corporation; or 9
(4) the confidentiality agreement or terms of the confidentiality 10
agreement. 11
(k) A confidentiality agreement entered into under (f) of this section may not 12
(1) prevent compliance with an administrative or court order 13
mandating disclosure; 14
(2) make confidential contract terms, including terms for in-kind 15
payments or services, or prospective contract terms, that bind the corporation, a 16
subsidiary of the corporation, or an entity with which the corporation, or a subsidiary 17
of the corporation, has a legal relationship to assume fiscal or performance liability, 18
obligation, or risk that could extend to or encumber the state, either directly or 19
indirectly; in this paragraph, "legal relationship" means a partnership, joint venture, 20
joint ownership agreement, or other legally binding business arrangement formed for 21
the purpose of shared ownership or management of, or pooling of resources for, an 22
entity in which the corporation, or a subsidiary of the corporation, has an ownership or 23
management interest; 24
(3) make confidential information that is related to known or 25
reasonably anticipated project economics that may lead to a significant fiscal effect or 26
liability to the state and that is necessary for the state to consider for a policy decision, 27
including a decision related to appropriations or other state funding or in-kind 28
payments or services from the state; 29
(4) make confidential contract terms governing the ownership or 30
management structure of a subsidiary of the corporation; or 31
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(5) make confidential information related to a state interest option 1
under AS 31.25.125. 2
(l) Upon request of a legislative committee or a member of the legislature, the 3
corporation or a subsidiary of the corporation shall provide information disclosable 4
under (k)(2) - (5) of this section. A legislative committee or member of the legislature 5
may request the information to be provided in a summarized format, with written 6
explanations, as necessary to assist the legislature in assessing relevant fiscal effects, 7
liabilities, or risks to the state. 8
(m) If the public disclosure of the information described in (k)(3) of this 9
section would cause commercial or competitive harm to an entity involved in a 10
component of the Alaska liquefied natural gas project, the information may be made 11
confidential under a confidentiality agreement entered into under (f) of this section if, 12
under the agreement, 13
(1) reasonable estimations or ranges of estimations of the information 14
may be publicly disclosed; or 15
(2) the information can be publicly disclosed in a redacted or 16
generalized format and the information disclosed is accurate and sufficient for a public 17
agent to assess the related fiscal effect, risk, or liability to the state. 18
(n) In this section, "public agent" means 19
(1) a public agency, as defined in AS 40.25.220, or an agent or 20
contractor of a public agency; 21
(2) an agent or contractor of a member of the legislature or of a 22
legislative committee. 23
* Sec. 16. AS 31.25.120 is amended by adding a new subsection to read: 24
(b) Unless the legislature approves the action by law, the corporation may not 25
transfer, sell, or otherwise dispose of an ownership or management interest in a 26
subsidiary of the corporation. 27
* Sec. 17. AS 31.25 is amended by adding a new section to read: 28
Sec. 31.25.125. Involvement in revenue-generating projects. (a) If the 29
corporation negotiates with another entity for participation by the corporation in a 30
revenue-generating project, the corporation shall negotiate an option for the state to 31
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acquire an interest in the project. The corporation shall immediately notify the 1
president of the senate, the speaker of the house of representatives, and the chairs of 2
the finance committee of each house of the legislature on each occasion that an option 3
is available for consideration by the legislature. 4
(b) An option negotiated under this section must 5
(1) before being agreed to, be approved by the legislature by law; and 6
(2) allow the state to exercise the option for at least 12 months after 7
notification of the legislature under (d) of this section. 8
(c) At the request of the legislature, a state agency shall cooperate with and 9
assist the legislature in determining whether to approve under (b)(1) of this section the 10
terms of an option negotiated under (a) of this section. 11
(d) The corporation shall immediately notify the president of the senate, the 12
speaker of the house of representatives, and the chairs of the finance committee of 13
each house of the legislature on each occasion that the state may exercise an option 14
negotiated under (a) of this section. The corporation shall notify the legislature under 15
this subsection on the later of the date that 16
(1) the corporation determines, with reasonable assurance and 17
considering the totality of circumstances, including review of all relevant financial 18
information, that the revenue-generating project will be completed, with or without 19
state investment; or 20
(2) a final investment decision is made for the revenue-generating 21
project. 22
(e) The state may not acquire an interest in a revenue-generating project under 23
this section unless the interest is approved by the legislature by law. When making an 24
investment decision under this section, the legislature shall act as a prudent investor. 25
(f) The Department of Revenue shall cooperate with and assist the legislature 26
in determining whether to acquire an interest in a revenue-generating project under (e) 27
of this section by exercising an option negotiated under (a) of this section, including 28
by identifying potential funding sources for exercising the option and potential fiscal 29
effects on the state. If requested by the legislature, another state agency shall cooperate 30
with and assist the legislature with making a determination under (e) of this section. 31
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(g) The corporation, and any other entity participating in a revenue-generating 1
project, shall 2
(1) cooperate with and assist the legislature in determining whether to 3
approve the terms of an option negotiated under (a) of this section or to acquire an 4
interest in the project by exercising an option negotiated under this section; 5
(2) provide information requested by the legislature related to the 6
project, including 7
(A) information necessary for the legislature to act as a prudent 8
investor; and 9
(B) financial records of or related to the revenue-generating 10
project; and 11
(3) ensure that at least one representative of the corporation and of 12
each participating entity are available to testify during public hearings of legislative 13
committees requesting testimony. 14
(h) In this section, 15
(1) "corporation" includes a subsidiary of the corporation; 16
notwithstanding the definition of "subsidiary of the corporation" in AS 31.25.390, a 17
subsidiary of a corporation does not include a partially owned subsidiary for purposes 18
of this section; 19
(2) "revenue-generating project" means a project, entity ownership, 20
legal business arrangement, partnership, joint venture, or other commercial endeavor 21
expected to generate revenue. 22
* Sec. 18. AS 31.25.130(a) is amended to read: 23
(a) Except as otherwise provided in this chapter and except for 24
AS 44.62.310 - 44.62.319 (Open Meetings Act), AS 44.62 (Administrative Procedure 25
Act) does not apply to this chapter. The corporation shall make available to members 26
of the public copies of the regulations adopted under (b) - (e) of this section. 27
* Sec. 19. AS 31.25 is amended by adding a new section to article 1 to read: 28
Sec. 31.25.145. Accounting. (a) The corporation shall deposit into separate 29
accounts in the general fund revenue 30
(1) generated by a subsidiary of the corporation; and 31
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(2) resulting from an option negotiated under AS 31.25.125. 1
(b) Each year, the legislature may appropriate the annual estimated balance in 2
the account described in (a)(1) of this section for operations of the corporation or for 3
any other purpose. 4
* Sec. 20. AS 31.25.160 is amended by adding a new subsection to read: 5
(g) The corporation, or a subsidiary of the corporation, may issue bonds only 6
if the legislature approves issuance of the bonds, except for refunding bonds. 7
Refunding bonds may be issued without further approval by the legislature in a 8
principal amount sufficient to provide funds for the payment of all bonds to be 9
refunded by the refunding bonds and, in addition, for the payment of all other amounts 10
that the corporation considers appropriate in connection with the refunding, including 11
expenses incident to the redeeming, calling, retiring, or paying of the outstanding 12
bonds, the funding of reserves, and the issuance of the refunding bonds. 13
* Sec. 21. AS 31.25.260(a) is amended to read: 14
(a) The exercise of the powers granted by this chapter is, in all respects, for 15
the benefit of the people of the state, for the people's [THEIR] well-being and 16
prosperity, and for the improvement of the people's [THEIR] social and economic 17
conditions, and, except as provided in AS 43.59.010(f), the corporation is not 18
required to pay a tax or assessment on any property owned by the corporation under 19
the provisions of this chapter or on the income from it, including state taxes levied or 20
authorized under AS 43.56.010(a) and municipal taxes under AS 43.56.010(b) as 21
provided in AS 43.56.020. 22
* Sec. 22. AS 31.25.260(a), as amended by sec. 21 of this Act, is amended to read: 23
(a) The exercise of the powers granted by this chapter is, in all respects, for 24
the benefit of the people of the state, for the people's well-being and prosperity, and 25
for the improvement of the people's social and economic conditions, and [, EXCEPT 26
AS PROVIDED IN AS 43.59.010(f),] the corporation is not required to pay a tax or 27
assessment on any property owned by the corporation under the provisions of this 28
chapter or on the income from it, including state taxes levied or authorized under 29
AS 43.56.010(a) and municipal taxes under AS 43.56.010(b) as provided in 30
AS 43.56.020. 31
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* Sec. 23. AS 31.25 is amended by adding new sections to read: 1
Sec. 31.25.280. Relationships with foreign entities. (a) The corporation shall 2
promptly provide written notice to the president of the senate, the speaker of the house 3
of representatives, and the chairs of the finance committee of each house of the 4
legislature if the corporation, or a subsidiary of the corporation, enters into a legal 5
relationship with a foreign entity, either directly or indirectly through another person 6
or entity. The notification under this section must 7
(1) be provided at least quarterly on the calendar year; 8
(2) include 9
(A) the full legal name of the foreign entity; 10
(B) a description of the legal relationship and any project 11
related to the legal relationship; 12
(C) the name of at least one individual authorized to bind the 13
foreign entity on matters related to the legal relationship; 14
(D) the physical address of the primary business operations of 15
the foreign entity; and 16
(E) the date the legal relationship was entered into. 17
(b) In addition to providing notification under (a) of this section, the 18
corporation shall ensure that an agent of the corporation or a subsidiary of the 19
corporation, if requested, is available to testify relating to the legal relationship during 20
one or more public hearings of legislative committees requesting testimony. 21
(c) In this section, "legal relationship" means a partnership, joint venture, joint 22
ownership agreement, merger, or other legal agreement made for the purpose of 23
investing in, obtaining monetary returns from, or obtaining an ownership interest in 24
(1) a project developed by the corporation or a subsidiary of the 25
corporation; 26
(2) a project in which the corporation or a subsidiary of the corporation 27
has an ownership or management interest; or 28
(3) an entity engaged in a project described in (1) or (2) of this 29
subsection. 30
Sec. 31.25.285. Legislative notification of ownership change. (a) The 31
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corporation shall promptly notify the president of the senate, the speaker of the house 1
of representatives, and the chairs of the finance committee of each house of the 2
legislature if 3
(1) an entity in a legal relationship with the corporation, or a subsidiary 4
of the corporation, has a significant change in ownership structure; or 5
(2) the corporation becomes aware that an entity in a legal relationship 6
with the corporation, or a subsidiary of the corporation, plans to make a significant 7
change in ownership structure. 8
(b) In this section, "legal relationship" means a partnership, joint venture, joint 9
ownership agreement, or other legally binding business arrangement 10
(1) of which the corporation, or a subsidiary of the corporation, has at 11
least a 10 percent interest; or 12
(2) that has an interest in a third entity in which the corporation, or a 13
subsidiary of the corporation, also has at least a 10 percent interest; and 14
(3) that formed for the purpose of shared ownership or shared 15
management of, or pooling of resources for, an entity in which the corporation, or a 16
subsidiary of the corporation, has an ownership or management interest. 17
* Sec. 24. AS 31.25.390 is amended by adding new paragraphs to read: 18
(8) "foreign entity" means 19
(A) an entity whose primary operations are not physically 20
located in the United States and that is not managed primarily by citizens of 21
the United States; or 22
(B) a natural person who is not a citizen of the United States; 23
(9) "subsidiary of the corporation" includes a subsidiary partially 24
owned by the corporation. 25
* Sec. 25. AS 38.05.180 is amended by adding a new subsection to read: 26
(mm) Before taking oil or gas royalties in value, the commissioner shall 27
determine that the value taken is based on the value of oil or gas of the same kind, 28
quality, and character prevailing for that field, unit, or area during the calendar month 29
the oil or gas is produced. The commissioner may take royalties on oil or gas that is 30
produced but not sold and may take royalties on gas that is produced and stored in a 31
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gas storage facility. The commissioner may not, when making a value determination 1
under this subsection, base a value for oil or gas on oil or gas sold at no cost or at a 2
cost substantially lower than that of other oil or gas of the same kind, quality, and 3
character. 4
* Sec. 26. AS 42.05 is amended by adding a new section to read: 5
Sec. 42.05.387. Rates charged by Alaska Gasline Development 6
Corporation gas pipeline. (a) An owner or operator of a gas pipeline advanced, 7
operated, or owned, in whole or in part, by the Alaska Gasline Development 8
Corporation, or a subsidiary of the corporation, 9
(1) may not recoup cost overruns from the construction of the first 10
phase of a gas pipeline by increasing the rates charged to a utility; in this paragraph, 11
"cost overrun" and "first phase of a gas pipeline" have the meanings given in 12
AS 31.25.080; 13
(2) may not charge a utility in the state more than 14
(A) $12 for each 1,000 cubic feet of natural gas after 15
completion of the gas pipeline, but before the completion of a related liquefied 16
natural gas plant; 17
(B) $5 for each 1,000 cubic feet of natural gas after completion 18
of a liquefied natural gas plant related to the gas pipeline. 19
(b) The commission has jurisdiction to enforce this section to the extent not 20
preempted by federal law. 21
(c) In this section, 22
(1) "gas pipeline" has the meaning given in AS 31.25.390; 23
(2) "liquefied natural gas plant" has the meaning given in 24
AS 31.25.390. 25
* Sec. 27. AS 43.20 is amended by adding a new section to read: 26
Sec. 43.20.019. Tax on income of certain oil and gas pass-through entities. 27
(a) Each taxable year, a tax is imposed on the entire taxable income derived from 28
sources in the state of every qualified entity. The tax is computed as follows: 29
If the taxable income is: Then the tax is: 30
Less than $1,000,000 zero 31
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$1,000,000 but less than $2,000,000 5 percent of the 1
taxable income over $1,000,000 2
$2,000,000 but less than $3,000,000 $50,000 plus 6 percent of the 3
taxable income over $2,000,000 4
$3,000,000 but less than $4,000,000 $110,000 plus 7 percent of the 5
taxable income over $3,000,000 6
$4,000,000 but less than $5,000,000 $180,000 plus 8 percent of the 7
taxable income over $4,000,000 8
$5,000,000 or more $260,000 plus 9.4 percent of the 9
taxable income over $5,000,000. 10
(b) For purposes of calculating taxable income under this section, 11
(1) taxable income of a qualified entity is determined under 12
AS 43.20.144 as if the qualified entity were taxable as a C corporation, as defined by 13
26 U.S.C. 1361(a)(2) (Internal Revenue Code), as that section read on January 1, 14
2026; 15
(2) notwithstanding AS 43.20.021 and AS 43.20.036, a qualified entity 16
may not apply as a credit or deduction against tax liability a credit or deduction 17
allowed as to federal taxes under 26 U.S.C. (Internal Revenue Code), except that the 18
qualified entity may take a credit or deduction allowed for a C corporation under (1) of 19
this subsection. 20
(c) The tax under this section does not apply to a corporation subject to tax 21
under AS 43.20.011 or to an entity that is part of a unitary business with a corporation 22
subject to tax under AS 43.20.011. 23
(d) A public corporation is exempt from the tax under this section. If a 24
qualified entity is held in part by a public corporation, income in proportion to the 25
ownership interest held by the public corporation is exempt from the tax under this 26
section. The department may direct each owner of a qualified entity that is owned in 27
part by the Alaska Gasline Development Corporation (AS 31.25) to file a return with 28
the department. Notwithstanding AS 40.25.100(a) and AS 43.05.230(a), a return filed 29
by the Alaska Gasline Development Corporation under this subsection is a public 30
record and is not confidential. 31
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(e) For the purpose of determining the tax due under this section, the 1
department shall 2
(1) aggregate the taxable income of two or more entities if the 3
department determines that, without the provisions of this section, the taxable income 4
would reasonably be expected to be attributed to a single entity; 5
(2) except as provided in (c) of this section, include in the calculation 6
of taxable income of the qualified entity income that is attributable to an entity that is 7
part of a unitary business with the qualified entity paying tax under this section; and 8
(3) adopt regulations to prevent evasion of taxes imposed under this 9
section. 10
(f) For purposes of calculating income under this section, a qualified entity 11
may deduct from income a payment to the shareholder, owner, member, or partner of 12
the qualified entity, if 13
(1) the shareholder, owner, member, or partner is a taxpayer under this 14
chapter; 15
(2) the payment does not include a transfer of property; 16
(3) the payment is included in the shareholder's, owner's, member's, or 17
partner's income for purposes of this chapter; and 18
(4) the payment was not made with the specific intent to reduce or 19
evade the payment of tax under this chapter. 20
(g) In this section, 21
(1) "carbon capture" and "carbon storage" have the meanings given in 22
AS 43.55.165(e)(23); 23
(2) "pipeline" means a pipeline that transports oil or gas from north of 24
68 degrees North latitude to a location outside of the lease or property where the oil or 25
gas is produced for the direct purpose of sale and delivery of the oil or gas to a 26
commercial market; 27
(3) "qualified entity" 28
(A) means a sole proprietorship, partnership, limited liability 29
company, or entity that has elected to file federal returns under 26 U.S.C. 1361 30
- 1379 (Internal Revenue Code) that 31
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(i) has taxable income; 1
(ii) owns, operates, manages, or controls an entity that 2
has taxable income; 3
(iii) holds an ownership, investment, or similar interest 4
in an entity that has taxable income; or 5
(iv) owns an operating right, operating interest, or 6
working interest in a mineral interest of an entity with taxable income; 7
(B) does not include a natural person; 8
(4) "taxable income" means income 9
(A) from the production of oil or gas from a lease or property 10
in the state; 11
(B) from the transportation of oil or gas by pipeline in the state; 12
(C) from the supply of oil or gas for transportation by pipeline 13
in the state, whether directly, to an intermediary, or as an intermediary; 14
(D) from gas treatment, carbon capture, or carbon storage 15
activities in the state; 16
(E) from liquefied natural gas processing in the state; 17
(F) from the marine transportation of liquefied natural gas 18
produced in the state; and 19
(G) of an entity that is part of a unitary business with a carrier 20
or producer paying tax under this section as provided under (e)(2) of this 21
section. 22
* Sec. 28. AS 43.20.030(a) is amended to read: 23
(a) If a taxpayer [CORPORATION], or a partnership that has a taxpayer 24
[CORPORATION] as a partner, is required to make a return under the provisions of 25
the Internal Revenue Code, the taxpayer [IT] shall file with the department, within 30 26
days after the federal return is required to be filed, a return setting out 27
(1) the amount of tax due under this chapter, less credits claimed 28
against the tax; and 29
(2) other information for the purpose of carrying out the provisions of 30
this chapter that the department requires. 31
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* Sec. 29. AS 43.20.031(i) is amended to read: 1
(i) A taxpayer that [CORPORATION WHICH] is a member of a group of 2
unitary corporations or entities that [WHICH] collectively has income from business 3
activity taxable both inside and outside the state, or income from other sources both 4
inside and outside the state, shall determine its income from sources in this state by 5
use of the combined method of accounting. 6
* Sec. 30. AS 43.55.011(f) is amended to read: 7
(f) The levy of tax under (e) of this section for 8
(1) oil and gas produced before January 1, 2022, from leases or 9
properties that include land north of 68 degrees North latitude, other than gas subject 10
to (o) of this section, may not be less than 11
(A) four percent of the gross value at the point of production 12
when the average price per barrel for Alaska North Slope crude oil for sale on 13
the United States West Coast during the calendar year for which the tax is due 14
is more than $25; 15
(B) three percent of the gross value at the point of production 16
when the average price per barrel for Alaska North Slope crude oil for sale on 17
the United States West Coast during the calendar year for which the tax is due 18
is over $20 but not over $25; 19
(C) two percent of the gross value at the point of production 20
when the average price per barrel for Alaska North Slope crude oil for sale on 21
the United States West Coast during the calendar year for which the tax is due 22
is over $17.50 but not over $20; 23
(D) one percent of the gross value at the point of production 24
when the average price per barrel for Alaska North Slope crude oil for sale on 25
the United States West Coast during the calendar year for which the tax is due 26
is over $15 but not over $17.50; or 27
(E) zero percent of the gross value at the point of production 28
when the average price per barrel for Alaska North Slope crude oil for sale on 29
the United States West Coast during the calendar year for which the tax is due 30
is $15 or less; [AND] 31
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(2) oil produced on and after January 1, 2022, and before January 1, 1
2027, from leases or properties that include land north of 68 degrees North latitude, 2
may not be less than 3
(A) four percent of the gross value at the point of production 4
when the average price per barrel for Alaska North Slope crude oil for sale on 5
the United States West Coast during the calendar year for which the tax is due 6
is more than $25; 7
(B) three percent of the gross value at the point of production 8
when the average price per barrel for Alaska North Slope crude oil for sale on 9
the United States West Coast during the calendar year for which the tax is due 10
is over $20 but not over $25; 11
(C) two percent of the gross value at the point of production 12
when the average price per barrel for Alaska North Slope crude oil for sale on 13
the United States West Coast during the calendar year for which the tax is due 14
is over $17.50 but not over $20; 15
(D) one percent of the gross value at the point of production 16
when the average price per barrel for Alaska North Slope crude oil for sale on 17
the United States West Coast during the calendar year for which the tax is due 18
is over $15 but not over $17.50; or 19
(E) zero percent of the gross value at the point of production 20
when the average price per barrel for Alaska North Slope crude oil for sale on 21
the United States West Coast during the calendar year for which the tax is due 22
is $15 or less; and 23
(3) oil produced on and after January 1, 2027, from leases or 24
properties that include land north of 68 degrees North latitude, may not be less 25
than 26
(A) six percent of the gross value at the point of production 27
when the average price per barrel for Alaska North Slope crude oil for 28
sale on the United States West Coast during the calendar year for which 29
the tax is due is more than $25; 30
(B) three percent of the gross value at the point of 31
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production when the average price per barrel for Alaska North Slope 1
crude oil for sale on the United States West Coast during the calendar 2
year for which the tax is due is over $20 but not over $25; 3
(C) two percent of the gross value at the point of production 4
when the average price per barrel for Alaska North Slope crude oil for 5
sale on the United States West Coast during the calendar year for which 6
the tax is due is over $17.50 but not over $20; 7
(D) one percent of the gross value at the point of production 8
when the average price per barrel for Alaska North Slope crude oil for 9
sale on the United States West Coast during the calendar year for which 10
the tax is due is over $15 but not over $17.50; or 11
(E) zero percent of the gross value at the point of 12
production when the average price per barrel for Alaska North Slope 13
crude oil for sale on the United States West Coast during the calendar 14
year for which the tax is due is $15 or less. 15
* Sec. 31. AS 43.55.020(a) is amended to read: 16
(a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 17
the tax as follows: 18
(1) for oil and gas produced before January 1, 2014, an installment 19
payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 20
as allowed by law, is due for each month of the calendar year on the last day of the 21
following month; except as otherwise provided under (2) of this subsection, the 22
amount of the installment payment is the sum of the following amounts, less 1/12 of 23
the tax credits that are allowed by law to be applied against the tax levied by 24
AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 25
not be less than zero: 26
(A) for oil and gas not subject to AS 43.55.011(o) or (p) 27
produced from leases or properties in the state outside the Cook Inlet 28
sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 29
the greater of 30
(i) zero; or 31
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(ii) the sum of 25 percent and the tax rate calculated for 1
the month under AS 43.55.011(g) multiplied by the remainder obtained 2
by subtracting 1/12 of the producer's adjusted lease expenditures for the 3
calendar year of production under AS 43.55.165 and 43.55.170 that are 4
deductible for the oil and gas under AS 43.55.160 from the gross value 5
at the point of production of the oil and gas produced from the leases or 6
properties during the month for which the installment payment is 7
calculated; 8
(B) for oil and gas produced from leases or properties subject 9
to AS 43.55.011(f), the greatest of 10
(i) zero; 11
(ii) zero percent, one percent, two percent, three 12
percent, or four percent, as applicable, of the gross value at the point of 13
production of the oil and gas produced from the leases or properties 14
during the month for which the installment payment is calculated; or 15
(iii) the sum of 25 percent and the tax rate calculated for 16
the month under AS 43.55.011(g) multiplied by the remainder obtained 17
by subtracting 1/12 of the producer's adjusted lease expenditures for the 18
calendar year of production under AS 43.55.165 and 43.55.170 that are 19
deductible for the oil and gas under AS 43.55.160 from the gross value 20
at the point of production of the oil and gas produced from those leases 21
or properties during the month for which the installment payment is 22
calculated; 23
(C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 24
each lease or property, the greater of 25
(i) zero; or 26
(ii) the sum of 25 percent and the tax rate calculated for 27
the month under AS 43.55.011(g) multiplied by the remainder obtained 28
by subtracting 1/12 of the producer's adjusted lease expenditures for the 29
calendar year of production under AS 43.55.165 and 43.55.170 that are 30
deductible under AS 43.55.160 for the oil or gas, respectively, 31
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produced from the lease or property from the gross value at the point of 1
production of the oil or gas, respectively, produced from the lease or 2
property during the month for which the installment payment is 3
calculated; 4
(D) for oil and gas subject to AS 43.55.011(p), the lesser of 5
(i) the sum of 25 percent and the tax rate calculated for 6
the month under AS 43.55.011(g) multiplied by the remainder obtained 7
by subtracting 1/12 of the producer's adjusted lease expenditures for the 8
calendar year of production under AS 43.55.165 and 43.55.170 that are 9
deductible for the oil and gas under AS 43.55.160 from the gross value 10
at the point of production of the oil and gas produced from the leases or 11
properties during the month for which the installment payment is 12
calculated, but not less than zero; or 13
(ii) four percent of the gross value at the point of 14
production of the oil and gas produced from the leases or properties 15
during the month, but not less than zero; 16
(2) an amount calculated under (1)(C) of this subsection for oil or gas 17
subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 18
carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 19
applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 20
AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 21
gas produced during the month for the amount of taxable gas produced during the 22
calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 23
during the month for the amount of taxable oil produced during the calendar year; 24
(3) an installment payment of the estimated tax levied by 25
AS 43.55.011(i) for each lease or property is due for each month of the calendar year 26
on the last day of the following month; the amount of the installment payment is the 27
sum of 28
(A) the applicable tax rate for oil provided under 29
AS 43.55.011(i), multiplied by the gross value at the point of production of the 30
oil taxable under AS 43.55.011(i) and produced from the lease or property 31
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during the month; and 1
(B) the applicable tax rate for gas provided under 2
AS 43.55.011(i), multiplied by the gross value at the point of production of the 3
gas taxable under AS 43.55.011(i) and produced from the lease or property 4
during the month; 5
(4) any amount of tax levied by AS 43.55.011, net of any credits 6
applied as allowed by law, that exceeds the total of the amounts due as installment 7
payments of estimated tax is due on March 31 of the year following the calendar year 8
of production; 9
(5) for oil and gas produced on and after January 1, 2014, and before 10
January 1, 2022, an installment payment of the estimated tax levied by 11
AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 12
month of the calendar year on the last day of the following month; except as otherwise 13
provided under (6) of this subsection, the amount of the installment payment is the 14
sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 15
applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 16
of the installment payment may not be less than zero: 17
(A) for oil and gas not subject to AS 43.55.011(o) or (p) 18
produced from leases or properties in the state outside the Cook Inlet 19
sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 20
the greater of 21
(i) zero; or 22
(ii) 35 percent multiplied by the remainder obtained by 23
subtracting 1/12 of the producer's adjusted lease expenditures for the 24
calendar year of production under AS 43.55.165 and 43.55.170 that are 25
deductible for the oil and gas under AS 43.55.160 from the gross value 26
at the point of production of the oil and gas produced from the leases or 27
properties during the month for which the installment payment is 28
calculated; 29
(B) for oil and gas produced from leases or properties subject 30
to AS 43.55.011(f), the greatest of 31
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(i) zero; 1
(ii) zero percent, one percent, two percent, three 2
percent, or four percent, as applicable, of the gross value at the point of 3
production of the oil and gas produced from the leases or properties 4
during the month for which the installment payment is calculated; or 5
(iii) 35 percent multiplied by the remainder obtained by 6
subtracting 1/12 of the producer's adjusted lease expenditures for the 7
calendar year of production under AS 43.55.165 and 43.55.170 that are 8
deductible for the oil and gas under AS 43.55.160 from the gross value 9
at the point of production of the oil and gas produced from those leases 10
or properties during the month for which the installment payment is 11
calculated, except that, for the purposes of this calculation, a reduction 12
from the gross value at the point of production may apply for oil and 13
gas subject to AS 43.55.160(f) or (g); 14
(C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 15
each lease or property, the greater of 16
(i) zero; or 17
(ii) 35 percent multiplied by the remainder obtained by 18
subtracting 1/12 of the producer's adjusted lease expenditures for the 19
calendar year of production under AS 43.55.165 and 43.55.170 that are 20
deductible under AS 43.55.160 for the oil or gas, respectively, 21
produced from the lease or property from the gross value at the point of 22
production of the oil or gas, respectively, produced from the lease or 23
property during the month for which the installment payment is 24
calculated; 25
(D) for oil and gas subject to AS 43.55.011(p), the lesser of 26
(i) 35 percent multiplied by the remainder obtained by 27
subtracting 1/12 of the producer's adjusted lease expenditures for the 28
calendar year of production under AS 43.55.165 and 43.55.170 that are 29
deductible for the oil and gas under AS 43.55.160 from the gross value 30
at the point of production of the oil and gas produced from the leases or 31
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properties during the month for which the installment payment is 1
calculated, but not less than zero; or 2
(ii) four percent of the gross value at the point of 3
production of the oil and gas produced from the leases or properties 4
during the month, but not less than zero; 5
(6) an amount calculated under (5)(C) of this subsection for oil or gas 6
subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 7
carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 8
applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 9
AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 10
gas produced during the month for the amount of taxable gas produced during the 11
calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 12
during the month for the amount of taxable oil produced during the calendar year; 13
(7) for oil and gas produced on or after January 1, 2022, an installment 14
payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 15
as allowed by law, is due for each month of the calendar year on the last day of the 16
following month; except as otherwise provided under (10) of this subsection, the 17
amount of the installment payment is the sum of the following amounts, less 1/12 of 18
the tax credits that are allowed by law to be applied against the tax levied by 19
AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 20
not be less than zero: 21
(A) for oil produced from leases or properties subject to 22
AS 43.55.011(f), the greatest of 23
(i) zero; 24
(ii) the percent applicable under AS 43.55.011(f) 25
[ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 26
PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 27
value at the point of production of the oil produced from the leases or 28
properties during the month for which the installment payment is 29
calculated; or 30
(iii) 35 percent multiplied by the remainder obtained by 31
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subtracting 1/12 of the producer's adjusted lease expenditures for the 1
calendar year of production under AS 43.55.165 and 43.55.170 that are 2
deductible for the oil under AS 43.55.160(h)(1) from the gross value at 3
the point of production of the oil produced from those leases or 4
properties during the month for which the installment payment is 5
calculated, except that, for the purposes of this calculation, a reduction 6
from the gross value at the point of production may apply for oil 7
subject to AS 43.55.160(f) or 43.55.160(f) and (g); 8
(B) for oil produced before or during the last calendar year 9
under AS 43.55.024(b) for which the producer could take a tax credit under 10
AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 11
sedimentary basin, no part of which is north of 68 degrees North latitude, other 12
than leases or properties subject to AS 43.55.011(o) or (p), the greater of 13
(i) zero; or 14
(ii) 35 percent multiplied by the remainder obtained by 15
subtracting 1/12 of the producer's adjusted lease expenditures for the 16
calendar year of production under AS 43.55.165 and 43.55.170 that are 17
deductible for the oil under AS 43.55.160(h)(2) from the gross value at 18
the point of production of the oil produced from the leases or properties 19
during the month for which the installment payment is calculated; 20
(C) for oil and gas produced from leases or properties subject 21
to AS 43.55.011(p), except as otherwise provided under (8) of this subsection, 22
the sum of 23
(i) 35 percent multiplied by the remainder obtained by 24
subtracting 1/12 of the producer's adjusted lease expenditures for the 25
calendar year of production under AS 43.55.165 and 43.55.170 that are 26
deductible for the oil under AS 43.55.160(h)(3) from the gross value at 27
the point of production of the oil produced from the leases or properties 28
during the month for which the installment payment is calculated, but 29
not less than zero; and 30
(ii) 13 percent of the gross value at the point of 31
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production of the gas produced from the leases or properties during the 1
month, but not less than zero; 2
(D) for oil produced from leases or properties in the state, no 3
part of which is north of 68 degrees North latitude, other than leases or 4
properties subject to (B), (C), or (F) of this paragraph, the greater of 5
(i) zero; or 6
(ii) 35 percent multiplied by the remainder obtained by 7
subtracting 1/12 of the producer's adjusted lease expenditures for the 8
calendar year of production under AS 43.55.165 and 43.55.170 that are 9
deductible for the oil under AS 43.55.160(h)(4) from the gross value at 10
the point of production of the oil produced from the leases or properties 11
during the month for which the installment payment is calculated; 12
(E) for gas produced from each lease or property in the state 13
outside the Cook Inlet sedimentary basin, other than a lease or property subject 14
to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of 15
production of the gas produced from the lease or property during the month for 16
which the installment payment is calculated, but not less than zero; 17
(F) for oil subject to AS 43.55.011(k), for each lease or 18
property, the greater of 19
(i) zero; or 20
(ii) 35 percent multiplied by the remainder obtained by 21
subtracting 1/12 of the producer's adjusted lease expenditures for the 22
calendar year of production under AS 43.55.165 and 43.55.170 that are 23
deductible under AS 43.55.160 for the oil produced from the lease or 24
property from the gross value at the point of production of the oil 25
produced from the lease or property during the month for which the 26
installment payment is calculated; 27
(G) for gas subject to AS 43.55.011(j) or (o), for each lease or 28
property, the greater of 29
(i) zero; or 30
(ii) 13 percent of the gross value at the point of 31
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production of the gas produced from the lease or property during the 1
month for which the installment payment is calculated; 2
(8) an amount calculated under (7)(C) of this subsection may not 3
exceed four percent of the gross value at the point of production of the oil and gas 4
produced from leases or properties subject to AS 43.55.011(p) during the month for 5
which the installment payment is calculated; 6
(9) for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and 7
(7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point 8
of production is determined under AS 43.55.011(f) [AS 43.55.011(f)(1) or (2)] but 9
substituting the phrase "month for which the installment payment is calculated" in 10
AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is due"; 11
(10) an amount calculated under (7)(F) or (G) of this subsection for oil 12
or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 13
carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 14
applicable, for gas, or set out in AS 43.55.011(k) for oil, but substituting in 15
AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 16
gas produced during the month for the amount of taxable gas produced during the 17
calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 18
during the month for the amount of taxable oil produced during the calendar year. 19
* Sec. 32. AS 43.55.020 is amended by adding a new subsection to read: 20
(n) If oil or gas is produced and sold at no cost or under circumstances in 21
which the sales price does not represent the prevailing value for oil or gas of like kind, 22
quality, or character for the field, unit, or area from which the product is produced, the 23
department shall require tax to be paid based on the value of the oil or gas. To 24
determine the value of the oil or gas for purposes of this subsection, the department 25
(1) shall base the value for oil or gas on the value of oil or gas of the 26
same kind, quality, and character prevailing for that field, unit, or area during the 27
calendar month of production or sale; and 28
(2) may not base a value for oil or gas on oil or gas sold at no cost or at 29
a cost substantially lower than that of other oil or gas of the same kind, quality, and 30
character. 31
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* Sec. 33. AS 43.55.023(c) is amended to read: 1
(c) A credit or portion of a credit under this section 2
(1) may not be used to reduce a person's tax liability under 3
AS 43.55.011(e) for any calendar year below zero; 4
(2) may, if not used under this subsection, be applied in a later 5
calendar year; 6
(3) may, regardless of when the credit was earned, be used to satisfy a 7
tax, interest, penalty, fee, or other charge that 8
(A) is related to the tax due under this chapter for a prior year, 9
except for a surcharge under AS 43.55.201 - 43.55.299, [OR] 43.55.300, or 10
43.55.320 or the tax levied by AS 43.55.011(i) or 43.55.014; and 11
(B) has not, for the purpose of art. IX, sec. 17(a), Constitution 12
of the State of Alaska, been subject to an administrative proceeding or 13
litigation. 14
* Sec. 34. AS 43.55.023(e) is amended to read: 15
(e) A person to which a transferable tax credit certificate is issued under (d) of 16
this section may transfer the certificate to another person, and a transferee may further 17
transfer the certificate. Subject to the limitations set out in (a) - (d) of this section, and 18
notwithstanding any action the department may take with respect to the applicant 19
under (g) of this section, the owner of a certificate may apply the credit or a portion of 20
the credit shown on the certificate 21
(1) against a tax levied by AS 43.55.011(e); however, a credit shown 22
on a transferable tax credit certificate may not be applied under this paragraph to 23
reduce a transferee's total tax liability under AS 43.55.011(e) for oil and gas produced 24
during a calendar year to less than 80 percent of the tax that would otherwise be due 25
without applying that credit; any portion of a credit not used under this paragraph may 26
be applied in a later period; or 27
(2) regardless of when the credit was earned, to satisfy a tax, interest, 28
penalty, fee, or other charge that 29
(A) is related to the tax due under this chapter, except for a 30
surcharge under AS 43.55.201 - 43.55.299, [OR] 43.55.300, or 43.55.320 or 31
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the tax levied by AS 43.55.011(i) or 43.55.014; 1
(B) is for a calendar year before the year in which the 2
certificate is applied; and 3
(C) has not, for the purpose of art. IX, sec. 17(a), Constitution 4
of the State of Alaska, been subject to an administrative proceeding or 5
litigation. 6
* Sec. 35. AS 43.55.025(h) is amended to read: 7
(h) A producer that purchases a production tax credit certificate may apply the 8
credits against its production tax levied by AS 43.55.011(e). Regardless of the price 9
the producer paid for the certificate, the producer may receive a credit against its 10
production tax liability for the full amount of the credit, but for not more than the 11
amount for which the certificate is issued. A production tax credit or a portion of a 12
production tax credit or a production tax credit certificate or a portion of a production 13
tax credit certificate allowed under this section 14
(1) may not be applied more than once; 15
(2) may be applied in a later calendar year; 16
(3) may, regardless of when the credit was earned, be applied to satisfy 17
a tax, interest, penalty, fee, or other charge that 18
(A) is related to the tax due under this chapter for a prior year, 19
except for a surcharge under AS 43.55.201 - 43.55.299, [OR] 43.55.300, or 20
43.55.320 or the tax levied by AS 43.55.011(i) or 43.55.014; and 21
(B) has not, for the purpose of art. IX, sec. 17(a), Constitution 22
of the State of Alaska, been subject to an administrative proceeding or 23
litigation. 24
* Sec. 36. AS 43.55.165(e) is amended to read: 25
(e) For purposes of this section, lease expenditures do not include 26
(1) depreciation, depletion, or amortization; 27
(2) oil or gas royalty payments, production payments, lease profit 28
shares, or other payments or distributions of a share of oil or gas production, profit, or 29
revenue, except that a producer's lease expenditures applicable to oil and gas produced 30
from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net 31
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profit paid to the state under that lease; 1
(3) taxes based on or measured by net income; 2
(4) interest or other financing charges or costs of raising equity or debt 3
capital; 4
(5) acquisition costs for a lease or property or exploration license; 5
(6) costs arising from fraud, wilful misconduct, gross negligence, 6
violation of law, or failure to comply with an obligation under a lease, permit, or 7
license issued by the state or federal government; 8
(7) fines or penalties imposed by law; 9
(8) costs of arbitration, litigation, or other dispute resolution activities 10
that involve the state or concern the rights or obligations among owners of interests in, 11
or rights to production from, one or more leases or properties or a unit; 12
(9) costs incurred in organizing a partnership, joint venture, or other 13
business entity or arrangement; 14
(10) amounts paid to indemnify the state; the exclusion provided by 15
this paragraph does not apply to the costs of obtaining insurance or a surety bond from 16
a third-party insurer or surety; 17
(11) surcharges levied under AS 43.55.201, [OR] 43.55.300, or 18
43.55.320; 19
(12) an expenditure otherwise deductible under (b) of this section that 20
is a result of an internal transfer, a transaction with an affiliate, or a transaction 21
between related parties, or is otherwise not an arm's length transaction, unless the 22
producer establishes to the satisfaction of the department that the amount of the 23
expenditure does not exceed the fair market value of the expenditure; 24
(13) an expenditure incurred to purchase an interest in any corporation, 25
partnership, limited liability company, business trust, or any other business entity, 26
whether or not the transaction is treated as an asset sale for federal income tax 27
purposes; 28
(14) a tax levied under AS 43.55.011 or 43.55.014; 29
(15) costs incurred for dismantlement, removal, surrender, or 30
abandonment of a facility, pipeline, well pad, platform, or other structure, or for the 31
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restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in 1
conjunction with dismantlement, removal, surrender, or abandonment; a cost is not 2
excluded under this paragraph if the dismantlement, removal, surrender, or 3
abandonment for which the cost is incurred is undertaken for the purpose of replacing, 4
renovating, or improving the facility, pipeline, well pad, platform, or other structure; 5
(16) costs incurred for containment, control, cleanup, or removal in 6
connection with any unpermitted release of oil or a hazardous substance and any 7
liability for damages imposed on the producer or explorer for that unpermitted release; 8
this paragraph does not apply to the cost of developing and maintaining an oil 9
discharge prevention and contingency plan under AS 46.04.030; 10
(17) costs incurred to satisfy a work commitment under an exploration 11
license under AS 38.05.132; 12
(18) that portion of expenditures, that would otherwise be qualified 13
capital expenditures, as defined in AS 43.55.023, incurred during a calendar year that 14
are less than the product of $0.30 multiplied by the total taxable production from each 15
lease or property, in BTU equivalent barrels, during that calendar year, except that, 16
when a portion of a calendar year is subject to this provision, the expenditures and 17
volumes shall be prorated within that calendar year; 18
(19) costs incurred for repair, replacement, or deferred maintenance of 19
a facility, a pipeline, a structure, or equipment, other than a well, that results in or is 20
undertaken in response to a failure, problem, or event that results in an unscheduled 21
interruption of, or reduction in the rate of, oil or gas production; or costs incurred for 22
repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or 23
equipment, other than a well, that is undertaken in response to, or is otherwise 24
associated with, an unpermitted release of a hazardous substance or of gas; however, 25
costs under this paragraph that would otherwise constitute lease expenditures under (a) 26
and (b) of this section may be treated as lease expenditures if the department 27
determines that the repair or replacement is solely necessitated by an act of war, by an 28
unanticipated grave natural disaster or other natural phenomenon of an exceptional, 29
inevitable, and irresistible character, the effects of which could not have been 30
prevented or avoided by the exercise of due care or foresight, or by an intentional or 31
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negligent act or omission of a third party, other than a party or its agents in privity of 1
contract with, or employed by, the producer or an operator acting for the producer, but 2
only if the producer or operator, as applicable, exercised due care in operating and 3
maintaining the facility, pipeline, structure, or equipment, and took reasonable 4
precautions against the act or omission of the third party and against the consequences 5
of the act or omission; in this paragraph, 6
(A) "costs incurred for repair, replacement, or deferred 7
maintenance of a facility, a pipeline, a structure, or equipment" includes costs 8
to dismantle and remove the facility, pipeline, structure, or equipment that is 9
being replaced; 10
(B) "hazardous substance" has the meaning given in 11
AS 46.03.826; 12
(C) "replacement" includes renovation or improvement; 13
(20) costs incurred to construct, acquire, or operate a refinery or crude 14
oil topping plant, regardless of whether the products of the refinery or topping plant 15
are used in oil or gas exploration, development, or production operations; however, if 16
a producer owns a refinery or crude oil topping plant that is located on or near the 17
premises of the producer's lease or property in the state and that processes the 18
producer's oil produced from that lease or property into a product that the producer 19
uses in the operation of the lease or property in drilling for or producing oil or gas, the 20
producer's lease expenditures include the amount calculated by subtracting from the 21
fair market value of the product used the prevailing value, as determined under 22
AS 43.55.020(f), of the oil that is processed; 23
(21) costs of lobbying, public relations, public relations advertising, or 24
policy advocacy; 25
(22) costs incurred as part of a capital expenditure or other action taken 26
for a carbon management purpose under AS 38.05.081 or a carbon offset project under 27
AS 38.95.400 - 38.95.499; 28
(23) costs incurred for carbon capture or carbon storage, including fees 29
incurred under AS 41.06.160, surcharges incurred under AS 41.06.175, or costs 30
associated with obtaining, operating, or maintaining a license or lease under 31
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AS 38.05.700 - 38.05.795; in this paragraph, 1
(A) "carbon capture" means the process of capturing carbon 2
dioxide from a chemical, mechanical, or industrial process, or directly from the 3
ambient atmosphere, and reducing the carbon dioxide to a concentrated form, 4
including a supercritical fluid; "carbon capture" does not include gas 5
processing or gas treatment; 6
(B) "carbon storage" means the long-term geologic storage of 7
carbon dioxide in a carbon storage facility permitted under AS 41.06.120 or a 8
Class VI injection well, as defined in 40 C.F.R. 146.5(f). 9
* Sec. 37. AS 43.55.201(b) is amended to read: 10
(b) The surcharge imposed by (a) of this section is in addition to the tax 11
imposed by AS 43.55.011 and is due on the last day of the month on oil produced 12
from each lease or property during the preceding month. The surcharge is in addition 13
to the surcharge imposed by AS 43.55.300 - 43.55.310 and 43.55.320. 14
* Sec. 38. AS 43.55 is amended by adding new sections to article 3 to read: 15
Sec. 43.55.320. Infrastructure maintenance surcharge on oil. (a) Every 16
producer of oil shall pay a surcharge of $0.30 per barrel of oil produced from each 17
lease or property in the state, less any oil the ownership or right to which is exempt 18
from taxation. 19
(b) The surcharge imposed by (a) of this section is in addition to the tax 20
imposed by AS 43.55.011 and the surcharges imposed by AS 43.55.201 and 21
43.55.300. 22
(c) A tax credit authorized under this chapter may not be applied to reduce a 23
producer's liability for the surcharge. 24
(d) The surcharge is due on the last day of the month on oil produced from 25
each lease or property during the preceding month. The surcharge shall be paid at the 26
same time and in the same manner as the surcharge imposed under AS 43.55.201. 27
Sec. 43.55.325. Dalton Highway pipeline corridor maintenance fund. (a) 28
The Dalton Highway pipeline corridor maintenance fund is established in the general 29
fund. 30
(b) The legislature may appropriate to the fund the revenue collected under 31
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AS 43.55.320 and other money. 1
(c) Money in the fund may be used by the legislature to make appropriations 2
for maintenance and operation costs of the James Dalton Highway (AS 19.40) and 3
within the James Dalton Highway corridor. 4
(d) Nothing in this section creates a dedicated fund. 5
* Sec. 39. AS 43.55.900(24) is amended to read: 6
(24) "surcharge" means 7
(A) when used in AS 43.55.201 - 43.55.299, the surcharge 8
levied by AS 43.55.201; 9
(B) when used in AS 43.55.300 - 43.55.310, the surcharge 10
levied by AS 43.55.300; 11
(C) when used in AS 43.55.320 - 43.55.325, the surcharge 12
levied by AS 43.55.320; 13
* Sec. 40. AS 43.56.020(b) is amended to read: 14
(b) There is exempt from state taxes levied or authorized under 15
AS 43.56.010(a), 16
(1) before the construction commencement date, property that is 17
committed by contract or other agreement for use in this state primarily for the 18
production or pipeline transportation of gas or unrefined oil, or in the operation or 19
maintenance of facilities for the production or pipeline transportation of gas or 20
unrefined oil; and 21
(2) a spur line that services a Fairbanks natural gas utility. 22
* Sec. 41. AS 43.56.020(d) is amended to read: 23
(d) Real or personal property used or committed by contract or other 24
agreement for the construction, operation, or maintenance [TAXABLE 25
PROPERTY] of a natural gas pipeline project [OWNED OR FINANCED BY THE 26
ALASKA GASLINE DEVELOPMENT CORPORATION OR A JOINT VENTURE, 27
PARTNERSHIP, OR OTHER ENTITY THAT INCLUDES THE ALASKA 28
GASLINE DEVELOPMENT CORPORATION] is exempt from state taxes levied or 29
authorized under AS 43.56.010(a) and municipal taxes levied or authorized under 30
AS 43.56.010(b) [BEFORE THE COMMENCEMENT OF COMMERCIAL 31
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OPERATIONS OF THAT NATURAL GAS PIPELINE PROJECT]. In this 1
subsection, "natural gas pipeline project" means a natural gas pipeline project 2
subject to, or expected by the department to be subject to, the tax under 3
AS 43.59.010 ["COMMENCEMENT OF COMMERCIAL OPERATIONS" MEANS 4
THE FIRST FLOW OF NATURAL GAS IN THE PROJECT THAT GENERATES 5
REVENUE TO THE OWNERS OF THE NATURAL GAS PIPELINE PROJECT]. 6
* Sec. 42. AS 43.56.020(d), as amended by sec. 41 of this Act, is amended to read: 7
(d) Taxable property [REAL OR PERSONAL PROPERTY USED OR 8
COMMITTED BY CONTRACT OR OTHER AGREEMENT FOR THE 9
CONSTRUCTION, OPERATION, OR MAINTENANCE] of a natural gas pipeline 10
project owned or financed by the Alaska Gasline Development Corporation or a 11
joint venture, partnership, or other entity that includes the Alaska Gasline 12
Development Corporation is exempt from state taxes levied or authorized under 13
AS 43.56.010(a) and municipal taxes levied or authorized under AS 43.56.010(b) 14
before the commencement of commercial operations of that natural gas pipeline 15
project. In this subsection, "commencement of commercial operations" means the 16
first flow of natural gas in the project that generates revenue to the owners of the 17
natural gas pipeline project ["NATURAL GAS PIPELINE PROJECT" MEANS A 18
NATURAL GAS PIPELINE PROJECT SUBJECT TO, OR EXPECTED BY THE 19
DEPARTMENT TO BE SUBJECT TO, THE TAX UNDER AS 43.59.010]. 20
* Sec. 43. AS 43.56.030 is amended to read: 21
Sec. 43.56.030. In place of other taxes. Except for those taxes imposed under 22
AS 43.55, the taxes levied or authorized under AS 43.56.010(b) are in place of 23
(1) all other ad valorem taxes or other taxes imposed by a municipality 24
on property subject to tax under this chapter or exempted from taxation by 25
AS 43.56.020; and 26
(2) all other taxes imposed by a municipality on or with respect to the 27
property subject to tax under this chapter or exempted from taxation by AS 43.56.020, 28
including [, BUT NOT LIMITED TO,] 29
(A) taxes on the retail sale or use of the property except for the 30
retail sales tax on the first $1,000 of each sale; 31
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(B) taxes on the sale or use of gas, including liquefied natural 1
gas, or unrefined oil; 2
(C) taxes on the sale or use of services used in or associated 3
with the property or in its maintenance or operation except for the sales tax on 4
the first $1,000 of each sale; 5
(D) taxes on or measured by gross or net income from the 6
property, including income from 7
(i) the exploration for, production of, or pipeline 8
transportation of gas or unrefined oil or property; or 9
(ii) a liquefied natural gas plant; and 10
(E) any license, excise, fee, charge or other tax on or pertaining 11
to the property or services. 12
* Sec. 44. AS 43.56.060(a) is amended to read: 13
(a) The department shall assess, at its full and true value as of January 1 of 14
the assessment year, property for the tax levied under AS 43.56.010(b) and 15
AS 29.45.080 on property used or committed by contract or other agreement for use 16
(1) for the pipeline transportation of gas or unrefined oil or for the 17
production of gas or unrefined oil; 18
(2) as part of or related to a liquefied natural gas plant [AT ITS 19
FULL AND TRUE VALUE AS OF JANUARY 1 OF THE ASSESSMENT YEAR]. 20
* Sec. 45. AS 43.56.210(5) is amended to read: 21
(5) "taxable property" 22
(A) means real and tangible personal property used or 23
committed by contract or other agreement for use within this state primarily in 24
the exploration for, production of, or pipeline transportation of gas or unrefined 25
oil (except for property used solely for the retail distribution or liquefaction of 26
natural gas), or in the operation or maintenance of facilities used in the 27
exploration for, production of, or pipeline transportation of gas or unrefined 28
oil; "taxable property" includes 29
(i) machinery, appliances, supplies, and equipment; 30
(ii) drilling rigs, wells (whether producing or not), 31
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gathering lines and transmission lines, pumping stations, compressor 1
stations, power plants, topping plants, and processing units; 2
(iii) roads, tank farms, tanker terminals, docks and other 3
port facilities, and air strips; 4
(iv) aircraft and motor vehicles owned by a person 5
whose principal business in the state is the exploration for, production 6
of, or pipeline transportation of gas or unrefined oil and whose 7
operation of the aircraft or motor vehicle directly relates to the conduct 8
of that business; 9
(v) maintenance equipment and facilities, and 10
maintenance camps and other related facilities; [AND] 11
(vi) communications facilities owned by a person 12
whose principal business in the state is the exploration for, production 13
of, or pipeline transportation of gas or unrefined oil and whose 14
operation of the communications facilities directly relates to the 15
conduct of that business; and 16
(vii) a marine export terminal; 17
(B) means a liquefied natural gas plant; 18
(C) does not include 19
(i) permanent residences; 20
(ii) office buildings requiring substantial local 21
government services; 22
(iii) oil and gas pipeline systems owned and operated by 23
a public utility that is certificated under AS 42.05.221 and is regulated 24
by the Regulatory Commission of Alaska; 25
(iv) aircraft and motor vehicles, except aircraft and 26
motor vehicles taxable under (A)(iv) of this paragraph; and 27
(v) communications facilities, except communications 28
facilities taxable under (A)(vi) of this paragraph; 29
* Sec. 46. AS 43.56.210 is amended by adding new paragraphs to read: 30
(7) "liquefied natural gas plant" means a facility for liquefying natural 31
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gas and includes structures, equipment, underlying land rights, other associated 1
systems, storage, and facilities for off-loading liquefied natural gas; 2
(8) "marine export terminal" means 3
(A) a terminal and related facilities required to export gas or 4
unrefined oil by marine transportation; and 5
(B) auxiliary vessels used in the operation of the terminal. 6
* Sec. 47. AS 43 is amended by adding a new chapter to read: 7
Chapter 59. Pipeline Alternative Volumetric Tax. 8
Sec. 43.59.010. Alternative volumetric tax. (a) The owner of a qualified 9
property shall pay an alternative volumetric tax on the throughput of the qualified 10
property. Subject to AS 43.59.015, the alternative volumetric tax applies beginning the 11
day after the commencement of commercial operations of the qualified property. If a 12
qualified property has multiple owners, each owner shall pay the tax in proportion to 13
ownership. 14
(b) The volumetric tax for each 1,000 cubic feet of natural gas 15
(1) transported through a gas treatment plant or carbon capture facility 16
is 17
(A) $0.06 before the date that throughput of natural gas 18
transported through the gas treatment plant or carbon capture facility first 19
exceeds 250,000,000 cubic feet of natural gas a day; 20
(B) $0.10 on and after the date that throughput of natural gas 21
transported through the gas treatment plant or carbon capture facility first 22
exceeds 250,000,000 cubic feet of natural gas a day; 23
(2) transported through a gas pipeline is 24
(A) $0.06 on and after the date the gas pipeline commences 25
commercial operations but before throughput of natural gas transported 26
through the gas pipeline first exceeds 250,000,000 cubic feet of natural gas a 27
day; 28
(B) $0.15 on and after the date that throughput of natural gas 29
transported through the gas pipeline first exceeds 250,000,000 cubic feet of 30
natural gas a day; 31
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(3) processed by a liquefied natural gas plant is $0.15 on and after the 1
date the liquefied natural gas plant commences commercial operations. 2
(c) The department shall adjust each tax rate under (b) of this section for 3
inflation, based on the percentage increase during the previous calendar year in the 4
Consumer Price Index for all urban consumers for urban Alaska, as determined by the 5
United States Department of Labor, Bureau of Labor Statistics. The department shall 6
adjust the tax rate 7
(1) under (b)(1)(A) of this section beginning January 1 following five 8
full calendar years of application of the tax under (b)(1)(A) of this section; 9
(2) under (b)(1)(B) of this section beginning January 1 following the 10
first full calendar year of application of the tax under (b)(1)(B) of this section; 11
(3) under (b)(2)(A) of this section beginning January 1 following the 12
first full five calendar years after the gas pipeline commences commercial operations; 13
(4) under (b)(2)(B) of this section beginning January 1 following the 14
first full calendar year of application of the tax under (b)(2)(B) of this section; 15
(5) under (b)(3) of this section beginning January 1 following the first 16
full calendar year after the liquefied natural gas plant commences commercial 17
operations. 18
(d) For purposes of determining throughput as required to assess the tax rate 19
under (b) of this section, the department shall calculate throughput as a rolling average 20
over a consecutive 30-day period. 21
(e) The tax levied under this section is in place of all property taxes levied on 22
qualified property, including taxes levied under AS 43.56.010 and AS 29.45.080. 23
(f) The Alaska Gasline Development Corporation (AS 31.25), or a subsidiary 24
of the corporation, shall pay the tax levied under this section. 25
(g) The alternative tax under this section does not apply to a spur line. Except 26
as provided in AS 43.56.020(b)(2), property associated with a spur line remains 27
subject to taxation under AS 43.56.010. In this subsection, "spur line" means a natural 28
gas transmission line or lateral line 29
(1) that branches from the main natural gas pipeline project to deliver 30
natural gas to a local community or utility distribution system; or 31
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(2) described in AS 31.25.005(4), or similar infrastructure not serving 1
as the primary export or mainline transmission facility. 2
Sec. 43.59.015. Additional payment; application of alternative volumetric 3
tax. (a) The owner of qualified property shall 4
(1) make a payment of at least $50,000,000, as described in 5
AS 44.33.850(b), to the state during the calendar year in which construction of a gas 6
pipeline commences; for purposes of this paragraph, construction of a gasline 7
commences when 8
(A) multiple sections of steel pipe that are intended for use as 9
part of a gas pipeline are laying and welding together in an excavated trench; 10
and 11
(B) at least one work camp has been established along the gas 12
pipeline route that is intended to provide crew quarters and services during 13
construction of the gas pipeline; 14
(2) for each of the five calendar years after the payment made under 15
(1) of this subsection, make a payment of at least $30,000,000, as described in 16
AS 44.33.850(c), to the state. 17
(b) The tax under AS 43.59.010 is suspended for the calendar year 18
immediately after a calendar year in which an owner of qualified property does not 19
make a payment required under (a)(2) of this section. If the tax under AS 43.59.010 is 20
suspended under this subsection, an owner of qualified property shall pay all other 21
property taxes levied on the qualified property, including taxes levied under 22
AS 43.56.010 and AS 29.45.080. 23
(c) Except as provided in (b) of this section, there is not a penalty or other 24
consequence for failing to make a payment under this section. 25
Sec. 43.59.020. Returns; payment of tax and fee. (a) Every person having 26
direct ownership or control of an interest in qualified property subject to tax under 27
AS 43.59.010 shall file a return with the department on or before the last day of each 28
month. The return must state the throughput, in cubic feet of natural gas a day, of the 29
qualified property for the month preceding the month in which the return is due. The 30
owner of the qualified property shall, at the time the return is filed, pay the tax due 31
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under AS 43.59.010 for the month preceding the return. A payment under this 1
subsection is considered late if the payment is not received by the department on or 2
before the last day of the month in which the return is due. 3
(b) If payment of the tax levied under AS 43.59.010 is delinquent, the 4
department shall assess a penalty of 10 percent of the amount of delinquent taxes and 5
interest on the delinquent taxes, exclusive of penalty, at the rate specified in 6
AS 43.05.225. 7
Sec. 43.59.030. Remedy. The remedy of distraint of property set out in 8
AS 43.20.270 applies to the tax levied under AS 43.59.010. However, only the 9
qualified property may be distrained. 10
Sec. 43.59.040. Allocation of volumetric tax. The department shall separately 11
account for the tax collected under AS 43.59.010(b)(1), (2), and (3). Each year, the 12
legislature may appropriate 13
(1) to the North Slope Borough, 50 percent of the tax collected on the 14
throughput of a gas treatment plant or carbon capture facility under 15
AS 43.59.010(b)(1); 16
(2) 50 percent of the tax collected on pipeline throughput under 17
AS 43.59.010(b)(2) to affected areas of the state, with appropriations proportionately 18
divided among the municipalities and the unorganized borough through which the gas 19
pipeline runs; to determine the proportional distribution under this paragraph, the 20
length of pipeline in a municipality is divided by the total length of the pipeline; the 21
state shall retain the portions of the tax for the proportion of the pipeline in the 22
unorganized borough; 23
(3) 50 percent of the tax collected on pipeline throughput under 24
AS 43.59.010(b)(2) to municipalities, to reserves, and to communities in the 25
unorganized borough, distributed on a per capita basis under AS 29.60.860; 26
(4) to the Kenai Peninsula Borough, 50 percent of the tax collected on 27
the throughput of a liquefied natural gas plant under AS 43.59.010(b)(3). 28
Sec. 43.59.050. Throughput; regulations. The department shall adopt 29
regulations under AS 44.62 (Administrative Procedure Act) to implement this chapter, 30
including procedures for measuring throughput, throughput reporting, and calculating 31
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the rolling average of throughput. For purposes of measuring throughput in regulations 1
adopted under this section, natural gas 2
(1) sold or otherwise delivered at an outlet or offtake point along the 3
gas pipeline is included in throughput; 4
(2) consumed as fuel for the operation of a liquefaction facility, 5
including fuel consumed for refrigeration, is not included in throughput when 6
calculating the tax for natural gas processed by a liquefied natural gas plant under 7
AS 43.59.010(b)(3); 8
(3) consumed as fuel for pipeline compression is not included in 9
throughput. 10
Sec. 43.59.100. Definitions. In this chapter, 11
(1) "commencement of commercial operations" means the first flow of 12
natural gas in the qualified property that generates revenue to the owners of the 13
qualified property; 14
(2) "department" means the Department of Revenue; 15
(3) "gas pipeline" has the meaning given in AS 31.25.390; 16
(4) "gas treatment plant" has the meaning given in AS 31.25.390; 17
(5) "liquefied natural gas plant" has the meaning given in 18
AS 31.25.390; 19
(6) "qualified property" means a major component of an Alaska 20
liquefied natural gas project as defined in AS 31.25.390, taxed under AS 43.59.010(b) 21
(A) for which construction commenced on or after January 1, 22
2026; and 23
(B) that is owned by an instrumentality of the state or a joint 24
venture, partnership, or other affiliated entity that includes an instrumentality 25
of the state. 26
* Sec. 48. AS 44.33 is amended by adding a new section to read: 27
Article 13A. Alaska Gasline Community Impact Fund. 28
Sec. 44.33.850. Alaska gasline community impact fund. (a) The Alaska 29
gasline community impact fund is established as a separate fund in the state treasury. 30
The fund consists of money appropriated to the fund. The department shall administer 31
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the fund for the purposes set out in this section. Money in the fund does not lapse. 1
Nothing in this section creates a dedicated fund. 2
(b) The gasline construction impact account is created as a separate account in 3
the fund. The account consists of money appropriated to the account. Upon the state's 4
receipt of a one-time payment intended to offset the effects of construction of a gas 5
pipeline from an entity that has partnered with the Alaska Gasline Development 6
Corporation (AS 31.25), the legislature may appropriate $50,000,000 of the payment 7
to the account. The department shall timely distribute grants from the account to 8
communities for activities, services, or facilities that offset actual or expected effects 9
of construction of a gas pipeline. When administering grants from the account, the 10
department shall prioritize granting awards based on the needs of the community, the 11
severity of the effects caused by construction of the pipeline, and the correlation of the 12
effect to the construction of the pipeline. 13
(c) The statewide gasline impact account is created as a separate account in 14
the fund. The account consists of money appropriated to the account. Each year, the 15
legislature may appropriate to the account up to $30,000,000 of revenue or receipts 16
received by the state as a result of construction of a gas pipeline or from an entity that 17
has partnered with the Alaska Gasline Development Corporation (AS 31.25). Each 18
year, the department shall distribute the money in the account to eligible 19
municipalities, to reserves, and to communities on a per capita basis in accordance 20
with AS 29.60.860. 21
(d) The department shall submit an annual report of fund activity to the senate 22
secretary and the chief clerk of the house of representatives on or before the first day 23
of each regular session of the legislature and shall notify the legislature that the report 24
is available. The report must contain 25
(1) a summary of the grants provided from the gasline construction 26
impact account established under (b) of this section, including 27
(A) the name of each grantee for the preceding calendar year; 28
(B) a summary of projects funded in the preceding calendar 29
year and an explanation of how the project offset an actual or expected effect 30
of the construction of a gas pipeline; 31
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(C) a determination of whether the grants provided in the 1
preceding calendar year offset the entire expected effect of the construction of 2
a gas pipeline, as described in the grant request for that project; 3
(D) a list of outstanding grant applications; 4
(E) a list of all grant payments, beginning on inception of the 5
grant program; 6
(2) a list of all communities that, in the preceding calendar year, 7
received funds distributed from the statewide gasline impact account established under 8
(c) of this section. 9
(e) In this section, 10
(1) "department" means the Department of Commerce, Community, 11
and Economic Development; 12
(2) "fund" means the Alaska gasline community impact fund 13
established under (a) of this section; 14
(3) "gas pipeline" has the meaning given in AS 31.25.390. 15
* Sec. 49. AS 31.25.030(d) and AS 42.05.711(v) are repealed. 16
* Sec. 50. AS 14.17.510(d); AS 29.45.050(aa), 29.45.080(g); AS 29.60.860(e); 17
AS 43.56.020(b)(2); AS 43.59.010, 43.59.020, 43.59.030, 43.59.040, 43.59.050, and 18
43.59.100 are repealed. 19
* Sec. 51. AS 44.33.850 is repealed. 20
* Sec. 52. AS 44.33.850(b) is repealed. 21
* Sec. 53. AS 29.60.860(d) and AS 44.33.850(c) are repealed. 22
* Sec. 54. The uncodified law of the State of Alaska is amended by adding a new section to 23
read: 24
APPROPRIATIONS TO THE ALASKA GASLINE COMMUNITY IMPACT FUND 25
AND THE STATEWIDE GASLINE IMPACT ACCOUNT. (a) The legislature may 26
appropriate to the gasline construction impact account established under AS 44.33.850(b), 27
added by sec. 48 of this Act, $50,000,000 of revenue or receipts received by the state as a 28
result of the construction of a gas pipeline or from an entity that has partnered with the Alaska 29
Gasline Development Corporation (AS 31.25). 30
(b) The legislature may appropriate to the statewide gasline impact account 31
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established under AS 44.33.850(c), added by sec. 48 of this Act, revenue or receipts for five 1
consecutive fiscal years, beginning the fiscal year after the legislature appropriates 2
$50,000,000 to the gasline construction impact account, as described (a) of this section. 3
* Sec. 55. The uncodified law of the State of Alaska is amended by adding a new section to 4
read: 5
APPLICABILITY: ALASKA GASLINE DEVELOPMENT CORPORATION 6
CONFIDENTIALITY AGREEMENTS, SUBSIDIARIES, NOTIFICATIONS, LEGAL 7
RELATIONSHIPS. (a) AS 31.25.080(a)(1), (6), and (24), as amended by sec. 12 of this Act, 8
apply to a transfer or disposition occurring on or after the effective date of sec. 12 of this Act. 9
(b) AS 31.25.090(k) and (m), added by sec. 15 of this Act, apply to a confidentiality 10
agreement entered into on or after the effective date of sec. 15 of this Act. 11
(c) AS 31.25.145, added by sec. 19 of this Act, applies to revenue generated on and 12
after the effective date of sec. 19 of this Act. 13
(d) AS 31.25.280, added by sec. 23 of this Act, applies to a legal relationship with a 14
foreign entity entered into on or after the effective date of sec. 23 of this Act. In this 15
subsection, "legal relationship" has the meaning given in AS 31.25.280(c), added by sec. 23 16
of this Act. 17
(e) AS 31.25.285, added by sec. 23 of this Act, applies to a legal relationship entered 18
into on or after the effective date of sec. 23 of this Act. In this subsection, "legal relationship" 19
has the meaning given in AS 31.25.285(b), added by sec. 23 of this Act. 20
* Sec. 56. The uncodified law of the State of Alaska is amended by adding a new section to 21
read: 22
APPLICABILITY: OIL AND GAS ENTITY TAX. The tax established under 23
AS 43.20.019, added by sec. 27 of this Act, applies to a qualified entity for a tax year 24
beginning on or after January 1, 2026. In this section, "qualified entity" has the meaning given 25
in AS 43.20.019(g), added by sec. 27 of this Act. 26
* Sec. 57. The uncodified law of the State of Alaska is amended by adding a new section to 27
read: 28
APPLICABILITY: OIL AND GAS VALUATION. AS 43.55.020(n), added by sec. 29
32 of this Act, applies to oil and gas produced on and after the effective date of sec. 32 of this 30
Act. 31
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* Sec. 58. The uncodified law of the State of Alaska is amended by adding a new section to 1
read: 2
APPLICABILITY: OIL AND GAS PROPERTY TAX ON LIQUEFIED NATURAL 3
GAS PLANTS. Notwithstanding AS 43.56.030, as amended by sec. 43 of this Act, 4
AS 43.56.060(a), as amended by sec. 44 of this Act, AS 43.56.210(5), as amended by sec. 45 5
of this Act, and AS 43.56.210(7), added by sec. 46 of this Act, a liquefied natural gas plant 6
existing on January 1, 2026, shall pay property taxes under AS 43.56.030, 43.56.060, and 7
43.56.210, as those sections read on January 1, 2026, until January 1, 2030. In this section, 8
"liquefied natural gas plant" means a facility for liquefying natural gas and includes 9
structures, equipment, underlying land rights, other associated systems, storage, and facilities 10
for off-loading liquefied natural gas. 11
* Sec. 59. The uncodified law of the State of Alaska is amended by adding a new section to 12
read: 13
TRANSITION: EXISTING OPTIONS. (a) Within 30 days after the effective date of 14
sec. 17 of this Act, the Alaska Gasline Development Corporation shall notify the president of 15
the senate, the speaker of the house of representatives, and the chairs of the finance committee 16
of each house of the legislature of any existing options to invest in a revenue-generating 17
project, as required under AS 31.25.125, added by sec. 17 of this Act. 18
(b) An option for state participation in a revenue-generating project negotiated by the 19
Alaska Gasline Development Corporation agreed to before the effective date of AS 31.25.125, 20
added by sec. 17 of this Act, must allow the state to exercise the option for at least 12 months 21
after the corporation notifies the legislature under AS 31.25.125, added by sec. 17 of this Act. 22
* Sec. 60. The uncodified law of the State of Alaska is amended by adding a new section to 23
read: 24
TRANSITION: PAYMENT OF TAX. A person subject to the tax levied under 25
AS 43.20.019, added by sec. 27 of this Act, before the effective date of sec. 27 of this Act, 26
shall pay the balance of the tax due for a tax year ending before January 1, 2027, by 27
January 1, 2027. Until January 1, 2027, the Department of Revenue shall waive interest that 28
would otherwise accrue under AS 43.05.225 and civil and criminal penalties accruing under 29
AS 43.05.220, 43.05.245, and 43.05.290, that are a result of the retroactivity of secs. 27 - 29 30
of this Act. 31
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* Sec. 61. The uncodified law of the State of Alaska is amended by adding a new section to 1
read: 2
ACCOUNT SUNSET; NOTIFICATION. (a) After the first appropriation to the 3
gasline construction impact account established under AS 44.33.850(b), added by sec. 48 of 4
this Act, is deposited in the account, the commissioner of commerce, community, and 5
economic development shall notify the revisor of statutes when the balance of the account is 6
zero. 7
(b) After the first appropriation to the statewide gasline impact account established 8
under AS 44.33.850(c), added by sec. 48 of this Act, is deposited in the account, the 9
commissioner of commerce, community, and economic development shall notify the revisor 10
of statutes when the balance of the account is zero. 11
* Sec. 62. The uncodified law of the State of Alaska is amended by adding a new section to 12
read: 13
RETROACTIVITY OF REGULATIONS. Notwithstanding a contrary provision of 14
AS 44.62.240, if the Department of Revenue expressly designates in a regulation that the 15
regulation applies retroactively to a specific date, a regulation adopted by the Department of 16
Revenue to implement, interpret, make specific, or otherwise carry out secs. 27 - 29 of this 17
Act applies retroactively to that date. 18
* Sec. 63. The uncodified law of the State of Alaska is amended by adding a new section to 19
read: 20
RETROACTIVITY. Sections 27 - 29, 56, and 60 of this Act are retroactive to 21
January 1, 2026. 22
* Sec. 64. The uncodified law of the State of Alaska is amended by adding a new section to 23
read: 24
CONDITIONAL EFFECT: PIPELINE VOLUME TAX; NOTIFICATION. (a) 25
Sections 2 - 4, 6, 8, 21, 40, 41, and 47 of this Act only take effect if, on or before January 1, 26
2038, the state receives a one-time payment of at least $50,000,000, as described in 27
AS 44.33.850(b), added by sec. 48 of this Act, intended to offset the effects of construction of 28
a gas pipeline, from an entity that has partnered with the Alaska Gasline Development 29
Corporation (AS 31.25). 30
(b) The commissioner of revenue shall, on or before January 1, 2038, notify the 31
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revisor of statutes whether the state has received the one-time payment described under (a) of 1
this section. 2
* Sec. 65. The uncodified law of the State of Alaska is amended by adding a new section to 3
read: 4
CONDITIONAL EFFECT: NATURAL GAS PROJECTS; NOTIFICATION. (a) 5
Sections 5, 22, 42, and 50 of this Act take effect only if secs. 2 - 4, 6, 8, 21, 40, 41, and 47 of 6
this Act take effect under sec. 64 of this Act and, 7
(1) by January 1, 2028, construction of a natural gas pipeline has not begun; 8
(2) by January 1, 2032, at least one major component of the Alaska liquefied 9
natural gas project, as defined in AS 31.25.390, has not been completed; or 10
(3) 10 years after commencement of commercial operation of a liquefied 11
natural gas plant, neither contingency under (1) or (2) of this subsection has occurred. 12
(b) The commissioner of revenue shall, 13
(1) on or before January 1, 2028, notify the revisor of statutes whether 14
construction of a natural gas pipeline has not begun; 15
(2) on or before January 1, 2032, notify the revisor of statutes whether at least 16
one major component of the Alaska liquefied natural gas project has not been completed; and 17
(3) notify the revisor of statutes when 10 years have elapsed since 18
commencement of commercial operation of a liquefied natural gas plant. 19
(c) In this section, 20
(1) "construction of a natural gas pipeline" means 21
(A) laying and welding together in an excavated trench multiple 22
sections of steel pipe that are intended for use as part of a gas pipeline; and 23
(B) establishment of at least one work camp along the gas pipeline 24
route that is intended to provide crew quarters and services during construction of the 25
gas pipeline; 26
(2) "gas pipeline" has the meaning given in AS 31.25.390; 27
(3) "liquefied natural gas plant" has the meaning given in AS 31.25.390; 28
(4) "qualified property" has the meaning given in AS 43.59.100, added by sec. 29
47 of this Act. 30
* Sec. 66. If secs. 2 - 4, 6, 8, 21, 40, 41, and 47 of this Act take effect under sec. 64(a) of 31
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this Act, they take effect the day after the one-time payment described in sec. 64(a) of this Act 1
is received by the state. 2
* Sec. 67. If secs. 5, 22, 42, and 50 of this Act take effect under sec. 65(a)(1) of this Act, 3
they take effect January 1, 2028. 4
* Sec. 68. If secs. 5, 22, 42, and 50 of this Act take effect under sec. 65(a)(2) of this Act, 5
they take effect January 1, 2032. 6
* Sec. 69. If secs. 5, 22, 42, and 50 of this Act take effect under sec. 65(a)(3) of this Act, 7
they take effect on the earlier of 8
(1) 10 years after commencement of commercial operation of a liquefied 9
natural gas plant; or 10
(2) January 1, 2050. 11
* Sec. 70. Sections 30 and 31 of this Act take effect January 1, 2027. 12
* Sec. 71. Sections 33 - 39 of this Act take effect July 1, 2026. 13
* Sec. 72. Section 52 of this Act takes effect on the earlier of 14
(1) the day after the balance of the gasline construction impact account 15
established under AS 44.33.850(b), added by sec. 48 of this Act, is zero; or 16
(2) January 1, 2038. 17
* Sec. 73. Section 53 of this Act takes effect on the earlier of 18
(1) the day after the balance of the statewide gasline impact account 19
established under AS 44.33.850(c), added by sec. 48 of this Act, is zero; or 20
(2) January 1, 2044. 21
* Sec. 74. Section 51 of this Act takes effect one year after the later of 22
(1) the repeal of AS 44.33.850(b) under secs. 52 and 72 of this Act; or 23
(2) the repeal of AS 44.33.850(c) under secs. 53 and 73 of this Act. 24
* Sec. 75. Except as provided in secs. 66 - 74 of this Act, this Act takes effect immediately 25
under AS 01.10.070(c). 26