Title 43. Revenue and Taxation.

Chapter 05. Administration of Revenue Laws.

Article 1. Department of Revenue.


Sec. 43.05.010. Duties of commissioner.
The commissioner of revenue shall
     (1) exercise general supervision and direct the activities of the Department of Revenue;

     (2) supervise the fiscal affairs and responsibilities of the department;

     (3) prescribe uniform rules for investigations and hearings;

     (4) keep a record of all departmental proceedings, record and file all bonds, and assume custody of returns, reports, papers, and documents of the department;

     (5) adopt a seal and affix it to each order, process, or certificate issued by the commissioner;

     (6) keep a record of each order, process, and certificate issued by the commissioner, and keep the record open to public inspection at all reasonable times;

     (7) hold hearings and investigations necessary for the administration of state tax and revenue laws;

     (8) except as provided in AS 43.05.405 — 43.05.499 and in AS 44.64.030, hear and determine appeals of a matter within the jurisdiction of the Department of Revenue and enter orders on the appeals that are final unless reversed or modified by the courts;

     (9) issue subpoenas to require the attendance of witnesses and the production of necessary books, papers, documents, correspondence, and other things;

     (10) order the taking of depositions before a person competent to administer oaths;

     (11) administer oaths and take acknowledgments;

     (12) request the attorney general for rulings on the interpretation of the tax and revenue laws administered by the department;

     (13) call upon the attorney general to institute actions for recovery of unpaid taxes, fees, excises, additions to tax, penalties, and interest;

     (14) issue warrants for the collection of unpaid tax penalties and interest and take all steps necessary and proper to enforce full and complete compliance with the tax, license, excise, and other revenue laws of the state;

     (15) report to the legislature before February 15 of each year the total amount of contributions reported and the total amount of credit claimed during the previous calendar year under AS 43.20.014, AS 43.55.019, AS 43.56.018, AS 43.65.018, AS 43.75.018, and AS 43.77.045;

     (16) consult with the commissioner of natural resources on negotiation of contracts and development of terms for inclusion in proposed contracts associated with a North Slope natural gas project;

     (17) direct the disposition of revenue received from gas delivered to the state under AS 43.55.014(b) by entering into agreements with the commissioner of natural resources related to the management of the custody and disposition of gas delivered to the state under AS 43.55.014(b).




Sec. 43.05.020. Collection agencies.
The commissioner may employ a collection agency outside the state to assist in the collection of revenue owed to the state. The commissioner may pay for these services by entering into contingent fee agreements the commissioner considers reasonable, or by the payment of amounts out of the proper appropriation for the department the commissioner considers reasonable.


Sec. 43.05.025. Audit agents.
The commissioner may employ agents outside the state to assist in the audit of books and records located outside the state. Agents employed under this section are subject to the restrictions of AS 43.05.230.


Sec. 43.05.030. Branch offices.
The department may establish branch offices essential for the efficient administration of its duties.


Sec. 43.05.040. Inspection of records or premises and issuance of subpoenas.
 (a) The department may examine the books, papers, records, or memoranda of any person to ascertain the correctness of a return filed or to determine whether a tax is due, or in an investigation or inspection in connection with tax matters. The records and the premises where a business is conducted shall be open at all reasonable times for official inspection, and the department may subpoena any person to appear and produce books, records, papers, or memoranda bearing upon tax matters and to give testimony or answer interrogatories under oath respecting tax matters. The department may administer oaths to persons who are so subpoenaed. A subpoena issued under this section may compel attendance of a witness or production of a document or thing, located either inside or outside the state, to the maximum extent permitted by law.

 (b) A subpoena may be served by the commissioner of public safety or a peace officer designated by the commissioner of public safety, by a person designated by the Department of Revenue, or as otherwise provided by law. A subpoena may also be served by registered or certified mail for delivery restricted only to the person subpoenaed. The return delivery receipt must be addressed so that the receipt is returned to the department.

 (c) If a person who is subpoenaed neglects or refuses to obey the subpoena issued as provided in this section, the department may report the fact to the superior court or the appropriate court of another jurisdiction, and may seek an order from the court compelling obedience to the subpoena. The court, to the maximum extent permitted by law, may compel obedience to the subpoena to the same extent as witnesses may be compelled to obey the subpoenas of the court.




Sec. 43.05.045. Electronic submission of return or report.
 (a) Unless an exemption is granted under (b) of this section, a taxpayer required to submit a return or report for a tax levied under this title or for any other tax administered by the department shall submit the return or report electronically in a format prescribed by the department. Failure to comply with this section may result in a civil penalty under AS 43.05.220(f). If a law under this title requires a report or return or a portion of a report or return to be in writing, an electronically filed report or return satisfies this section. A taxpayer shall submit attachments to a report or return required under this title electronically.

 (b) To request an exemption to (a) of this section, a taxpayer shall submit to the department evidence satisfactory to the department that the taxpayer does not have the capability to submit the return or report electronically. An application for an exemption must be submitted before a return or report is due. An exemption granted under this subsection is valid for five years after the first tax filing due date after the exemption is granted. When an exemption under this subsection expires, the taxpayer may apply for another exemption. An exemption granted under this subsection applies to any return or report submitted to the department.




Sec. 43.05.050. Return by department upon failure to make return or making false or fraudulent return.
If a person fails to file a return at the time prescribed by law or by regulation, or makes, wilfully or otherwise, a false or fraudulent return, the department shall make the return from the information it obtains. A return made by the department is prima facie good and sufficient for all legal purposes.


Sec. 43.05.060. Agreements with department respecting liability.
The department may enter into an agreement with a person relating to the liability of the person, or of a person or estate the person represents, for a tax, license fee, or excise tax for a period ending before the date of the agreement. If the agreement is approved by the attorney general, the agreement is final and conclusive and, except upon a showing of fraud or malfeasance, or misrepresentation of a material fact, the case may not be reopened as to the matters agreed upon or the agreement modified. In a suit or proceeding relating to the tax liability of the taxpayer the agreement may not be annulled, modified, set aside, or disregarded.


Sec. 43.05.070. Compromise of tax or penalty.
 (a) If in the opinion of the department there is doubt as to the liability of the taxpayer for or the collectibility of a tax, license fee, or excise tax, the department, with the approval of the attorney general, may compromise the tax.

 (b) The department, with the approval of the attorney general, may, for cause shown, compromise a penalty accruing under the state tax, license, or excise tax laws.




Sec. 43.05.075. Concealing or falsifying evidence.
A person may not knowingly, in connection with a compromise or offer of a compromise under AS 43.05.070 or in connection with a closing agreement or offer to enter a closing agreement under AS 43.05.060,
     (1) conceal from an officer or employee of the state property belonging to the estate of the taxpayer or other person liable for the tax; or

     (2) receive, destroy, mutilate, or falsify a book, document, or record or make a false statement under oath relating to the estate or the financial condition of the taxpayer or other person liable for the tax.




Sec. 43.05.080. Adoption of regulations.
The department shall adopt and publish regulations necessary for the enforcement of the tax, license, or excise tax laws administered by it. The department shall prepare and distribute all forms necessary or useful in the administration of tax, license, and excise tax laws.


Sec. 43.05.085. List of contributions.
The commissioner shall prepare and furnish to the Alaska Public Offices Commission by July 1 of each year a list containing the total amount of contributions received by each candidate and group for which a credit was received by an individual under AS 43.20.013(a). The commissioner shall also mail a copy of the list to each of the candidates and groups which were recipients of those credited contributions. The list becomes public information under AS 40.25.110 — 40.25.120 on its delivery to the Alaska Public Offices Commission.


Sec. 43.05.090. Preparation and publication of statistics.
The department shall prepare and annually publish statistics of the revenues derived under the tax laws administered by it.


Sec. 43.05.095. Indirect expenditure report.
 (a) The commissioner shall, not later than July 1 before the first regular session of each legislature, submit a report to the chair of the finance committee of each house of the legislature and to the legislative finance division that states, for each indirect expenditure made by the state,
     (1) the name of the indirect expenditure;

     (2) a brief description of the indirect expenditure;

     (3) the statutory authority for the indirect expenditure;

     (4) the date the statute authorizing the indirect expenditure is to be repealed, if applicable;

     (5) the intent of the legislature in enacting the statute authorizing the indirect expenditure;

     (6) the public purpose served by the indirect expenditure;

     (7) the estimated annual effect on revenue of the indirect expenditure for the previous five fiscal years, excluding the fiscal year immediately preceding the date the report is due;

     (8) the estimated cost to administer the indirect expenditure, if applicable;

     (9) the number of beneficiaries of the indirect expenditure.

 (b) For purposes of (a) of this section, federal tax credits adopted under AS 43.20.021 shall be reported in the aggregate.

 (c) A department, agency, or public corporation of the state shall, upon the request of the commissioner, provide the records, reports, data analysis, or other information necessary for the commissioner to complete the report required by this section. The commissioner may enter into a confidentiality agreement if necessary to obtain information or a record required to prepare the report under this section.

 (d) In this section, “indirect expenditure” means an express provision of state law that results in foregone revenue for the state by providing
     (1) a tax credit or other credit;

     (2) an exemption, but does not include federal tax exemptions adopted by reference in AS 43.20.021;

     (3) a discount;

     (4) a deduction, but does not include costs incurred in the ordinary course of business that are deducted in the calculation of a tax under this title or in the calculation of a royalty or net profit share payment for a lease issued under AS 38;

     (5) a differential allowance.




Sec. 43.05.100. Designation of depositories and deposit of money.
 (a) [Repealed, § 3 ch 149 SLA 1978.]
 (b) The department may designate banks in the state as depositaries of tax revenues and may deposit tax revenues in these banks.




Sec. 43.05.110. Property in possession of deceased employee.
The personal representative of a deceased employee of the department who has possession or control of a tax list, record, return, paper, document, or book or money collected shall deliver it to the department.


Sec. 43.05.120. Concealing property or evidence. [Repealed, § 38 ch 168 SLA 1990.]
Sec. 43.05.130. Penalty.
A person who, by conduct not described in AS 43.05.290, violates a provision of AS 43.05.010 — 43.05.130 or a regulation adopted under those provisions is subject to a civil penalty of not more than $1,000 for each violation.


Article 2. Fiscal Responsibilities.


Sec. 43.05.140. Bond of commissioner.
Before taking office, the commissioner shall furnish a bond to the state. The bond shall be approved by the attorney general and filed with the Department of Administration, and a copy of it shall be filed in the attorney general’s office. The bond shall be conditioned that the principal will faithfully discharge the duties of the office, keep a strict, true and correct account of all money disbursed, and that the principal will properly account for it and will pay over to a successor or other person entitled by law to receive it all money or property in the hands or possession of the principal, in accordance with law; or, in default, that the parties executing the bond will pay to the state and others injured all damages, costs, and expenses resulting from the default. The surety on the bond shall be a surety company authorized to transact business in the state. All premiums for the commissioner’s bond shall be paid by the state. The amount of the bond shall be $200,000, but if the funds in the treasury of the state exceed the amount of the bond given by the commissioner, or if for any reason the governor and the Department of Administration consider the bond insufficient they shall notify the commissioner of that fact, and the commissioner shall give the additional bond with sufficient sureties, within the time and in the amount that the governor and the Department of Administration consider necessary for the safety of the state.


Sec. 43.05.150. Collection of state money.
 (a) The department shall demand, sue for, collect, receive, and safely keep all money of the state that is not by law entrusted to the care and custody of some other office.

 (b) [Repealed, § 53 ch 32 SLA 1971.]
 (c) [Repealed, § 53 ch 32 SLA 1971.]
 (d) [Repealed, § 53 ch 32 SLA 1971.]
 (e) [Repealed, § 9 ch 218 SLA 1976.]




Sec. 43.05.170. Payment and negotiability of warrants.
A warrant drawn by the Department of Administration against the state treasury must be a negotiable instrument. Upon presentation for payment, the department shall pay all warrants drawn by the Department of Administration against the state treasury that have been properly endorsed and have not been cancelled by law. The commissioner may designate one or more agents for the purpose of redeeming state warrants and may require that these agents be used exclusively for the purpose of redeeming state warrants. Warrants made payable to two or more persons in an amount less than $50 may be paid if endorsed by only one of the designated payees. In this section, “negotiable instrument” has the meaning given in AS 45.03.104(a).


Sec. 43.05.180. Accounting for state funds.
The department shall keep an account of money received, money disbursed, and money and investments in its custody.


Sec. 43.05.190. Embezzlement. [Repealed, § 112 ch 6 SLA 1984. For current law see AS 11.46.210.]
Sec. 43.05.200. Application for and receipt of funds due from United States.
The department shall apply to the federal government for money which is due to the state. The department may receive the money and deposit it in the state treasury to be expended in accordance with the law.


Sec. 43.05.210. Funds received under the Federal Mineral Leasing Act. [Repealed, § 70 ch 14 SLA 1987.]

Article 3. Remedies, Procedure, Interest, and Penalties.


Sec. 43.05.220. Civil penalties.
 (a) Five percent shall be added to a tax for each 30-day period or fraction of the period during which the taxpayer fails to file at the time or times required by law or regulation a return or report, or pay the full amount of the tax, or a portion or a deficiency of the tax, as finally determined by the department and required by this title, unless it is shown that the failure is due to a reasonable cause and not to wilful neglect. The penalty may not exceed 25 percent in the aggregate. The penalty is computed only on the unpaid balance of the tax liability as determined by the department. The department shall prescribe by regulation circumstances which constitute reasonable cause for purposes of this section.

 (b) If a tax deficiency or part of a tax deficiency is due to negligence or intentional disregard of law or regulation without intent to defraud, five percent of the total amount of the tax deficiency shall be assessed, collected, and paid in the same manner as a tax deficiency.

 (c) If a tax deficiency or part of a tax deficiency is due to fraud, a civil fraud penalty equal to 50 percent of the tax due or $500, whichever is greater, shall be added to the tax. This penalty is in addition to penalties determined under (a) or (b) of this section.

 (d) A person required to collect or account for a tax imposed by this title who wilfully fails to collect the tax or to truthfully account for and pay over the tax, or wilfully attempts to evade payment of the tax is, in addition to other penalties provided by law, liable for a civil penalty equal to the total amount of the tax not collected, not accounted for, not paid over, or evaded. The penalty imposed by this subsection is in place of the tax not paid to the state. This penalty shall be paid upon demand by the commissioner or a designee of the commissioner, and shall be assessed and collected in the same manner as taxes are assessed and collected under this title.

 (e) A penalty imposed by this section shall be collected at the same time, in the same manner, and as a part of the original tax. However, if the original tax is paid before neglect or fraud is discovered, the penalty shall be collected in the same manner as the original tax. Interest may not be collected on a penalty imposed by this section.

 (f) Unless the department determines that failure to comply with AS 43.05.045 is due to a reasonable cause, the department shall assess a civil penalty of $25 or one percent of the total tax before any payment, whichever is greater, against a taxpayer who fails to submit electronically a return or report under AS 43.05.045.




Sec. 43.05.225. Interest.
Unless otherwise provided,
     (1) a delinquent tax under this title
          (A) before January 1, 2014, bears interest in each calendar quarter at the rate of five percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District as of the first day of that calendar quarter, or at the annual rate of 11 percent, whichever is greater, compounded quarterly as of the last day of that quarter;

          (B) on and after January 1, 2014, and before January 1, 2018, bears interest in each calendar quarter at the rate of three percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District as of the first day of that calendar quarter;

          (C) on and after January 1, 2018, bears interest in each calendar quarter at the rate of 5.25 percentage points above the annual rate charged member banks for advances by the 12th federal reserve district as of the first day of that calendar quarter, compounded quarterly as of the last day of that quarter;

     (2) the interest rate is 12 percent a year for
          (A) delinquent fees payable under AS 05.15.095(c); and

          (B) unclaimed property that is not timely paid or delivered, as allowed by AS 34.45.470(a).




Sec. 43.05.230. Disclosure of tax returns and reports.
 (a) It is unlawful for a current or former officer, employee, or agent of the state to divulge the amount of income or the particulars set out or disclosed in a report or return made under this title, except
     (1) in connection with official investigations or proceedings of the department, whether judicial or administrative, involving taxes due under this title;

     (2) in connection with official investigations or proceedings of the child support enforcement agency, whether judicial or administrative, involving child support obligations imposed or imposable under AS 25 or AS 47;

     (3) as provided in AS 38.05.036 pertaining to audit functions of the Department of Natural Resources;

     (4) as provided in AS 43.05.405 — 43.05.499; and

     (5) as otherwise provided in this section or AS 43.55.890.

 (b) The department, upon written request, shall furnish to the taxpayer a copy of the taxpayer’s tax return upon payment of a fee of $1 per page.

 (c) The department may permit the proper officer of the United States or of a state, territory or possession of the United States or of Canada or of a province or territory of Canada, or the officer’s authorized representative, to inspect tax returns or reports filed with the department, or may furnish to the officer or representative a copy of the tax return, if the other jurisdiction grants substantially similar privileges to the department or its representative or to counsel for the state, and if the department determines that the other jurisdiction provides adequate safeguards for the confidentiality of the returns and reports, and that the returns and reports will be used for tax purposes only. The department may also permit the division responsible for employment and training services of the state Department of Labor and Workforce Development to inspect tax returns or reports filed with the department or may furnish a copy of the tax returns for tax purposes only.

 (d) The commissioner may furnish to the Multistate Tax Commission or other authorized agent information contained in the tax returns, reports, related schedules and documents filed under an audit or investigation of a multistate business made by the department. This information may be furnished for tax purposes only. The Multistate Tax Commission or other authorized agent may make the information available to the tax officials of other states, the District of Columbia, and the United States and its territories for tax purposes only.

 (e) Nothing in this section prohibits the publication of statistics so classified as to prevent the identification of particular returns or reports or the publication of delinquent lists showing the names of taxpayers who have failed to pay their taxes at the time and in the manner provided by law, together with other relevant information which in the opinion of the department may assist in the collection of delinquent taxes.

 (f) A wilful violation of the provisions of this section or of a condition imposed under AS 43.55.040(1)(B) is punishable by a fine of not more than $5,000, or by imprisonment for not more than two years, or by both.

 (g) The information contained in a license issued by the commissioner of revenue or the commissioner of commerce, community, and economic development under AS 43.40, AS 43.50, AS 43.60, AS 43.65, AS 43.70, and AS 43.75 is public information.

 (h) The commissioner shall, upon request, furnish to the Department of Natural Resources copies of tax returns, reports, and other documents filed under AS 43.55 or AS 43.65, and the Department of Revenue’s determinations and workpapers under those chapters. The Department of Natural Resources shall maintain the confidentiality that the Department of Revenue is required to extend to the returns, reports, documents, determinations, and workpapers furnished to the Department of Natural Resources under this subsection.

 (i) The commissioner shall, upon request, furnish to the Department of Environmental Conservation or the Department of Fish and Game all names and addresses of businesses that are required to file confidential reports under AS 43.75.015. The Department of Environmental Conservation and the Department of Fish and Game shall maintain the confidentiality that the Department of Revenue is required to extend to the names and addresses furnished under this subsection.

 (j) The name of each person claiming a credit and the amount of credit received for each gas storage facility by that person under AS 43.20.046 is public information. The commissioner shall furnish the information to the Regulatory Commission of Alaska on request.

 (k) The name of each person that the department has allowed to make an election under AS 43.55.014(a) and the amount of gas produced from each lease or property to which an effective election under AS 43.55.014 applies is public information.

 (l) For tax credit certificates purchased by the department in the preceding calendar year under AS 43.55.028, the department shall make the following information public by April 30 of each year:
     (1) the name of each person from which the department purchased a transferable tax credit certificate; and

     (2) the aggregate amount of the tax credit certificates purchased from the person in the preceding calendar year.




Sec. 43.05.240. Taxpayer remedies.
 (a) A taxpayer aggrieved by the action of the department in fixing the amount of a tax or penalty may apply to the department within 60 days after the date of mailing of the notice required to be given to the taxpayer by the department, giving notice of the grievance, and requesting an informal conference to be scheduled with an appeals officer. The taxpayer shall be given access to the taxpayer’s file in the department in the matter for preparation for the informal conference. At the informal conference, the taxpayer may present to the appeals officer arguments and evidence relevant to the amount of tax or penalty due the state. If the department determines that a correction is warranted, the department shall make the correction.

 (b) A party who believes that the appeals officer is unduly delaying a hearing process may notify the commissioner in writing. Within 30 days after being notified by a party, the commissioner may issue an order prescribing a schedule for the appeals officer to complete the informal conference or setting a meeting at which that schedule will be discussed and prescribed. The schedule may be subsequently modified by consent of the parties. If the commissioner fails to issue an order within 30 days after receiving notice of a party’s belief of undue delay, the department’s action in fixing the amount of tax or penalty shall be considered to have been summarily affirmed by the appeals officer the same as if an informal conference decision to that effect were issued on the last day of that 30-day period.




Sec. 43.05.241. Administrative appeal.
For a matter within the jurisdiction of the office of administrative hearings (AS 44.64) under AS 43.05.405, the taxpayer aggrieved by an informal conference decision entered under AS 43.05.240 may file with the office of administrative hearings a notice of appeal for formal hearing, as provided in AS 43.05.430, no later than 30 days after service of the decision resulting from an informal conference.


Sec. 43.05.242. Judicial appeal challenging validity of tax.
 (a) Within 30 days after a decision resulting from the informal conference, a person aggrieved by the action of the department under AS 43.05.240 on a ground specified in this section may appeal to the superior court.

 (b) An appeal under this section may be taken from an informal conference decision only with respect to an issue in the assessment for tax, interest, and penalties that the taxpayer raises upon the ground that a tax statute or tax regulation is
     (1) violative of the United States Constitution;

     (2) violative of the state constitution; or

     (3) preempted by federal statute, regulation, or treaty.

 (c) An appeal of an issue under this section may not be taken from an informal conference decision if
     (1) there is a dispute of material fact;

     (2) a factual record is necessary to decide the question of law raised;

     (3) development of a factual record will render it unnecessary to reach the question of law raised; or

     (4) the taxpayer challenges the assessment of the tax related to the issue on a ground other than one listed in (b) of this section.

 (d) An issue may not be presented to the superior court unless the issue first has been presented in writing to the department at or before the informal conference. The department shall prepare a record of that portion of the informal conference relevant to the issue on appeal. The superior court shall
     (1) resolve a question of law in the exercise of the independent judgment of the superior court judge;

     (2) defer to the department on a question of law for which discretion is legally vested in the department unless not supported by a reasonable basis.

 (e) An appeal of the informal conference decision under this section is exclusive as to the issue raised. The taxpayer electing to appeal under this section may not pursue an appeal of the issue under AS 43.05.241 or pursue any other action under another statute on the issue.

 (f) When an appeal is taken under this section, the taxpayer shall be given access to the file of the department in the matter for preparation of the appeal.

 (g) In an appeal under this section, the amount due shall be paid within 30 days after the date of the service of the informal conference decision. In place of payment of the amount due, the taxpayer may file a bond with the court or otherwise obtain relief from payment in accordance with the Alaska Rules of Appellate Procedure.

 (h) Venue for an appeal filed under this section shall be set under rules adopted by the supreme court.

 (i) If it is determined that appeal was improperly filed under this section, the appeal shall be transferred to the office of administrative hearings (AS 44.64) for further proceedings under AS 43.05.405 — 43.05.499.




Sec. 43.05.245. Assessment and collection of tax, penalties, and interest.
If a taxpayer fails to file a return or report required by this title in the time required by law or regulation, or makes an erroneous or fraudulent return, the department shall proceed to assess the license fees, tax, penalties, or interest and make a return from information that it obtains. An assessment or a return subscribed by the department in accordance with this section is presumed sufficient for all legal purposes. However, nothing prevents a taxpayer from presenting evidence or other information in an informal conference under AS 43.05.240 or in an appeal under AS 43.05.241 in order to rebut the presumed sufficiency of an assessment or return subscribed by the department, nor does the presumption of sufficiency alter the parties’ respective burdens of proof once the taxpayer has presented evidence or other material information to rebut that presumption. The assessment of license fees, tax, penalties, or interest under this section occurs when the department issues a notice and demand for payment of the license fees, tax, penalties, or interest. The notice and demand for payment is issued when the notice and demand is delivered to the taxpayer in person or placed in the United States mail, addressed to the last known address of the taxpayer. Penalties and interest assessed under this title shall be collected in the same manner as provided in this title for the collection of tax or license fees.


Sec. 43.05.250. Payment of taxes.
 (a) If a tax is required under this title to be paid on or before a certain date, the date fixed is the last day for the payment.

 (b) In addition to money, the department may receive bank drafts, checks, cashier’s checks, or money orders for the payment of taxes under regulations adopted by the department.

 (c) The department may adopt other methods of payment including the use of bank depositories, bank and wire transfers, stamps, or other methods necessary or helpful in securing a complete and timely collection of the tax.




Sec. 43.05.255. Definition. [Repealed, E.O. No. 68 § 8 (1988).]
Sec. 43.05.260. Limitation on assessment.
 (a) Except as provided in (c) of this section, AS 43.20.200(b), and AS 43.55.075, the amount of a tax imposed by this title must be assessed within three years after the return was filed, whether or not a return was filed on or after the date prescribed by law. If the tax is not assessed before the expiration of the applicable period, proceedings may not be instituted in court for the collection of the tax.

 (b) For purposes of this section, a return filed before the last day prescribed by law or regulation is considered as filed on the last day.

 (c) The following exceptions apply to the limitation period in (a) of this section:
     (1) in the case of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of the tax may be begun without assessment, at any time;

     (2) in the case of a failure to file a return, the tax may be assessed, or a proceeding in court for the collection of the tax may be begun without assessment, at any time;

     (3) if, before the expiration of the time prescribed in this section for the assessment of a tax imposed by this title, both the department and the taxpayer have consented in writing to the assessment after the expiration of the time, the tax may be assessed at any time before the expiration of the period agreed upon; however, the period agreed upon may be extended by a subsequent agreement in writing made before the expiration of the period previously agreed upon.




Sec. 43.05.270. Collection after assessment.
 (a) When the assessment of a tax imposed by this title has been made within the period of limitation under AS 43.05.260, the tax may be collected by levy or by a proceeding in court, but only if the levy is made or the proceeding is begun
     (1) within six years after the assessment of the tax; or

     (2) before the expiration of a period for collection agreed upon in writing by the department and the taxpayer before the expiration of the six-year period; a period agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon; the period provided by this paragraph during which a tax may be collected by levy may not be extended or curtailed because of a judgment against the taxpayer.

 (b) The date on which a levy on property or right to property is made is the date on which the notice of seizure is given.




Sec. 43.05.275. Credit and refund claims.
 (a) Except as provided in AS 43.20.021, a claim for credit or refund of a tax under this title for which a taxpayer is required to file a return or pay a tax may be filed by the taxpayer
     (1) before the later of
          (A) three years from the time the return was filed; or

          (B) two years from the time the tax was paid; or

     (2) within two years from the time the tax was paid, if no return was filed.

 (b) If the department and the taxpayer have consented to extend the period for assessment of tax as provided in AS 43.05.260(c)(3), a tax refund claim may be filed at any time before the expiration of the period agreed upon.

 (c) A taxpayer who has filed a return, paid the full amount due on the return, and made a claim under this section may, without exhausting administrative remedies, file an action in superior court to recover on the claim if the sole ground for appeal is that a tax statute is
     (1) violative of the United States Constitution;

     (2) violative of the state constitution; or

     (3) preempted by federal statute, regulation, or treaty.

 (d) An action may not be brought under (c) of this section if
     (1) there is a dispute of material fact;

     (2) a factual record is necessary to decide the appeal;

     (3) development of a factual record will render it unnecessary to reach a question of constitutional law or federal preemption; or

     (4) the taxpayer challenges the assessment of the tax on a ground other than one listed in (c) of this section.




Sec. 43.05.280. Interest on overpayments.
 (a) Interest shall be allowed and paid on an overpayment of a tax under this title at the rate and in the manner provided in AS 43.05.225(1).

 (b) Interest shall be allowed and paid as follows:
     (1) in the case of a credit, from the date of the overpayment to the due date of the amount against which the credit is taken;

     (2) in the case of a refund, from the date of the overpayment to a date, as determined by the department, preceding the date of the refund check by not more than 30 days, whether or not the refund check is accepted by the taxpayer after tender of the check to the taxpayer; the acceptance of the refund check does not affect the right of the taxpayer to claim an additional overpayment and interest on the overpayment.

 (c) If an overpayment of a tax imposed by this title is refunded within 90 days after the last date prescribed for filing the return of the tax, determined without regard to an extension of time for filing the return, or if the return is filed after the last filing date and the overpayment is refunded within 90 days after the date the return is filed, interest may not be allowed under (a) of this section on that overpayment.




Sec. 43.05.290. Criminal penalties.
 (a) A person who wilfully attempts to evade a tax imposed by this title is, in addition to other penalties provided by this title, guilty of a class C felony.

 (b) A person required under this title to collect, account for, and pay over a tax imposed by this title who wilfully fails to collect or truthfully account for and pay over the tax at the time or times required by law or regulation is, in addition to other penalties provided by this title, guilty of a class C felony.

 (c) A person required under this title to pay a tax, make a return, keep records, or supply information, who wilfully fails to pay the tax or estimated tax, make the return, keep the records, or supply the information at the time or times required by law or regulation is, in addition to other penalties provided by this title, guilty of a class A misdemeanor.

 (d) A person who wilfully makes and subscribes a return or other document required under this title which contains or is verified by a written declaration that it is made under the penalties of perjury which the person does not believe to be true and correct as to every material matter is, in addition to other penalties provided by this title, guilty of a felony and, upon conviction, punishable by a fine of not more than $25,000, or by imprisonment for not more than three years, or by both.

 (e) A person who wilfully and knowingly aids or assists in, or procures, or counsels the preparation or presentation in connection with a matter arising under this title of a return, affidavit, claim, or other document that is fraudulent or is false as to a material matter is guilty of a felony whether or not the falsity or fraud is with the knowledge or consent of the person required to present the return, affidavit, claim, or document. Upon conviction, the person is punishable by a fine of not more than $25,000, or by imprisonment for not more than three years, or by both.

 (f) A person who wilfully delivers or discloses to the commissioner or the department a list, return, account, statement, or other document known by the person to be fraudulent or to be false as to a material matter is guilty of a class A misdemeanor.

 (g) [Repealed, § 114 ch 6 SLA 1984.]
 (h) A person engaging in or attempting to engage in a business, trade, profession, or occupation for which a license is required under this title, who wilfully fails to obtain the license, is guilty of a misdemeanor and, upon conviction, is punishable by a fine of not more than $2,000, or by imprisonment for not more than six months, or by both. This subsection does not apply to a violation of AS 43.70.020.

 (i) In this section “person” includes, but is not limited to, an officer or employee of a corporation or a member or employee of a partnership, who, as officer, employee, or member, is under a duty to perform the act in respect to which the violation occurs.




Article 4. Tax Appeals.


Sec. 43.05.400. Office of tax appeals established. [Repealed, § 91 ch 163 SLA 2004.]
Sec. 43.05.405. Jurisdiction.
The office has original jurisdiction to hear formal appeals from informal conference decisions of the Department of Revenue under AS 43.05.240. Appeal to the office may be taken only from an informal conference decision under AS 43.05.240. AS 44.64.060 does not apply to an administrative hearing under the jurisdiction of the office under this section. Jurisdiction of the office under this section is limited to, and AS 43.05.405 — 43.05.499 and AS 44.64.070 apply to and govern, an administrative appeal regarding
     (1) electric and telephone cooperative taxes under AS 10.25;

     (2) a seafood marketing assessment under AS 16.51;

     (3) all taxes levied under AS 43, except the property tax assessed under AS 43.56; and

     (4) any other taxes administered by the Department of Revenue.




Sec. 43.05.410. Appointment; term; reappointment. [Repealed, § 91 ch 163 SLA 2004.]
Sec. 43.05.415. Removal. [Repealed, § 91 ch 163 SLA 2004.]
Sec. 43.05.420. Administration.
 (a) [Repealed, § 91 ch 163 SLA 2004.]
 (b) In addition to qualifications under AS 44.64.040, an administrative law judge who conducts a proceeding under AS 43.05.405 — 43.05.499 shall have at least four years of professional experience as a tax attorney, a certified public accountant practicing in the area of tax, or a tax administrator.

 (c) The chief administrative law judge may adopt regulations implementing or interpreting AS 43.05.405 — 43.05.499, including rules of procedure and evidence for proceedings before the office.




Sec. 43.05.425. Qualifications; code of conduct. [Repealed, § 91 ch 163 SLA 2004.]
Sec. 43.05.430. Notice of appeal from informal conference decision.
An appeal under the jurisdiction of the office is initiated by filing with the office, and serving upon the commissioner of revenue, a notice of appeal from an informal conference decision of the Department of Revenue under AS 43.05.240. A notice of appeal from the informal conference decision may be filed or amended after the time for filing has expired only if good cause is shown.


Sec. 43.05.435. Scope and standards for decision.
The administrative law judge shall hear all questions de novo under AS 43.05.405 — 43.05.499. The administrative law judge shall
     (1) resolve a question of fact by a preponderance of the evidence or, if a different standard of proof has been set by law for a particular question, by that standard of proof;

     (2) resolve a question of law in the exercise of the independent judgment of the administrative law judge;

     (3) defer to the Department of Revenue as to a matter for which discretion is legally vested in the Department of Revenue, unless not supported by a reasonable basis.




Sec. 43.05.440. Service of documents.
Service of documents required under AS 43.05.405 — 43.05.499 may be accomplished in any manner authorized under the Alaska Rules of Civil Procedure. If service is done only by mail, the date of service is determined by the date of mailing. If service is done by both mail and hand delivery, the date of service is determined by the earlier of the date of mailing or actual receipt of the documents.


Sec. 43.05.445. Discovery.
 (a) In an appeal under AS 43.05.405, discovery may take place only under a plan for discovery approved by the administrative law judge. The administrative law judge shall approve a plan for discovery to the extent consistent with the efficient, just, and speedy conduct of the appeal. The plan may limit or set conditions on discovery and must include provisions for stipulations of fact by the Department of Revenue and the taxpayer. Discovery shall be limited to information that is relevant to the determination of the correct tax or penalty, unless the Department of Revenue or the taxpayer makes a showing that the discovery is reasonably calculated to lead to admissible information.

 (b) Requests by the taxpayer for disclosure of public records relating to the appeal are governed by, and the records are disclosed only in accordance with, the plan approved under this section.

 (c) Legislative history, reported court decisions, statutes, regulations, or similar documents available for public inspection at a library or the office of the lieutenant governor or through a publicly accessible database must be obtained through those means and may not be sought through discovery.




Sec. 43.05.450. Subpoenas.
An administrative law judge may issue a subpoena to compel attendance of a witness or the production of a document or thing. A subpoena may compel attendance of a witness or production of a document or thing, located either inside or outside the state, to the maximum extent permitted by law. A subpoena may be used for the purpose of discovery or for the purpose of presenting evidence at a formal hearing. A subpoena shall issue upon request of a party, subject to reasonable limitation or conditions set in the subpoena. A subpoena may be enforced by petition to or other appropriate legal proceeding brought in a court of this state or another jurisdiction.


Sec. 43.05.455. Formal hearing.
 (a) At or before the formal hearing, a party may present argument and evidence relevant to the amount of the tax or penalty. The administrative law judge shall administer oaths and permit inquiry necessary to determine the proper amount of the tax or penalty.

 (b) Each party and witness shall be present during the formal hearing, except that
     (1) with the consent of the taxpayer, the administrative law judge may conduct all or part of the hearing by telephone, audio or video teleconference, or other electronic medium; and

     (2) with the consent of the parties and the administrative law judge, all or part of the hearing may be conducted through correspondence.

 (c) The taxpayer bears the burden of proof on questions of fact by a preponderance of the evidence unless a different standard of proof has been set by law for a particular question.

 (d) The formal hearing before the administrative law judge is not required to be conducted with strict adherence to the Alaska Rules of Evidence. Relevant evidence must be admitted if it is probative of a material fact in controversy. Irrelevant and unduly repetitious evidence shall be excluded. Hearsay evidence is admissible if it is the kind of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of a common law or statutory rule that makes improper the admission of the evidence over objection in a civil action. Oral evidence may be taken only on oath or affirmation. The rules of privilege are effective to the same extent that they are recognized in a civil action in the courts of this state, except that relevant documents and other material items that are public records under AS 40.25.100 — 40.25.295 shall be admissible.

 (e) The administrative law judge shall make a record of the proceedings of the appeal, including recordation of the proceedings of a formal hearing by electronic or stenographic means.

 (f) The administrative law judge may grant exceptions to the requirements of this section in the interest of justice.




Sec. 43.05.460. Enforcement.
 (a) The administrative law judge and each party is responsible for the efficient, just, and speedy conduct of the formal hearing. The administrative law judge may impose sanctions on the parties for failure to comply with a subpoena, an order respecting discovery, and any other matter regarding conduct of the appeal. In imposing sanctions, the administrative law judge shall be guided by the practices of the courts of this state in imposing sanctions for similar offenses in civil proceedings.

 (b) The administrative law judge may
     (1) remand the matter for consideration of material new information or material information withheld by a party;

     (2) prohibit a party from introducing information previously withheld without good cause, and any other evidence dependent upon the information;

     (3) enter an order, upon a showing of good cause,
          (A) barring a designated claim or defense;

          (B) striking part or all of a pleading of a party; or

          (C) dismissing part or all of the appeal; or

     (4) grant any other relief that the administrative law judge considers appropriate.

 (c) In addition to the remedies of (a) and (b) of this section, a party may seek enforcement of a subpoena or other order of an administrative law judge by the superior court under AS 44.62.590.




Sec. 43.05.465. Decision; reconsideration; finality.
 (a) Within 180 days after the record on the appeal is closed, the administrative law judge shall issue a decision in writing. The decision must contain a concise statement of reasons for the decision, including findings of fact and conclusions of law. In the decision, the administrative law judge may grant relief, provide remedies, and issue any order that is appropriate. The administrative law judge shall serve each party in the case with a copy of the decision. Unless reconsideration is ordered under (c) of this section, the decision under this subsection is the final administrative decision.

 (b) A party may request reconsideration of a decision issued under (a) of this section within 30 days after the date of service shown in the certificate of service of the decision. The request must state specific grounds for reconsideration. Reconsideration may be granted if, in reaching the decision, the administrative law judge has
     (1) overlooked, misapplied, or failed to consider a statute, regulation, court or administrative decision, or legal principle directly controlling;

     (2) overlooked or misconceived some material fact or proposition of law;

     (3) misconceived a material question in the case; or

     (4) applied law in the ruling that has subsequently changed.

 (c) The administrative law judge may issue an order for reconsideration of all or part of the decision upon request of a party. Reconsideration is based on the record, unless the administrative law judge allows additional evidence and argument. A hearing on reconsideration at which additional evidence or argument is offered or received is subject to the procedures applicable to a hearing under AS 43.05.455.

 (d) The power to order reconsideration expires 60 days after the date of service, as shown on the certificate of service, of a decision issued under (a) of this section. If the administrative law judge does not issue an order for reconsideration within the time allowed for ordering reconsideration, a motion for reconsideration is considered denied.

 (e) Within 60 days after the close of the record on reconsideration, the administrative law judge shall issue a written decision upon reconsideration. The administrative law judge shall serve each party in the case with a copy of the decision upon reconsideration. The decision upon reconsideration is the final administrative decision.

 (f) A final administrative decision becomes final either on the date
     (1) 60 days after the date of service of a decision issued under (a) of this section if an order for reconsideration is not issued; or

     (2) the decision upon reconsideration is served, as shown by the certificate of service executed by the administrative law judge under (e) of this section.




Sec. 43.05.470. Public proceedings and records.
 (a) Records, proceedings, and decisions under AS 43.05.405 — 43.05.499 are confidential, except that the records, proceedings, and decisions become public records and open to the public when the final administrative decision is issued and becomes final.

 (b) Upon a showing of good cause, an administrative law judge shall issue a protective order requiring that specified parts of the records, proceeding, or decision shall be kept confidential in a particular appeal. If a protective order is issued, the final administrative decision shall be made public after redacting by deletion or substitution of information as required by the protective order.

 (c) The department, in consultation with the chief administrative law judge, shall maintain, index, and make available for public inspection the final administrative decisions, proceedings, and records of the office made public under this section.




Sec. 43.05.475. Consistency of decisions.
 (a) As to questions of law, a final administrative decision issued under AS 43.05.405 — 43.05.499, unless reversed or overruled, has the force of legal precedent.

 (b) To promote consistency among legal determinations issued under AS 43.05.405 — 43.05.499, the chief administrative law judge may review and circulate among the other administrative law judges the drafts of formal decisions, decisions upon reconsideration, and other legal opinions of the other administrative law judges in the office. The drafts are confidential documents and are not subject to disclosure under AS 40.25.100 — 40.25.295 or this chapter.




Sec. 43.05.480. Judicial review.
 (a) Judicial review by the superior court of a final administrative decision may be had by a party to the appeal under AS 43.05.405 — 43.05.499 by filing a notice of appeal in accordance with the applicable rules of court governing appeals to that court in civil matters. The notice of appeal shall be filed within 30 days after an administrative decision becomes final under AS 43.05.465. The right to judicial review under this subsection is not affected by the failure to seek reconsideration before the administrative law judge.

 (b) The amount due must be paid or refunded within 30 days after the date that the final administrative decision becomes final under AS 43.05.465. In place of payment of the amount due, a taxpayer who has appealed a final administrative decision may file a bond with the court or otherwise obtain relief from payment in accordance with the Alaska Rules of Appellate Procedure.

 (c) Appeals under this section are reviewed under AS 44.62.560 and 44.62.570.

 (d) If, after the appeal is heard, it appears that the final administrative decision was correct, the court shall affirm the decision. If the final administrative decision is incorrect, the court shall determine the amount due. If the taxpayer is entitled to a refund, the court shall order the repayment and the Department of Revenue shall pay the amount due and attach a certified copy of the judgment to the payment. If the court determines that the taxpayer owes an additional amount, the court shall order the payment and the taxpayer shall pay the amount due and attach a certified copy of the judgment to the payment. Any payment required under this subsection shall be paid by the 30th day following the expiration of the time within which an appeal from the superior court decision may be filed, unless the party appealing files a bond or otherwise obtains relief from payment in accordance with the Alaska Rules of Appellate Procedure.




Sec. 43.05.499. Definitions.
In AS 43.05.405 — 43.05.499, unless the context otherwise requires,
     (1) “administrative law judge” means an administrative law judge employed or retained by the office;

     (2) “commissioner” means the commissioner of administration;

     (3) “department” means the Department of Administration;

     (4) “discovery” means the use of subpoenas, subpoenas duces tecum, interrogatories, requests for production, requests for admission, depositions, and other methods of civil procedure by which one party to an action may discover information within the knowledge and control of another person;

     (5) “legislative history” means the documents of the legislature recording the background and events, including draft bills, correspondence and memoranda, committee reports, tapes and transcripts of hearings, and tapes and transcripts of floor debate concerning consideration of a bill;

     (6) “office” means office of administrative hearings (AS 44.64);

     (7) “party” means the Department of Revenue or the taxpayer;

     (8) “proceeding” means only a proceeding under the jurisdiction of the office;

     (9) “subpoena” means a command to appear at a certain time and place to testify, or to appear at a certain time and place to produce books, papers, and other things, and testify;

     (10) “tax” means a tax described in AS 43.05.405, including a seafood marketing assessment under AS 16.51;

     (11) “taxpayer” means a person required to pay a tax, including a person required to pay a seafood marketing assessment under AS 16.51.




Chapter 08. Borrowing in Anticipation of Revenues.

Sec. 43.08.010. Borrowing in anticipation of revenues permitted.
The commissioner is hereby authorized to borrow money on behalf of the state, when in the judgment of the commissioner it becomes necessary in order to meet appropriations for any fiscal year in anticipation of the collection of the revenues for that year. Money borrowed shall be used only for the purposes and within the amounts of appropriations authorized.


Sec. 43.08.020. Issuance and payment of notes.
The commissioner shall issue notes for the amounts borrowed in anticipation of the collection of revenues, direct or indirect, for that year. The notes issued by the commissioner under this chapter may be renewed from time to time but all such notes and renewals thereof and the interest thereon shall be paid from revenues by the end of the fiscal year next succeeding the year in which the notes were issued.


Sec. 43.08.030. Security and payment.
Notes issued under this chapter shall, with interest thereon, be paid from revenues in anticipation of the collection of which the same were issued and the full faith, credit, resources, and taxing power of the state are hereby pledged to the payment. To further secure the payment of the notes the commissioner may pledge on behalf of the state such collateral as in the discretion of the commissioner may be necessary to effect such borrowing most advantageous to the state.


Sec. 43.08.035. Annual appropriation.
 (a) There is appropriated each fiscal year from the general fund the amount necessary for the payment of interest on revenue anticipation notes issued under this chapter when the term of those notes measured from the date of issuance to the date of first maturity does not exceed nine months.

 (b) The commissioner shall obtain approval of the Legislative Budget and Audit Committee for the expenditure of appropriations made under (a) of this section.

 (c) The commissioner shall make available to the legislature by the third Monday of each January a report setting out in detail the amount appropriated from the general fund under this section for the previous fiscal year, the amount anticipated during the current fiscal year, and an amount forecast for the next fiscal year. The commissioner shall notify the legislature that the report is available.




Sec. 43.08.040. Sale of notes.
Notes authorized to be issued under this chapter shall be sold by the commissioner in the manner and at the price or prices as the commissioner shall determine, at either public or private sale; however, a note may not be sold at less than par and accrued interest.


Sec. 43.08.050. Execution of notes.
Notes for money borrowed in anticipation of revenues shall be signed by the governor and countersigned by the lieutenant governor. The governor’s signature may be a facsimile signature.


Sec. 43.08.060. Decision.
The commissioner has discretion to determine the necessity for time, amount, and terms of such borrowing. The reasonable exercise of such discretion shall be final and conclusive.


Article 1. Legal Actions and Liens.


Chapter 10. Enforcement and Collection of Taxes.

Sec. 43.10.010. Attorney general to prosecute violation of revenue laws.
 (a) The attorney general shall prosecute every civil and criminal action growing out of state revenue laws. The costs of the action shall be paid out of the proper appropriation for the Department of Law.

 (b) The attorney general with the approval of the commissioner may retain the services of attorneys to assist in the collection of revenue where it is necessary to prosecute an action for the collection of the revenue or make efforts to collect revenue outside the state. The commissioner may compensate the attorneys on a direct fee or contingent fee basis at a rate that the commissioner considers fair and reasonable. If the compensation is for a direct fee the commissioner shall pay for the services from the proper appropriation for the Department of Revenue.




Sec. 43.10.015. Bad checks.
If a check or money order is presented to the department in payment of any amount due, and is not paid when presented to the payor, there shall be paid as a penalty by the person who tendered the check or money order, upon notice and demand by the commissioner or a delegate, the sum of $10 or an amount equal to one percent of the amount of the check or money order, whichever is greater. This penalty is in addition to other penalties provided by law and is applicable each time the check or money order is presented to the department or the department is requested by the person tendering the check or money order to present it to the payor. This section does not apply if the person tendered the check in good faith and with reasonable cause to believe that it would be duly paid.


Sec. 43.10.020. Disposition of money collected from actions.
All money derived from civil and criminal actions growing out of state revenue laws shall be deposited in the general fund.


Sec. 43.10.030. Distraint on property extended to all state revenue statutes.
The remedy of distraint on property, set out in AS 43.20.270, applies to all state revenue statutes existing or hereafter enacted for the collection of taxes and license fees.


Sec. 43.10.032. Enforcement.
 (a) Each of the following is a debt to the state:
     (1) a tax levied under this title that is due and unpaid;

     (2) the interest, penalty, additional amount, or addition to a tax under (1) of this subsection;

     (3) a tax levied under this title that has been erroneously refunded; and

     (4) the interest, penalty, additional amount or addition to a tax that has been erroneously refunded.

 (b) A debt under (a) of this section may be
     (1) collected by lien foreclosure; or

     (2) recovered in a civil action brought by the state.




Sec. 43.10.035. Lien.
 (a) If a person who is liable to pay a tax or license fee under this title neglects or refuses to pay the tax or license fee after demand, the amount, including interest, additional amount, or assessable penalty, together with costs, is a lien in favor of the state upon all property and right to property, real or personal, belonging to that person.

 (b) Unless specifically provided otherwise by law, the lien imposed by this section arises at the time the assessment is made and continues until the amount assessed is paid or a judgment against the taxpayer arising out of the liability is satisfied.




Sec. 43.10.037. Accounting and disposition of fees. [Repealed, § 28 ch 90 SLA 1991.]
Sec. 43.10.040. Recording and filing of state tax liens. [Repealed, § 45 ch 113 SLA 1980.]
Sec. 43.10.042. Recording lien and certificate of discharge.
 (a) A lien imposed under AS 43.10.010 — 43.10.060 is not valid as against a mortgagee or other lien holder, pledgee, purchaser, or judgment creditor until notice of it is recorded in the records of the recording district where the property subject to the lien is situated. However, regardless of the date the liens are recorded, a lien arising out of a tax due under AS 43.56 and 43.75, including the penalties and interest on the tax, is a lien prior, paramount, and superior to all other liens, mortgages, hypothecations, conveyances, and assignments, upon all the real and personal property of the person liable for the tax, and upon all the real and personal property used with the permission of the owner to carry on the business that is subject to the tax.

 (b) AS 40.19.040 applies to a notice of state tax lien and documents relating to a state tax lien as well as to a notice of federal lien and documents relating to a federal lien.




Sec. 43.10.045. Suspension of licenses.
In addition to the other penalties imposed in this title, if a person who is authorized to conduct a business by a license issued under the laws of the state fails to pay a tax levied under this title, the license of the person is suspended until the tax imposed by this title, together with interest and penalties, is paid in full.


Sec. 43.10.050. Contents of index. [Repealed, § 45 ch 113 SLA 1980.]
Sec. 43.10.060. Use as evidence.
The recording of a state tax lien certified by the recorder is evidence in all courts in the state and has the same effect as the original.


Article 2. Reciprocity.


Sec. 43.10.070. Reciprocity in collection of taxes.
 (a) The courts of the state shall recognize and enforce the liability for taxes lawfully imposed by the laws of every state or territory which extends a like comity in respect to the liability for taxes lawfully imposed by the laws of this state. The officials of a state or territory may bring action in the courts of this state for the collection of their taxes. The certificate of the secretary of state of the other state or territory that the officials have the authority to collect the taxes sought to be collected by the action is conclusive proof of that authority.

 (b) The attorney general may bring action in the courts of other states or territories to collect taxes due the state.




Sec. 43.10.080. Definition of taxes.
In AS 43.10.070, “taxes” includes
     (1) tax and license assessments lawfully made, whether they are based upon a return or other disclosure of the taxpayer, upon the information and belief of the taxing authority, or otherwise;

     (2) penalties lawfully imposed under a taxing or licensing statute;

     (3) interest charges lawfully added to the tax liability which constitutes the subject of the action.




Secs. 43.10.090 — 43.10.150. Uniform Federal Tax Lien Registration Act. [Repealed, § 43 ch 161 SLA 1988. For current law see, AS 40.19.]

Article 3. Service of Process on Nonresident Businesses.


Sec. 43.10.160. Filing statement and tax bond with department. [Repealed, § 2 ch 93 SLA 1997.]
Sec. 43.10.170. Agent for service of process.
 (a) Every nonresident person shall, as a condition precedent to severing or taking resources or transacting or doing business in the state, file with the commissioner of commerce, community, and economic development a duly executed and notarized instrument appointing the commissioner of commerce, community, and economic development the agent upon whom all original process may be served in any action or legal proceeding resulting from the taxpayer’s failure or neglect to pay state taxes or license fees, and agreeing that service of the original process against the nonresident taxpayer is of the same effect as if personally served on the nonresident taxpayer in the state.

 (b) The service of process shall be made by leaving a copy with the commissioner of commerce, community, and economic development. If legal action is instituted against the nonresident taxpayer, the commissioner of commerce, community, and economic development shall immediately notify the nonresident by sending a copy of the process by registered letter to the last known address of the taxpayer.

 (c) If a nonresident taxpayer fails to appoint the commissioner of commerce, community, and economic development as agent for service of process, service may nevertheless be made upon the commissioner of commerce, community, and economic development, who shall then transmit a copy of the process by registered mail to the last known address of the taxpayer, and this service is binding to the same effect as if personally served on the nonresident taxpayer in the state.




Secs. 43.10.180 — 43.10.200. Proceedings against bond; intent of AS 43.10.160 — 43.10.200; penalties. [Repealed, § 2 ch 93 SLA 1997.]

Article 4. Refunds of Taxes and License Fees.


Sec. 43.10.210. Recovery of overpayments and protested payments.
 (a) The Department of Administration shall, with the approval of the attorney general and the Department of Revenue, refund to a taxpayer the amount of a tax paid to the Department of Revenue under protest and deposited in the treasury if
     (1) the taxpayer recovers judgment against the Department of Revenue for the return of the tax; or

     (2) in the absence of a judgment, it is obvious to the Department of Revenue that the taxpayer would obtain judgment if legal proceedings were prosecuted by the taxpayer.

 (b) The Department of Administration shall refund the amount of an overpayment to a taxpayer if the Department of Revenue, on audit of the account in question, determines that a remittance by the taxpayer exceeds the amount due.

 (c) If the department and the attorney general determine that a licensee has paid a license tax and is prevented from using the license by court order, administrative decision, or other cause beyond the control of the taxpayer, the Department of Administration shall refund the amount of the license tax to the licensee.




Chapter 15. Refunds of Taxes and Licenses.

[Renumbered as AS 43.10.210.]

Chapter 18. State Aid to Local Governments.

Secs. 43.18.010 — 43.18.045. State aid to local governments. [Repealed, § 11 ch 155 SLA 1980. For current law, see AS 29.60.]
Sec. 43.18.050. Specific expenditures. [Repealed, § 3 ch 265 SLA 1976.]
Secs. 43.18.100 — 43.18.135. [Renumbered as AS 14.11.100 — 14.11.135.]
Sec. 43.18.300. [Renumbered as AS 29.89.110.]
Secs. 43.18.400 — 43.18.460. [Renumbered as AS 05.35.010 — 05.35.070.]
Sec. 43.18.500. [Renumbered as AS 44.33.401 — 44.33.417.]

Chapter 19. Multistate Tax Compact.

Sec. 43.19.010. Compact.
The Multistate Tax Compact is hereby enacted into law and entered into with all jurisdictions legally joining in it, in the form substantially as follows:


Sec. 43.19.020. Commissioner of revenue to represent department.
 (a) The commissioner of revenue shall represent this state on the Multistate Tax Commission.

 (b) The member representing this state on the multistate commission may be represented by an alternate designated by the commissioner.




Sec. 43.19.030. Consulting committee.
The governor shall appoint a consulting committee consisting of three persons who are representative of subdivisions affected or likely to be affected by the Multistate Tax Compact, none of whom may be members of the legislature. The member of the commission representing this state, and any alternate designated by the member shall consult regularly with this committee, in accordance with Article VI, 1 (b) of the compact.


Sec. 43.19.040. Advisory committee.
There is established the Multistate Tax Compact Advisory Committee composed of the member of the Multistate Tax Commission representing this state, any alternate designated by the member, the attorney general or the designee of the attorney general, the members of the consulting committee, two members of the senate to be appointed by the president, and two members of the house of representatives to be appointed by the speaker. The chairman shall be the member of the commission representing this state. The committee shall meet on the call of its chairman or at the request of a majority of its members, but in any event it shall meet not less than three times in each year. The committee may consider all matters relating to recommendations of the Multistate Tax Commission and the activities of the members in representing this state on the commission.


Sec. 43.19.050. Interstate audits.
Article VIII of the compact relating to interstate audits shall be in force in and with respect to this state.


Article 1. Persons Subject to Tax; Returns and Payment; Credits.


Chapter 20. Alaska Net Income Tax Act.

Sec. 43.20.010. Tax on individuals, fiduciaries, and corporations. [Repealed, § 13 ch 70 SLA 1975.]
Sec. 43.20.011. Tax on corporations.
 (a) [Repealed, § 10 ch 1 SSSLA 1980.]
 (b) [Repealed, § 10 ch 1 SSSLA 1980.]
 (c) [Repealed, § 10 ch 1 SSSLA 1980.]
 (d) [Repealed, § 10 ch 1 SSSLA 1980.]
 (e) There is imposed for each taxable year upon the entire taxable income of every corporation derived from sources within the state a tax computed as follows:
If the taxable income is:     Then the tax is:     Less than $25,000     zero     $25,000 but less than $49,000     2 percent of the taxable income over           $25,000     $49,000 but less than $74,000     $480 plus 3 percent of the taxable income           over $49,000     $74,000 but less than $99,000     $1,230 plus 4 percent of the taxable income          over $74,000     $99,000 but less than $124,000     $2,230 plus 5 percent of the taxable income           over $99,000     $124,000 but less than $148,000     $3,480 plus 6 percent of the taxable income          over $124,000     $148,000 but less than $173,000     $4,920 plus 7 percent of the taxable income          over $148,000     $173,000 but less than $198,000     $6,670 plus 8 percent of the taxable income          over $173,000     $198,000 but less than $222,000     $8,670 plus 9 percent of the taxable income           over $198,000     $222,000 or more     $10,830 plus 9.4 percent of the taxable           income over $222,000.      (f) [Repealed, § 10 ch 1 SSSLA 1980.]




Sec. 43.20.012. Limitation on application of chapter; credits.
 (a) The tax imposed by this chapter does not
     (1) apply to an individual;

     (2) apply to a fiduciary;

     (3) for a tax year beginning after December 31, 2012, apply to an Alaska corporation that is a qualified small business and that meets the active business requirement in 26 U.S.C. 1202(e) as that subsection read on January 1, 2012; or

     (4) for a tax year beginning after June 30, 2007, apply to the income received by a regional association qualified under AS 16.10.380 or nonprofit corporation holding a hatchery permit under AS 16.10.400 from the sale of salmon or salmon eggs under AS 16.10.450 or from a cost recovery fishery under AS 16.10.455.

 (b) An individual may file a return under this chapter in order to receive a tax credit under AS 43.20.013.

 (c) For the purposes of (a)(3) of this section,
     (1) whether a corporation qualifies under (a)(3) of this section shall be determined on the first day of the tax year for which the corporation claims it qualifies under (a)(3) of this section;

     (2) all corporations that are members of the same parent-subsidiary controlled group shall be treated as one corporation.

 (d) In this section,
     (1) “Alaska corporation” means a corporation that has been incorporated in the state or is authorized to do business in the state;

     (2) “parent-subsidiary controlled group” has the meaning given in 26 U.S.C. 1202 as that section read on January 1, 2012;

     (3) “qualified small business” has the meaning given in 26 U.S.C. 1202 as that section read on January 1, 2012, and does not include a construction, transportation, utility, or fisheries business.




Sec. 43.20.013. Individual tax credits.
 (a) A resident individual is entitled to a tax credit not to exceed $100 for
     (1) a contribution made in a calendar year to a person or organization for use exclusively
          (A) for a political campaign for a candidate for
               (i) President or Vice President of the United States, whether or not the candidate will be voted on in a primary election in Alaska;

               (ii) United States senator from Alaska;

               (iii) United States representative from Alaska;

               (iv) governor or lieutenant governor of Alaska;

               (v) the Alaska legislature;

               (vi) delegate to an Alaska constitutional convention;

               (vii) electoral confirmation as a judge or justice of a court in Alaska; or

               (viii) municipal office in Alaska; or

          (B) by a group seeking to influence the outcome of a ballot proposition or question in Alaska; and

     (2) dues paid in a calendar year to a nonprofit organization organized primarily for the purpose of influencing elections in Alaska.

 (b) A resident individual is entitled to a tax credit equal to 16 percent of the tax credit claimed by the individual on the federal income tax return of the individual for household and dependent care services necessary for gainful employment.

 (c) The commissioner shall pay the amount of a tax credit allowed by this section to a resident individual who makes a return as provided in AS 43.20.012. A credit under this section shall be paid in the manner provided in AS 43.20.030(e) for the payment of refunds and payment may not be made without an appropriation for that purpose.




Sec. 43.20.014. Income tax education credit.
 (a) A taxpayer is allowed a credit against the tax due under this chapter for cash contributions accepted for
     (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state;

     (2) secondary school level vocational education courses, programs, and facilities by a school district in the state;

     (3) vocational education courses, programs, equipment, and facilities by a state-operated vocational technical education and training school, a nonprofit regional training center recognized by the Department of Labor and Workforce Development, and an apprenticeship program in the state that is registered with the United States Department of Labor under 29 U.S.C. 50 — 50b (National Apprenticeship Act);

     (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association or by a public or private nonprofit elementary or secondary school in the state;

     (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state;

     (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government;

     (7) the Alaska higher education investment fund under AS 37.14.750;

     (8) funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of
          (A) tuition and textbooks;

          (B) registration, course, and programmatic student fees;

          (C) on-campus room and board at the postsecondary institution in the state that provides the dual-credit course;

          (D) transportation costs to and from a residential school approved by the Department of Education and Early Development under AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and

          (E) other related educational and programmatic costs;

     (9) constructing, operating, or maintaining a residential housing facility by a residential school in the state approved by the Department of Education and Early Development under AS 14.16.200;

     (10) childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant;

     (11) science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and

     (12) the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state.

 (b) The amount of the credit is
     (1) 50 percent of contributions of not more than $100,000;

     (2) 100 percent of the next $200,000 of contributions; and

     (3) 50 percent of the amount of contributions that exceed $300,000.

 (c) Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used.

 (d) A contribution claimed as a credit under this section may not
     (1) be the basis for a credit claimed under another provision of this title;

     (2) also be allowed as a deduction under 26 U.S.C. 170 against the tax imposed by this chapter; and

     (3) when combined with contributions that are the basis for credits taken during the taxpayer’s tax year under AS 21.96.070, 21.96.075, AS 43.55.019, AS 43.56.018, AS 43.65.018, AS 43.75.018, or AS 43.77.045, result in the total amount of credits exceeding $5,000,000; if the taxpayer is a member of an affiliated group, then the total amount of credits may not exceed $5,000,000 for the affiliated group; in this paragraph, “affiliated group” has the meaning given in AS 43.20.145.

 (e) The credit under this section may not reduce a person’s tax liability under this chapter to below zero for any tax year. An unused credit or portion of a credit not used under this section for a tax year may not be sold, traded, transferred, or applied in a subsequent tax year.

 (f) In this section,
     (1) “dual-credit student” means a secondary level student in the state who simultaneously earns college and high school credit for a course;

     (2) “nonprofit organization” means a charitable or educational organization in the state that is exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue Code);

     (3) “school district” means a borough school district, a city school district, a regional educational attendance area, or a state boarding school;

     (4) “vocational education” means organized educational activities that offer a sequence of courses that provides individuals with the academic and technical knowledge and skills the individuals need to prepare for further education and for careers other than careers requiring a baccalaureate, master’s, or doctoral degree.




Sec. 43.20.015. Individual tax credit. [Repealed, § 10 ch 1 SSSLA 1980.]
Sec. 43.20.016. Sharing of corporate income tax revenue with municipalities. [Repealed, § 88 ch 74 SLA 1985.]
Sec. 43.20.017. Individual tax exemptions. [Repealed, § 10 ch 1 SSSLA 1980.]
Sec. 43.20.018. Alaska veterans’ memorial endowment fund contribution credit. [Repealed, § 25 ch 46 SLA 2002.]
Sec. 43.20.020. Exemptions. [Repealed, § 13 ch 70 SLA 1975.]
Sec. 43.20.021. Internal Revenue Code adopted by reference.
 (a) Sections 26 U.S.C. 1 — 1399 and 6001 — 7872 (Internal Revenue Code), as amended, are adopted by reference as a part of this chapter. These portions of the Internal Revenue Code have full force and effect under this chapter unless excepted to or modified by other provisions of this chapter.

 (b) For purposes of calculating the federal tax payable on personal holding companies provided for in the provisions of 26 U.S.C. 541 (Internal Revenue Code), the rate is 12.6 percent.

 (c) For purposes of calculating the alternative tax on capital gains provided for in the provisions of 26 U.S.C. 1201 (Internal Revenue Code), the rate is 4.5 percent for corporations.

 (d) Where a credit allowed under the Internal Revenue Code is also allowed in computing Alaska income tax, it is limited to 18 percent for corporations of the amount of credit determined for federal income tax purposes which is attributable to Alaska. This limitation does not apply to a special industrial incentive tax credit under AS 43.20.042.

 (e) [Repealed, § 10 ch 1 SSSLA 1980.]
 (f) For the purpose of calculating the alternative minimum tax on tax preferences provided for in 26 U.S.C. 55 — 59 (Internal Revenue Code), the tax is 18 percent for corporations of the applicable alternative minimum federal tax.

 (g) For purposes of calculating the accumulated earnings tax as provided in 26 U.S.C. 531 (Internal Revenue Code), the rate is 4.95 percent of the first $100,000 of accumulated taxable income and 6.93 percent of accumulated taxable income in excess of $100,000.

 (h) Nothing in this chapter or in AS 43.19 (Multistate Tax Compact) may be construed as an exception to or modification of 26 U.S.C. 883.

 (i) The provision in (h) of this section does not apply to commercial passenger vessels as defined in AS 43.52.295.

 (j) For purposes of calculating interest under the look-back method in 26 U.S.C. 460 (Internal Revenue Code), the rate of interest shall be as provided in that section.




Sec. 43.20.030. Returns and payment of taxes.
 (a) If a corporation, or a partnership that has a corporation as a partner, is required to make a return under the provisions of the Internal Revenue Code, it shall file with the department, within 30 days after the federal return is required to be filed, a return setting out
     (1) the amount of tax due under this chapter, less credits claimed against the tax; and

     (2) other information for the purpose of carrying out the provisions of this chapter that the department requires.

 (b) The return shall either be on oath or contain a written declaration that it is made under penalty of perjury, and the department shall prescribe forms accordingly.

 (c) Notwithstanding (a) of this section, the total amount of tax imposed by this chapter is due and payable to the department at the same time and in the same manner as the tax payable to the United States Internal Revenue Service.

 (d) A taxpayer, upon request by the department, shall furnish to the department a true and correct copy of the tax return which the taxpayer has filed with the United States Internal Revenue Service. Every taxpayer shall notify the department in writing of any alteration in, or modification of, the taxpayer’s federal income tax return and of a recomputation of tax or determination of deficiency, whether with or without assessment. A full statement of the facts must accompany this notice. The notice shall be filed within 60 days after the final determination of the modification, recomputation or deficiency, and the taxpayer shall pay the additional tax or penalty under this chapter. For purposes of this section, a final determination shall mean the time that an amended federal return is filed or a notice of deficiency or an assessment is mailed to the taxpayer by the Internal Revenue Service, except that in no event will there be a final determination for purposes of this section until the taxpayer has exhausted rights of appeal under federal law.

 (e) The department may credit or refund overpayments of taxes, taxes erroneously or illegally assessed or collected, penalties collected without authority, and taxes that are found unjustly assessed or excessive in amount, or otherwise wrongfully collected. The department shall set limitations, specify the manner in which claims for credits or refunds are made, and give notice of allowance or disallowance. When a refund is allowed to a taxpayer, it shall be paid out of the general fund by a disbursement issued under a voucher approved by the department.

 (f) [Repealed, § 10 ch 1 SSSLA 1980.]
 (g) [Repealed, § 10 ch 1 SSSLA 1980.]




Sec. 43.20.031. Deduction of taxes; consolidated returns; accounting methods.
 (a) [Repealed, § 10 ch 1 SSSLA 1980.]
 (b) [Repealed, § 10 ch 1 SSSLA 1980.]
 (c) In computing the tax under this chapter, the taxpayer is not entitled to deduct any taxes based on or measured by net income. The taxpayer may deduct the tax levied and paid under AS 43.55.

 (d) [Repealed, § 1 ch 98 SLA 1984.]
 (e) An affiliated group of corporations may make or the commissioner may require them to make a consolidated return for the taxable year in place of separate returns. For purposes of calculating the amount of tax payable by the group under a consolidated filing, 26 U.S.C. 1501 — 1552 (Internal Revenue Code), as amended, apply.

 (f) [Repealed, § 10 ch 1 SSSLA 1980.]
 (g) [Repealed, § 10 ch 1 SSSLA 1980.]
 (h) [Repealed, § 10 ch 1 SSSLA 1980.]
 (i) A corporation which is a member of a group of unitary corporations which collectively has income from business activity taxable both inside and outside the state, or income from other sources both inside and outside the state, shall determine its income from sources in this state by use of the combined method of accounting.




Secs. 43.20.033 , 43.20.035. Taxable income of fiduciaries, nonresidents, and part-year residents. [Repealed, § 10 ch 1 SSSLA 1980.]
Sec. 43.20.036. Federal tax deductions and credits.
 (a) For purposes of calculating the income tax payable under this chapter, the taxpayer may not apply as a credit against tax liability the foreign tax credit allowed as to federal taxes under 26 U.S.C. 27 (Internal Revenue Code).

 (b) For purposes of calculating the income tax payable under this chapter, the taxpayer may apply as a credit against tax liability the investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue Code) upon only the first $20,000,000 of qualified investment, other than qualified investment for a special industrial incentive investment tax credit under AS 43.20.042, put into use in the state for each taxable year. This limitation does not apply to the amounts invested in equipment that meets the definition of a certified pollution control facility as defined in 26 U.S.C. 169 (Internal Revenue Code) as in effect on June 19, 1975, except that the date specified in 26 U.S.C. 169(d) (Internal Revenue Code) as a condition of qualifying a certified pollution control facility for a deduction does not apply.

 (c) For purposes of calculating the income tax payable under this chapter, the taxpayer may apply as an exemption from tax liability the tax exemption for domestic international sales corporations under 26 U.S.C. 991 (Internal Revenue Code), except those taxpayers who are engaged in the exportation of nonrenewable resources.

 (d) [Repealed, § 10 ch 1 SSSLA 1980.]
 (e) [Repealed, § 10 ch 1 SSSLA 1980.]
 (f) [Repealed, § 10 ch 1 SSSLA 1980.]
 (g) [Repealed, § 10 ch 1 SSSLA 1980.]
 (h) [Repealed, § 10 ch 1 SSSLA 1980.]
 (i) [Repealed, § 10 ch 1 SSSLA 1980.]
 (j) For purposes of calculating the tax payable under this chapter, a deduction under 26 U.S.C. 170 may only be taken if payment is made on or before the last day of the taxable year.




Sec. 43.20.037. Trade or business energy conservation credit. [Repealed, § 50 ch 83 SLA 1980.]
Secs. 43.20.038 — 43.20.039. Residential fuel and residential fuel conservation credits. [Repealed, § 10 ch 1 SSSLA 1980.]
Sec. 43.20.040. Income from sources in the state.
 (a) In this chapter, income from sources in the state includes
     (1) income from real or tangible personal property located in the state;

     (2) income of whatever nature from a business, trade or profession having a business situs in the state and compensation for services rendered in the state;

     (3) income from stocks, bonds, notes, bank deposits, and other intangible personal property having a taxable or business situs in the state;

     (4) rentals and royalties for the use of or for the privilege of using, in the state, patents, copyrights, secret processes and formulas, good will, marks, trade brands, franchises, and other property having a taxable or business situs in the state.

 (b) In this section, income is from a source having a taxable or business situs in the state if it is derived from
     (1) owning or operating business facilities or property in the state;

     (2) conducting business, farming, or fishing operations in the state;

     (3) [Repealed, § 10 ch 1 SSSLA 1980.]
     (4) a partnership which transacts business in the state;

     (5) a corporation which transacts business in the state which has elected to file federal returns under subchapter S of the Internal Revenue Code;

     (6) [Repealed, § 10 ch 1 SSSLA 1980.]
     (7) engaging in any other activity from which income is received, realized or derived in the state.

 (c) The receipt of income derived solely from interest earned on property in the state does not alone establish a taxable or business situs in the state.




Sec. 43.20.042. Special industrial incentive investment tax credits.
 (a) Subject to (c) of this section, for purposes of calculating eligible taxes the taxpayer may apply as a credit against eligible taxes the following percentage of the investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue Code) on only the first $250,000,000 of qualified investment in the state for each taxable year after December 31, 1984, for a gas processing project: (1) 100 percent on the first $50,000,000 of qualified investment; (2) 80 percent on qualified investment over $50,000,000 but not exceeding $100,000,000; (3) 70 percent on qualified investment over $100,000,000 but not exceeding $150,000,000; (4) 60 percent on qualified investment over $150,000,000 but not exceeding $200,000,000; and (5) 40 percent on qualified investment over $200,000,000 but not exceeding $250,000,000. A credit may not be allowed under this subsection for an investment credit that is allowed as to federal taxes for leased property by reason of 26 U.S.C. 168(f)(8) (Internal Revenue Code). In this subsection, “gas processing project” means the integrated plant, facilities, and equipment, including pollution control equipment, used for preparation of consumer or transportation gas, or for conditioning, fractionation, storage, handling or processing of a product, other than crude oil, of an oil or gas well, into liquefied natural gas, methanol, ammonia, urea, olefins, propanes, butanes, polymers and intermediate hydrocarbon products; it does not include a pipeline from oil and gas wells to or from a plant and facilities.

 (b) Subject to (c) of this section, for purposes of calculating eligible taxes the taxpayer may apply as a credit against eligible taxes the following percentage of the investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue Code) on only the first $250,000,000 of qualified investment in the state for each taxable year after December 31, 1984, for exploration, drilling of wells, development, or mining of the minerals and other natural deposits listed in 26 U.S.C. 613(b) (Internal Revenue Code) other than sand or gravel unless the mining of sand or gravel is ancillary to a mining development involving a qualified natural deposit other than sand or gravel: (1) 100 percent on the first $50,000,000 of qualified investment; (2) 80 percent on qualified investment over $50,000,000 but not exceeding $100,000,000; (3) 70 percent on qualified investment over $100,000,000 but not exceeding $150,000,000; (4) 60 percent on qualified investment over $150,000,000 but not exceeding $200,000,000; and (5) 40 percent on qualified investment over $200,000,000 but not exceeding $250,000,000. A credit may not be allowed under this subsection for any investment credit that is allowed as to federal taxes for leased property by reason of 26 U.S.C. 168(f)(8) (Internal Revenue Code). In this subsection, “mining” has the meaning given in 26 U.S.C. 613(c)(2) (Internal Revenue Code).

 (c) A taxpayer may not claim an investment tax credit under (a) or (b) of this section unless the gas processing project or mining project began operation and production after December 31, 1984. A gas processing or mining project is considered to have begun operation and production when the first product or mineral is produced that is ultimately either sold or transferred for further processing or ultimate use.

 (d) A taxpayer may not claim an additional investment tax credit under AS 43.20.036(b) for an investment for which a special industrial incentive investment tax credit is claimed under (a) or (b) of this section.

 (e) If a taxpayer making an investment that qualifies for the investment tax credit under this section is a member of a group of affiliated corporations filing a consolidated return under the provisions of this chapter, the amount of the investment tax credit that may be claimed on the consolidated return is limited to the amount the taxpayer making the qualified investment would have been eligible to claim had a consolidated return not been filed.

 (f) The investment tax credit per taxable year allowed by (a) and (b) of this section may not exceed 60 percent of the eligible tax liability. Any unused portion of the investment tax credit shall be subject to the carry forward provisions in 26 U.S.C. 46(b)(3) (Internal Revenue Code) except that the unused credit may not be carried forward to tax years beginning after December 31, 1999.

 (g) Except as provided in (f) of this section, a tax credit under this section may not be claimed on investments made after December 31, 1994.

 (h) In this section “eligible taxes” means the total tax liability of a taxpayer for the annual taxes due under the provisions of this chapter and AS 43.65.




Sec. 43.20.043. Gas exploration and development tax credit. [Repealed, §§ 2, 5, ch. 26, SLA 2009, as amended by § 16, ch. 15, SLA 2010.]
Sec. 43.20.044. Exploration credits.
 (a) A taxpayer may apply as a credit against the tax levied under this chapter
     (1) the exploration incentive credit authorized by AS 27.30;

     (2) an alternative tax credit for oil and gas exploration earned by the taxpayer under AS 43.55.025 for exploration expenditures incurred for work performed on or after July 1, 2016.

 (b) In a tax year in which a taxpayer applies against the tax levied under this chapter the exploration incentive credit authorized by AS 27.30, the commissioner shall require the taxpayer to submit the accounting of mining operation activities form required by AS 27.30.030(b).




Sec. 43.20.045. Proration of part-year resident and nonresident individual credits. [Repealed, § 10 ch 1 SSSLA 1980.]
Sec. 43.20.046. Gas storage facility tax credit.
 (a) A person that is an owner of a gas storage facility described in (b) of this section that commences commercial operation after December 31, 2010, and before January 1, 2016, may apply a refundable credit against a tax liability that may be imposed on the person under this chapter for the taxable year in which the gas storage facility commences commercial operation. The tax credit under this section shall be an amount equal to $1.50 for each 1,000 cubic feet of working gas storage capacity that is certified under AS 31.05.032 less any amount of credit received under this section taken in earlier tax years for that capacity. The total amount of the credit that may be received for a single gas storage facility under this section may not exceed the lesser of $15,000,000 or 25 percent of the costs incurred to establish the gas storage facility. The tax credit in this section is in addition to any other credit under this chapter for which the person is eligible.

 (b) A gas storage facility qualifying for the credit in this section
     (1) must have a working gas storage capacity of at least 500,000,000 cubic feet of gas other than cushion gas;

     (2) must have a minimum withdrawal capability of 10,000,000 cubic feet a day as certified by the Alaska Oil and Gas Conservation Commission under AS 31.05.032;

     (3) may not have been in operation as a gas storage facility before January 1, 2011;

     (4) must be regulated under AS 42.05 as a utility and be available to furnish the service of natural gas storage to the public for compensation; in this paragraph, “service of natural gas storage” has the meaning given in AS 42.05.990; and

     (5) if located on state land and leased or subject to a lease under AS 38.05.180, must be in compliance with the terms of the lease.

 (c) To claim the credit, the person shall submit to the department a copy of the certification of working gas storage capacity and withdrawal capability issued under AS 31.05.032, the date that the gas storage facility commenced commercial operation, and other information required by the department. A person applying the credit against a liability under this chapter shall claim the credit on the person’s return.

 (d) A person entitled to a tax credit under this section that is greater than the person’s tax liability under this chapter may request a refund in the amount of the unused portion of the tax credit.

 (e) Subject to the requirements in AS 43.55.028(j), thedepartment may use available money in the oil and gas tax credit fund established in AS 43.55.028 to make the refund applied for under (d) of this section in whole or in part if the department finds that, after application of all available tax credits, the claimant’s total tax liability under this chapter for the calendar year in which the claim is made is zero.

 (f) For the purpose of determining the amount of the credit under this section, the working gas storage capacity on which the credit is based shall be the capacity certified by the Alaska Oil and Gas Conservation Commission under AS 31.05.032.

 (g) A person may not receive a credit under this section for the acquisition of a gas storage facility for which a credit has been granted under this section.

 (h) If the gas storage facility for which a credit was received under this section ceases commercial operation during the nine calendar years immediately following the calendar year in which the gas storage facility commences commercial operation, the tax liability under this chapter of the person who claimed the credit shall be increased. The amount of the increase in tax liability
     (1) shall be determined and assessed for the taxable year in which the gas storage facility ceases commercial operation, regardless of whether the gas storage facility subsequently resumes commercial operation; and

     (2) is equal to the total amount of the credit taken multiplied by a fraction, the numerator of which is the difference between 10 and the number of calendar years for which the gas storage facility was eligible for a tax credit under this section and the denominator of which is 10.

 (i) The issuance of a refund under this section does not limit the department’s ability to later audit or adjust the claim if the department determines, as a result of the audit, that the person that claimed the credit was not entitled to the amount of the credit. The tax liability of the person receiving the credit under this chapter is increased by the amount of the credit that exceeds that to which the person was entitled. If the tax liability is increased under this subsection, the increase bears interest under AS 43.05.225 from the date the refund was issued.

 (j) A person claiming a tax credit under this section for a gas storage facility that ceases commercial operation within nine calendar years immediately following the calendar year in which the gas storage facility commences commercial operation shall notify the department in writing of the date the gas storage facility ceased commercial operation. The notice must be filed with the return for the taxable year in which the gas storage facility ceases commercial operation.

 (k) A refund under this section does not bear interest.

 (l) In this section, “ceases commercial operation,” “commences commercial operation,” “gas storage facility,” and “working gas storage capacity” have the meanings given in AS 31.05.032.




Sec. 43.20.047. Liquefied natural gas storage facility tax credit.
 (a) A person that is an owner of a liquefied natural gas storage facility described in (b) of this section that commences commercial operation before January 1, 2020, may apply a refundable credit against a tax liability that may be imposed on the person under this chapter or receive the amount of the credit in the form of a payment for the taxable year in which the liquefied natural gas storage facility commences commercial operation. The tax credit or payment under this section may not exceed the lesser of $15,000,000 or 50 percent of the costs incurred to establish or expand the liquefied natural gas storage facility. The tax credit in this section is in addition to any other credit under this chapter for which the person is eligible.

 (b) To qualify for the credit in this section, a liquefied natural gas storage facility
     (1) must have a liquefied natural gas storage volume of not less than 25,000 gallons of liquefied natural gas, or, if the credit is claimed for an expansion, the expansion must have increased the capacity of an existing liquefied natural gas storage facility by more than 25,000 gallons;

     (2) may not have been in operation as a liquefied natural gas storage facility before January 1, 2011, unless the tax credit in this section is based on the expansion of the liquefied natural gas storage facility after December 31, 2011;

     (3) must be regulated under AS 42.05 as a utility and be available to furnish the service of liquefied natural gas storage to customers, utilities, or industrial facilities; in this paragraph, “service of liquefied natural gas storage” has the meaning given in AS 42.05.990;

     (4) if located on state land and leased or subject to a lease under AS 38.05, must be in compliance with the terms of the lease; and

     (5) must have commenced commercial operation on or before the date the person takes a credit under (a) of this section or applies for a payment under (a) of this section.

 (c) To claim the credit or request a payment, a person shall submit to the department a certification of the capacity of the liquefied natural gas storage facility measured in gallons or the capacity of an expansion to an existing liquefied natural gas storage facility measured in gallons, the date that the liquefied natural gas storage facility commenced commercial operation, the date that any expansion to the liquefied natural gas storage facility commenced commercial operation, and other information required by the department.

 (d) A person applying the credit under this section against a liability under this chapter shall claim the credit on the person’s return. A person entitled to a tax credit under this section that is greater than the person’s tax liability under this chapter may request a refund or payment in the amount of the unused portion of the tax credit.

 (e) Subject to the requirements in AS 43.55.028(j), thedepartment may use money available in the oil and gas tax credit fund established in AS 43.55.028 to make a refund or payment under (d) of this section in whole or in part if the department finds that, after application of all available tax credits, the claimant’s total tax liability under this chapter for the calendar year in which the claim is made is zero.

 (f) For the purpose of determining the amount of the credit under this section, the costs incurred to establish a liquefied natural gas storage facility or to expand a liquefied natural gas storage facility shall be submitted to the department with verification by an independent certified public accountant licensed in the state. The volume of working liquefied natural gas storage or volume of the expansion to an existing liquefied natural gas storage facility shall be verified by a professional engineer licensed in the state with relevant experience.

 (g) A person may not receive a credit under this section for the acquisition of a liquefied natural gas storage facility for which a credit has been taken under this section.

 (h) If the liquefied natural gas storage facility for which a credit was received under this section ceases commercial operation during the nine calendar years immediately following the calendar year in which the liquefied natural gas storage facility commences commercial operation, the tax liability under this chapter of the person who claimed the credit shall be increased, and a person not subject to the tax under this chapter that received a payment under (d) and (e) of this section shall be liable to the state in the amount determined in this subsection. The amount of the increase in tax liability or liability to the state
     (1) for a person subject to the tax under this chapter, shall be determined and assessed for the taxable year in which the liquefied natural gas storage facility ceases commercial operation, regardless of whether the liquefied natural gas storage facility subsequently resumes commercial operation;

     (2) for a person not subject to the tax due under this chapter, shall be determined and assessed as of December 31 of the calendar year in which the liquefied natural gas storage facility ceases commercial operation, regardless of whether the liquefied natural gas storage facility subsequently resumes commercial operation; and

     (3) is equal to the total amount of the credit taken or received as a payment under (d) of this section, as applicable, multiplied by a fraction, the numerator of which is the difference between 10 and the number of calendar years for which the liquefied natural gas storage facility was eligible for a tax credit under this section and the denominator of which is 10.

 (i) The issuance of a refund under this section does not limit the department’s ability to later audit or adjust the claim if the department determines, as a result of the audit, that the person that claimed the credit was not entitled to the amount of the credit. The tax liability of the person receiving the credit under this section is increased by the amount of the credit that exceeds that to which the person was entitled. If the tax liability is increased under this subsection, the increase bears interest at the rate set by AS 43.05.225 from the date the refund was issued.

 (j) A person claiming a tax credit under this section for a liquefied natural gas storage facility that ceases commercial operation within nine calendar years immediately following the calendar year in which the liquefied natural gas storage facility commences commercial operation shall notify the department in writing of the date the liquefied natural gas storage facility ceased commercial operation. The notice must be filed with the return for the taxable year in which the liquefied natural gas storage facility ceases commercial operation.

 (k) A refund under this section does not bear interest.

 (l) In this section,
     (1) “ceases commercial operation” means that the liquefied natural gas storage facility fails to add or withdraw 20 percent or more of its working capacity of liquefied natural gas during a calendar year after the calendar year in which the liquefied natural gas storage facility commences commercial operation;

     (2) “commences commercial operation” means the first input of liquefied natural gas into a liquefied natural gas storage facility for purposes other than testing;

     (3) “liquefied natural gas storage facility” has the meaning given in AS 42.05.990.




Sec. 43.20.048. Veteran employment tax credit.
 (a) A taxpayer that hires a veteran and employs the veteran in the state is entitled to a credit under this section against the tax due under this chapter. The taxpayer is entitled to the credit for each veteran whose employment qualifies under this section.

 (b) To qualify as a veteran for the purposes of the credit under this section, the veteran must have been unemployed for more than four weeks immediately preceding the date employment begins and must have been discharged or released from military service
     (1) not more than 10 years before the date employment begins in the case of a veteran who is a disabled veteran; or

     (2) not more than two years before the date employment begins in the case of a veteran who is not a disabled veteran.

 (c) The amount of credit that may be applied by a taxpayer for each qualifying veteran under this section is,
     (1) for a veteran employed in the state for 1,560 hours or more during the 12 consecutive months immediately following the date the veteran is first employed,
          (A) $3,000 for a disabled veteran; and

          (B) $2,000 for a veteran who is not disabled;

     (2) for a veteran employed in the state for 500 hours or more in a seasonal position during the three consecutive months immediately following the date the veteran is first employed by an employer in a seasonal position, $1,000; an employer that hires a veteran for a seasonal position may take the credit under this paragraph only for the first season in which the employer employs the veteran.

 (d) The tax credit under this section may be applied against the tax due under this chapter for the first tax year ending on or after the end of the employment period described in (c) of this section. The credit may not be used to reduce a person’s tax liability under this chapter below zero for any tax year, and any credit or portion of a credit not used under this section may be applied in a later tax year.

 (e) A taxpayer shall keep a record of the name of the veteran employee whose employment is the basis for a credit under this section, documentation supporting the employee’s qualification as a veteran or disabled veteran, and the veteran employee’s hours employed and period of employment. The department may adopt a regulation that lists the documentation that must be maintained to support a claim that an employee qualifies as a veteran or disabled veteran for purposes of this section.

 (f) In this section,
     (1) “disabled veteran” has the meaning given in AS 39.25.159;

     (2) “seasonal position” means employment that is not intended to continue through an entire calendar year but recurs annually;

     (3) “veteran” means an individual who served in and was honorably discharged from the
          (A) armed forces of the United States, including a reserve unit of the armed forces of the United States; or

          (B) Alaska Territorial Guard, the Alaska Army National Guard, the Alaska Air National Guard, or the Alaska Naval Militia.




Sec. 43.20.049. Qualified oil and gas service industry expenditure credit.
 (a) For a tax year beginning after December 31, 2013, a taxpayer may apply a credit against the tax due under this chapter for a qualified oil and gas service industry expenditure incurred in the state. The total amount of credit a taxpayer may receive in a tax year may not exceed the lesser of 10 percent of qualified oil and gas service industry expenditures incurred in the state during the tax year or $10,000,000.

 (b) A taxpayer may not apply more than $10,000,000 in tax credits under this section in a tax year. A tax credit or portion of a tax credit under this section may not be used to reduce the taxpayer’s tax liability under this chapter below zero. Any unused tax credit or portion of a tax credit under this section may be applied in later tax years, except that any unused tax credit or portion of a tax credit may not be carried forward for more than five tax years immediately following the tax year in which the qualified oil and gas service industry expenditures were incurred.

 (c) An expenditure that is the basis of the credit under this section may not be the basis for
     (1) a deduction against the tax levied under this chapter;

     (2) a credit or deduction under another provision of this title; or

     (3) any federal credit claimed under this title.

 (d) Notwithstanding any contrary provision of AS 40.25.100(a) or AS 43.05.230(e), for a year that three or more taxpayers claim a tax credit under this section, the department may publish the aggregated amount of tax credits claimed under this section and a description of the qualified oil and gas service industry expenditures that were the basis for a tax credit under this section.

 (e) In this section,
     (1) “manufacture” means to perform substantial industrial operations in the state to transform raw material into tangible personal property with a useful life of three years or more for use in the exploration for, development of, or production of oil or gas deposits;

     (2) “modification” means an adjustment, equipping, or other alteration to existing tangible personal property that has a useful life of three years or more and is for use in the exploration for, development of, or production of oil or gas deposits; “modification” does not include minor product alterations or inventory activities;

     (3) “qualified oil and gas service industry expenditure” means an expenditure directly attributable to an in-state manufacture or in-state modification of tangible personal property used in the exploration for, development of, or production of oil or gas deposits, but does not include components or equipment used for or in the process of that manufacturing or modification.




Sec. 43.20.050. Taxpayer liable. [Repealed, § 13 ch 70 SLA 1975.]
Sec. 43.20.051. [Renumbered as AS 43.20.141.]
Sec. 43.20.052. Credit for the in-state manufacture of urea, ammonia, or gas-to-liquid products.
 (a) A taxpayer that owns an interest, either directly or through a partnership or limited liability company, in an in-state processing facility whose primary function is the manufacturing and sale of urea, ammonia, or gas-to-liquid products to third parties in arm’s length transactions is entitled to receive a credit under this section against the tax due under this chapter. The credit under this section is equal to the percentage of the amount of royalty paid under AS 38.05.135 on natural gas from a state lease that is delivered in the taxable year of the taxpayer for use at the in-state processing facility equal to the percentage of the ownership interest held by the taxpayer in the in-state processing facility.

 (b) A tax credit or portion of a tax credit under this section may not be used to reduce a taxpayer’s tax liability under this chapter below zero. An unused tax credit or portion of a tax credit received under this section may not be carried forward for use in a taxable year of the taxpayer after the taxable year in which the credit is earned.

 (c) To claim a credit under this section, the taxpayer shall
     (1) report to the department the name of each lessee delivering natural gas for use at the in-state processing facility, the identification and quantity of natural gas from each state lease that is the source of the natural gas, the ownership percentage of the taxpayer in the in-state processing facility, and the price for the natural gas established in a contract between the in-state processing facility and the lessee delivering the natural gas; and

     (2) demonstrate to the department that the taxpayer, to the maximum extent possible,
          (A) hires qualified residents from throughout the state for the management, engineering, construction, operation, and maintenance of, and other positions for, the in-state processing facility;

          (B) establishes hiring facilities in the state or uses existing hiring facilities in the state; and

          (C) uses, as far as practicable, the job centers and associated services operated by the Department of Labor and Workforce Development or an Internet-based labor exchange system operated by the state.

 (d) In this section, “gas-to-liquid product” has the meaning given in AS 38.05.180(ll).




Sec. 43.20.053. Qualified in-state oil refinery infrastructure expenditures tax credit.
 (a) A taxpayer that owns an in-state oil refinery whose primary function is the manufacturing and sale of refined petroleum products to third parties in arm’s length transactions may apply a credit against the tax due under this chapter for a qualified infrastructure expenditure incurred in the state for a tax year beginning after December 31, 2014, and before January 1, 2020. The total amount of credit a taxpayer may receive under this section may not exceed the lesser of 40 percent of qualified infrastructure expenditures incurred in the state during the tax year or $10,000,000 for each in-state refinery for which qualified expenditures are incurred.

 (b) A taxpayer applying the credit under this section against a liability under this chapter shall claim the credit on the taxpayer’s return. A tax credit or portion of a tax credit under this section may not be used to reduce the taxpayer’s tax liability under this chapter below zero. Any unused tax credit or portion of a tax credit under this section may be carried forward to the five tax years immediately following the tax year in which the qualified infrastructure expenditures were incurred.

 (c) An expenditure that is the basis of the credit under this section may not be the basis for
     (1) a deduction against the tax levied under this chapter;

     (2) a credit or deduction under another provision of this title; or

     (3) any federal credit claimed under this title.

 (d) A person entitled to a tax credit under this section that is greater than the person’s tax liability under this chapter may request a refund or payment in the amount of the unused portion of the tax credit.

 (e) Subject to the requirements in AS 43.55.028(j), thedepartment may use money available in the oil and gas tax credit fund established in AS 43.55.028 to make a refund or payment under (d) of this section in whole or in part if the department finds that,after application of all available tax credits, the claimant’s total tax liability under this chapter for the calendar year in which the claim is made is zero.

 (f) A refund under this section does not bear interest.

 (g) If an oil refinery ceases commercial operation during the nine calendar years immediately following the calendar year in which a credit under this section was received, regardless of whether commercial operation later resumes, the taxpayer’s tax liability under this chapter will be increased. The tax liability increase is equal to the total amount of credit taken multiplied by a fraction
     (1) the numerator of which is the difference between 10 and the number of calendar years for which the oil refinery was eligible for a credit under this section; and

     (2) the denominator of which is 10.

 (h) A person claiming a tax credit under this section for an oil refinery that ceases commercial operation or is sold during the nine calendar years immediately following the calendar year in which a credit under this section was received shall notify the department in writing of the date the oil refinery ceased commercial operation or was sold. The notice must be filed with the return for the tax year in which the oil refinery ceases commercial operation or was sold.

 (i) The issuance of a refund under this section does not limit the department’s ability to later audit or adjust the claim as provided in AS 43.05 if the department determines that the taxpayer claiming the credit was not entitled to the amount of the credit.

 (j) In this section,
     (1) “modification” means an adjustment or other alteration to existing tangible personal property that has a useful life of three years or more;

     (2) “qualified infrastructure expenditure” means an expenditure for the in-state purchase, installation, or modification of tangible personal property for the in-state manufacture or in-state transport of refined petroleum products, or petroleum-based feedstock;

     (3) “refined petroleum products” means separate marketable elements, compounds, or mixtures of oil in liquid form, including gasoline, diesel, jet fuel, gas oil, heating oil, and kerosene;

     (4) [Repealed, § 33, ch. 4, 4SSLA 2016.]




Sec. 43.20.060. Direct allocation. [Repealed, § 13 ch 70 SLA 1975.]
Sec. 43.20.061. Credit for taxes paid another state. [Repealed, § 10 ch 1 SSSLA 1980.]
Sec. 43.20.065. [Renumbered as AS 43.20.142.]
Sec. 43.20.070. Employees of interstate carriers. [Repealed, § 13 ch 70 SLA 1975.]
Sec. 43.20.071. [Renumbered as AS 43.20.143.]
Sec. 43.20.072. [Renumbered as AS 43.20.144.]
Sec. 43.20.073. [Renumbered as AS 43.20.145.]

Article 2. Allocation and Apportionment.


Secs. 43.20.080 — 43.20.140. Allocation of nonbusiness income; net rents and royalties; capital gains and losses; interests and dividends; patent and copyright royalties; allocation of business income; apportionment by commissioner. [Repealed, § 13 ch 70 SLA 1975.]
Sec. 43.20.141. Income from sources in the state of nonresident partners.
In determining the source of a nonresident partner’s income, effect may not be given to a provision in the partnership agreement that
     (1) characterizes payments to the partner as being for services or for the use of capital;

     (2) allocates to the partner, as income or gain from sources outside the state, a greater proportion of the partner’s distributive share of partnership income or gain than the ratio of partnership income or gain from sources outside the state to partnership income or gain from all sources; or

     (3) allocates to the partner a greater proportion of a partnership item of loss or deduction connected to Alaska sources than the partner’s proportionate share, for federal income tax purposes of partnership loss or education generally.




Sec. 43.20.142. Allocation and apportionment.
A taxpayer who has income from business activity that is taxable both inside and outside the state or income from other sources both inside and outside the state shall allocate and apportion net income as provided in AS 43.19 (Multistate Tax Compact), or as provided by this chapter.


Sec. 43.20.143. Transportation carriers.
 (a) All business income of water transportation carriers shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax Compact) as modified by the following:
     (1) the numerator of the property factor is the sum of the value for property in a fixed location, including buildings and land used in the business, and intrastate equipment and personal property determined according to AS 43.19 (Multistate Tax Compact), and the value of interstate mobile property determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator of the property factor is determined according to AS 43.19 (Multistate Tax Compact);

     (2) the numerator of the payroll factor is the sum of the wages and salaries of employees assigned to fixed locations determined according to AS 43.19 (Multistate Tax Compact) and the wages and salaries of employees assigned to interstate mobile property determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator of the payroll factor is determined in accordance with AS 43.19 (Multistate Tax Compact);

     (3) the numerator of the sales factor is the sum of all revenues from intrastate activities and revenues from interstate activities determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator is determined in accordance with AS 43.19 (Multistate Tax Compact);

     (4) the portions of the numerator of the property, payroll, and sales factors which are directly related to interstate mobile property operations are determined by a ratio which the number of days spent in ports inside the state bears to the total number of days spent in ports inside and outside the state; the term “days spent in ports” does not include periods when ships are tied up because of strikes or withheld from Alaska service for repairs, or because of seasonal reduction of service; days in port are computed by dividing the total number of hours in all ports by 24.

 (b) The department shall, by regulation, adopt formulas to ensure that the total income subject to apportionment under this chapter has been apportioned only to those states having jurisdiction to tax the income. Transportation carriers other than water carriers shall apportion their income to the state by means of the formulas adopted by the department.




Sec. 43.20.144. Oil and gas producers and pipelines.
 (a) All business income of a taxpayer engaged in the production of oil or gas from a lease or property in this state or engaged in the transportation of oil or gas by pipeline in this state shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax Compact) as modified by this section.

 (b) A taxpayer’s business income to be apportioned under this section to the state shall be the federal taxable income of the taxpayer’s consolidated business for the tax period, except that
     (1) taxes based on or measured by net income that are deducted in the determination of the federal taxable income shall be added back; the tax levied and paid under AS 43.55 may not be added back;

     (2) intangible drilling and development costs that are deducted as expenses under 26 U.S.C. 263(c) (Internal Revenue Code) in the determination of the federal taxable income shall be capitalized and depreciated as if the option to treat them as expenses under 26 U.S.C. 263(c) (Internal Revenue Code) had not been exercised;

     (3) depletion deducted on the percentage depletion basis under 26 U.S.C. 613 (Internal Revenue Code) in the determination of the federal taxable income shall be recomputed and deducted on the cost depletion basis under 26 U.S.C. 612 (Internal Revenue Code); and

     (4) depreciation shall be computed on the basis of 26 U.S.C. 167 (Internal Revenue Code) as that section read on June 30, 1981.

 (c) A taxpayer’s business income shall be apportioned to this state by multiplying the taxpayer’s income determined under (b) of this section by the apportionment factor applicable to the taxpayer among the following factors:
     (1) the apportionment factor of a taxpayer subject to this section but not engaged in the production of oil and gas, or of gas only, as appropriate, from a lease or property in this state during the tax period is a fraction, the numerator of which is the sum of the property factor under AS 43.19 (Multistate Tax Compact) and the sales factor under (d) of this section for the taxpayer for that tax period, and the denominator of which is two;

     (2) the apportionment factor of a taxpayer subject to this section but not engaged in the pipeline transportation of oil or gas in this state during the tax period is a fraction, the numerator of which is the sum of the property factor under (e) of this section and the extraction factor under (f) of this section for the taxpayer for the tax period, and the denominator of which is two;

     (3) the apportionment factor of a taxpayer engaged both in the production of oil or gas from a lease or property in this state and in the pipeline transportation of oil or gas in this state during the tax period is a fraction, the numerator of which is the sum of the sales factor under (d) of this section, the property factor under (e) of this section, and the extraction factor under (f) of this section for the taxpayer for the tax period, and the denominator of which is three.

 (d) The sales factor of a taxpayer subject to this section is a fraction,
     (1) the numerator of which is the sum of the following for the tax period:
          (A) the tariffs allowed and received by or for the taxpayer for transporting oil or gas by pipeline in this state, regardless of whether the tariffs are paid by third parties or by entities within the taxpayer’s consolidated business; and

          (B) the total sales of the taxpayer in this state, determined in accordance with AS 43.19 (Multistate Tax Compact), but excluding
               (i) those sales already included in the tariffs described in (A) of this paragraph;

               (ii) constructive sales or deemed sales of natural gas delivered to the state as payment of tax under an election made by the taxpayer under AS 43.55.014;

               (iii) fees, allowed and received, that are paid between entities within the consolidated business of the taxpayer for transporting the taxpayer’s natural gas; and

     (2) the denominator of which is the sum of the following for the tax period:
          (A) the tariffs allowed and received by or for the taxpayer’s consolidated business for transporting oil or gas by pipeline everywhere, regardless of whether the tariffs are paid by third parties or by entities within the taxpayer’s consolidated business; and

          (B) the total sales of the taxpayer’s consolidated business everywhere, determined in accordance with AS 43.19 (Multistate Tax Compact), but excluding
               (i) those sales already included in the tariffs described in (A) of this paragraph;

               (ii) constructive sales or deemed sales of natural gas delivered to the state as payment of tax under an election made by the taxpayer under AS 43.55.014 or delivered in another tax jurisdiction under a law comparable to AS 43.55.014;

               (iii) fees, allowed and received, that are paid between entities within the consolidated business of the taxpayer for transporting the taxpayer’s natural gas.

 (e) Unless otherwise specified in this section, the property factor of a taxpayer subject to this section is a fraction,
     (1) the numerator of which is the sum of the following for the tax period:
          (A) the average value, determined under AS 43.19 (Multistate Tax Compact), of the taxpayer’s real and tangible personal property owned or rented and used in this state during the tax period; and

          (B) the cumulative intangible drilling and development costs capitalized or expensed for federal income tax purposes under 26 U.S.C. 263(c) (Internal Revenue Code), for the taxpayer’s producing oil and gas wells in this state; and

     (2) the denominator of which is the sum of the following for the tax period:
          (A) the average value, determined under AS 43.19 (Multistate Tax Compact), of the real and tangible personal property everywhere owned or rented and used by the taxpayer’s consolidated business during the tax period; and

          (B) the cumulative intangible drilling and development costs capitalized or expensed for federal income tax purposes under 26 U.S.C. 263(c) (Internal Revenue Code), for the producing oil and gas wells everywhere of the taxpayer’s consolidated business.

 (f) The extraction factor of a taxpayer subject to this section is a fraction,
     (1) the numerator of which is the sum of the following for the tax period:
          (A) the number of barrels of the taxpayer’s oil (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer in this state; and

          (B) one-sixth of the number of Mcf of the taxpayer’s gas, excluding reinjected gas but including gas subject to an election under AS 43.55.014, (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer in this state; and

     (2) the denominator of which is the sum of the following for the tax period:
          (A) the number of barrels of oil of the taxpayer’s consolidated business (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer’s consolidated business everywhere; and

          (B) one-sixth of the number of Mcf of gas, excluding reinjected gas but including gas subject to an election under AS 43.55.014, of the taxpayer’s consolidated business (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer’s consolidated business everywhere.

 (g) A taxpayer that has signed a contract approved by the legislature as a result of submission of a proposed contract developed under AS 43.82 or as a result of acts by the legislature in implementing the purposes of AS 43.82, providing for payments in lieu of the tax under this chapter and that has nexus with the state solely as the result of the taxpayer’s participation in the approved qualified project that is subject to the contract or would not, but for such participation, be engaged in the production of oil or gas from a lease or property in this state or engaged in the transportation of oil or gas by pipeline in this state, is not required to file a return under this section unless required to do so by the contract.

 (h) In this section,
     (1) “barrel” means the quantity of oil contained in 42 United States gallons of 231 cubic inches each, measured at a temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds per square inch;

     (2) “consolidated business” means a corporation or group of corporations having more than 50 percent common ownership, direct or indirect, or a group of corporations in which there is common control, either direct or indirect, as evidenced by any arrangement, contract, or agreement; the requirements of this chapter apply whether or not the taxpayer is the parent or controlling corporation;

     (3) “federal taxable income” means taxable income as the term is used in AS 43.20.011 — 43.20.142;

     (4) “gas” means all hydrocarbons produced that are not defined as oil, including all liquid hydrocarbons extracted at a gas processing plant;

     (5) “lease or property” has the meaning given it by the department in its regulations;

     (6) “Mcf ” means the quantity of gas contained in 1,000 cubic feet of space, measured at a temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds per square inch; and

     (7) “oil” means crude petroleum oil and other hydrocarbons, regardless of API gravity, which are produced in liquid form, including the liquid hydrocarbons sometimes known as distillate or condensate which are recovered by separation from gas other than at a gas processing plant.




Sec. 43.20.145. Affiliated groups.
 (a) A corporation that is a member of an affiliated group shall file a return using the water’s edge combined reporting method. A return under this section must include the following corporations if the corporations are part of a unitary business with the filing corporation:
     (1) an affiliated corporation that is eligible to be included in a federal consolidated return under 26 U.S.C. 1501 — 1505 (Internal Revenue Code) if the corporation’s property, payroll, and sales factors in the United States average
          (A) 20 percent or more; or

          (B) under 20 percent, if the corporation does not meet the requirements of 26 U.S.C. 861(c);

     (2) a domestic international sales corporation; in this paragraph, “domestic international sales corporation” has the meaning given in 26 U.S.C. 992(a);

     (3) a foreign sales corporation; in this paragraph, “foreign sales corporation” has the meaning given to the term “FSC” in 26 U.S.C. 922(a);

     (4) a corporation, regardless of the place where the corporation was incorporated, if the corporation’s property, payroll, and sales factors in the United States average 20 percent or more;

     (5) a corporation that is incorporated in or does business in a country that does not impose an income tax, or that imposes an income tax at a rate lower than 90 percent of the United States income tax rate on the income tax base of the corporation in the United States, if
          (A) 50 percent or more of the sales, purchases, or payments of income or expenses, exclusive of payments for intangible property, of the corporation are made directly or indirectly to one or more members of a group of corporations filing under the water’s edge combined reporting method;

          (B) the corporation does not conduct significant economic activity.

 (b) When computing taxable income for a corporation under (a) of this section, the following amounts shall be excluded:
     (1) 80 percent of dividend income received from foreign corporations;

     (2) an amount treated as a dividend under 26 U.S.C. 78;

     (3) 80 percent of the royalties accrued or received from a foreign corporation.

 (c) In (b)(1) and (3) of this section, a payment is considered to be received from a corporation that is part of the unitary business if the payment is received
     (1) by a member of an affiliated group included in a water’s edge combined report filed under this section; and

     (2) from a corporation in which the recipient owns 50 percent or more of the stock of the corporation.

 (d) Dividends and royalties taxable to a corporation using the water’s edge combined reporting method are in lieu of an expense attribution for income excluded under (b) of this section.

 (e) The department may require a corporation that files under (a) of this section to file a report under AS 43.20.142 and 43.20.143 prepared without regard to this section if the corporation or an affiliated corporation
     (1) fails to comply with regulations adopted under this chapter, including domestic disclosure spread sheet filing requirements; or

     (2) does not provide information that is requested by the department that is necessary for the department to audit the taxpayer’s corporate return in a reasonable period of time.

 (f) This section does not apply to taxpayers subject to AS 43.20.144 engaged in
     (1) the production of oil or gas from a lease or property in the state; or

     (2) the transportation of oil or gas by regulated pipeline in the state.

 (g) A corporation that has signed a contract approved by the legislature as a result of submission of a proposed contract developed under AS 43.82 or as a result of acts by the legislature in implementing the purposes of AS 43.82, providing for payments in lieu of the tax under this chapter and that has nexus with the state solely as the result of the corporation’s participation in the approved qualified project that is subject to the contract is not required to file a return under this section unless required to do so by the contract.

 (h) In this section,
     (1) “affiliated corporation” means a member of an affiliated group to which the taxpayer filing a return under (a) of this section belongs;

     (2) “affiliated group” means a group of two or more corporations in which 50 percent or more of the voting stock of each member of the group is directly or indirectly owned by one or more corporate or noncorporate common owners, or by one or more of the members of the group;

     (3) “foreign corporation” means a corporation created or organized outside of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a possession of the United States;

     (4) “water’s edge combined reporting method” means a reporting method in which the only corporations besides the taxpayer that may be included in the return are the corporations listed in (a) of this section.




Sec. 43.20.150. Definitions. [Repealed, § 45 ch 113 SLA 1980.]

Article 3. Administration.


Sec. 43.20.160. Administration.
 (a) The department shall administer this chapter.

 (b) [Repealed, § 45 ch 113 SLA 1980.]
 (c) The department shall prescribe and furnish all necessary forms, and adopt and publish all necessary regulations in plain and concise language conformable with this chapter for the assessment and collection of the taxes imposed by this chapter. The department shall apply as far as practicable the administrative and judicial interpretations of the federal income tax law. The department shall also prepare a concise statement of the contents of the code sections referred to in this chapter for the information of the taxpayer and make them available to the taxpayer making a return.

 (d) All money collected by the department under this chapter shall be deposited in the general fund of the state.

 (e) [Repealed, § 10 ch 1 SSSLA 1980.]




Sec. 43.20.170. Collection of income tax at source. [Repealed, § 11 ch 1 SSSLA 1980.]
Sec. 43.20.172. Information required of fish processors and buyers. [Repealed, § 16 ch 82 SLA 1982.]
Sec. 43.20.173. Collection of income tax at source for fish and fish products. [Repealed, § 1 ch 28 SLA 1965.]
Sec. 43.20.180. Credits against tax. [Repealed, § 10 ch 1 SSSLA 1980.]
Sec. 43.20.190. Publicity. [Repealed, § 3 ch 166 SLA 1976. For law on disclosure of tax returns and reports, see AS 43.05.230.]
Sec. 43.20.200. Review and assessment.
 (a) As soon as practicable after a return is filed, the department may examine it and determine the correct amount of the tax. If an error is disclosed by the examination, the department shall so notify the taxpayer by first-class mail. The taxpayer may petition for redetermination of deficiency as provided in AS 43.05.240.

 (b) The same period of limitation upon the assessment and collection of taxes imposed under this chapter and the same exceptions to it shall apply as provided in 26 U.S.C. 6501 — 6503 (Internal Revenue Code). In the case of additional tax due by reason of a modification, recomputation, or determination of deficiency in a taxpayer’s federal income tax return, the period of limitation on assessment commences from the date that the notice required in AS 43.20.030(d) is filed, and if no notice is filed the tax may be assessed at any time.




Sec. 43.20.210. Additional penalty tax. [Repealed, § 3 ch 166 SLA 1976. For civil penalty, see AS 43.05.220.]
Sec. 43.20.215. Penalty for late payment of refund. [Repealed, § 10 ch 1 SSSLA 1980.]

Article 4. Enforcement.


Sec. 43.20.220. Enforcement. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.10.032.]
Sec. 43.20.230. Lien. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.10.035.]
Sec. 43.20.240. Recording lien and certificate of discharge. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.10.042.]
Sec. 43.20.250. Action to enforce lien.
In a case where there is a refusal or neglect to pay a tax, including interest, penalty, additional amount, or addition to the tax, together with additional costs that accrue, the attorney general, at the request of the department may file an action in the superior court to enforce the lien of the state for the tax upon property and rights to property, real or personal, or to subject the property and rights to property owned by the delinquent, or in which the delinquent has a right, title, or interest to the payment of the tax. The action shall be commenced and pursued in the manner provided for the foreclosure of liens in AS 09.45.170 — 09.45.220, which are applicable to tax liens arising under this chapter to the extent that the provisions are not inconsistent with other provisions of this chapter. The action may be started at any time within six years after the lien arises.


Sec. 43.20.260. Suspension of licenses. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.10.045.]
Sec. 43.20.270. Distraint on property.
 (a) The department may collect taxes, with interest, penalties, and other additional amounts permitted by law, by distraint and sale, in the manner provided in this section, of the property of a person liable to pay the taxes, interest, penalties, or other additional amounts, who neglects or refuses to pay them within 10 days from the mailing of notice and demand for payment of them, and who has not appealed from the assessment of the taxes, interest, penalties, and other additional amounts determined under AS 43.05.240 or following appeal taken under AS 43.05.241 or 43.05.242.

 (b) Notwithstanding the provisions of AS 09.38 or any other provision of law exempting property from execution, only the following property, if it belongs to the head of a family, is exempt from distraint and sale under this chapter:
     (1) the schoolbooks and wearing apparel necessary for the family;

     (2) arms for personal use;

     (3) one cow, two hogs, five sheep and their wool, but the aggregate market value of the sheep may not exceed $50;

     (4) the necessary food for the exempt cow, hogs, and sheep, for not more than 30 days;

     (5) fuel to an amount not greater than $25;

     (6) provisions to an amount not greater than $50;

     (7) household furniture kept for use to an amount not greater than $300; and

     (8) the books, tools, or implements of a trade or profession, to an amount not greater than $100.

 (c) In case of neglect or refusal to pay taxes or deficiencies as provided in this chapter, the department may levy, or, by warrant issued by it, authorize a deputy or agent to levy upon, seize and sell all property, except exempt property belonging to the person, for the payment of the amount due, with interest and penalty for nonpayment, and also of a further amount sufficient for the fees, costs, and expenses of the levy.

 (d) When distraint is made, as provided in this section,
     (1) the deputy or agent charged with the collection shall make or have made an account of the property distrained, a copy of which, signed by the deputy or agent making the distraint, shall be left with the owner or possessor of the property, or at the dwelling or usual place of business of the owner or possessor, with a person of suitable age and discretion, if a person of suitable age and discretion can be found, or, if the taxpayer is a corporation, with an officer, manager, general agent, or agent for process, with a note of the amount demanded and the time and place of sale;

     (2) the deputy or agent shall immediately publish a notice of the time and place of sale, together with a description of the property distrained, in a newspaper within the judicial district in which the distraint is made, and, in the discretion of the department, have the notice publicly posted in three public places within five miles of the place where the sale is to be held; and

     (3) the time of sale may not be less than 10 nor more than 60 days from the date of the notification to the owner or possessor of the property, and the place proposed for the sale may not be more than five miles from the place of making the distraint; the sale may be adjourned from time to time by the deputy or agent, if the deputy or agent considers it advisable, but not for more than 90 days in all.

 (e) When property is advertised for sale under distraint, the deputy or agent making the seizure shall proceed to sell the property at public auction, offering the property at not less than a fair minimum price, including the expenses of making the seizure and of advertising the sale, and if the amount bid for the property at the sale is not equal to the fair minimum price so fixed, the agent or deputy conducting the sale may declare the property to be purchased by the agent or deputy for the state. The property so purchased may be sold by the deputy or agent under regulations prescribed by the department.

 (f) The property distrained shall be restored to the owner or possessor if, before the sale, payment of the amount due is made to the deputy or agent charged with the collection, together with the fees and other charges; but in case of nonpayment, the deputy or agent shall proceed to sell the property at public auction. The owner of real property sold under this section, the owner’s heir, executor, or administrator, or a person in behalf of the owner may redeem the property sold or a particular tract of the property at any time within 120 days after the sale of the property or tract. The property or tract may be redeemed upon payment to the purchaser or, if the purchaser cannot be found in the state, then to the commissioner of revenue for the use of the purchaser, the purchaser’s heirs, or assigns, the amount paid by the purchaser and interest on it at the rate of 12 percent a year. If land sold is redeemed under this subsection, the commissioner shall cause entry of the fact to be made upon the record mentioned in (g)(6) of this section and the entry shall be evidence of such redemption.

 (g) The following provisions apply to sale of property under this section.
     (1) In the case of property sold under this section, the deputy or agent conducting the sale shall give to the purchaser a certificate of sale upon payment in full of the purchase price. In the case of real property, the certificate shall set out the real property purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid for it.

     (2) In the case of real property sold under this section and not redeemed in the manner and within the time provided in (f) of this section, the commissioner shall execute to the purchaser of the real property at the sale a deed of the real property so purchased, reciting the facts set out in the certificate.

     (3) If real property is declared purchased by the deputy or agent for the state at a sale under (e) of this section, the deputy or agent shall at the proper time execute a deed for it after its preparation and the endorsement of approval as to its form by the attorney general and, without delay, cause the deed to be duly recorded in the proper registry of deeds.

     (4) In all cases of sale of property under this section other than real property, the certificate of sale
          (A) is prima facie evidence of the right of the deputy or agent to make the sale, and conclusive evidence of the regularity of the proceedings in making the sale;

          (B) transfers to the purchaser all right, title, and interest of the delinquent in and to the property sold;

          (C) where the property consists of stock, is notice, when received, to a corporation, company, or association of the transfer, and is authority to the corporation, company, or association to record the transfer on their books and records in the same manner as if the stock was transferred or assigned by the party holding the stock in lieu of an original or prior certificate, which is void, whether cancelled or not; and

          (D) where the subject of sale is security or other evidence of debt, is a good and valid receipt to the person holding it, as against a person holding or claiming to hold possession of the security or other evidence of debt.

     (5) In the case of the sale of real property under this section
          (A) the deed of sale given under (2) of this subsection is prima facie evidence of the facts stated in it; and

          (B) if the proceedings of the commissioner or a deputy or agent of the commissioner as set out have been substantially in accordance with the provisions of law, the deed is considered and operates as a conveyance of all the right, title, and interest the party delinquent had in and to the real property thus sold at the time the lien of the state attached to it.

     (6) The commissioner or a deputy or agent of the commissioner shall keep a record of all sales of real property under this section and of redemption of the property. The record shall set out the tax for which the sale was made, the date of seizure and sale, the name of the party assessed and all proceedings in making the sale, the amount of expenses, the names of the purchasers, and the date of the deed. A copy of the record or a part of it certified by the commissioner is evidence in any court of the truth of the facts stated in it.

 (h) When property liable to distraint for taxes is not divisible, so as to enable the department by sale of a part of it to raise the whole amount of the tax or deficiency, with all costs and charges, the whole of the property shall be sold, and the surplus of the proceeds of the sale, after making allowance for the amount of the tax or deficiency, interest, penalties, and additions to it and for the costs and charges of the distraint and sale, shall be surrendered to the owner of the property.

 (i) If property seized and sold under this section is not sufficient to satisfy the claim of the state for which distraint or seizure is made, the deputy or agent may, thereafter, and as often as is necessary, proceed to seize and sell in like manner any other property liable to seizure of the taxpayer against whom the claim exists until the amount due from the taxpayer, together with all expenses, is fully paid.

 (j) A person in possession of property, or rights to property, which is subject to distraint, upon which a levy is made, shall, upon demand by the deputy or agent making the levy, surrender the property or rights to the deputy or agent, unless the property or right is, at the time of the demand, subject to an attachment under judicial process. A person who fails or refuses to so surrender the property or rights is personally liable to the state in a sum equal to the value of the property or rights not so surrendered, but not exceeding the amount of the taxes or deficiencies, including penalties, and interest, for the collection of which levy is made, together with costs and interest from the date of the levy.

 (k) All persons shall, on demand of an agent or deputy about to distrain or having distrained on property, or rights of property, exhibit all books containing evidence or statements relating to the subject of distraint, or the property or rights of property liable to distraint for the tax due.

 (l) The department shall by regulation determine the fees and charges to be allowed in cases of distraint, and may determine whether an expense incurred in making a distraint or seizure is necessary.

 (m) The period of limitation upon distraint is the same as provided under 26 U.S.C. 6501(c), 6502(a), and 6503(a) (Internal Revenue Code). In determining the running of a period of limitation in respect of distraint, the distraint is considered to begin when the levy upon property is made.

 (n) The provisions of this chapter are not exclusive but are in addition to all other existing remedies provided by law for the enforcement of the revenue laws of the state.

 (o) The department may be made a party defendant in an action by a person aggrieved by the unlawful seizure or sale of the person’s property, but only the state is responsible for a final money judgment secured against the department, and the judgment shall be satisfied out of the general fund of the state treasury.

 (p) The department shall adopt and publish all necessary regulations for the enforcement of this section.

 (q) In this section “person” includes an officer or employee of a corporation or a member or employee of a partnership, who as an officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.




Sec. 43.20.275. Definitions for AS 43.20.250 — 43.20.270.
In AS 43.20.250 — 43.20.270,
     (1) “property” means all property, real and personal, tangible and intangible, a right, title, or interest to property, and, without limitation, stocks, securities, bank accounts, and evidences of debt;

     (2) “taxes” includes deficiencies in respect to the taxes.




Article 5. General Provisions.


Sec. 43.20.280. Taxpayers’ remedies. [Repealed, § 3 ch 166 SLA 1976. For current law, see AS 43.05.240.]
Sec. 43.20.290. Exclusive state authority.
No tax may be levied and collected upon the net income of resident or nonresident individuals by a general law city or by a home rule city or any other political subdivision of the state.


Sec. 43.20.300. References to Internal Revenue Code.
 (a) The provisions of the Internal Revenue Code as now in effect or hereafter amended mentioned in this chapter are incorporated in this chapter by reference and have effect as though fully set out in this chapter.

 (b) When portions of the Internal Revenue Code incorporated by reference as provided in (a) of this section refer to rules and regulations adopted by the United States Commissioner of Internal Revenue, or hereafter adopted, they are regarded as regulations adopted by the department under and in accord with the provisions of this chapter, unless and until the department adopts specific regulations in place of them conformable with this chapter.




Secs. 43.20.310 , 43.20.320. Taxable years to which applicable; arrangement and classification. [Repealed, § 62 ch 21 SLA 1991.]
Sec. 43.20.330. Penalties. [Repealed, § 3 ch 169 SLA 1972.]
Sec. 43.20.335. Penalties. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.220 and 43.05.290.]
Sec. 43.20.340. Definitions.
In this chapter,
     (1) “bank” means a financial institution including a national banking association;

     (2) “corporation” includes an association, joint-stock company, and an insurance company;

     (3) “fiscal year” means an accounting period of 12 months ending on the last day of a month other than December;

     (4) “includes” and “including” when used in a definition do not exclude other things otherwise within the meaning of the word defined;

     (5) “Internal Revenue Code” means the Internal Revenue Code of the United States (26 U.S.C.) as the code exists now or as hereafter amended, as the code and amendments apply to the normal taxes and surtax on net incomes, which amendments are operative for the purposes of this chapter as of the time they became operative or will become operative under federal law;

     (6) “part-year resident” means an individual who enters or leaves the state during the taxable year and who has resided or was domiciled in the state for a period of less than 12 months during the taxable year;

     (7) “person” means an individual, a trust or estate, or partnership, or a corporation;

     (8) “taxable year” means the calendar year or the fiscal year ending during the calendar year upon the basis of which the net income is computed under this chapter; “taxable year” includes, in the case of a return made for a fractional part of a year under this chapter, the period for which the return is made;

     (9) “taxpayer” means a person subject to a tax imposed by this chapter;

     (10) “trade or business” includes the engaging in or carrying on of a trade, business, profession, vocation, employment, and rendition of services or commercial activity and includes the performance of the function of a public office.




Sec. 43.20.350. Short title.
This chapter may be cited as the Alaska Net Income Tax Act.


Chapter 21. Oil and Gas Corporate Income Tax.

[Repealed, § 19 ch 116 SLA 1981.]

Chapter 23. Permanent Fund Dividends.

Sec. 43.23.005. Eligibility.
 (a) An individual is eligible to receive one permanent fund dividend each year in an amount to be determined under AS 43.23.025 if the individual
     (1) applies to the department;

     (2) is a state resident on the date of application;

     (3) was a state resident during the entire qualifying year;

     (4) has been physically present in the state for at least 72 consecutive hours at some time during the prior two years before the current dividend year;

     (5) is
          (A) a citizen of the United States;

          (B) an alien lawfully admitted for permanent residence in the United States;

          (C) an alien with refugee status under federal law; or

          (D) an alien that has been granted asylum under federal law;

     (6) was, at all times during the qualifying year, physically present in the state or, if absent, was absent only as allowed in AS 43.23.008; and

     (7) was in compliance during the qualifying year with the military selective service registration requirements imposed under 50 U.S.C. App. 453 (Military Selective Service Act), if those requirements were applicable to the individual, or has come into compliance after being notified of the lack of compliance.

 (b) [Repealed, § 18 ch 4 SLA 1992.]
 (c) A parent, guardian, or other authorized representative may claim a permanent fund dividend on behalf of an unemancipated minor or on behalf of a disabled or an incompetent individual who is eligible to receive a payment under this section. Notwithstanding (a)(2) — (4) of this section, a minor is eligible for a dividend if, during the two calendar years immediately preceding the current dividend year, the minor was born to or adopted by an individual who is eligible for a dividend for the current dividend year.

 (d) Notwithstanding the provisions of (a) — (c) of this section, an individual is not eligible for a permanent fund dividend for a dividend year when
     (1) during the qualifying year, the individual was sentenced as a result of conviction in this state of a felony;

     (2) during all or part of the qualifying year, the individual was incarcerated as a result of the conviction in this state of a
          (A) felony; or

          (B) misdemeanor if the individual has been convicted of
               (i) a prior felony as defined in AS 11.81.900; or

               (ii) two or more prior misdemeanors as defined in AS 11.81.900.

 (e) [Repealed, § 64 ch 21 SLA 1991.]
 (f) The commissioner may waive the requirement of (a)(4) of this section for an individual absent from the state
     (1) in a time of national military emergency under military orders while serving in the armed forces of the United States, or for the spouse and dependents of that individual; or

     (2) while in the custody of the Department of Health and Social Services in accordance with a court order under AS 47.10 or AS 47.12 and placed outside of the state by the Department of Health and Social Services for purposes of medical or behavioral treatment.

 (g) For purposes of applying (d)(1) of this section, the date the court imposes a sentence or suspends the imposition of sentence shall be treated as the date of conviction. For purposes of applying (d)(2)(B) of this section, multiple convictions arising out of a single criminal episode shall be treated as a single conviction.

 (h) If an individual who would otherwise have been eligible for a permanent fund dividend dies after applying for the dividend but before the dividend is paid, the department shall pay the dividend to a personal representative of the estate or to a successor claiming personal property under AS 13.16.680. If an individual who would otherwise have been eligible for a dividend and who did not apply for the dividend dies during the application period, a personal representative of the estate or a successor claiming personal property under AS 13.16.680 may apply for and receive the dividend. If an individual who received a dividend for the year immediately before the qualifying year and who would otherwise have been eligible for a dividend dies during the qualifying year after having been a state resident for at least 180 days immediately before the date of death, notwithstanding (a)(1) — (3) and (a)(6) of this section, a personal representative of the estate or a successor claiming personal property under AS 13.16.680 may apply for and receive the dividend. Notwithstanding AS 43.23.011, an application for a dividend may be filed by the personal representative or the successor under this subsection at any time before the end of the application period for the next dividend year.




Sec. 43.23.008. Allowable absences.
 (a) Subject to (b) and (d) of this section, an otherwise eligible individual who is absent from the state during the qualifying year remains eligible for a current year permanent fund dividend if the individual was absent
     (1) receiving secondary or postsecondary education on a full-time basis;

     (2) receiving vocational, professional, or other specific education on a full-time basis for which, as determined by the Alaska Commission on Postsecondary Education, a comparable program is not reasonably available in the state;

     (3) serving on active duty as a member of the armed forces of the United States or accompanying, as that individual’s spouse, minor dependent, or disabled dependent, an individual who is
          (A) serving on active duty as a member of the armed forces of the United States; and

          (B) eligible for a current year dividend;

     (4) serving under foreign or coastal articles of employment aboard an oceangoing vessel of the United States merchant marine;

     (5) receiving continuous medical treatment recommended by a licensed physician or convalescing as recommended by the physician who treated the illness if the treatment or convalescence is not based on a need for climatic change;

     (6) providing care for a parent, spouse, sibling, child, or stepchild with a critical life-threatening illness whose treatment plan, as recommended by the attending physician, requires travel outside the state for treatment at a medical specialty complex;

     (7) providing care for the individual’s terminally ill family member;

     (8) settling the estate of the individual’s deceased parent, spouse, sibling, child, or stepchild, provided the absence does not exceed 220 cumulative days;

     (9) serving as a member of the United States Congress;

     (10) serving on the staff of a member from this state of the United States Congress;

     (11) serving as an employee of the state in a field office or other location;

     (12) accompanying a minor who is absent under (5) of this subsection;

     (13) accompanying another eligible resident who is absent for a reason permitted under (1), (2), (5) — (12), (16), or (17) of this subsection as the spouse, minor dependent, or disabled dependent of the eligible resident;

     (14) serving as a volunteer in the federal peace corps program;

     (15) because of training or competing as a member of the United States Olympic Team or a United States national team for an Olympic sport;

     (16) participating for educational purposes in a student fellowship sponsored by the United States Department of Education or by the United States Department of State;

     (17) for any reason consistent with the individual’s intent to remain a state resident, provided the absence or cumulative absences do not exceed
          (A) 180 days in addition to any absence or cumulative absences claimed under (3) of this subsection if the individual is not claiming an absence under (1), (2), or (4) — (16) of this subsection;

          (B) 120 days in addition to any absence or cumulative absences claimed under (1) — (3) of this subsection if the individual is not claiming an absence under (4) — (16) of this subsection but is claiming an absence under (1) or (2) of this subsection; or

          (C) 45 days in addition to any absence or cumulative absences claimed under (1) — (16) of this subsection if the individual is claiming an absence under (4) — (16) of this subsection.

 (b) An individual may not claim an allowable absence under (a)(1) — (16) of this section unless the individual was a resident of the state for at least six consecutive months immediately before leaving the state.

 (c) [Repealed, § 3 ch 33 SLA 2013.]
 (d) After an individual has been absent from the state for more than 180 days in each of the five preceding qualifying years, the department shall presume that the individual is no longer a state resident. The individual may rebut this presumption by providing clear and convincing evidence to the department that
     (1) the individual was physically present in the state for at least 30 cumulative days during the past five years; and

     (2) the individual is a state resident as defined in AS 43.23.095.

 (e) To determine whether an individual intends to return and remain in the state indefinitely, the department shall consider all relevant factors, including
     (1) the length of time the individual was absent from the state compared to the length of time the individual was physically present in the state;

     (2) the frequency and duration of voluntary return trips to the state during the past five years;

     (3) whether the individual’s intent to return to and remain in the state is conditioned on future events beyond the individual’s control;

     (4) the ties the individual has established with the state or another jurisdiction, as demonstrated by
          (A) maintenance of a home;

          (B) payment of resident taxes;

          (C) registration of a vehicle;

          (D) registration to vote and voting history;

          (E) acquisition of a driver’s license, business license, or professional license; and

          (F) receipt of benefits under a claim of residency in the state or another jurisdiction;

     (5) the priority that the individual gave the state on an employment assignment preference list, including a list used by military personnel.

 (f) For purposes of (a)(7) of this section, “family member” means a person who is
     (1) legally related to the individual through marriage or guardianship; or

     (2) the individual’s sibling, parent, grandparent, son, daughter, grandson, granddaughter, uncle, aunt, niece, nephew, or first cousin.




Sec. 43.23.010. Eligibility for permanent fund dividend. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.011. Application period.
 (a) An application for a permanent fund dividend shall be filed during the period that begins January 1 and ends March 31 of that dividend year.

 (b) An otherwise eligible individual may apply for a current year dividend after March 31 of that year if the individual was eligible during the application period under (a) of this section for hostile fire or imminent danger pay while serving on active duty as a member of the armed forces of the United States. The individual must apply under this subsection within 90 days after the last day the individual was eligible for hostile fire or imminent danger pay. If the individual was eligible for hostile fire or imminent danger pay on March 31 of the current dividend year, the 90-day application period extension begins on the first day after March 31 that the individual was no longer eligible for the pay.

 (c) The commissioner may permit an individual to apply for a permanent fund dividend for any year after the application deadline under (a) or (b) of this section if the individual
     (1) at any time during the application period for that dividend established in (a) or (b) of this section,
          (A) served on active duty as a member of the armed forces of the United States; and

          (B) was eligible for hostile fire or imminent danger pay; and

     (2) demonstrates a reasonable cause for the delay in applying for that dividend.




Sec. 43.23.015. Application and proof of eligibility.
 (a) The commissioner shall adopt regulations under the Administrative Procedure Act (AS 44.62) for determining the eligibility of individuals for permanent fund dividends. The commissioner may require an individual to provide proof of eligibility, and the commissioner may use other information available from other state departments or agencies to determine the eligibility of an individual. The commissioner shall consider all relevant circumstances in determining the eligibility of an individual. However, the residency of an individual’s spouse may not be the principal factor relied upon by the commissioner in determining the residency of the individual.

 (b) The department shall prescribe and furnish an application form for claiming a permanent fund dividend. The application must include
     (1) notice of the penalties provided for under AS 43.23.035;

     (2) a statement of eligibility and a certification of residency;

     (3) the means for an applicant eligible to vote under AS 15.05, or a person authorized to act on behalf of the applicant, to furnish information required by AS 15.07.060(a)(1) — (4) and (7) — (9), and an attestation that such information is true.

 (c) Except as provided in (d) of this section or as may be provided by regulations adopted by the department, an individual must personally sign the application for permanent fund dividends, including the certification of residency required under (b) of this section.

 (d) The application and certification of residency of an unemancipated individual under 18 years of age or of a disabled or an incompetent individual must be signed by the individual’s parent, legal guardian, or other authorized representative. An individual may complete, sign, and file an application on behalf of a member of the armed forces of the United States who is serving on active duty outside of the United States if the individual has a power of attorney from the member of the armed forces that authorizes, in specific or general terms, the individual to file that application.

 (e) If a public agency claims a permanent fund dividend on behalf of an individual, the public agency shall hold the dividend in trust for the individual. Money held in trust under this subsection shall be invested by the commissioner in accordance with AS 37.10.070.

 (f) A minor or a disabled or an incompetent individual may not maintain a claim against the state or an officer or employee of the state based on the manner in which the parent, guardian, or authorized representative other than a public agency of the state managed or disposed of permanent fund dividends received on behalf of the minor or disabled or incompetent individual.

 (g) If an individual is aggrieved by a decision of the department determining the individual’s eligibility for a permanent fund dividend or the individual’s authority to claim a permanent fund dividend on behalf of another, the individual may, upon payment of a $25 appeal fee, request the department to review its decision. Within 12 months after the administrative appeal is filed, the department shall provide the individual with a final written decision. If the individual is aggrieved by the decision of the department after all administrative proceedings, the individual may appeal that decision to the superior court in accordance with AS 44.62.560. An appeal to the court under this section does not entitle the aggrieved individual to a trial de novo. The appeal shall be based on the record of the administrative proceeding from which appeal is taken and the scope of appeal is limited to matters contained in the record of the administrative proceeding. If, as a result of an administrative proceeding or a court appeal, the individual prevails, the $25 appeal fee shall be returned to the individual by the department.

 (h) The penalty and enforcement provisions of AS 43.23.035 apply to an individual who claims a permanent fund dividend on behalf of another.

 (i) An indigent individual may apply for a waiver of the appeal fee required under (g) of this section. The department shall prescribe and furnish a form for that purpose. The department shall grant the waiver if, during the year immediately preceding the year the form is submitted to the department, the individual was a member of a family with an income equal to or less than the federal poverty guidelines for Alaska set by the United States Department of Health and Human Services.

 (j) The application form for claiming a permanent fund dividend must include a place for the applicant to voluntarily indicate that the applicant is a veteran, the branch of service, including the Alaska Territorial Guard, and the dates of service. Notwithstanding AS 43.23.017, the department shall release information provided under this subsection to the Department of Military and Veterans’ Affairs and may not otherwise release the information. The Department of Military and Veterans’ Affairs may only release the information to congressionally chartered veterans service organizations in the state. The application form must contain notice that providing the information under this subsection is voluntary, that the information will be released as provided in this subsection, and that the veterans service organizations are not required to keep it confidential.




Sec. 43.23.016. Voter registration. [Effective March 1, 2017.]
The commissioner shall establish by rule a schedule by which the commissioner will provide and shall provide, as soon as is practicable, the director of elections with
     (1) electronic records from the permanent fund dividend applications of the information required by AS 15.07.060(a)(1) — (4) and (7) — (9), and the attestation that such information is true, for each permanent fund dividend applicant who
          (A) is a citizen of the United States; and

          (B) is at least 18 years of age or will be within 90 days of the date of the application; and

     (2) the mailing addresses for all permanent fund dividend applicants.




Sec. 43.23.017. Applicant information confidential.
 (a) Except as provided in (c) of this section, information on each permanent fund dividend application, except the applicant’s name, is confidential. The department may only release information that is confidential under this section
     (1) to a local, state, or federal government agency;

     (2) in compliance with a court order;

     (3) to the individual who or agency that files an application on behalf of another;

     (4) to a banking institution to verify the direct deposit of a permanent fund dividend or correct an error in that deposit;

     (5) as directed to do so by the applicant;

     (6) to a contractor who has a contract with a person entitled to obtain the information under (1) — (5) of this section to receive, store, or manage the information on that person’s behalf; a contractor receiving data under this paragraph may only use the data as directed by and for the purposes of the person entitled to obtain the information;

     (7) to the division of elections as required by AS 43.23.016.

 (b) Notwithstanding (a) of this section, the department may release the names and addresses of permanent fund dividend applicants to a legislator of this state and to the legislator’s office staff for official legislative purposes.

 (c) Information submitted on a permanent fund dividend application that is used for the purpose of registering an applicant to vote under AS 43.23.016 shall be kept confidential by the division of elections as provided in AS 15.07.195.




Sec. 43.23.020. Proof of eligibility. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.021. Delayed payment of certain dividends.
 (a) Notwithstanding other provisions regarding the payment of permanent fund dividends, if an individual is required to register as a sex offender or child kidnapper under AS 12.63 and has not registered or has not completed the required periodic verifications or notices required under AS 12.63, payment of the dividend for that individual shall be delayed.

 (b) If payment of a dividend is delayed, the department shall notify the individual in writing of the delayed payment status, explain the requirements of this section, and request proof of registration and compliance with the verifications and notices required under AS 12.63. The dividend may not be paid unless, within one year after the notification, the department determines that the individual has registered and is in compliance with the verifications and notices required under AS 12.63.

 (c) The permanent fund dividend of an individual for whom payment has been delayed, but that remains payable under (b) of this section, is subject to levy, execution, garnishment, attachment, or any other remedy for the collection of debt. The department shall immediately pay that dividend, or the portion of it that has been claimed by a debtor, as provided in AS 43.23.065 — 43.23.068.

 (d) If an individual for whom payment of a permanent fund dividend has been delayed but remains payable under (b) of this section dies before the dividend is paid or payable, the department shall pay the dividend to a personal representative of the individual’s estate.

 (e) The department shall include notice with the dividend application form of the requirements of (a) and (b) of this section.




Sec. 43.23.025. Amount of dividend.
 (a) By October 1 of each year, the commissioner shall determine the value of each permanent fund dividend for that year by
     (1) determining the total amount available for dividend payments, which equals
          (A) the amount of income of the Alaska permanent fund transferred to the dividend fund under AS 37.13.145(b) during the current year;

          (B) plus the unexpended and unobligated balances of prior fiscal year appropriations that lapse into the dividend fund under AS 43.23.045(d);

          (C) less the amount necessary to pay prior year dividends from the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and 43.23.055(3) and (7);

          (D) less the amount necessary to pay dividends from the dividend fund due to eligible applicants who, as determined by the department, filed for a previous year’s dividend by the filing deadline but who were not included in a previous year’s dividend computation;

          (E) less appropriations from the dividend fund during the current year, including amounts to pay costs of administering the dividend program and the hold harmless provisions of AS 43.23.075;

     (2) determining the number of individuals eligible to receive a dividend payment for the current year and the number of estates and successors eligible to receive a dividend payment for the current year under AS 43.23.005(h); and

     (3) dividing the amount determined under (1) of this subsection by the amount determined under (2) of this subsection.

 (b) [Repealed, § 5 ch 68 SLA 1991.]




Sec. 43.23.028. Public notice.
 (a) By October 1 of each year, the commissioner shall give public notice of the value of each permanent fund dividend for that year and notice of the information required to be disclosed under (3) of this subsection. In addition, the stub attached to each individual dividend disbursement advice must
     (1) disclose the amount of each dividend attributable to income earned by the permanent fund from deposits to that fund required under art. IX, sec. 15, Constitution of the State of Alaska;

     (2) disclose the amount of each dividend attributable to income earned by the permanent fund from appropriations to that fund and from amounts added to that fund to offset the effects of inflation;

     (3) disclose the amount by which each dividend has been reduced due to each appropriation from the dividend fund, including amounts to pay the costs of administering the dividend program and the hold harmless provisions of AS 43.23.075;

     (4) include a statement that an individual is not eligible for a dividend when
          (A) during the qualifying year, the individual was convicted of a felony;

          (B) during all or part of the qualifying year, the individual was incarcerated as a result of the conviction of a
               (i) felony; or

               (ii) misdemeanor if the individual has been convicted of a prior felony or two or more prior misdemeanors;

     (5) include a statement that the legislative purpose for making individuals listed under (4) of this subsection ineligible is to
          (A) obtain reimbursement for some of the costs imposed on the state criminal justice system related to incarceration or probation of those individuals;

          (B) provide funds for services for and payments to crime victims and for grants for the operation of domestic violence and sexual assault programs;

     (6) disclose the total amount that would have been paid during the previous fiscal year to individuals who were ineligible to receive dividends under AS 43.23.005(d) if they had been eligible;

     (7) disclose the total amount appropriated for the current fiscal year under (b) of this section for each of the funds and agencies listed in (b) of this section.

 (b) To the extent that amounts appropriated for a fiscal year do not exceed the total amount that would have been paid during the previous fiscal year to individuals who were ineligible to receive dividends under AS 43.23.005(d) or under AS 43.23.021(b) if they had been eligible, the notice requirements of (a)(3) of this section do not apply to appropriations from the dividend fund to
     (1) the crime victim compensation fund established under AS 18.67.162 for payments to crime victims;

     (2) the Council on Domestic Violence and Sexual Assault established under AS 18.66.010 for grants for the operation of domestic violence and sexual assault programs;

     (3) the Department of Corrections for incarceration and probation programs;

     (4) the office of victims’ rights;

     (5) nonprofit victims’ rights organizations for grants for services to crime victims; or

     (6) the Department of Revenue for grants to minor children of incarcerated individuals under a grant program established by regulations of the Department of Revenue under AS 44.62 (Administrative Procedure Act).




Sec. 43.23.030. Amount of dividend. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.033. Subpoena power.
 (a) The commissioner or the commissioner’s designee at the director level may issue subpoenas to compel the production of books, papers, correspondence, memoranda, and other records considered necessary as evidence in connection with an investigation under or the administration of this chapter.

 (b) In case of refusal to obey a subpoena issued to any person under (a) of this section, the superior court may, upon application by the department, issue an order requiring the person to appear before the department to produce evidence if ordered. Failure to obey the order of the court is punishable as contempt.

 (c) A person who, without just cause, fails or refuses to produce books, papers, correspondence, memoranda, and other records, if it is in the person’s power to do so, in obedience to a subpoena of the department or an authorized representative of it, upon conviction, is punishable by a fine of not more than $200, or by imprisonment for not more than 60 days, or by both. Each day the failure or refusal continues is a separate offense.




Sec. 43.23.035. Penalties and enforcement.
 (a) In addition to any criminal penalties imposed by state law, if an individual is convicted of a crime in connection with a false statement made in a certification required under AS 43.23.015, and the conviction is not reversed, that individual forfeits all permanent fund dividends paid and is not eligible for a future permanent fund dividend.

 (b) If the commissioner determines that a permanent fund dividend should not have been claimed by or paid to an individual, the commissioner may use all collection procedures or remedies available for collection of taxes under this title to recover the payment of a permanent fund dividend that was improperly made. A notice of an improperly paid dividend must be sent to the individual within
     (1) three years after the improper payment is sent; or

     (2) six years after the improper payment is sent if the commissioner determines that the individual exercised gross negligence or recklessly disregarded a material fact in connection with a false statement made in an application.

 (c) In addition to any criminal penalties imposed by state law, if the department finds that an individual, in claiming a permanent fund dividend, or an individual, in certifying another person’s eligibility, wilfully misrepresents, exercises gross negligence with respect to, or recklessly disregards a material fact pertaining to, eligibility, the department may issue an order against the individual for the
     (1) forfeiture of the dividend;

     (2) imposition of a civil fine of up to $3,000; and

     (3) loss of eligibility to receive the next five dividends following the forfeited dividend.

 (d) If notice is not sent within the time required under (b) of this section, administrative or judicial proceedings may not be commenced for recovery of an improperly paid dividend. The time limitations of (b) of this section do not apply if a dividend is forfeited under (a) of this section or if it is more probable than not that an individual has committed a crime in connection with a false statement made in an application.

 (e) The provisions of AS 43.23.015(g) and (i) apply to a request for review of, and to appeal of, a decision under (c) of this section by an individual aggrieved by the decision. When all appeals have been exhausted under this chapter or the time when all of the appeals that could have been taken has expired, the order issued imposing a civil fine, forfeiture, or loss of eligibility becomes final and enforceable in the same manner as a judgment of the court.




Sec. 43.23.040. Penalties and enforcement. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.045. Dividend fund.
 (a) The dividend fund is established as a separate fund in the state treasury. The dividend fund shall be administered by the commissioner and shall be invested by the commissioner in the same manner as provided in AS 37.10.070.

 (b) [Repealed, § 29 ch 134 SLA 1992.]
 (c) [Repealed, § 24 ch 99 SLA 1985.]
 (d) Unless specified otherwise in an appropriation act, the unexpended and unobligated balance of an appropriation to implement this chapter lapses into the dividend fund on June 30 of the fiscal year for which the appropriation was made and shall be used in determining the amount of and paying the subsequent year’s dividend as provided in AS 43.23.025(a)(1)(B).

 (e) [Repealed, § 29 ch 134 SLA 1992.]




Sec. 43.23.050. Dividend fund established. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.055. Duties of the department.
The department shall
     (1) annually pay permanent fund dividends from the dividend fund;

     (2) subject to AS 43.23.011 and paragraph (8) of this section, adopt regulations under AS 44.62 (Administrative Procedure Act) that establish procedures and time limits for claiming a permanent fund dividend; the department shall determine the number of eligible applicants by October 1 of the year for which the dividend is declared and pay the dividends by December 31 of that year;

     (3) adopt regulations under AS 44.62 (Administrative Procedure Act) that establish procedures and time limits for an individual upon emancipation or upon reaching majority to apply for permanent fund dividends not received during minority because the parent, guardian, or other authorized representative did not apply on behalf of the individual;

     (4) assist residents of the state, particularly in rural areas, who because of language, disability, or inaccessibility to public transportation need assistance to establish eligibility and to apply for permanent fund dividends;

     (5) use a list of individuals ineligible for a dividend under AS 43.23.005(d) provided annually by the Department of Corrections and the Department of Public Safety to determine the number and identity of those individuals;

     (6) adopt regulations that are necessary to implement AS 43.23.005(d);

     (7) adopt regulations that establish procedures for the parent, guardian, or other authorized representative of a disabled individual to apply for prior year permanent fund dividends not received by the disabled individual because no application was submitted on behalf of the individual;

     (8) adopt regulations that establish procedures for an individual to apply to have a dividend disbursement under AS 37.25.050(a)(2) reissued if it is not collected within two years after the date of its issuance; however, the department may not establish a time limit within which an application to have a disbursement reissued must be filed;

     (9) provide any information, upon request, contained in permanent fund dividend records to the child support services agency created in AS 25.27.010, or the child support enforcement agency of another state, for child support purposes authorized under law; if the information is contained in an electronic data base, the department shall provide the requesting agency with either
          (A) access to the data base; or

          (B) a copy of the information in the data base and a statement certifying its contents;

     (10) establish a fraud investigation unit for the purpose of assisting the
          (A) Department of Law in the prosecution of individuals who apply for or obtain a permanent fund dividend in violation of a provision in AS 11, by detecting and investigating those crimes; and

          (B) commissioner to detect and investigate the claiming or paying of permanent fund dividends that should not have been claimed by or paid to an individual and to impose the penalties and enforcement provisions under AS 43.23.035.




Sec. 43.23.060. Duties of the department. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.062. Contributions from dividends.
 (a) Notwithstanding AS 43.23.069, the Department of Revenue shall prepare the electronic Alaska permanent fund dividend application to allow an applicant who files electronically to direct that money be subtracted from the dividend payment and contributed to the peace officer and firefighter survivors’ fund or to one or more of the educational organizations, community foundations, or charitable organizations that appear on the contribution list contained in the application. A contribution to the peace officer and firefighter survivors’ fund or to an organization may be $25, $50, $75, $100, or more, in increments of $50, up to the total amount of the permanent fund dividend that the applicant is entitled to receive. If the total amount of contributions elected by an applicant exceeds the amount of the permanent fund dividend that the applicant is entitled to receive, contributions shall be deducted from the dividend in the order of priority elected by the applicant on the application until the entire amount of the dividend that the applicant is entitled to receive is allocated for contribution. The electronic dividend application form must include notice that seven percent of the money contributed will be used for administrative costs incurred in implementing this section, and money from the dividend fund will not be used for that purpose.

 (b) The department shall list each educational organization, community foundation, or charitable organization eligible under (c) and (d) of this section, each university campus that applies under (l) of this section, and the peace officer and firefighter survivors’ fund on the contribution list. The department shall maintain an electronic database for the contribution list that is accessible to the public and that permits searches by organization or fund name, geographic location, and type. The department shall provide a statement of the contributions made by an individual that is suitable for federal income tax purposes to each individual who elects to contribute under (a) of this section.

 (c) The department may not include a charitable organization, other than a community foundation, on the contribution list for a dividend year unless the purpose of the charitable organization is to provide services for youth development, workforce development, arts and culture, aid and services to the elderly, low-income individuals, individuals in emergency situations, victims of crime, disabled individuals, individuals with mental illness, primary, vocational, and higher education, health and dental care, recreational facilities, child abuse and neglect, economic development, food assistance, libraries, public broadcasting, recycling of waste, animal rescue, and zoos. The department may not include on the contribution list an educational organization, community foundation, or charitable organization that is the affiliate of a group. For purposes of this subsection,
     (1) “affiliate” means an organization or foundation that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, a group;

     (2) “group” has the meaning given in AS 15.13.400(8)(B).

 (d) Except for each campus of the University of Alaska, the department may include an educational organization, community foundation, or charitable organization on the contribution list for a current dividend year only if the organization
     (1) before March 31 of the qualifying year, files an application for inclusion on the list for that dividend year on the form required by the department;

     (2) is exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue Code) as an educational or a charitable organization on the date of application;

     (3) was qualified for tax exempt status under 26 U.S.C. 501(c)(3) (Internal Revenue Code) as an educational or a charitable organization during the two calendar years that immediately precede the year the application is filed;

     (4) unless exempted under federal law, has a current Internal Revenue Service Form 990 on file with the United States Department of the Treasury, Internal Revenue Service, or, if the Internal Revenue Service has granted a filing extension for the current year, has on file that form for the immediately preceding year;

     (5) is directed by a voluntary board of directors or local advisory board, a majority of whose members are residents of the state;

     (6) if a community foundation, provided in the state aid during the two calendar years that immediately precede the year the application is filed, or, if an education organization or charitable organization, provided in the state services during the two calendar years that immediately precede the year the application is filed;

     (7) receives at least $100,000 or five percent of its total annual receipts, whichever is less, from contributions;

     (8) has completed and provided to the department a financial audit with an unqualified opinion conducted by an independent certified public accountant for the fiscal year to which the Internal Revenue Service Form 990 required under (4) of this subsection applies; this paragraph applies only to an organization that is required by the federal government to complete a financial audit by an independent certified public accountant; and

     (9) does not make grants or contributions to an organization that is exempt from taxation under 26 U.S.C. 501(c)(4) or (6).

 (e) Unless an appropriation specifically directs that the money be used for costs incurred in implementing this section, the department may not use money from the dividend fund for administrative costs incurred in implementing this section, even if it has been appropriated for costs of administering the dividend program. Contributions shall be distributed to each organization as soon as practicable.

 (f) The department shall charge an application fee of $250 for each educational organization, community foundation, or charitable organization that files an application under (d) of this section or for each university campus that files an application under (l) of this section. The application fees shall be separately accounted for under AS 37.05.142. The annual estimated balance in the account maintained under AS 37.05.142 for application fees collected under this subsection may be appropriated for costs of administering this section.

 (g) The department may use an agent or enter into a contract for the implementation and operation of the contribution program under this section. Before executing a contract with a corporation or other organization, the organization must provide a copy of its policies and procedures to the department. A contract entered into under this subsection is exempt from AS 36.30 (State Procurement Code).

 (h) A public agency that claims a dividend on behalf of an individual under AS 43.23.015(e) may not elect to make contributions from the dividend under (a) of this section.

 (i) The department may adopt regulations under AS 44.62 (Administrative Procedure Act) to carry out the provisions of this section. Notwithstanding this subsection and other provisions of law, a state agency, including the department, may not adopt regulations or otherwise impose requirements or procedures on organizations to implement, interpret, make specific, or otherwise carry out the provisions of this section unless required by the federal government. If an organization disagrees with an action of the department under this section and requests an administrative hearing, the hearing shall be conducted by the office of administrative hearings (AS 44.64.010).

 (j) By January 20 of each year, the department shall prepare a report identifying the organizations on the contribution list for the immediately preceding year, together with the amount of contributions made to each of the organizations, and shall notify the legislature that the report is available.

 (k) A community foundation may not deposit contributions received under this section into a fund that would be included in the definition of a donor advised fund under 26 U.S.C. 4966(d)(2) (Internal Revenue Code).

 (l) The University of Alaska shall apply separately for each of the three main campuses to be listed on the contribution list for the current dividend year in the manner prescribed by the department. The University of Alaska may apply for each campus other than the three main campuses to be listed on the contribution list for the current dividend year in the manner prescribed by the department.

 (m) In addition to the application fee in (f) of this section, the department shall withhold a coordination fee from each organization, foundation, or university campus that receives contributions under this section in the immediately preceding dividend year. The coordination fee for an organization, foundation, or university campus that receives contributions under this section shall be seven percent of the amount of contributions reported by the department under (j) of this section for the organization, foundation, or university campus for the immediately preceding dividend year. The coordination fee shall be separately accounted for under AS 37.05.142 and shall be accounted for separately from the application fee collected under (f) of this section. The annual estimated balance in the account maintained under AS 37.05.142 for coordination fees collected under this subsection may be appropriated for costs of administering this section. The department may not withhold a coordination fee for contributions to the peace officer and firefighter survivors’ fund.

 (n) In this section,
     (1) “community foundation” means a nonprofit, autonomous, philanthropic institution that is organized and operated primarily as a permanent collection of endowed funds for the long-term benefit of a defined geographic area within one or more municipalities, that has a long-term goal of increasing its permanent unrestricted charitable endowment to benefit the area served, that primarily provides benefits by making grants and may also provide other forms of charitable services, that makes grants that are not limited to providing one type of benefit or to serving one population segment, and that makes grants to multiple grantees;

     (2) “peace officer and firefighter survivors’ fund” means the fund established in AS 39.60.010(a).




Sec. 43.23.065. Exemption of and levy on permanent fund dividends.
 (a) Except as provided in (b) of this section, 20 percent of the annual permanent fund dividend payable to an individual is exempt from levy, execution, garnishment, attachment, or any other remedy for the collection of debt. No other exemption applies to a dividend. Notwithstanding other laws, a writ of execution upon a dividend that has not been delivered to the debtor may be served on the commissioner by
     (1) certified mail, return receipt requested; or

     (2) a civilian process server licensed by the commissioner of public safety using electronic execution procedures, as provided under regulations adopted by the department.

 (b) An exemption is not available under this section for permanent fund dividends taken to satisfy
     (1) child support obligations required by court order or decision of the child support services agency under AS 25.27.140 — 25.27.220;

     (2) court ordered restitution under AS 12.55.045 — 12.55.051, 12.55.100, or AS 47.12.120(b)(4);

     (3) claims on defaulted education loans under AS 43.23.067;

     (4) court ordered fines;

     (5) writs of execution under AS 09.35 of a judgment that is entered
          (A) against a minor in a civil action to recover damages and court costs;

          (B) under AS 09.65.255 against the parent, parents, or legal guardian of an unemancipated minor;

     (6) a debt owed by an eligible individual to an agency of the state, including the University of Alaska, unless the debt is contested and an appeal is pending, or the time limit for filing an appeal has not expired;

     (7) a debt owed to a person for a program for the rehabilitation of perpetrators of domestic violence required under AS 12.55.101, AS 18.66.100(c)(15), AS 25.20.061(3), or AS 33.16.150(f)(2);

     (8) a judgment for unpaid rent or damage owed to a landlord by an eligible individual that was a tenant of the landlord; in this paragraph, “tenant” has the meaning given in AS 34.03.360;

     (9) court-ordered forfeiture of an appearance or performance bond under AS 12.30.075.

 (c) Claims listed in (b) of this section have priority in the order listed over other claims on a permanent fund dividend whether payments are sought through legal actions for the collection of debts or through assignments from the debtor.

 (d) An assignment of or levy, execution, garnishment, attachment, or other remedy for the collection of debt applied to a dividend for a year may not be accepted by the department before April 1 of that same year. AS 09.38.080(c) and 09.38.085 do not apply to a levy on a permanent fund dividend. Upon receipt of a writ of execution under (a) of this section or another court order, the commissioner shall deliver to the court that portion of the dividend executed upon along with the case name and number. At the time payment is made to the court, the department shall send to the individual at the address provided in the individual’s dividend application and to the court that issued the writ or order a notice that contains
     (1) notification that all or part of the individual’s dividend has been seized under a writ of execution or court order;

     (2) the name and address of the court that issued the writ or order;

     (3) the case number for which the writ or order was issued;

     (4) the amount seized under the writ or order; and

     (5) notification that the individual has 30 days from the date the notice is mailed in which to file with the court an objection to the seizure if a mistake has been made.




Sec. 43.23.066. Claims on reimbursement for court-ordered treatment.
 (a) AS 09.38 does not apply to permanent fund dividends taken under AS 47.12.155(c). Notwithstanding AS 09.35, execution on a dividend claimed under AS 47.12.155(c) is accomplished by delivering a certified claim to the department containing the following information:
     (1) the name and social security number of the individual whose dividend is being claimed;

     (2) the amount the individual owes on the reimbursement claim; and

     (3) a statement that
          (A) the Department of Health and Social Services has notified the individual that future permanent fund dividends of the individual will be taken to satisfy the reimbursement claim;

          (B) the individual was notified of the right to request a hearing and allowed 30 days after the date of the notice described in (A) of this paragraph to request the Department of Health and Social Services to hold a hearing on the reimbursement claim;

          (C) the reimbursement claim has not been contested, or, if contested, that the issue has been resolved in favor of the Department of Health and Social Services; and

          (D) if the reimbursement claim has been contested and resolved in favor of the Department of Health and Social Services, no appeal is pending, the time limit for filing an appeal has expired, or the appeal has been resolved in favor of the Department of Health and Social Services.

 (b) The Department of Health and Social Services shall notify the individual if a dividend is claimed under (a) of this section. The notice shall be sent to the address provided in the individual’s permanent fund dividend application and must provide the following information:
     (1) the amount of the reimbursement claim;

     (2) notice that the permanent fund dividend, or that portion of the permanent fund dividend that does not exceed the amount of the reimbursement claim, shall be paid to the Department of Health and Social Services; and

     (3) notification that the individual has a right to request a hearing and has 30 days after the date the notice is mailed in which to file with the Department of Health and Social Services an objection to the dividend claim if a mistake has been made.

 (c) AS 44.62.330 — 44.62.630 apply to a hearing requested by an individual under (b)(3) of this section.




Sec. 43.23.067. Claims of defaulted education loans.
 (a) AS 09.38 does not apply to a permanent fund dividend taken under AS 14.43.145. Notwithstanding AS 09.35, the Alaska Commission on Postsecondary Education may take a permanent fund dividend under AS 14.43.145 by delivering a claim to the department certifying the following information:
     (1) the name and social security number of the individual whose dividend is being claimed;

     (2) the amount the individual owes on a loan awarded under AS 14.43; and

     (3) a statement that the loan is in default under AS 14.43.145, or, if the individual has requested review of the status of the loan under AS 14.43.145(c), that a final determination has been made that the loan is in default.

 (b) The Alaska Commission on Postsecondary Education shall notify the individual of a claim under (a) of this section. The notice shall be sent to the address provided in the individual’s permanent fund dividend application and must provide the following information:
     (1) the amount of the claim;

     (2) notice that the amount of the permanent fund dividend up to the amount of the claim shall be paid to the Alaska Commission on Postsecondary Education to be credited against the individual’s loan balance; and

     (3) the individual’s right to a hearing under (c) of this section.

 (c) Within 30 days after the date of the notice under (b) of this section, the individual may request a hearing. AS 44.62.330 — 44.62.630 apply to a hearing under this section. At the hearing, the borrower has the burden to show that
     (1) the commission has not sent a notice of default in compliance with AS 14.43.145(b);

     (2) the notice of default has been rescinded after review under AS 14.43.145(c); or

     (3) the amount owed by the borrower is less than the amount claimed from the permanent fund dividend.

 (d) If the amount owed by the borrower is determined under (c) of this section to be some amount greater than $0, but less than the amount claimed, the commission may amend its claim to the amount determined to be owing.




Sec. 43.23.068. Claims on defaulted public assistance overpayment.
 (a) AS 09.38 does not apply to permanent fund dividends taken under AS 47.05.080(b). Notwithstanding AS 09.35, execution on a dividend claimed under AS 47.05.080(b) is accomplished by delivering a certified claim to the department containing the following information:
     (1) the name and social security number of the individual whose dividend is being claimed;

     (2) the amount the individual owes on the overpayment claim; and

     (3) a statement that
          (A) the Department of Health and Social Services has notified the individual that future permanent fund dividends of the individual will be taken to satisfy the overpayment claim;

          (B) the individual was notified of the right to request a hearing and allowed 30 days from the date of the notice under (A) of this paragraph to request the Department of Health and Social Services to hold a hearing on the overpayment claim;

          (C) the overpayment claim has not been contested, or, if contested, that the issue has been resolved in favor of the Department of Health and Social Services; and

          (D) if the overpayment claim has been contested and resolved in favor of the Department of Health and Social Services, no appeal is pending, the time limit for filing an appeal has expired, or the appeal has been resolved in favor of the Department of Health and Social Services.

 (b) The Department of Health and Social Services shall notify the individual if a dividend is claimed under (a) of this section. The notice shall be sent to the address provided in the individual’s permanent fund dividend application and must provide the following information:
     (1) the amount of the overpayment claim;

     (2) notice that the amount of the permanent fund dividend that does not exceed the amount of the overpayment claim shall be paid to the Department of Health and Social Services; and

     (3) notification that the individual has a right to request a hearing and has 30 days from the date the notice is mailed in which to file with the Department of Health and Social Services an objection to the dividend claim if a mistake has been made.

 (c) AS 44.62.330 — 44.62.630 apply to a hearing requested by an individual under (b)(3) of this section.




Sec. 43.23.069. Assignments.
 (a) Except as provided in (b) of this section, a person eligible to receive a permanent fund dividend may not assign the right to the dividend. An attempted assignment of the right to receive a permanent fund dividend is against public policy and is void.

 (b) A person may assign the right to receive a permanent fund dividend to a federal, state, or municipal government agency or to a court.

 (c) For purposes of this section, “state agency” includes a regional housing authority created under AS 18.55.996.




Sec. 43.23.070. Exemption of permanent fund dividends. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.071. Fees for processing claims and assignments.
The department shall by regulation adopted under AS 44.62 (Administrative Procedure Act) establish fees for processing claims on dividends received by the department under AS 43.23.065, 43.23.067, or 43.23.072 and for processing assignments of dividends received by the department under AS 43.23.069(b). The fees shall cover the administrative expenses of the department associated with the claims and assignments. Fees shall be deducted from the amount of the dividend remaining after payment of the portion claimed or assigned, or, if the entire dividend is claimed or assigned, the fees shall be deducted before the dividend is paid to the creditor or assignee.


Sec. 43.23.072. Claims for amounts owed under the Alaska Employment Security Act.
 (a) AS 09.38 does not apply to permanent fund dividends taken by the Department of Labor and Workforce Development for a claim for payment of money owed under AS 23.20 (Alaska Employment Security Act). Notwithstanding AS 09.35, execution on a dividend claimed under this section is accomplished by delivering a certified claim to the Department of Revenue containing the following information:
     (1) the name and social security number of the individual whose dividend is being claimed; if the Department of Labor and Workforce Development does not have access to the individual’s social security number for this purpose, the department may supply other identification information authorized under regulations to make a claim under AS 43.23.065;

     (2) the amount the individual owes on the claim under AS 23.20;

     (3) a statement that
          (A) the Department of Labor and Workforce Development has notified the individual that future permanent fund dividends of the individual will be taken to satisfy the claim under AS 23.20;

          (B) the individual was notified of the right to request a hearing under AS 23.20 and the Department of Labor and Workforce Development has allowed the individual at least 30 days after the date of the notice described in (A) of this paragraph to request a hearing on the claim;

          (C) the claim under AS 23.20 has not been contested, or, if contested, the issue has been resolved in favor of the Department of Labor and Workforce Development; and

          (D) if the claim under AS 23.20 has been contested and resolved in favor of the Department of Labor and Workforce Development, an appeal is not pending, the time limit for filing an appeal has expired, or the appeal has been resolved in favor of the department.

 (b) The Department of Labor and Workforce Development shall notify the individual if a dividend is claimed under (a) of this section. The notice shall be sent to the mailing address provided in the individual’s permanent fund dividend application and must provide the following information:
     (1) the amount of the claim under AS 23.20;

     (2) notice that the permanent fund dividend, or that portion of the permanent fund dividend that does not exceed the amount of the claim under AS 23.20, shall be paid to the Department of Labor and Workforce Development in accordance with priorities established in state law;

     (3) notice that the individual has a right to request a hearing and has a specific time after the date that the notice is mailed in which to file with the Department of Labor and Workforce Development an objection to paying the claim from the individual’s permanent fund dividend.

 (c) Except as provided in (d) of this section, AS 44.62.330 — 44.62.630 apply to a hearing requested by an individual under (b) of this section. The hearing
     (1) is limited to issues of identity of the individual and whether an amount is still owing in the claim under AS 23.20; and

     (2) may be conducted telephonically or in writing.

 (d) If the Department of Labor and Workforce Development has a notification or hearing procedure established in statute or regulation, the department may instead use that notification and hearing procedure so long as
     (1) the procedure provides at least the minimum time for notice specified in (a)(3)(B) of this section for the individual to request a hearing;

     (2) the notice includes the statements required by (b) of this section; and

     (3) the hearing is limited to the issues specified in (c)(1) of this section.

 (e) The Department of Labor and Workforce Development may adopt regulations to implement this section under AS 44.62 (Administrative Procedure Act).

 (f) In a claim for payment under this section, the Department of Labor and Workforce Development may include only fines, penalties, overpayments, attorney fees, costs, and other amounts that
     (1) are owed the department under other provisions of state law under which the claim under AS 23.20 is being made; and

     (2) have been established by court judgment or administrative order.




Sec. 43.23.073. Claims of the University of Alaska.
 (a) AS 09.38 does not apply to a permanent fund dividend taken under AS 14.40.251. Notwithstanding AS 09.35, the University of Alaska may take a permanent fund dividend under AS 14.40.251 by delivering a claim to the department certifying the following information:
     (1) the name and social security number of the individual whose dividend is being claimed;

     (2) the amount the individual owes the university; and

     (3) a statement that
          (A) the amount claimed is in default under AS 14.40.251;

          (B) the university has notified the individual that future permanent fund dividends will be taken to satisfy the claim;

          (C) the individual was notified of the right to request a hearing and allowed 30 days after the date of the notice described in (B) of this paragraph to request the university to hold a hearing on the claim;

          (D) the claim has not been contested or, if contested, the issue has been resolved in favor of the university; and

          (E) if the claim has been contested and resolved in favor of the university, no appeal is pending, the time limit for filing an appeal has expired, or the appeal has been resolved in favor of the university.

 (b) The University of Alaska shall notify the individual of a claim under (a) of this section. The notice shall be sent to the address provided in the individual’s permanent fund dividend application and must provide the following information:
     (1) the amount of the claim;

     (2) notice that the amount of the permanent fund dividend up to the amount of the claim shall be paid to the university to be credited against the individual’s default balance; and

     (3) notice of the individual’s right to a hearing under (c) of this section.

 (c) Within 30 days after the date of the notice under (b) of this section, the individual may request a hearing. AS 44.62.330 — 44.62.630 apply to a hearing under this subsection. At the hearing, the individual has the burden to show that
     (1) the university has not sent a notice of default in compliance with AS 14.40.251(b);

     (2) the notice of default has been rescinded after review under AS 14.40.251(c); or

     (3) the amount owed by the individual is less than the amount claimed from the permanent fund dividend.

 (d) If the amount owed is determined under (c) of this section to be some amount greater than $0, but less than the amount claimed, the University of Alaska may amend its claim to the amount determined to be owing.




Sec. 43.23.075. Eligibility for public assistance.
 (a) In determining the eligibility of an individual under a public assistance program administered by the Department of Health and Social Services in which eligibility for assistance is based on financial need, the Department of Health and Social Services may not consider a permanent fund dividend as income or resources received by the recipient of public assistance or by a member of the recipient’s household unless required to do so by federal law or regulation. The Department of Health and Social Services shall notify all recipients of public assistance of the effects of receiving a permanent fund dividend.

 (b) An individual who is denied medical assistance under 42 U.S.C. 1396 — 1396p (Social Security Act, Title XIX) solely because of the receipt of a permanent fund dividend by the individual or by a member of the individual’s household is eligible for state-funded medical assistance under AS 47.25.120 — 47.25.300 (general relief assistance program). The individual is entitled to receive, for a period not to exceed four months, the same level of medical assistance as the individual would have received under 42 U.S.C. 1396 — 1396p (Social Security Act, Title XIX) had there been no permanent fund dividend program.

 (c) An individual who is denied assistance solely because permanent fund dividends received by the individual or by a member of the individual’s household are counted as income or resources under federal law or regulation is eligible for cash assistance under AS 47.25.120 — 47.25.300 (general relief assistance program). Notwithstanding the limit in AS 47.25.130, the individual is entitled to receive, for a period not to exceed four months, the same amount as the individual would have received under other public assistance programs had there been no permanent fund dividend program.




Sec. 43.23.080. Eligibility for state public assistance payments. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.085. Eligibility for state programs.
A program administered by the state or any of its instrumentalities or municipalities, the eligibility for which is based on financial need, may not consider a permanent fund dividend as income or resources unless required to do so by federal law or regulation.


Sec. 43.23.090. Tax exemption. [Repealed, § 22 ch 102 SLA 1982.]
Sec. 43.23.095. Definitions.
In this chapter,
     (1) “Alaska permanent fund” means the fund established by art. IX, § 15 of the state constitution;

     (2) “disabled” means physically or mentally unable to complete and sign an application due to a serious emotional disturbance, visual, orthopedic, or other health impairment, or developmental disability that is attributable to intellectual disability, cerebral palsy, epilepsy, autism, or other cause; “disabled” does not mean “incompetent”;

     (3) “dividend fund” means the fund established by AS 43.23.045;

     (4) “individual” means a natural person;

     (5) “permanent fund dividend” means a right to receive a payment from the dividend fund;

     (6) “qualifying year” means the year immediately preceding January 1 of the current dividend year;

     (7) “state resident” means an individual who is physically present in the state with the intent to remain indefinitely in the state under the requirements of AS 01.10.055 or, if the individual is not physically present in the state, intends to return to the state and remain indefinitely in the state under the requirements of AS 01.10.055;

     (8) “year” means a calendar year.




Sec. 43.23.100. Definitions. [Repealed, § 22 ch 102 SLA 1982.]

Chapter 25. Alaska Industrial Incentive Act.

[Repealed, § 63 ch 37 SLA 1986.]

Chapter 26. Industrial Incentive Tax Credits.

[Repealed, § 64 ch 37 SLA 1986.]

Chapter 30. Inheritance and Transfer Taxes.

[Repealed, § 1 ch 24 SLA 1970.]

Chapter 31. Estate Tax Law of Alaska.

Sec. 43.31.011. Tax upon estates of resident decedents.
A tax is imposed upon the transfer of the estate of a person who, at the time of death, was a resident of this state, the amount of which shall be computed as follows:
     (1) Determine the amount of the credit allowable under the applicable federal revenue Act for estate, inheritance, legacy, and succession taxes actually paid to the several states.

     (2) Determine for each of the other states the amount of all constitutionally valid estate, inheritance, legacy, and succession taxes, actually paid to each of the other states in respect to property owned by the decedent or subject to these taxes as a part of or in connection with the decedent’s estate.

     (3) Determine for each other state in which property is located that is owned by the decedent or subject to estate, inheritance, legacy, or succession taxes as a part of or in connection with the decedent’s estate the proportion of the amount of the credit allowable under the applicable federal revenue Act for estate, inheritance, legacy, and succession taxes actually paid to the several states, as the value of the property taxable in that state bears to the value of the entire gross estate wherever situated.

     (4) The amount of the tax is the amount of the allowable credit as determined in (1) of this section less the sum of the smaller figures of (2) or (3) of this section for each of the other states in which the decedent’s property is situated. For example: The amount of allowable credit under the federal Act is $10,000 (relating to (1) in this section)
     Amount of Tax     Proportion of Credit     Smaller of          Actually Paid     from Situs of Property     (2) of (3)          (relating to (2) of     (relating to (3) of     of this          this section)     this section)     section     State X     $3,000     10%—$1,000     $1,000     State Y     $1,000     15%—$1,500     $1,000                    __________________________________                    $2,000     The Alaska estate tax is $10,000 minus $2,000 equalling $8,000.




Sec. 43.31.021. Tax upon estates of nonresident decedents.
A tax is imposed upon the transfer of real property situated in this state, upon tangible personal property having an actual situs in this state, upon intangible personal property having a business situs in this state and upon stocks, bonds, debentures, notes and other securities or obligations of corporations organized under the laws of this state, of a person who at the time of death was not a resident of this state but was a resident of the United States, the amount of which shall be a sum equal to that proportion of the amount of the credit allowable under the applicable federal revenue Act for estate, inheritance, legacy and succession taxes actually paid to the several states, as the value of the property taxable in this state bears to the value of the entire gross estate wherever situated.


Sec. 43.31.031. Tax upon estates of alien decedents.
 (a) A tax is imposed upon the transfer of real property situated and tangible personal property having an actual situs in this state and upon intangible personal property physically present in this state of a person who at the time of death was not a resident of the United States, the amount of which is a sum equal to that proportion of the credit allowable under the applicable federal revenue Act for estate, inheritance, legacy, and succession taxes actually paid to the several states, as the value of the property taxable in this state bears to the value of the estate taxable by the United States wherever situated.

 (b) For the purpose of this section, stock in a corporation organized under the laws of this state shall be considered physically present in this state. The amount receivable as insurance upon the life of a decedent who at the time of death was not a resident of the United States, and any money deposited with a person carrying on the banking business by or for the decedent who was not engaged in business in the United States at the time of death, is not for the purpose of this section, considered to be physically present in this state.




Sec. 43.31.041. Administration by Department of Revenue.
The department, except as otherwise provided, has jurisdiction and is charged with the administration and enforcement of the provisions of this chapter.


Sec. 43.31.051. Examination of books, papers, records, etc.
 (a) The department, for the purpose of ascertaining the correctness of a return, or for the purpose of making a return where none has been made, may examine books, papers, records, or memoranda, bearing upon the matter required to be included in the return; may require the attendance of persons rendering the return or of an officer or employee of those persons, or of any person having knowledge in the premises, at a convenient place in the superior court in the judicial district in which the person resides, and may take testimony with reference to the matter required by law to be included in the return, and may administer oaths to these persons.

 (b) If a person subpoenaed to appear under this chapter to testify, or to produce books, papers, or other data, refuses to do so, the superior court in the judicial district in which the person resides has jurisdiction by appropriate process to compel the attendance, testimony, or production of books, papers, or other data.




Sec. 43.31.061. Appointment, bonds and credentials of agents.
 (a) The department may appoint and remove examiners and appraisers it considers necessary, these persons to have those duties and powers the department prescribes. The compensation of these examiners and appraisers shall be as the department prescribes, and they shall be reimbursed for travel expenses as provided for state employees.

 (b) The department may require the examiners, appraisers, and employees as it designates to give bond payable to the state for the faithful performance of their duties in that form and with those sureties as it determines, and all premiums on these bonds shall be paid by the state.

 (c) All officers empowered by law to administer oaths or employees, examiners, and appraisers appointed by the department may administer an oath to persons giving testimony before them or to take the acknowledgment of a person in respect to the returns or reports required under this chapter.

 (d) All employees, examiners, and appraisers appointed by the department shall have for identification purposes proper credentials issued by the department and exhibit them upon demand.




Sec. 43.31.071. Regulations.
The department may adopt regulations not inconsistent with this chapter as it considers necessary to enforce its provisions, and may adopt regulations as are or may be promulgated with respect to the estate tax provisions of the revenue Act of the United States insofar as they are applicable. The department may prescribe forms it considers proper for the administration of this chapter.


Sec. 43.31.081. Information confidential. [Repealed, § 3 ch 166 SLA 1976. For current law, see AS 43.05.230.]
Sec. 43.31.091. Actions by or against department.
The department may sue and be sued but may not be required to give supersedeas or other bond in any cause or court of this state.


Sec. 43.31.101. Special appraisers. [Repealed, § 56 ch 32 SLA 1971.]
Sec. 43.31.111. Notice of death or tax return.
The executor, within two months after the decedent’s death, or within a like period after qualifying as executor, shall submit a report of the death to the department on the form prepared and published by the department known as the preliminary notice and report. If a federal estate tax return is required by the applicable federal revenue Act, a copy of the preliminary notice filed with the federal government may be filed with the department in place of the preliminary notice and report.


Sec. 43.31.121. Tax return in certain cases.
The executor of an estate required by the laws of the United States to file a federal estate tax return shall file with the department within 15 months from the date of death a return consisting of an executed copy of the federal estate tax return, and shall file with this return all supplemental data, if any, as may be necessary to determine and establish the correct tax under this chapter. This return shall be made in the case of every decedent who at the time of death was not a resident of the United States and whose gross estate includes any real property situated and tangible personal property having an actual situs in the state and intangible personal property physically present in the state.


Sec. 43.31.131. Failure to make return and extension.
If the federal taxing authorities grant an extension of time for filing a return the department shall allow a like extension of time for filing upon the filing by the executor of a copy of the federal extension with the department. An extension of time for filing a return does not operate to extend the time for payment of the tax. If a person fails to file a return at the time prescribed by law or files, wilfully or otherwise, a false or fraudulent return, the department shall make the return from its own knowledge and from information it can obtain through testimony or otherwise. A return so made by the department shall be prima facie good and sufficient for all legal purposes.


Sec. 43.31.141. When tax due, extension and interest.
The tax imposed by this chapter is due and payable 15 months after the decedent’s death and shall be paid by the executor to the department. If the department finds that the payment on the due date of tax or any part of the tax would impose undue hardship upon the estate, the department may extend the time for payment of any part, but no extension may be for more than one year and the aggregate of extensions with respect to an estate may not exceed five years from the due date. In that case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension unless a further extension is granted. If the time for the payment is extended, there shall be collected, as part of this amount, interest on the tax as provided in AS 43.05.225(1) from the due date of the tax to the date the tax is paid.


Sec. 43.31.151. Notice of deficiency in federal estate tax.
It is the duty of the executor to file with the department within 60 days after a final determination of a deficiency in federal estate tax has been made, written notice of the deficiency. If, based upon this deficiency and the ground for it, it appears that the amount of tax previously paid is less than the amount of tax owing, the difference together with interest at the rate of seven percent a year from the due date of the tax shall be paid upon notice and demand by the department. If the executor fails to give the notice required by this section, any additional tax owing may be assessed, or a proceeding in court for the collection of the tax may be begun without assessment at any time before the filing of notice or within 30 days after the delinquent filing of notice, notwithstanding the provisions of AS 43.05.260.


Sec. 43.31.161. Deficiency, hearing, and procedure. [Repealed, § 3 ch 166 SLA 1976. For taxpayer remedies, see AS 43.05.240.]
Sec. 43.31.171. Civil penalties. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.05.220.]
Sec. 43.31.181. Receipts for taxes.
The department shall issue to the executor, upon payment of the tax imposed by this chapter, receipts in triplicate, any of which is sufficient evidence of payment, and shall entitle the executor to be credited and allowed the amount of the receipt by a court having jurisdiction to audit or settle the accounts of the executor. If the executor files a complete return and makes written application to the department for determination of the amount of the tax and discharge from personal liability, the department, as soon as possible, and in any event within one year after receipt of the application, shall notify the executor of the amount of the tax, and upon payment of the tax the executor shall be discharged from personal liability for any additional tax thereafter found to be due, and is entitled to receive from the department a receipt in writing showing the discharge; however, the discharge does not operate to release the gross estate of the lien of additional tax that may thereafter be found to be due, while the title to the gross estate remains in the executor or in the heirs, devisees, or distributees; but after the discharge is given, no part of the gross estate is subject to lien or to any claim or demand for tax after the title to the estate has passed to a bona fide purchaser for value.


Sec. 43.31.191. Failure to pay tax.
 (a) If a tax imposed by this chapter or any portion of the tax is unpaid within 90 days after it becomes due, and the time for payment is not extended, the department shall collect the tax, penalty and interest by using the remedy of distraint on real and personal property as set out in AS 43.20.270 or by issuing a warrant directed to the commissioner of public safety commanding the commissioner to
     (1) levy upon and sell the real and personal property of the estate found in the state for the payment of the amount of the unpaid tax with interest and penalties, if any, as may have accrued or been assessed against it, together with the cost of executing the warrant; and

     (2) return the warrant to the department and pay to it the money collected under it by a time to be specified in the warrant, not less than 60 days from the date of the warrant.

 (b) The commissioner of public safety shall proceed upon the warrant in all respects, with like effect, in the manner prescribed by law for executions issued against property upon judgments of a court of record. Alias and pluries warrants may issue from time to time as the department considers proper until the entire amount of the tax, deficiency, interest, penalties and costs have been recovered.




Sec. 43.31.201. Tax payable from entire estates and third persons.
If the tax or a part of the tax is paid or collected out of that part of the estate passing to or in possession of a person other than the executor in the capacity of executor, the person is entitled to a reimbursement out of a part of the estate still undistributed or by a just and equitable contribution by the person whose interest in the estate of the decedent would have been reduced if the tax had been paid before the distribution of the estate or whose interest in the estate is subject to an equal or prior liability for the payment of tax, debts, or other charges against the estate, it being the purpose and intent of this section that so far as is practical and unless otherwise directed by the will of the decedent, the tax shall be paid out of the estate before its distribution; but the department is not charged with enforcing contribution from a person.


Sec. 43.31.211. Lien for unpaid taxes. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.10.035(a).]
Sec. 43.31.221. Personal liability of executor.
If an executor makes distribution either in whole or in part of any of the property of an estate to the heirs, next of kin, distributees, legatees or devisees without having paid or secured the tax due the state under this chapter, or obtained the release of the property from the lien of the tax the executor becomes personally liable for the tax so due the state, or so much of it as remains due and unpaid, to the full extent of the full value of any property belonging to the person or estate which may come into the hands, custody, or control of the executor.


Sec. 43.31.230. Sale of real estate by executor to pay tax.
Every executor has the same right and power to take possession of or sell, convey and dispose of real estate as assets of the estate for the payment of the tax imposed by this chapter as the executor may have for the payment of the debts of the decedent.


Sec. 43.31.240. Actions to enforce payment.
Actions may be brought within the time or times specified in this chapter by the department to recover the amount of taxes, penalties and interest due under this chapter. The action shall be brought in the superior court where the estate is being or has been administered, or if no administration is had in this state, then in the appropriate court of the jurisdiction where any of the property of the estate is situated.


Sec. 43.31.250. No discharge of executor until tax paid.
No final account of an executor of the estate of a nonresident, nor of the estate of a resident where the value of the gross estate wherever situated exceeds $60,000 may be allowed by any court until the account shows, and the judge of the court finds, that the tax imposed by the provisions of this chapter upon the executor, which has become payable, has been paid. The certificate of the department of nonliability for tax or its receipt for the amount of tax certified is conclusive in proceedings as to the liability or the payment of the tax to the extent of the certificate.


Sec. 43.31.260. Agreements as to tax due.
For the purpose of facilitating the settlement and distribution of estates held by executors, the department may, on behalf of the state, agree upon the amount of taxes at any time due or to become due from the executor under the provisions of this chapter, and payment in accordance with the agreement is full satisfaction of the taxes to which the agreement relates.


Sec. 43.31.270. Time for assessment of tax. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.05.260.]
Sec. 43.31.280. Refunds of excess tax paid.
 (a) When it appears upon the examination of a return made under this chapter or upon proof submitted to the department by the executor, that an amount of estate tax has been paid in excess of the tax legally due under this chapter, then the amount of overpayment, together with any overpayment of interest on it shall be refunded to the executor and this refund shall be made by the department as a matter of course regardless of whether the executor has filed a written claim for it, except that upon request of the department, the executor shall file with the department a conformed copy of any written claim for refund of federal estate tax which has been filed with the United States.

 (b) Notwithstanding (a) of this section, no refund of estate tax may be made nor is any executor entitled to bring an action for refund of estate tax after the expiration of two years from the date of payment of the tax to be refunded unless there has been filed with the department written notice of administrative or judicial determination of the federal estate tax liability of the estate, whichever occurs last, and notice shall have been so filed not later than 60 days after determination has become final.

 (c) In this section, an administrative determination shall be considered to have become final on the date of receipt by the executor or other interested party of the final payment to be made refunding federal estate tax or upon the last date on which the executor or any other interested party receives notice from the United States that an overpayment of federal estate tax has been credited by the United States against any liability other than federal estate tax of the estate. A final judicial determination shall be considered to have occurred on the date on which a judgment entered by a court of competent jurisdiction and determining that there has been an overpayment of federal estate tax becomes final.

 (d) Nothing in this section prevents an executor from bringing or maintaining an action in a court of competent jurisdiction within a period otherwise prescribed by law to determine any question bearing upon the taxable situs of property, the domicile of a decedent, or otherwise affecting the jurisdiction of the state to impose an inheritance or estate tax with respect to a particular item of property.




Sec. 43.31.290. Superior court judge to furnish names of decedents.
Each superior court judge shall, on or before the 10th day of every month, notify the department of the names of all decedents, the names and addresses of the respective executors, administrators or curators appointed, the amount of the bonds, if any, required by the court, and the probable value of the estates, in all estates of decedents whose wills have been probated or propounded for probate before the judge or upon which letters testamentary or upon whose estates letters of administration or curatorship have been sought or granted, during the preceding months. The report shall contain any other information which the judge may have concerning the estate of these decedents. The judge shall also furnish immediately further information, from the records and files of the judge’s office in regard to the estates, which the department may from time to time require.


Sec. 43.31.300. Corporate executors of nonresident decedents.
If the executor of the estate of a nonresident is a corporation duly authorized, qualified, and acting as an executor in the jurisdiction of the domicile of the decedent, it is under the duties and obligations as to the giving of notices and filing of returns required by this chapter, and may bring and defend actions and suits as authorized or permitted by this chapter, to the same extent as an individual executor, notwithstanding that the corporation may be prohibited from exercising, in this state, any powers as executor, but nothing in this section authorizes corporations not authorized to do business in this state to qualify or act as executor, administrator, or in any other fiduciary capacity, if otherwise prohibited by the laws of this state, except to the extent expressly provided.


Sec. 43.31.310. Prima facie liability for tax.
The estate of each decedent whose property is subject to the laws of the state is considered prima facie liable for estate taxes under this chapter, and is subject to a lien for them in an amount which may be later determined to be due and payable on the estate as provided in this chapter. The presumption of liability begins on the date of the death of the decedent and continues until the full settlement of all taxes which may be found to be due under this chapter, the settlement to be shown by receipts for all taxes due to be issued by the department as provided for in this chapter. Whenever it appears to the department that an estate is not subject to a tax under this chapter the department shall issue to the executor, administrator, curator or other personal representative, or to the heirs, devisees, or legatees of the decedent, a certificate in writing to that effect, showing nonliability to tax, which certificate of nonliability has the same effect as a receipt showing payment. The certificate of nonliability is subject to record and admissible in evidence in like manner as receipts showing payment of taxes. There shall be paid to the department a fee of $2.50 for each certificate so issued.


Sec. 43.31.320. Discharge of estate; notice of lien, limitation, etc.
 (a) If no receipt for the payment of taxes, or no receipt of nonliability for taxes has been issued or recorded as provided for in this chapter, the property constituting the estate of the decedent in this state shall be considered fully acquitted and discharged of all liability for estate and inheritance taxes under this chapter after a lapse of 10 years from the date of the filing with the department of notice of the decedent’s death, or after a lapse of 10 years from the date of the filing with the department of an estate tax return, whichever date is earlier, unless the department makes out, files and has recorded with the appropriate recorder wherein any part of the estate of the decedent may be situated in this state, a notice of lien against the property of the estate, specifying the amount or approximate amount of taxes claimed to be due to the state under this chapter, which notice of lien continues the lien in force for an additional period of five years or until payment is made. Notice of lien shall be filed and recorded; however, if no receipt for the payment of taxes, or no certificate of nonliability for taxes, has been issued or recorded as provided for in this chapter, the property constituting the estate of the decedent in this state, if the decedent was a resident of this state at the time of death, shall be considered fully acquitted and discharged of all liability for tax under this chapter after a lapse of 10 years from the date of the death of the decedent, unless the department makes out, files and has recorded notice of lien as provided in this chapter, which notice continues the lien in force against the property of the estate for an additional period of five years or until payment is made.

 (b) Notwithstanding anything to the contrary in this section or this chapter, no lien for estate and inheritance taxes under this chapter may continue for more than 20 years from the date of death of the decedent, whether the decedent is a resident or nonresident of this state.




Sec. 43.31.330. Disposition of proceeds.
All taxes and fees levied and collected under this chapter shall be paid into the general fund.


Sec. 43.31.340. Interpretation and construction.
When not otherwise provided for in this chapter, the rules of interpretation and construction applicable to the estate and inheritance tax laws of the United States apply to and shall be followed in the interpretation of this chapter.


Sec. 43.31.350. Failure to produce records.
A person who fails to comply with any duty imposed upon the person by this chapter, or who, having possession or control of any record, file or paper, containing or supposed to contain information concerning the estate of the decedent, or having possession or control of any property comprised in the gross estate of the decedent, fails to exhibit it upon request to the department or an examiner or appraiser, appointed under this chapter, who desires to examine it in the performance of official duties under this chapter, is liable to a penalty of not more than $1,000, with costs of suit, in a civil action in the name of the state.


Secs. 43.31.360 — 43.31.390. Failure to make return; false return or return statement; tax evasion. [Repealed, § 46 ch 113 SLA 1980. For criminal penalties, see AS 43.05.290.]
Sec. 43.31.400. Effectiveness of chapter.
This chapter shall remain in force and effect so long as the government of the United States retains in full force and effect as a part of the revenue laws of the United States a federal estate tax, and this chapter shall cease to be operative when the government of the United States ceases to impose an estate tax of the United States.


Sec. 43.31.410. Exemptions.
The tax imposed under the inheritance and estate tax laws of this state in respect to personal property, except tangible property having an actual situs in this state, is not payable
     (1) if the transferer at the time of death was a resident of a state or territory of the United States, or the District of Columbia, which at the time of death did not impose a death tax of any character in respect to property of residents of this state, except tangible personal property having an actual situs in the state, territory or district; or

     (2) if the laws of the state, territory or district of the residence of the transferer at the time of death contained a reciprocal exemption provision under which nonresidents were exempted from death taxes of every character in respect to personal property, except tangible personal property having an actual situs therein, and if the state, territory or district of the residence of the nonresident decedent allowed a similar exemption to residents of the state, territory or district of residence of the decedent.




Sec. 43.31.420. Definitions.
In this chapter,
     (1) “decedent” includes the testator, intestate grantor, bargainor, vendor, or donor;

     (2) “executor” means the executor, administrator, or curator of the decedent, or if there is no executor, administrator, or curator appointed qualified and acting, then any person who is in the actual or constructive possession of any property included in the gross estate of the decedent;

     (3) “gross estate” means the gross estate as determined under the provisions of the applicable federal revenue Act;

     (4) “intangible personal property” means incorporeal personal property including deposits in banks, negotiable instruments, mortgages, debts, receivables, shares of stock, bonds, notes, credits, evidences of an interest in property, evidences of debt, and choses in action generally;

     (5) “net estate” means the net estate as determined under the provisions of the applicable federal revenue Act;

     (6) “nonresident” means a natural person domiciled outside the state;

     (7) “person” means persons, corporations, associations, joint stock companies, and business trusts;

     (8) “real property” means real property as it is commonly understood and includes real property whose legal title is in the decedent but which is subject to a contract of sale to a third party;

     (9) “resident” means a natural person domiciled in the state;

     (10) “tangible personal property” means corporeal personal property, including money;

     (11) “transfer” includes the passing of property or any interest in property, in possession or enjoyment, present or future, by inheritance, descent, devise, succession, bequest, grant, deed, bargain, sale, gift, or appointment in the manner described in this chapter;

     (12) “United States” used in a geographical sense includes only the 50 states and the District of Columbia.




Sec. 43.31.430. Short title.
This chapter may be cited as the Estate Tax Law of Alaska.


Chapter 35. Gaming and Gambling on Passenger Vessels.

Secs. 43.35.010 — 43.35.070. Amount of tax; administration; distributor fees; operation by a minor; distribution of tax; orders and regulations; gambling not legalized. [Repealed, § 2 ch 39 SLA 1998.]
Sec. 43.35.080. Penalties. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.220 and 43.05.290.]
Sec. 43.35.090. Definitions. [Repealed, § 2 ch 39 SLA 1998.]
Secs. 43.35.100 — 43.35.150. License tax; regulations and orders; manner of paying tax; refund to local governments; gambling not legalized; violations and penalties. [Repealed, § 2 ch 39 SLA 1998.]
Sec. 43.35.200. Gambling activities aboard commercial vessels purportedly authorized by federal law.
AS 43.35.200 — 43.35.220 apply to the use of playing cards, dice, roulette wheels, coin-operated instruments or machines, or other objects or instruments used, designed, or intended for gaming or gambling used in the waters under the jurisdiction of the State of Alaska on a voyage described in 15 U.S.C. 1175(c)(2), and to any other gambling activities taking place aboard large passenger vessels in the state.


Sec. 43.35.210. Tax on gambling activities.
There is imposed on the operator of gaming or gambling activities aboard large passenger vessels in the state a tax of 33 percent of the adjusted gross income from those activities. “Adjusted gross income” means gross income less prizes awarded and federal and municipal taxes paid or owed on the income. The tax shall be collected and is due and payable to the Department of Revenue in the manner and at the times required by the Department of Revenue.


Sec. 43.35.220. Disposition of receipts.
The proceeds from the tax on gambling operations aboard commercial passenger vessels in the state’s marine water shall be deposited in the large passenger vessel gaming and gambling tax account that is established as a subaccount within the commercial vessel passenger tax account (AS 43.52.230(a)).


Chapter 40. Motor Fuel Tax.

Sec. 43.40.005. Refined fuel surcharge levied.
 (a) Every dealer or user of refined fuels shall pay a surcharge of $.0095 a gallon on refined fuel sold, transferred, or used in the state.

 (b) The following refined fuels are exempt from the surcharge imposed under this section:
     (1) fuel sold to a federal or state government agency for official use;

     (2) fuel refined and used outside the United States;

     (3) liquefied petroleum gas;

     (4) aviation fuel;

     (5) fuel sold or transferred between qualified dealers.




Sec. 43.40.007. Use of revenue derived from the refined fuel surcharge.
The legislature may appropriate the annual estimated balance of the surcharge levied under AS 43.40.005 to the oil and hazardous substance release prevention account of the oil and hazardous substance release prevention and response fund established in AS 46.08.010. Nothing in this section creates a dedicated fund.


Sec. 43.40.010. Tax on transfers or consumption of motor fuel and expenditure of proceeds.
 (a) In addition to the surcharge levied under AS 43.40.005, there is levied a tax of eight cents a gallon on all motor fuel sold or otherwise transferred within the state, except that
     (1) the tax on aviation gasoline is four and seven-tenths cents a gallon;

     (2) the tax on motor fuel used in and on watercraft of all descriptions is five cents a gallon;

     (3) the tax on all aviation fuel other than gasoline is three and two-tenths cents a gallon; and

     (4) the tax rate on motor fuel that is blended with alcohol is the same tax rate a gallon as other motor fuel; however,
in an area and during the months in which fuel containing alcohol is required to be sold, transferred, or used in an effort to attain air quality standards for carbon monoxide as required by federal or state law or regulation, the tax rate on motor fuel that is blended with alcohol is six cents a gallon less than the tax on other motor fuel not described in (1) — (3) of this subsection.

 (b) In addition to the surcharge levied under AS 43.40.005, there is levied a tax of eight cents a gallon on all motor fuel consumed by a user, except that
     (1) the tax on aviation gasoline consumed is four and seven-tenths cents a gallon;

     (2) the tax on motor fuel used in and on watercraft of all descriptions is five cents a gallon;

     (3) the tax on all aviation fuel other than gasoline is three and two-tenths cents a gallon; and

     (4) the tax rate on motor fuel that is blended with alcohol is the same tax rate a gallon as other motor fuel; however,
in an area and during the months in which fuel containing alcohol is required to be sold, transferred, or used in an effort to attain air quality standards for carbon monoxide as required by federal or state law or regulation, the tax rate on motor fuel that is blended with alcohol is six cents a gallon less than the tax on other motor fuel not described in (1) — (3) of this subsection.

 (c) [Repealed, § 24 ch 37 SLA 2015.]
 (d) [Repealed, § 3 ch 166 SLA 1976.]
 (e) Sixty percent of the proceeds of the revenue from the motor fuel taxes on aviation fuel, excluding the amount determined to have been spent by the state in its collection, shall be refunded to a municipality owning and operating or leasing and operating an airport in the proportion that the revenue was collected at the municipal airport. All other proceeds of the motor fuel taxes on aviation fuel shall be paid into a special aviation fuel tax account in the state general fund. The legislature may appropriate funds from this account for capital or operating costs of airports.

 (f) The proceeds from the revenue from the tax on motor fuel used in boats and watercraft of all descriptions shall be deposited in a special watercraft fuel tax account in the general fund. The legislature may appropriate from this account for water and harbor facilities.

 (g) The proceeds of the revenue from the tax on all motor fuels, except as provided in (e), (f) and (j) of this section, shall be deposited in a special highway fuel tax account in the state general fund. The legislature may appropriate funds from it for expenditure by the Department of Transportation and Public Facilities directly or as matched with available federal-aid highway money for maintenance of highways, construction of highway projects and ferries included in the program provided for in AS 19.10.150, including approaches, appurtenances and related facilities and acquisition of rights-of-way or easements, and other highway costs including surveys, administration, and related matters. All departments of the state government authorized to spend funds collected from taxes imposed by this chapter shall perform, when feasible, all construction or reconstruction projects by contract after the projects have been advertised for competitive bids, except that, when feasible, arrangements shall be made with political subdivisions to carry out the construction or reconstruction projects. If it is not feasible for the work to be performed by state engineering forces, the commissioner of transportation and public facilities may contract on a professional basis with private engineering firms for road design, bridge design, and services in connection with surveys. If more than one private engineering firm is available for the work the contracts shall be entered into on a negotiated basis.

 (h) All motor fuel tax receipts shall be paid into the general fund and distributed to the proper accounts in the general fund. Valid motor fuel tax refund claims shall be paid from the highway fuel tax account in the general fund.

 (i) [Repealed, § 35 ch 126 SLA 1994.]
 (j) The proceeds from the tax on motor fuel used in snow vehicles and, unless a tax refund is applied for under AS 43.40.050(a), other internal combustion engines not used in or in conjunction with a motor vehicle licensed to be operated on public ways shall be deposited in a special nonpublic highway use account in the general fund. The legislature may appropriate from this account to the Department of Transportation and Public Facilities for trail staking and shelter construction and maintenance.

 (k) The tax on the transfer or consumption of motor fuel provided for in this section does not apply to liquified petroleum gas.

 (l) [Repealed, § 3 ch 182 SLA 1990.]




Sec. 43.40.013. Collection of the refined fuel surcharge and the motor fuel tax.
Every dealer who sells or otherwise transfers refined or motor fuel in the state shall collect the surcharge and tax required in this chapter at the time of sale, and remit the total surcharge and tax collected during each calendar month of each year to the department by the last day of each succeeding month. Every user shall likewise remit the surcharge and tax required in this chapter and accrued on fuel actually used by the user during each month. If the monthly return is timely filed, one percent of the total monthly surcharge and tax due, limited to a maximum of $100, may be deducted and retained to cover the expense of accounting and filing the monthly return. At the time the remittance is made, each dealer or user shall submit a statement to the department showing all fuel that the dealer or user has distributed or used during the month.


Sec. 43.40.015. Exemption from collection of tax.
 (a) A dealer who has a reasonable belief at the time of sale or transfer that fuel that is sold or transferred is not to be used as motor fuel need not collect the motor fuel tax. However, as to fuel for which the tax was not collected and for which a certificate of use was not obtained, if the department determines that the fuel was put to a use that is taxable under this chapter, the dealer is liable for the tax and subject to a civil penalty under AS 43.05.220(a) whether or not the dealer’s belief that the fuel sold or transferred would not be used as motor fuel was reasonable.

 (b) Except for sale or transfer of fuel under (d) of this section, if the motor fuel tax is not collected, the dealer shall obtain a certificate of use from the buyer or transferee at the time of the first sale or transfer of the fuel stating that the fuel that has been or will be purchased or received is not intended for use as motor fuel. The form of the certificate of use shall be prescribed by the department by regulation. The department may not collect the motor fuel tax from a dealer for fuel for which a certificate of use has been properly obtained under this subsection.

 (c) A certificate of use obtained under this section must be renewed annually for exemptions listed under AS 43.40.100(2).

 (d) A certificate of use is not required under this section
     (1) for fuel exempted under AS 43.40.100(2)(C) or (J); and

     (2) for fuel exempted under AS 43.40.100(2)(I) other than fuel sold or transferred under this exemption to a person who is engaged in construction or mining activity.




Sec. 43.40.020. Penalty for violation. [Repealed, § 46 ch 113 SLA 1980. For criminal penalties, see AS 43.05.290.]
Sec. 43.40.025. Handling of tax in sales or transfers of motor fuel in certain credit transactions. [Repealed, § 3 ch 82 SLA 1998, effective July 1, 2008.]
Sec. 43.40.030. Refund of the motor fuel tax for nonhighway use.
 (a) Except as specified in AS 43.40.010(j), a person who uses motor fuel to operate an internal combustion engine is entitled to a motor fuel tax refund of six cents a gallon if
     (1) the tax on the motor fuel has been paid;

     (2) the motor fuel is not aviation fuel, or motor fuel used in or on watercraft; and

     (3) the internal combustion engine is not used in or in conjunction with a motor vehicle licensed to be operated on public ways.

 (b) The entire amount of the motor fuel tax levied by this chapter shall be refunded to the purchaser on that part of the motor fuel used in a foreign country on which the tax has been paid when the fuel is sold and delivered in the state for non-highway use in a foreign country.

 (c) The department shall establish the necessary regulations and prescribe the appropriate forms to prove that, for purposes of the motor fuel tax, the motor fuel is taken to and used in foreign countries.

 (d) If a person obtains motor fuel on which the motor fuel tax levied by this chapter has been paid and the motor fuel is exempt from the motor fuel tax, the person is entitled to a refund of the motor fuel tax paid.




Sec. 43.40.035. Other refunds and credits.
 (a) A person who resells fuel on which a surcharge under AS 43.40.005 or the tax under AS 43.40.010(a) or (b) was previously paid is entitled to a credit or refund of (1) the motor fuel tax if the resold fuel is not motor fuel and the requirements of AS 43.40.015 have been fulfilled; or (2) the amount of surcharge or tax previously paid exceeds the surcharge or tax due on the resale. The amount of the credit or refund under this section is equal to the amount of the surcharge or tax previously paid on the resold fuel less the amount of the surcharge or tax prescribed by AS 43.40.005 or 43.40.010(a) or (b), respectively.

 (b) A reseller may elect, with the express written consent of the supplier of the reseller, to receive the credit or refund under this section directly from the supplier rather than by filing a claim for the credit or refund with the department. When an election is properly made under this subsection, the supplier may claim the credit or refund from the department. To be effective an election under this subsection must be signed in quadruplicate by the reseller and by the supplier. The reseller and the supplier shall each file one copy of the election, with original signatures, with the department. The reseller and supplier shall each retain a copy of the election with original signatures for audit review by the department. If an election is made under this subsection, it may not be revoked without the express written consent of the supplier.

 (c) For motor fuel sold to federal, state, and local government agencies for official use and purchased with a government credit card, the credit card issuer may apply for a refund of any motor fuel tax assessed on the purchase if the tax is not billed by the credit card issuer to the government agency making the purchase. For refined fuel sold to federal agencies for official use and purchased with a government credit card, the credit card issuer may apply for a refund of any refined fuel surcharge assessed on the purchase if the surcharge is not billed by the credit card issuer to the government agency making the purchase.




Sec. 43.40.040. Applications and permits for refund. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.40.050(a).]
Sec. 43.40.050. Refund claim by affidavit or other documentation.
 (a) A person who claims a refund under AS 43.40.030 shall present the claim for the refund to the commissioner by affidavit upon a form provided by the commissioner. The claim shall include the name, address, and occupation of the applicant, the nature of the business of the applicant, and a description sufficient to identify the machinery or equipment in which the motor fuel for which the refund is claimed was used. The claim shall be accompanied by each invoice issued to the claimant at the time the motor fuel was purchased. The commissioner may require any additional information that the commissioner considers necessary for the administration of this subsection.

 (b) A claim for refund under AS 43.40.030 or 43.40.035 shall be filed within one year after the date of the purchase of the refined or motor fuel as indicated on the invoice, and failure to file within the one-year period is a waiver of the right to the refund. A claim is considered to be filed when the claim is mailed or personally presented to an office of the department.

 (c) A reseller who claims a refund or credit under AS 43.40.035 shall present the refund claim to the department or to the supplier of that reseller by affidavit on a form provided by the department. The claim shall include the name, address, and occupation of the applicant, the nature of the business of the applicant, and a description sufficient to identify the reason for the refund or credit. The claim shall be supported by documentation required by the department.

 (d) A credit card issuer who claims a refund under AS 43.40.035 shall present the refund claim to the department on a form prescribed by the department together with documentation of the claim required by the department.




Sec. 43.40.060. Separate invoices.
The department may require the issuance of separate invoices for refined or motor fuel sold, distributed, or transferred when the invoices will be the basis for a refund claim.


Sec. 43.40.070. Refund warrants.
 (a) Upon approval of a refund claim of the motor fuel tax by the department, a disbursement shall be made from the highway fuel tax account in the general fund in favor of the applicant in the amount of the claim.

 (b) Upon approval of a refund claim of the refined fuel surcharge by the department, a disbursement shall be made from the oil and hazardous substance release prevention account of the oil and hazardous substance release prevention and response fund established in AS 46.08.010 in favor of the applicant in the amount of the claim.




Sec. 43.40.080. Examination of books and records.
 (a) To determine the validity of a claim for refund, the department may examine the books and records of the claimant and the books and records of a distributor of the refined or motor fuel. The department may cancel the refund of a claimant relying on a fraudulent invoice.

 (b) [Repealed, § 46 ch 113 SLA 1980.]




Sec. 43.40.085. Preservation of books and records.
Dealers and users shall preserve for three years all books and records pertaining to sales, transfers, and uses of refined or motor fuel that are subject to a surcharge or tax under this chapter.


Sec. 43.40.090. Criminal violation. [Repealed, § 46 ch 113 SLA 1980.]
Sec. 43.40.092. Disallowance of exemption from motor fuel tax for certain fuel sold for use in jet propulsion aircraft operating in flights that continue from foreign countries.
 (a) The provisions of this section apply to disallow the exemption from the motor fuel tax for motor fuel sold for use by a dealer or used by a user in jet propulsion aircraft operating in flights that continue from foreign countries if, for motor fuel produced by a refiner,
     (1) the refiner determines, on or after July 1, 1997, that the refiner will expand capacity or expand the refinery to produce more residual fuel oil used in watercraft;

     (2) on or after the July 1, 1997, the refiner has voluntarily committed by agreement entered into with the commissioner that, if the refiner expands its oil refining capacity in order to produce additional supplies of fuel for use in jet propulsion aircraft that qualify for the tax exemption, when the refiner expands capacity, the refiner will
          (A) use the refiner’s best efforts to advertise for, recruit, and employ in the construction activities associated with expanding refinery capacity resident workers who have experience in the specific fields in which they are hired to work;

          (B) contract with licensed Alaska firms to prepare materials that are used in construction activities and to provide services in conjunction with activities associated with expanded refinery capacity and, in contracting with those firms, to encourage the refiner’s contractors to employ and, when necessary, train state residents; and

          (C) enter into contracts with Alaska-licensed vendors, contractors, and suppliers for the provision of supplies and services used in conjunction with activities associated with expanding refinery capacity; and

     (3) the commissioner determines that a dealer or user claiming the exemption for motor fuel acquired from a refiner who has entered into an agreement described in (2) of this subsection acquired the motor fuel for which the exemption is claimed from a refiner who has not complied with the requirements of the agreement in completing expansion of its oil refining capacity under the agreement described in (1) of this subsection.

 (b) For purposes of this section,
     (1) the term “resident worker” means an individual who
          (A) is physically present in the state with the intent to remain in the state indefinitely and has a home in the state;

          (B) demonstrates that intent by maintaining a residence in the state;

          (C) possesses a resident fishing, trapping, or hunting license, or receives a permanent fund dividend; and

          (D) may be required to state under oath that the individual is not claiming residency outside of the state or obtaining benefits under a claim of residency outside of the state;

     (2) the phrases “Alaska-licensed contractors” and “Alaska firms” mean a contractor or firm that
          (A) has held an Alaska business license for one year before performing any work in connection with the commitment described in (a) of this section;

          (B) has maintained for one year a place of business within the state that deals in the supplies, services, or construction of the nature required for the commitment described in (a) of this section; and

          (C) is
               (i) a sole proprietorship and the proprietor is an Alaska resident;

               (ii) a partnership and more than 50 percent of the partners are Alaska residents;

               (iii) a corporation that has been incorporated in the state or is authorized to do business in the state; or

               (iv) a joint venture composed entirely of ventures that qualify under this subparagraph.




Sec. 43.40.094. Qualified dealer license.
 (a) A dealer is eligible for a qualified dealer license if the dealer sells at least 50 percent of fuel acquired to unrelated persons for any combination of the following purposes:
     (1) resale;

     (2) use in heating private or commercial buildings or facilities;

     (3) use in jet propulsion aircraft;

     (4) motor fuel.

 (b) A person applying for a qualified dealer license must use a form or format prescribed by the department. At the time of application, the applicant must provide an estimate of the average number of gallons of fuel subject to surcharge or tax each month during a calendar year, and state the estimated amount of surcharge and tax on those gallons. A license issued under this section is not transferable.

 (c) The department may not issue or renew a qualified dealer license if
     (1) the department finds that the applicant or qualified dealer has withheld information required in the application or that the information submitted in the application is false or misleading;

     (2) the applicant, or a responsible person of a business organization that is applying for the license, has been convicted within the last 10 years, in this state or in any other taxing jurisdiction, of crimes involving a fuel surcharge or tax;

     (3) the qualified dealer fails to comply with a requirement of this chapter;

     (4) the qualified dealer has failed to pay in full the surcharge, taxes, interest, and penalties levied under AS 43.05 or this chapter.

 (d) The department may
     (1) issue only one qualified dealer license to each person;

     (2) put additional limitations on the applicant or holder of a qualified dealer license.

 (e) A license issued under this section expires on June 30 following the date of issue. Before a license issued under this section expires, the licensee may apply to renew the license, on a form or in a format prescribed by the department, for one year after the expiration date of the license.

 (f) If the department determines a qualified dealer license may not be issued or renewed under this section, the department shall mail or electronically deliver a notice of license denial or nonrenewal to the person whose license was denied or not renewed. The person may appeal a notice of license denial or nonrenewal not later than 10 days after the date the notice was mailed or electronically delivered.

 (g) The department may, at the time an applicant applies for a qualified dealer license, require the applicant to file a bond or other security with the department in an amount equal to twice the estimated surcharge and tax due to the department in one month, or $5,000, whichever is greater.

 (h) The department may adopt regulations to implement this section, including regulations relating to the revocation of a license.




Sec. 43.40.100. Definitions.
In this chapter,
     (1) “dealer” means a person who sells or otherwise transfers in this state refined or motor fuel on which the surcharge or tax imposed by this chapter has not been paid;

     (2) “motor fuel” means fuel used in an engine for the propulsion of a motor vehicle or aircraft, and fuel used in and on watercraft for any purpose, or in a stationary engine, machine, or mechanical contrivance that is run by an internal combustion motor; “motor fuel” does not include
          (A) fuel consigned to foreign countries;

          (B) fuel sold for use in jet propulsion aircraft operating in flights
               (i) to foreign countries; or

               (ii) that continue from foreign countries, unless exemption of the motor fuel from taxation is disallowed because of the refiner’s failure to comply with the provisions of a voluntary agreement under AS 43.40.092 in conjunction with expansion of refinery capacity;

          (C) fuel used in stationary power plants operating as public utility plants and generating electrical energy for sale to the general public;

          (D) fuel used by nonprofit power associations or corporations for generating electric energy for resale;

          (E) fuel used by charitable institutions;

          (F) fuel sold or transferred between qualified dealers;

          (G) fuel sold to federal, state, and local government agencies for official use;

          (H) fuel used in stationary power plants that generate electrical energy for private residential consumption;

          (I) fuel used to heat private or commercial buildings or facilities;

          (J) fuel used for other nontaxable purposes as prescribed by regulations adopted by the department;

          (K) fuel used in stationary power plants of 100 kilowatts or less that generate electrical power for commercial enterprises not for resale; or

          (L) residual fuel oil used in and on watercraft if the residual fuel oil is sold or transferred in the state or consumed by a user; for purposes of this subparagraph, “residual fuel oil” means the heavy refined hydrocarbon known as number 6 fuel oil that is the residue from crude oil after refined petroleum products have been extracted by the refining process and that may be consumed or used only when sufficient heat is provided to the oil to reduce its viscosity rated by kinetic unit and to give it fluid properties sufficient for pumping and combustion;

     (3) “qualified dealer” means a person who (A) refines, (B) imports, (C) manufactures, (D) produces, (E) compounds, or (F) wholesales refined or motor fuel;

     (4) “refined fuel” means fuel produced from oil that is used in an engine, machine, or contrivance that creates heat, energy, or power;

     (5) “user” means a person consuming or using refined or motor fuel, who
          (A) purchases the fuel out of the state and ships it into the state for personal use in the state;

          (B) manufactures the fuel in the state; or

          (C) purchases or receives fuel in the state that is not subject to the surcharge or tax under this chapter at the time of purchase or receipt or is subject to a surcharge or tax that is less than the rate prescribed by AS 43.40.005 or 43.40.010.




Secs. 43.40.110 — 43.40.120. Additional tax levy on transfers or consumption of motor fuel. [Repealed, § 8 ch 158 SLA 1970.]

Chapter 43. Disaster Taxes.

Secs. 43.43.010 — 43.43.060. Disaster relief tax. [Repealed, § 1 ch 48 SLA 1969.]
Secs. 43.43.110 — 43.43.160. Disaster severance tax. [Repealed, § 2 ch 247 SLA 1970.]

Chapter 45. School Tax.

[Repealed, § 2 ch 64 SLA 1980.]

Article 1. Cigarette Tax Act.


Chapter 50. Tobacco Taxes and Sales.

Sec. 43.50.010. License.
 (a) A person may not sell, purchase, possess, or acquire cigarettes as a manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer without a license.

 (b) The department, upon application and payment of the fee, shall issue a license to each manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer. The department shall adopt reasonable regulations that it considers necessary in respect to the application for and the issuance of licenses.

 (c) The department may refuse to issue a license if there is reasonable cause to believe that the applicant has wilfully withheld information requested to determine the applicant’s eligibility to receive a license, or if there is reasonable cause to believe that information submitted in the application is false or misleading and is not made in good faith.

 (d) A license required by AS 43.50.010 — 43.50.180 is in addition to any other license required by law.

 (e) A license issued under AS 43.50.010 — 43.50.180 must include
     (1) the name and address of the licensee;

     (2) the type of business to be conducted; and

     (3) the year for which the license is issued.




Sec. 43.50.020. Separate licenses.
If a person operates more than one place of business, the person must obtain a separate license for each place of business, except that a person operating one or more cigarette vending machines is considered to have only one place of business for the purpose of a license under AS 43.50.010 — 43.50.180. A person licensed only as a manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer may not operate in another capacity unless the appropriate license for it is first secured. Each license shall be exhibited at the place of business for which it is issued and in the manner prescribed by the department.


Sec. 43.50.030. License fees.
 (a) For each license issued to a manufacturer, and for each renewal, the fee is $50.

 (b) For each license issued to a distributor or wholesaler-distributor, and for each renewal, the fee is $50.

 (c) For each license issued to a vending machine operator, and for each renewal, the fee is $50.

 (d) For each license issued to a direct-buying retailer, and for each renewal, the fee is $50.

 (e) For each license issued to a buyer, and for each renewal, the fee is $25.

 (f) A license may not be issued except upon the payment of the fee notwithstanding a statute or exemption to the contrary.




Sec. 43.50.035. Wholesaler-distributor license.
 (a) A person outside of this state who sells or distributes cigarettes into this state and is not required to be licensed under AS 43.50.010 may apply for a wholesaler-distributor license.

 (b) A person outside of this state who sells or distributes cigarettes into this state, who is not required to be licensed under AS 43.50.010, and who wishes to purchase stamps under this chapter is required to be licensed as a wholesaler-distributor.

 (c) The department shall adopt reasonable regulations necessary for the collection of cigarette taxes on cigarette sales or distributions made by a wholesaler-distributor licensee into this state and standards for
     (1) application and issuance of the license; and

     (2) refusal to issue the license.




Sec. 43.50.040. Expiration of licenses.
A license issued under AS 43.50.010 or 43.50.035 expires on June 30 following the date of issue. If a license is revoked, or the business for which the license is issued changes ownership or the licensee changes the place of business from the premises covered by the license, the licensee shall immediately return the license to the department. If the licensee moves the business to another location in the state, the license shall, upon the payment of a fee of 50 cents, be reissued for the new location for the balance of the unexpired term. Before a license issued under AS 43.50.010 or 43.50.035 expires, the licensee may apply to renew the license for one year from the expiration date of the license. The renewal fee required by AS 43.50.030 must accompany the application. The department shall adopt reasonable regulations that it considers necessary regarding the renewal of licenses.


Sec. 43.50.050. Transfer of licenses.
A license is not assignable or transferable. However in the case of death, bankruptcy, receivership, or incompetency of the licensee, or if the business of the licensee is transferred to another by operation of law, the department may extend the license for a limited time to the executor, administrator, trustee, receiver, or the transferee.


Sec. 43.50.060. Refunds.
The department may not refund the license fee upon the surrender or revocation of a license. The department may refund a license fee that is paid or collected in error. If a license is lost, destroyed, or defaced, the department may issue a duplicate license upon payment of a fee of 50 cents.


Sec. 43.50.070. Suspension or revocation of or refusal to renew a license.
 (a) The department may suspend, revoke, or refuse to renew a license issued under this chapter (1) for a negligent violation of AS 11.76.100, 11.76.106, 11.76.107, or a violation of this chapter or a regulation of the department adopted under this chapter; (2) if a licensee ceases to act in the capacity for which the license was issued; or (3) if a licensee negligently sells tobacco or products containing tobacco to a person who is required to, but does not, hold a license endorsement under AS 43.70.075 or whose license endorsement under AS 43.70.075 has been suspended. A person whose license is suspended or revoked may not sell cigarettes or tobacco products, or permit cigarettes or tobacco products to be sold, during the period of the suspension or revocation on the premises occupied or controlled by that person. A disciplinary proceeding or action is not barred or abated by the expiration, transfer, surrender, renewal, or extension of a license issued under this chapter. The department shall comply with the provisions of AS 44.62 (Administrative Procedure Act), except that a hearing officer of the department, rather than a hearing officer assigned under AS 44.62.350, may conduct hearings.

 (b) In this section, “licensee” means a person licensed under AS 43.50.010 — 43.50.180 or 43.50.300 — 43.50.390.




Sec. 43.50.080. Returns. [Repealed, § 20 ch 109 SLA 2003.]
Sec. 43.50.090. Tax imposed.
 (a) There is levied an excise tax of 38 mills on each cigarette imported or acquired in the state. The tax shall be paid through the use of stamps as provided in AS 43.50.500 — 43.50.700. A person who imports or acquires cigarettes in the state upon which a stamp required by this chapter has not been affixed in accordance with AS 43.50.500 — 43.50.700, who fails to apply to purchase stamps as required by AS 43.50.540(a), and who fails to pay the tax through the use of stamps is not relieved of the obligation to pay taxes due under this chapter. The person shall still pay the tax, and the tax is due on or before the end of the month following the month in which cigarettes were manufactured, imported, acquired, or sold in this state. Cigarettes upon which the excise is imposed are not again subject to the excise when acquired by another person.

 (b) It is the intent and purpose of this section to provide for the collection of this excise from the person who first acquires the cigarettes in this state.

 (c) The tax imposed under (a) of this section does not apply to cigarettes imported or acquired in the state by an exchange, commissary, or ship’s stores operated by one of the uniformed services of the United States as defined in 5 U.S.C. 2101.

 (d) The tax imposed under (a) of this section does not apply to the first 400 cigarettes personally transported into the state by an individual for that individual’s personal consumption during the calendar month.




Sec. 43.50.100. Unlicensed possession or sale.
 (a) [Repealed, § 45 ch 113 SLA 1980.]
 (b) [Repealed, § 3 ch 166 SLA 1976.]
 (c) [Repealed, § 45 ch 113 SLA 1980.]
 (d) A person or licensee who is in control or possession of cigarettes contrary to this chapter or who offers to sell or dispose of cigarettes to others for the purpose of resale without being licensed to do so is considered to have possession of the cigarettes as a consumer and is personally liable for the cigarette taxes imposed by this chapter, plus a penalty of 100 percent.

 (e) [Repealed, § 45 ch 113 SLA 1980.]




Sec. 43.50.105. Restrictions on shipping or transporting cigarettes.
 (a) A person who is not licensed under this chapter may not ship or cause to be shipped cigarettes to a person in this state unless the person receiving the cigarettes is
     (1) licensed under this chapter;

     (2) an operator of a customs bonded warehouse under 19 U.S.C. 1311 or 19 U.S.C. 1555; or

     (3) an instrumentality of the federal government or an Indian tribal organization authorized by law to possess cigarettes not taxed under this chapter.

 (b) A person who is licensed under this chapter may not ship or cause to be shipped cigarettes to a person in this state unless the person receiving the cigarettes
     (1) is licensed under this chapter;

     (2) holds a tobacco endorsement under AS 43.70.075;

     (3) is an operator of a customs bonded warehouse under 19 U.S.C. 1311 or 19 U.S.C. 1555;

     (4) is an instrumentality of the federal government or an Indian tribal organization authorized by law to possess cigarettes not taxed under this chapter; or

     (5) is an individual 19 years of age or older receiving the cigarettes for personal consumption and the tax imposed on the cigarettes under this chapter has been paid.

 (c) A common or contract carrier may not knowingly transport cigarettes to a person in this state unless the person
     (1) shipping the cigarettes is licensed under this chapter and, before shipment, provides the common or contract carrier with a copy of the person’s current license issued by the department and an affidavit from the intended recipient certifying that the person receiving the cigarettes is a person described under (b)(1) — (5) of this section; or

     (2) receiving the cigarettes is a person described under (a)(2) or (3) of this section or is licensed under this chapter and, before receipt, provides the common or contract carrier with a copy of the person’s current license issued by the department.

 (d) If the cigarettes are transported by a common or contract carrier to a home or residence, it is rebuttably presumed that the common or contract carrier knew that the person receiving the cigarettes was not a person described under (b)(1) — (5) of this section, unless the person shipping the cigarettes has satisfied the requirements in (c)(1) of this section.

 (e) A person, other than a common or contract carrier, may not knowingly transport cigarettes to a person in this state, unless the person receiving the cigarettes is a person described under (b)(1) — (5) of this section.

 (f) A person who ships or causes to be shipped cigarettes to a person in this state shall plainly and visibly mark the container or wrapping with the word “cigarettes” if the cigarettes are shipped in a container or wrapping other than the cigarette manufacturer’s original container or wrapping.

 (g) A person who violates the provisions of this section is guilty of a
     (1) class A misdemeanor if the person unlawfully ships, causes to be shipped, or transports at least one but fewer than 5,000 cigarettes;

     (2) class C felony if the person unlawfully ships, causes to be shipped, or transports 5,000 or more cigarettes.

 (h) In addition to the criminal penalty under (g) of this section, the department may assess a civil fine of not more than $5,000 for each violation of this section.

 (i) A person who violates the provisions of this section is jointly and severally liable for the taxes imposed by AS 43.50.090 and 43.50.190. To the fullest extent permitted by the Constitution of the United States, a person who violates the provisions of this section is required to collect the taxes and pay them to the department.




Sec. 43.50.110. Taxpayer’s remedies. [Repealed, § 3 ch 166 SLA 1976. For current law, see AS 43.05.240.]
Sec. 43.50.120. Lien. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.10.035.]
Sec. 43.50.130. Records.
 (a) A licensee shall keep a complete and accurate record of all cigarettes manufactured, purchased, or acquired. The records, except in the case of a manufacturer, must include a written statement containing the name and address of the seller and the purchaser, the date of delivery, the quantity of cigarettes, the trade name and brand, and the price paid for each brand of cigarettes purchased. The licensee shall keep such other records as the department prescribes. All statements and records required by this section shall be in the form prescribed by the department, shall be preserved for three years, and shall be offered for inspection upon demand by the department.

 (b) A licensee may not issue or accept a written statement that falsely indicates the name of the customer, the type of merchandise, the price, the discounts, or the terms of sale.

 (c) Where an invoice is given or accepted by a licensee
     (1) a statement that makes the invoice a false record of the transaction may not be inserted in the invoice; and

     (2) a statement that should be included in the invoice may not be omitted from the invoice if the invoice does not reflect the transaction involved without the statement.

 (d) An invoice for the sale of cigarettes given or accepted by a licensee under this chapter must state whether the taxes imposed by this chapter have been paid.




Sec. 43.50.140. Disposition of proceeds.
The proceeds derived from the payment of taxes, fees, and penalties under AS 43.50.010 — 43.50.180, and the license fees received by the department shall be paid into a state fund entitled “School Fund,” and shall be used exclusively to rehabilitate, construct, and repair the state’s school facilities, and for costs of insurance on buildings comprising school facilities during the rehabilitation, construction, and repair, and for the life of the buildings.


Sec. 43.50.145. Notification of noncompliance; confiscation of noncomplying cigarettes. [Repealed, § 4 ch 103 SLA 2003.]
Sec. 43.50.150. Administration and regulatory authority; cooperation with municipalities.
 (a) The department shall
     (1) administer this chapter; and

     (2) collect, supervise, and enforce the collection of taxes due under this chapter and penalties as provided in AS 43.05.

 (b) The department may adopt regulations necessary for the administration of this chapter.

 (c) The department may enter into an agreement with a municipality that imposes a tax on cigarettes or other tobacco products for the purpose of jointly auditing a person liable for a tax under AS 43.50.010 — 43.50.390 and the municipal tax on cigarettes or other tobacco products.

 (d) The department may enter into an agreement with a municipality that collects a tax on cigarettes through the use of a stamp similar to that used by the department under AS 43.50.500 to distribute and collect money for the stamps issued by the municipality on behalf of the municipality in conjunction with the distribution and sale of stamps under AS 43.50.500 — 43.50.700. An agreement under this subsection must provide for the municipality to reimburse the department for the cost of distributing the municipality’s stamps and collecting the money for those stamps.

 (e) Notwithstanding AS 40.25.100(a) and AS 43.05.230(a), the department may furnish the proper officer or representative of a municipality the tax returns or reports filed with the department under this chapter if the municipality grants substantially similar privileges to the department, provides adequate safeguards for the confidentiality of the returns and reports, and uses the returns and reports only for tax purposes.




Sec. 43.50.160. Criminal penalties. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.290.]
Sec. 43.50.170. Definitions.
In AS 43.50.010 — 43.50.180, unless the context otherwise requires,
     (1) “buyer” means a person who imports or acquires cigarettes for the person’s own consumption from any source other than a manufacturer, distributor, direct-buying retailer, retailer, or wholesaler-distributor;

     (2) “cigarette” means a roll for smoking of any size or shape, made wholly or partly of tobacco, whether the tobacco is flavored, adulterated, or mixed with another ingredient, if the wrapper or cover of the roll is made of paper or a material other than tobacco;

     (3) “direct-buying retailer” means a person who is engaged in the sale of cigarettes at retail in this state and who brings cigarettes or causes cigarettes to be brought into the state that are not purchased from a wholesaler-distributor;

     (4) “distributor” means a person who brings cigarettes that are not purchased from a wholesaler-distributor, or has cigarettes that are not purchased from a wholesaler-distributor brought, into the state, and who sells or distributes at least 75 percent of the cigarettes to others for resale in the state;

     (5) “licensee” means a person licensed under AS 43.50.010 — 43.50.180;

     (6) “manufacturer” means a person who makes, fashions, or produces cigarettes for sale to distributors or other persons;

     (7) “person” includes an individual, company, partnership, limited liability partnership, joint venture, joint agreement, limited liability company, association, mutual or otherwise, corporation, estate, trust, business trust, receiver, trustee, syndicate, or political subdivision of this state, or combination acting as a unit;

     (8) “place of business” means a place where cigarettes are sold, or where cigarettes are brought or kept for the purpose of sale or consumption, including a vessel, vehicle, airplane, or train;

     (9) “retailer” means a person in the state who is engaged in the business of selling cigarettes at retail;

     (10) “sale” includes a sale, barter, exchange, and every other manner of transferring the ownership of personal property;

     (11) “tobacco product” has the meaning given in AS 43.50.390;

     (12) “wholesaler-distributor” means a person outside this state who sells or distributes cigarettes into this state, who is not required to be licensed under AS 43.50.010, and who is licensed under AS 43.50.035.




Sec. 43.50.180. Short title.
AS 43.50.010 — 43.50.180 may be cited as the Cigarette Tax Act.


Article 2. Additional Cigarette Taxes.


Sec. 43.50.190. Additional tax levy on cigarettes.
 (a) There is levied an excise tax on each cigarette imported or acquired in this state,
     (1) after December 31, 2004, but before July 1, 2006, 42 mills;

     (2) after June 30, 2006, but before July 1, 2007, 52 mills;

     (3) after June 30, 2007, 62 mills.

 (b) The tax levied by this section is in addition to the tax levied by AS 43.50.010 — 43.50.180. The tax shall be administered and collected in the same manner as the tax levied by AS 43.50.010 — 43.50.180, except that receipts from the tax shall be deposited in the general fund. The penalties provided in AS 43.05 and this chapter apply to the tax levied in this section.

 (c) The tax imposed under (a) of this section does not apply to the first 400 cigarettes personally transported into the state by an individual for that individual’s personal consumption during the calendar month.

 (d) A portion of the annual proceeds of the tax levied under (a) of this section equal to 8.9 percent of the total proceeds of the tax shall be deposited into the tobacco use education and cessation fund established in AS 37.05.580. This deposit shall be in addition to any sums deposited into the fund under AS 37.05.580(a).

 (e) In this section, “cigarette” has the meaning given in AS 43.50.170.




Sec. 43.50.200. Nonparticipating manufacturer equity excise tax.
 (a) There is levied an excise tax of 12.5 mills on each cigarette imported or acquired in this state from a nonparticipating manufacturer.

 (b) The tax levied by this section is in addition to the taxes levied by AS 43.50.010 — 43.50.190. The tax shall be administered and collected in the same manner as the taxes levied by AS 43.50.010 — 43.50.180, except that receipts from the tax shall be deposited in the general fund. The penalties provided in AS 43.05 and this chapter apply to the tax levied in this section.

 (c) In this section, “nonparticipating manufacturer” means a tobacco product manufacturer as defined in AS 45.53.100 that is not a participating manufacturer as that term is defined in sec. II(jj) of the Master Settlement Agreement.




Article 3. Excise Tax on Certain Tobacco Products.


Sec. 43.50.300. Excise tax levied.
An excise tax is levied on tobacco products in the state at the rate of 75 percent of the wholesale price of the tobacco products. The tax is levied when a person
     (1) brings, or causes to be brought, a tobacco product into the state from outside the state for sale;

     (2) makes, manufactures, or fabricates a tobacco product in the state for sale in the state; or

     (3) ships or transports a tobacco product to a retailer in the state for sale by the retailer.




Sec. 43.50.310. Exemptions.
 (a) A facility operated by one of the uniformed services of the United States is exempt from the tax. In this subsection, “uniformed services” has the meaning given in 5 U.S.C. 2101.

 (b) The tax does not apply to a tobacco product if the United States Constitution or other federal laws prohibit the levying of the tax on the product by the state.




Sec. 43.50.320. Licensing.
 (a) Except as provided in (g) of this section, a person must be licensed by the department if the person engages in business as a distributor for a tobacco product that is subject to the tax.

 (b) The department, upon application and payment of a fee of $50, shall issue a license for one year to a person who applies for a license under (a) of this section.

 (c) The department may refuse to issue a license under this section if there is reasonable cause to believe the information submitted in the application is false or misleading and is not made in good faith.

 (d) A license issued under this section must include the name and address of the licensee, the type of business to be conducted, and the year for which the license is issued.

 (e) The department may renew a license issued under this section for a fee of $50.

 (f) The department may suspend, revoke, or refuse to renew a license issued under this section as provided in AS 43.50.070.

 (g) A license required by this section is in addition to any other license required by law, except that a person who is licensed under AS 43.50.010 — 43.50.180 is exempt from the licensing requirements of this section.

 (h) A license issued under this section is not assignable or transferable, except that in the case of death, bankruptcy, receivership, or incompetency of the licensee, or if the business of the licensee is transferred to another by operation of law, the department may extend the license for a limited time to the executor, administrator, trustee, receiver, or the transferee.




Sec. 43.50.330. Returns.
 (a) On or before the last day of each calendar month, a licensee shall file a return with the department. The return must state the number or amount of tobacco products sold by the licensee during the preceding calendar month, the selling price of the tobacco products, and the amount of tax imposed on the tobacco products.

 (b) The licensee shall remit with the return the tax due under AS 43.50.300 for the month covered by the return, after deducting four-tenths of one percent of the tax due, which the licensee shall retain to cover the expense of accounting and filing the return.




Sec. 43.50.335. Tax credits and refunds.
The department shall adopt procedures for a refund or credit to a licensee of the tax paid for tobacco products that have become unfit for sale, are destroyed, or are returned to the manufacturer for credit or replacement if the licensee provides proof acceptable to the department that the tobacco products have not been and will not be consumed in this state.


Sec. 43.50.340. Records.
A licensee shall keep a complete and accurate record of all tobacco products of the licensee subject to the tax, including purchase prices, sales prices, the names and addresses of the sellers and the purchasers, the dates of delivery, the quantities of tobacco products, and the trade names and brands. Statements and records required by this section must be in the form prescribed by the department, preserved for three years, and available for inspection upon demand by the department.


Sec. 43.50.350. Disposition of proceeds.
The tax collected by the department shall be deposited in the general fund. The annual estimated balance in the account maintained by the commissioner of administration under AS 37.05.142 may be used by the legislature to make appropriations for health care, health research, health promotion, and health education programs.


Sec. 43.50.360. Annual report. [Repealed, § 35 ch 126 SLA 1994.]
Sec. 43.50.370. Regulations.
The department shall adopt under the Administrative Procedure Act (AS 44.62) reasonable regulations that it considers necessary to carry out the provisions of AS 43.50.300 — 43.50.390.


Sec. 43.50.390. Definitions.
In AS 43.50.300 — 43.50.390,
     (1) “distributor” means a person who
          (A) brings, or causes to be brought, a tobacco product into the state from outside the state for sale;

          (B) makes, manufactures, or fabricates a tobacco product in the state for sale in the state; or

          (C) ships or transports a tobacco product to a retailer in the state for sale by the retailer;

     (2) “licensee” means a distributor who is
          (A) licensed under AS 43.50.320; or

          (B) exempted by AS 43.50.320(g) from licensing under AS 43.50.320;

     (3) “the tax” means the tax levied by AS 43.50.300;

     (4) “tobacco product” means
          (A) a cigar;

          (B) a cheroot;

          (C) a stogie;

          (D) a perique;

          (E) snuff and snuff flour;

          (F) smoking tobacco, including granulated, plug-cut, crimp-cut, ready-rubbed, and any form of tobacco suitable for smoking in a pipe or cigarette;

          (G) chewing tobacco, including cavendish, twist, plug, scrap, and tobacco suitable for chewing; or

          (H) an article or product made of tobacco or a tobacco substitute, but not including a cigarette as defined in AS 43.50.170;

     (5) “wholesale price” means
          (A) the established price for which a manufacturer sells a tobacco product to a distributor after deduction of a discount or other reduction received by the distributor for quantity or cash if the manufacturer’s established price is adequately supported by bona fide arm’s length sales as determined by the department; or

          (B) the price, as determined by the department, for which tobacco products of comparable retail price are sold to distributors in the ordinary course of trade if the manufacturer’s established price does not meet the standards of (A) of this paragraph.




Article 4. Compliance with Federal Laws Relating to Cigarettes.


Sec. 43.50.400. Sale or distribution of cigarettes; prohibitions.
A person may not
     (1) sell or distribute to consumers in this state, acquire, hold, own, possess, or transport for sale or distribution in this state, or import or cause to be imported into this state for sale or distribution in this state cigarettes
          (A) the package of which
               (i) bears a statement, label, stamp, sticker, or notice indicating that the manufacturer did not intend the cigarettes to be sold, distributed, or used in the United States, including labels stating, “for export only,” “U.S. tax-exempt,” “for use outside U.S.,” or similar wording; or

               (ii) does not comply with all requirements of federal law regarding health warnings and other information on packages of cigarettes manufactured, packaged, or imported for sale, distribution, or use in the United States, including the warning labels required by 15 U.S.C. 1333 (Federal Cigarette Labeling and Advertising Act), and all federal trademark and copyright laws;

          (B) imported into the United States on or after January 1, 2000, in violation of 26 U.S.C. 5754; or

          (C) for which a list of the ingredients added to tobacco in the manufacture of those cigarettes has not been submitted to the Secretary of the United States Department of Health and Human Services as required under 15 U.S.C. 1335a (Federal Cigarette Labeling and Advertising Act);

     (2) alter a package of cigarettes before sale or distribution to the consumer so as to remove, conceal, or obscure
          (A) a statement, label, stamp, sticker, or notice described in (1)(A)(i) of this section; or

          (B) any health warning, including a health warning that is specified in 15 U.S.C. 1333 (Federal Cigarette Labeling and Advertising Act).




Sec. 43.50.410. Imported cigarettes: requirements.
A person that imports into this state for sale or distribution in this state cigarettes manufactured outside of the United States shall file with the department, on or before the last day of each calendar quarter, for the cigarettes that the person imported into this state in the preceding calendar quarter, a statement signed by the person under penalty of perjury that the commissioner shall treat as confidential and that shall not be considered a public record under AS 40.25.110, identifying the brand and brand styles of the cigarettes, the quantity of each brand style of cigarettes, and the person or persons to whom the cigarettes have been shipped. In this section, “calendar quarter” means each of the three-month periods ending March 31, June 30, September 30, and December 31.


Sec. 43.50.420. Enforcement.
For the purpose of enforcing AS 43.50.400 — 43.50.450, the commissioner may share information with any local, state, or federal government agency.


Sec. 43.50.430. Applicability.
AS 43.50.400 — 43.50.450 do not apply to cigarettes
     (1) imported into the United States for personal use free of federal tax or duty, or voluntarily abandoned to the United States Secretary of the Treasury at the time of entry; or

     (2) sold or intended to be sold as duty-free merchandise by a duty-free sales enterprise in accordance with the provisions of 19 U.S.C. 1555(b); however, AS 43.50.400 — 43.50.450 apply to duty-free cigarettes that are brought back into the customs territory for resale within the customs territory.




Sec. 43.50.450. Definitions.
In AS 43.50.400 — 43.50.450, unless the context otherwise requires,
     (1) “cigarette” has the meaning given in AS 43.50.170;

     (2) “manufacturer” has the meaning given in AS 43.50.170.




Article 5. Compliance with Statutory Requirements Regarding Cigarette Sales.


Sec. 43.50.460. Tobacco product manufacturer certifications.
 (a) Every tobacco product manufacturer whose cigarettes are sold in this state, whether directly or through a distributor, retailer, or similar intermediary or intermediaries, shall execute and deliver on a form or in the manner prescribed by the commissioner a certification to the commissioner, no later than April 30 of each year, certifying, under penalty of perjury, that, as of the date of the certification, the tobacco product manufacturer is either a participating manufacturer or is in full compliance with AS 45.53.

 (b) A participating manufacturer shall include in its certification a list of its brand families. The participating manufacturer shall update the list 30 days before any addition or modification to its brand families by executing and delivering a supplemental certification to the commissioner.

 (c) A nonparticipating manufacturer shall include in its certification a complete list of all of its brand families. The nonparticipating manufacturer shall update the list 30 days before any addition or modification to its brand families by executing and delivering a supplemental certification to the commissioner. A nonparticipating manufacturer’s certification must
     (1) separately list brand families of cigarettes and the number of units sold for each brand family that was sold in the state during the preceding calendar year;

     (2) list all of its brand families that have been sold in the state at any time during the current calendar year;

     (3) indicate by an asterisk any brand family sold in the state during the preceding calendar year that is no longer being sold in the state as of the date of the certification; and

     (4) identify by name and address any other manufacturer of the listed brand families in the preceding calendar year.

 (d) For a nonparticipating manufacturer, the certification required by (a) of this section must additionally certify that the nonparticipating manufacturer
     (1) is registered to do business in the state or has appointed a resident agent for service of process and provided notice of the appointment as required by AS 43.50.475;

     (2) has
          (A) established and continues to maintain a qualified escrow fund; and

          (B) executed a qualified escrow agreement that has been reviewed and approved by the Department of Law and that governs the qualified escrow fund; and

     (3) is in full compliance with AS 45.53 and this section, and any regulations adopted under those statutes.

 (e) For a nonparticipating manufacturer, the certification must also include the
     (1) name, address, telephone number, and electronic mail address of the financial institution where the nonparticipating manufacturer has established the qualified escrow fund required under AS 45.53 and the regulations adopted under that chapter;

     (2) account number of the qualified escrow fund and sub-account number for the State of Alaska;

     (3) amount that the non-participating manufacturer placed in the qualified escrow fund for cigarettes sold in the state during the preceding calendar year, the date and amount of each such deposit, and the evidence or verification considered necessary by the commissioner to confirm the information submitted under this section; and

     (4) amounts of and dates of any withdrawal or transfer of money the nonparticipating manufacturer made at any time from the qualified escrow fund or from any other qualified escrow fund into which the nonparticipating manufacturer ever made escrow payments in accordance with AS 45.53 and the regulations adopted under that chapter.

 (f) A tobacco product manufacturer may not include a brand family in its certification unless
     (1) for a participating manufacturer, the participating manufacturer affirms that the brand family is to be considered to be its cigarettes for purposes of calculating its payments under the Master Settlement Agreement for the relevant year, in the volume and shares determined under the Master Settlement Agreement; and

     (2) for a nonparticipating manufacturer, the nonparticipating manufacturer affirms that the brand family is to be considered to be its cigarettes for purposes of AS 45.53.

 (g) Nothing in this section shall be construed as limiting or otherwise affecting the state’s right to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the Master Settlement Agreement or for purposes of AS 45.53.

 (h) A tobacco product manufacturer shall maintain all invoices and documentation of sales of cigarettes and other information relied upon for the certification for a period of five years, unless otherwise required by law to maintain them for a greater period of time.




Sec. 43.50.465. Directory of cigarettes approved for sale and importation.
Not later than July 30 of each year, the commissioner shall develop and make available for public inspection a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of AS 43.50.460 and all brand families that are listed in those certifications, except as follows:
     (1) the commissioner may not include or retain in the directory the name or brand families of any nonparticipating manufacturer that fails to provide the required certification or whose certification the commissioner determines is not in compliance with AS 43.50.460, unless the commissioner has determined that the violation has been cured to the satisfaction of the commissioner;

     (2) neither a tobacco product manufacturer nor brand family shall be included or retained in the directory if the commissioner concludes that
          (A) for a nonparticipating manufacturer, all escrow payments required under AS 45.53 for any period for any brand family, regardless of whether listed by the nonparticipating manufacturer, have not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the Department of Law; or

          (B) all outstanding final judgments, including interest on those judgments, for violations of AS 45.53 have not been fully satisfied for the brand family and the manufacturer;

     (3) the commissioner shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand families to keep the directory in conformity with the requirements of AS 43.50.460 — 43.50.495;

     (4) every licensee shall provide to the commissioner, and update as necessary, an electronic mail address for the purpose of receiving any notifications that may be required by AS 43.50.460 — 43.50.495.




Sec. 43.50.470. Prohibition against sale or importation of cigarettes not in the directory.
 (a) A person may not sell, offer, or possess for sale in this state, or import for personal consumption in this state, cigarettes of a tobacco product manufacturer or brand family not included in the directory.

 (b) Under regulations adopted by the department, the department may allow a licensee a credit for the tax paid under this chapter on cigarettes that the licensee destroys or returns to the manufacturer or distributor to avoid a violation of this section if
     (1) the tobacco product manufacturer and brand family of the cigarettes were included in the directory at the time the licensee came into possession of the cigarettes; and

     (2) the tobacco product manufacturer or brand family was subsequently removed from the directory while the licensee was still in possession of the cigarettes.




Sec. 43.50.475. Agent for service of process.
 (a) A nonresident or foreign nonparticipating manufacturer that has not registered to do business in the state as a foreign corporation or business entity shall, as a condition precedent to having its brand families listed or retained in the directory, appoint and continually engage without interruption the services of an agent in this state to act as agent for the service of process on whom all process and an action or proceeding against the nonparticipating manufacturer concerning or arising out of the enforcement of AS 43.50.460 — 43.50.495 and AS 45.53 may be served in any manner authorized by law. The nonparticipating manufacturer shall provide the name, address, telephone number, electronic mail address, and proof of the appointment and availability of the agent to and to the satisfaction of the commissioner and the Department of Law.

 (b) The nonparticipating manufacturer shall provide notice to the commissioner and the Department of Law 30 calendar days before termination of the authority of an agent and shall additionally provide proof to the satisfaction of the Department of Law of the appointment of a new agent no less than five calendar days before the termination of an existing agent appointment. If an agent terminates an agency appointment, the nonparticipating manufacturer shall notify the commissioner and the Department of Law of the termination within five calendar days and shall include proof to the satisfaction of the Department of Law of the appointment of a new agent.

 (c) Any nonparticipating manufacturer whose products are sold in this state without appointing or designating an agent as required by this section is considered to have appointed the commissioner of commerce, community, and economic development as its agent and may be proceeded against in courts of this state by service of process upon the commissioner of commerce, community, and economic development in the manner described by AS 10.06.175(b), regardless of whether the nonparticipating manufacturer is a corporation; however, the appointment of the commissioner of commerce, community, and economic development as the agent does not satisfy the condition precedent to having the nonparticipating manufacturer’s brand families listed or retained in the directory.




Sec. 43.50.480. Reporting and disclosure of information; escrow installments.
 (a) Not later than the end of the month following the month in which cigarettes were imported or sold in the state, each licensee shall submit the information the commissioner requires to facilitate compliance with AS 43.50.460 — 43.50.495, including a list by brand family of the total number of cigarettes or, in the case of roll-your-own cigarettes, the equivalent stick count for which the licensee, during the previous calendar month, paid the tax due for the cigarettes. For a period of five years, the licensee shall maintain and make available to the commissioner all invoices and documentation of sales of cigarettes of all nonparticipating manufacturers and any other information relied upon in reporting to the commissioner.

 (b) The commissioner is authorized to disclose to the Department of Law any information received under this chapter and requested by the Department of Law for purposes of determining compliance with and enforcing the provisions of this chapter. The commissioner and the Department of Law shall share with each other the information received under this chapter, and may share the information with other federal, state, or local agencies only for purposes of enforcement of AS 43.50.460 — 43.50.495, AS 45.53, or corresponding laws of other states.

 (c) The commissioner or Department of Law may require at any time that the nonparticipating manufacturer provide proof from the financial institution in which the manufacturer has established a qualified escrow fund for the purpose of compliance with AS 45.53 of the amount of money in the fund being held on behalf of the state and the dates of deposits, and listing the amounts of all withdrawals from the fund and the dates of withdrawals.

 (d) In addition to the information required to be submitted under (a) of this section, the commissioner or the Department of Law may require a licensee or tobacco product manufacturer to submit any additional information, including samples of the packaging or labeling of each brand family, necessary to enable the commissioner or the Department of Law to determine whether a tobacco product manufacturer is in compliance with AS 43.50.460 — 43.50.495.

 (e) To promote compliance with the provisions of AS 43.50.460 — 43.50.495, the commissioner may adopt regulations requiring a tobacco product manufacturer subject to the requirements of AS 43.50.460 to make the escrow deposits required in quarterly installments during the year in which the sales covered by the deposits are made. The commissioner may require production of information sufficient to determine the adequacy of the amount of the installment deposit.




Sec. 43.50.485. Penalties and other remedies.
 (a) In addition to or in place of any other civil or criminal remedy provided by law, upon a determination that a licensee has violated AS 43.50.470(a) or any regulation adopted under that statute, the commissioner may revoke or suspend the license issued under AS 43.50.010, 43.50.035, or 43.50.320 of any licensee. The department shall comply with the provisions of AS 44.62 (Administrative Procedure Act). Each offer to sell cigarettes in violation of AS 43.50.470(a) constitutes a separate violation. The commissioner also may impose a civil penalty in an amount not to exceed the greater of 500 percent of the retail value of the cigarettes sold or $5,000 upon a determination of violation of a provision of AS 43.50.470(a) or any regulations adopted under that statute. The penalty shall be imposed in the manner provided by AS 43.05.245.

 (b) Any cigarettes that have been sold, offered for sale, or possessed for sale in this state, or imported for personal consumption in this state in violation of AS 43.50.470(a) are contraband, regardless of whether the violation was knowing, and the cigarettes are subject to seizure and forfeiture; seized and forfeited cigarettes shall be destroyed and may not be resold. The department shall comply with the provisions of AS 44.62 (Administrative Procedure Act).

 (c) The Department of Law, on behalf of the commissioner, may seek an injunction to restrain a threatened or actual violation of AS 43.50.460, 43.50.470(a), or 43.50.480 by a licensee and to compel the licensee to comply with those provisions.




Sec. 43.50.490. Miscellaneous provisions.
 (a) A determination of the commissioner not to list in, or to remove from, the directory a brand family or tobacco product manufacturer is subject to administrative review under AS 44.62.330 — 44.62.630.

 (b) A person may not be issued a license or granted a renewal of a license under AS 43.50.010, 43.50.035, or 43.50.320 unless the person has certified in writing, under penalty of perjury, that the person will comply fully with AS 43.50.460 — 43.50.495.

 (c) The department shall adopt under AS 44.62 (Administrative Procedure Act) reasonable regulations that it considers necessary to carry out the provisions of AS 43.50.460 — 43.50.495.

 (d) If a court determines that a person has violated the provisions of AS 43.50.460 — 43.50.495, the court shall order any profits, gain, gross receipts, or other benefit from the violation to be disgorged and paid to the state for deposit in the general fund. Unless otherwise expressly provided, the remedies or penalties provided by AS 43.50.460 — 43.50.495 are cumulative to each other and to the remedies or penalties available under all other laws of this state.




Sec. 43.50.495. Definitions.
In AS 43.50.460 — 43.50.495, unless the context otherwise requires,
     (1) “brand family” means all styles of cigarettes sold under the same trade mark and differentiated from one another by means of additional modifiers or descriptors, including menthol, lights, kings, and 100s; “brand family” includes any brand name, alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicium of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes;

     (2) “cigarette” has the meaning given in AS 45.53.100;

     (3) “commissioner” means the commissioner of revenue;

     (4) “department” means the Department of Revenue;

     (5) “directory” means the directory developed and made available under AS 43.50.465;

     (6) “licensee” means a person licensed or required to be licensed under AS 43.50.010, 43.50.035, or 43.50.320;

     (7) “Master Settlement Agreement” has the meaning given in AS 45.53.100;

     (8) “nonparticipating manufacturer” means a tobacco product manufacturer that is not a participating manufacturer;

     (9) “participating manufacturer” has the meaning given in Section II(jj) of the Master Settlement Agreement and all amendments to that agreement;

     (10) “qualified escrow fund” has the meaning given in AS 45.53.100;

     (11) “roll-your-own” has the meaning given in AS 45.53.100(4)(B);

     (12) “tobacco product manufacturer” has the meaning given in AS 45.53.100;

     (13) “units sold” has the meaning given in AS 45.53.100.




Article 6. Cigarette Tax Stamps.


Sec. 43.50.500. Tax payment by use of stamps.
A licensee shall pay the tax imposed under AS 43.50.090(a), 43.50.190(a), and 43.50.200 through the use of stamps issued under AS 43.50.500 — 43.50.700.


Sec. 43.50.510. Stamp design; manner of affixing.
 (a) The department shall design and furnish stamps of sizes and denominations as determined by the department.

 (b) Notwithstanding the packaging requirements of AS 43.70.075(g)(1), a stamp required under AS 43.50.500 — 43.50.700 must be affixed
     (1) on the smallest package that will be handled, sold, used, consumed, or distributed in this state; and

     (2) in a denomination equal to the amount of tax due under this chapter on the cigarettes in the package.

 (c) A stamp required under AS 43.50.500 — 43.50.700 shall be affixed to the bottom of each individual package of cigarettes in a manner so that the stamp cannot be removed from the package without being mutilated or destroyed.

 (d) For purposes of this section, a stamp is considered affixed only if more than 80 percent of the stamp is attached to the individual package in accordance with (c) of this section and regulations adopted by the department.




Sec. 43.50.520. Stamp required before sale, distribution, or consumption.
 (a) Except as provided in AS 43.50.580, a licensee or the authorized agent or designee of the licensee shall affix a stamp, in the manner required by AS 43.50.510, to each package of cigarettes immediately upon the opening of the shipping container containing the package and before sale, distribution, or consumption in this state.

 (b) Except as provided in AS 43.50.580 and 43.50.610, a person may not engage in the following activities in this state unless the package containing the cigarettes is affixed with the required stamp:
     (1) sell or distribute cigarettes to a person who is a consumer in this state;

     (2) acquire, hold, own, possess, or transport cigarettes for sale or distribution in this state;

     (3) import or cause to be imported cigarettes into this state for sale, distribution, or consumption; or

     (4) place or store cigarette packages in a vending machine in this state.




Sec. 43.50.530. Sale of stamps.
 (a) The department shall furnish stamps for sale to licensees.

 (b) The department may enter into agreements with financial institutions to permit the sale of stamps by those institutions. The department shall make a list of financial institutions authorized to sell stamps under this section available to the public.

 (c) The department may limit the number of stamps sold to a licensee during the three months immediately preceding the effective date of a tax increase under AS 43.50.090, 43.50.190, or 43.50.200 to minimize the amount of cigarette stockpiling by a licensee. The department may not set the limit of stamps that a licensee may purchase during that three-month period below an amount equal to three times the average monthly stamp purchases made by the licensee during the 12-month period immediately preceding that three-month period.




Sec. 43.50.540. Purchase of and payment for stamps.
 (a) A licensee shall apply to the department or a financial institution authorized under AS 43.50.530(b) to purchase stamps required by AS 43.50.500 — 43.50.700.

 (b) A licensee may authorize an agent or designee to purchase stamps for the licensee at a location where stamps are sold. The licensee’s authorization of an agent or designee must be in writing and must be signed by the licensee. The licensee shall provide a copy of the authorization to the department. The authorization continues in effect until the department receives the licensee’s written notice of revocation of the authorization.

 (c) Except as otherwise provided in this subsection, each stamp shall be sold to a licensee at its denominated value less the discount provided in this subsection. The discount under this subsection is provided as compensation for affixing stamps to packages as required by AS 43.50.500 — 43.50.700. The department may reduce or eliminate the discount to a licensee under this subsection if the licensee fails to meet the requirements of AS 43.50.500 — 43.50.700. The discount under this subsection is equal to the sum of the amounts calculated using the following percentages of denominated value of stamps purchased by a licensee under this section in a calendar year:
     (1) $1,000,000 or less, three percent;

     (2) the amount that is more than $1,000,000 but not more than $2,000,000, two percent;

     (3) the amount that is over $2,000,000, zero percent.

 (d) Payment for stamps shall be made at the time of purchase, except that the department may permit a licensee to defer payments as provided in AS 43.50.550.

 (e) The licensee or the licensee’s agent or designee must obtain the stamps in person from the department or a financial institution authorized to sell stamps under AS 43.50.530(b). Alternatively, the licensee may request in writing that the stamps be shipped or transported in a manner specified by the licensee that is acceptable to the department. The department may accept only United States mail or common or private carrier as a shipping or transportation method.

 (f) Title to the stamps passes immediately to the licensee at the time the stamps are obtained in person or, if the stamps are shipped or transported, at the time the stamps are placed in the United States mail or received by the common or private carrier. The licensee bears all costs associated with shipping or transporting the stamps. The department may replace stamps lost or damaged in transit if the licensee provides proof acceptable to the department verifying that the loss or damage occurred while the stamps were in the possession of the shipping company and the shipping company substantiates the loss or damage. Damaged stamps must be returned to the department before the department may replace them.

 (g) Loss, destruction, or theft of stamps does not absolve the licensee of its obligation to make payment for the stamps, including payment on a deferred-payment basis under AS 43.50.550.

 (h) For purposes of the discount provided in (c) of this section, “stamps purchased by a licensee” includes stamps purchased by affiliated licensees.




Sec. 43.50.550. Deferred-payment basis for stamps.
 (a) A licensee may apply to the department to purchase stamps on a deferred-payment basis. Upon receipt of the application and the bond required under (b) of this section, the department may set the maximum dollar amount of stamps that the licensee is authorized to purchase on a deferred-payment basis in a calendar month.

 (b) A licensee who submits an application for the purchase of stamps on a deferred-payment basis shall, as a condition of approval of the application, post a bond acceptable to the department in an amount equal to
     (1) 200 percent of the maximum dollar amount of allowed monthly purchases under this section; or

     (2) 100 percent of the maximum dollar amount of allowed monthly purchases under this section if the licensee
          (A) holds a license issued under AS 43.50.010 for a physical location in this state; and

          (B) has been in full compliance with the provisions of this title and regulations adopted under this title during the preceding 60 months.

 (c) Amounts owing for stamps purchased on a deferred-payment basis in a calendar month are due on or before the last day of the next calendar month. Payment shall be made by a remittance acceptable to the department that is made payable to the department.

 (d) The department may designate the sales locations where the licensee may make purchases of stamps on a deferred-payment basis and fix the dollar amount of purchases that the licensee may make under this section at each designated sales location each month.




Sec. 43.50.560. Suspension of deferred-payment basis privilege.
The department may suspend, without prior notice, a licensee’s privilege to purchase stamps on a deferred-payment basis or may reduce the monthly dollar amount of purchases the licensee may make under AS 43.50.550 if
     (1) the licensee fails to pay for stamps when payment is due;

     (2) the licensee’s bond is cancelled or becomes void, impaired, or unenforceable;

     (3) the department determines that the collection of an amount unpaid or due from the licensee under this chapter is jeopardized; or

     (4) the licensee violates a state statute or regulation related to the collection of taxes under this chapter.




Sec. 43.50.570. Interest.
A licensee who fails to pay an amount due for the purchase of stamps within the time required
     (1) is considered to have failed to pay the cigarette taxes due under this chapter; and

     (2) shall pay interest at the rate established under AS 43.05.225 from the date on which the amount became due until the date of payment.




Sec. 43.50.580. Possession of unstamped cigarettes.
 (a) Except as provided in (b) of this section and in AS 43.50.610, a person may not possess unstamped cigarettes in this state.

 (b) A licensee may possess unstamped cigarettes in this state if
     (1) the licensee posts a surety bond in an amount satisfactory to the department to ensure performance of its duties under this chapter; and

     (2) unstamped cigarettes are necessary for the conduct of the licensee’s business in making sales or distributions to
          (A) an instrumentality of the federal government or an Indian tribal organization authorized by law to possess cigarettes not taxed under this chapter; or

          (B) customers outside the state and the licensee provides proof acceptable to the department that the licensee is properly licensed in the jurisdictions outside the state where the sales or distributions are made.

 (c) At the time of shipping or delivering cigarettes to an instrumentality of the federal government or an Indian tribal organization authorized by law to possess cigarettes not taxed under this chapter, a licensee shall make a duplicate invoice showing complete details of the shipment or other distribution and a statement indicating whether stamps were affixed to each cigarette package in accordance with AS 43.50.500 — 43.50.700. The licensee shall transmit the duplicate invoice to the department as an attachment to the monthly report required under AS 43.50.630.

 (d) If a licensee who is authorized to possess unstamped cigarettes under (b) of this section fails to comply with the requirements of this section, the licensee is no longer authorized to and may not possess unstamped cigarettes under this section and is subject to the imposition of any applicable penalty under this title or other law.

 (e) For purposes of (a) of this section, “person” does not include entities to whom sales or distributions are made as described in (b)(2) of this section.




Sec. 43.50.590. Refunds or credits for unused stamps and for unsalable, destroyed, or certain returned cigarette packages.
 (a) The department shall adopt procedures for a refund or credit to a licensee in the amount of the denominated value, less the discount given under AS 43.50.540, for
     (1) unused or damaged stamps;

     (2) stamps affixed to cigarette packages that have become unfit for use or sale, are destroyed, or are returned to the manufacturer for credit or replacement if the licensee provides proof acceptable to the department that the cigarettes have not been and will not be consumed in this state; or

     (3) stamps affixed to cigarette packages that are sold or distributed outside the state if the licensee provides proof acceptable to the department that the cigarettes have not been and will not be consumed in this state and the licensee is properly licensed in the jurisdictions outside the state where the sales or distributions are made.

 (b) A refund or credit under (a) of this section may not be allowed for stamps affixed to cigarette packages in violation of this chapter or AS 45.53.




Sec. 43.50.600. Stamps prohibited on cigarette packages not complying with federal and state laws.
A licensee or the licensee’s authorized agent or designee may not affix a stamp to a cigarette package if the cigarettes
     (1) may not be acquired, held, owned, imported, possessed, sold, or distributed in this state under AS 43.50.400; or

     (2) are not in compliance with other state or federal laws.




Sec. 43.50.610. Unstamped cigarettes as contraband; seizure.
Unstamped cigarettes found in this state are contraband and may be seized by the commissioner or an agent or employee of the commissioner or by any peace officer of the state, unless
     (1) the cigarettes are
          (A) in the possession of a licensee or are in transit from outside the state and are consigned to a licensee; and

          (B) in the original and unopened shipping container; or

     (2) possession of the unstamped cigarettes is not a violation of this chapter.




Sec. 43.50.620. Forfeiture and destruction of seized cigarettes.
Cigarettes seized under AS 43.50.500 — 43.50.700 are forfeited to the state. After notice and an opportunity for a hearing, the commissioner shall destroy the cigarettes forfeited under this section.


Sec. 43.50.625. Forfeiture of other property.
 (a) Upon a showing of probable cause that a person has committed the crime of misconduct involving unstamped cigarettes or stamps in the first degree under AS 43.50.640, the following are subject to forfeiture:
     (1) material and equipment used in the manufacture, sale, offering for sale, or possession for sale of cigarettes in this state in violation of AS 43.50.500 — 43.50.640 or 43.50.660 — 43.50.700;

     (2) aircraft, vehicles, or vessels used to transport or facilitate the transportation of cigarettes manufactured, sold, offered for sale, or possessed for sale in this state in violation of AS 43.50.500 — 43.50.640 or 43.50.660 — 43.50.700;

     (3) money, securities, negotiable instruments, or other things of value used in financial transactions derived from activity prohibited under AS 43.50.500 — 43.50.640 or 43.50.660 — 43.50.700.

 (b) Property subject to forfeiture under this section may be actually or constructively seized under an order issued by the superior court upon a showing of probable cause that the property is subject to forfeiture under this section. Constructive seizure is effected upon posting a signed notice of seizure on the item to be forfeited, stating the violation and the date and place of seizure. Seizure without a court order may be made if
     (1) the seizure is incident to a valid arrest or search;

     (2) the property subject to seizure is the subject of a prior judgment in favor of the state; or

     (3) there is probable cause to believe that the property is subject to forfeiture under (a) of this section; property seized under this paragraph may be held for not more than 48 hours unless an order of forfeiture is issued by the court before the end of that time period.

 (c) Within 30 days after a seizure under this section, the Department of Public Safety shall make reasonable efforts to ascertain the identity and whereabouts of any person holding an interest, or an assignee of a person holding an interest, in the property seized, including a right to possession, or a lien, mortgage, or conditional sales contract. The Department of Public Safety shall notify the person ascertained to have an interest in the seized property of the impending forfeiture, and, before forfeiture, the Department of Public Safety shall publish, once a week for four consecutive calendar weeks, a notice of the impending forfeiture in a newspaper of general circulation in the judicial district in which the seizure was made, or if a newspaper is not published in that judicial district, in a newspaper published in the state and distributed in that judicial district.

 (d) Property subject to forfeiture under (a) of this section may be forfeited
     (1) upon conviction of a person for a violation of AS 43.50.640; or

     (2) upon judgment by the superior court in a proceeding in rem that the property was used in a manner subjecting it to forfeiture under (a) of this section.

 (e) The owner of property subject to forfeiture under (a) of this section is entitled to relief from the forfeiture in the nature of remission of the forfeiture if, in an action under (d) of this section, the owner shows that the owner
     (1) was not a party to the violation;

     (2) did not have actual knowledge or reasonable cause to believe that the property was used or was to be used in violation of the law; and

     (3) did not have actual knowledge or reasonable cause to believe that the person committing the violation had, within the last 10 years,
          (A) a criminal record for violating this chapter; or

          (B) committed other violations of this chapter.

 (f) The court may allow the owner of property that is subject to forfeiture under (a) of this section to redeem the property by paying an amount determined by the court to be the fair market value of the property.

 (g) A person other than the owner holding, or the assignee of, a lien, mortgage, or conditional sales contract on, or the right to possession of, property subject to forfeiture under (a) of this section is entitled to relief from the forfeiture in the nature of remission of the forfeiture if, in an action under (d) of this section, the person shows that the person
     (1) was not a party to the violation subjecting the property to forfeiture;

     (2) did not have actual knowledge or reasonable cause to believe that the property was used or was to be used in violation of the law; and

     (3) did not have actual knowledge or reasonable cause to believe that the person committing the violation had, within the last 10 years,
          (A) a criminal record for violating this chapter; or

          (B) committed other violations of this chapter.

 (h) It is not a defense in an in rem forfeiture proceeding brought under (d)(2) of this section that a criminal proceeding is pending or has resulted in conviction or acquittal of a person charged with violating AS 43.50.640.

 (i) Property forfeited under this section shall be placed in the custody of the commissioner of public safety for disposition according to an order entered by the court. The court shall order destroyed any property forfeited under this section that is harmful to the public and may order any property forfeited under this section that was seized in a municipality to be transferred to the municipality in which the property was seized or to another municipality affected by the crime for which the property was forfeited. The state shall notify all municipalities affected by the crime of the forfeiture proceeding. Other property shall be ordered sold and the proceeds used for payment of expenses of the proceedings for forfeiture and sale, including expenses of seizure, custody, and court costs. The remainder of the proceeds shall be deposited in the general fund.

 (j) The title to a vehicle or vessel forfeited to the state under this section may be transferred by the state to a municipality or the local governing body of a village for official use by the municipality or village, on condition that the vehicle or vessel not be available for use by the defendant.




Sec. 43.50.630. Monthly reports; records retention; inspection of records.
 (a) On or before the last day of each calendar month, a licensee shall file the following information for each place of business with the department, on a form or in a format prescribed by the department:
     (1) the quantity and brands of cigarettes manufactured, imported, acquired, or sold in the state during the preceding calendar month;

     (2) the number and dollar amount of stamps
          (A) purchased during the preceding calendar month;

          (B) affixed to cigarette packages during the preceding calendar month;

          (C) not affixed to cigarette packages and on hand at the end of the preceding calendar month; and

          (D) refunded or credited to a licensee under AS 43.50.590; and

     (3) any other information that the department requires to carry out its duties under this chapter.

 (b) If a licensee ceases to manufacture, import, acquire, or sell cigarettes in this state, the licensee shall immediately file the form required under (a) of this section with the department, for the period ending with the cessation.

 (c) All statements and other records required by AS 43.50.500 — 43.50.700 must be
     (1) in a form or format prescribed by the department;

     (2) preserved by a licensee for a period of three years; and

     (3) available for inspection at any time upon oral or written demand by the department or its authorized agent.

 (d) A summary of information filed under (a) of this section shall be prepared by the department and released to the public upon request.




Sec. 43.50.640. Misconduct involving unstamped cigarettes or stamps in the first degree.
 (a) A person commits the crime of misconduct involving unstamped cigarettes or stamps in the first degree if the person
     (1) with reckless disregard that the cigarettes are unstamped
          (A) sells or distributes 5,000 or more unstamped cigarettes in a single transaction;

          (B) owns or possesses 5,000 or more unstamped cigarettes with the intent to sell; or

          (C) acquires, holds, transports, imports, or possesses 10,000 or more unstamped cigarettes; or

     (2) with reckless disregard that the stamp was previously affixed to another cigarette package
          (A) affixes a previously used stamp to a cigarette package; or

          (B) possesses, sells, or distributes a previously used stamp.

 (b) Misconduct involving unstamped cigarettes or stamps in the first degree is a class C felony.




Sec. 43.50.650. Misconduct involving unstamped cigarettes or stamps in the second degree.
 (a) A person commits the crime of misconduct involving unstamped cigarettes or stamps in the second degree if the person
     (1) with reckless disregard that the cigarettes are unstamped
          (A) sells or distributes at least one but fewer than 5,000 unstamped cigarettes in a single transaction;

          (B) owns or possesses at least one but fewer than 5,000 unstamped cigarettes, with intent to sell;

          (C) acquires, holds, transports, imports, or possesses at least 601 but fewer than 10,000 unstamped cigarettes; or

          (D) acquires, holds, transports, imports, or possesses at least one but fewer than 601 unstamped cigarettes that are not for personal consumption; or

     (2) is not licensed under this chapter or otherwise authorized by the department to possess stamps and possesses a stamp that is not affixed to a cigarette package.

 (b) Misconduct involving unstamped cigarettes or stamps in the second degree is a class A misdemeanor.




Sec. 43.50.660. Construction of criminal statutes.
 (a) The provisions of AS 11.16, AS 11.81.600, 11.81.610, and 11.81.900 apply to AS 43.50.640 and 43.50.650.

 (b) For purposes of AS 43.50.640 and 43.50.650, display of cigarettes by a person, or possession other than in the original and unopened shipping container of cigarettes by a person who holds a business license endorsement under AS 43.70.075, is prima facie evidence of possession with intent to sell cigarettes. In this subsection, “display” means to openly exhibit.




Sec. 43.50.670. Unauthorized transfer of unaffixed stamps.
 (a) A licensee may not sell, exchange, or otherwise transfer stamps not affixed to a package of cigarettes in accordance with this chapter to another person without the prior written approval of the department.

 (b) After notice and opportunity for a hearing, the department may assess a civil fine of not less than $1,000 nor more than $10,000 for a violation of (a) of this section. The fine assessed is in addition to any other penalty available under the law.




Sec. 43.50.700. Definitions.
In AS 43.50.500 — 43.50.700, unless the context otherwise requires,
     (1) “affiliated licensees” means two or more licensees in which the same person holds, directly or indirectly, at least a 50 percent ownership interest;

     (2) “carton” means a box or container originating from the manufacturer that contains packages of that manufacturer’s cigarettes;

     (3) “cigarette” has the meaning given in AS 43.50.170;

     (4) “licensee” means a person licensed by the department under AS 43.50.010 or 43.50.035 to sell, distribute, purchase, possess, or acquire cigarettes;

     (5) “package” means the individual packet, box, or other container, originating from the manufacturer, in which retail sales of cigarettes are normally made or intended to be made; “package” does not include containers that are cartons, cases, bales, or boxes that contain packages of cigarettes;

     (6) “person” has the meaning given in AS 43.50.170;

     (7) “shipping container” means the case, box, parcel, or other container in which cartons or packages of cigarettes are placed for shipment or transportation from one place to another; “shipping container” does not include a package in which retail sales of cigarettes are normally made or intended to be made;

     (8) “stamp” means a stamp or other indicium that is
          (A) printed, manufactured, or made under authorization of the department under this chapter;

          (B) issued, sold, or circulated by the department; and

          (C) used to pay the cigarette taxes levied under this chapter;

     (9) “unstamped cigarettes” means a package containing cigarettes that is not affixed with the stamp required by AS 43.50.500 — 43.50.700 or is affixed with a stamp in a denomination less than the tax levied under this chapter.




Article 7. Unfair Cigarette Sales.


Sec. 43.50.710. Sale at less than minimum price; rebate in price.
 (a) A wholesaler or retailer may not, with intent to injure competitors or destroy or substantially lessen competition,
     (1) advertise, offer to sell, or sell, at retail or wholesale, cigarettes at less than the minimum price determined by the department under
          (A) AS 43.50.810(a) for a sale at wholesale; or

          (B) AS 43.50.810(b) for a sale at retail; or

     (2) offer a rebate in price, give a rebate in price, offer a concession of any kind, or give a concession of any kind or nature in connection with the sale of cigarettes.

 (b) A retailer may not induce or attempt to induce or procure or attempt to procure
     (1) the purchase of cigarettes at a price less than the wholesale minimum price determined under AS 43.50.810(a);

     (2) a rebate or concession of any kind or nature in connection with the purchase of cigarettes.

 (c) Evidence of advertisement, offering to sell, or sale of cigarettes by a wholesaler or retailer at less than the applicable minimum price determined by the department under AS 43.50.810, or evidence of an offer of a rebate in the price, the giving of a rebate in price, offer of a concession, or the giving of a concession of any kind or nature in connection with the sale of cigarettes, or the inducing, attempt to induce, the procuring, or the attempt to procure the purchase of cigarettes at a price less than the applicable minimum price determined by the department under AS 43.50.810 is prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition.

 (d) Nothing in this section prohibits a manufacturer from offering promotions to a wholesaler or a retailer if the wholesale promotion is the same for all participating wholesalers and the retail promotion is the same for all participating retailers.

 (e) A wholesaler or retailer who violates the provisions of this section is guilty of a class B misdemeanor.




Sec. 43.50.720. Sale at less than minimum price; sale with gift or concession.
In all advertisements, offers for sale, or sales involving two or more items when at least one of the items is cigarettes at a combined price, and in all advertisements, offers for sale, or sales involving the giving of any gift, concession, or coupon of any kind in conjunction with the sale of cigarettes, the wholesaler’s or retailer’s combined selling price may not be less than the applicable minimum price determined by the department under AS 43.50.810 of the total of all articles, products, commodities, gifts, and concessions included in the transactions, except that, if any articles, products, commodities, gifts, or concessions are not cigarettes, the price shall be the applicable minimum price determined by the department under AS 43.50.810.


Sec. 43.50.730. Sale to another wholesaler. [Repealed, § 8 ch 114 SLA 2010.]
Sec. 43.50.740. Sales at price to meet competition.
 (a) [Repealed, § 8 ch 114 SLA 2010.]
 (b) [Repealed, § 43 ch 1 FSSLA 2004.]
 (c) A manufacturer whose product is sold in the state directly or through an intermediary shall provide the department with a current price list for all brands of cigarettes of the manufacturer and shall notify the department at least three days before a price change takes effect.




Sec. 43.50.750. Contracts in violation of law are illegal.
A contract, express or implied, made by a person in violation of the provisions of AS 43.50.710 — 43.50.849 is illegal and void.


Secs. 43.50.760 , 43.50.770. Determination of cost; determination of cost of cigarettes purchased outside of ordinary channels of trade. [Repealed, § 8 ch 114 SLA 2010.]
Sec. 43.50.780. Injunction.
 (a) The department or a person injured by a violation or who would suffer from any threatened violation of AS 43.50.710 — 43.50.849 may maintain an action to prevent, restrain, or enjoin the violation or threatened violation. If, in the action, a violation or threatened violation of AS 43.50.710 — 43.50.849 is established, the court may enjoin and restrain or otherwise prohibit the violation or threatened violation, and the court shall assess the costs of reasonable attorney fees against the defendant. In the action, it is not necessary that actual damages to the plaintiff be alleged or proved, but, if actual damages are alleged and proved, the plaintiff, in addition to injunctive relief and costs, including reasonable attorney fees, may recover actual damages.

 (b) If injunctive relief is not requested or required, a person injured by a violation of AS 43.50.710 — 43.50.849 may maintain an action for damages in the appropriate court.




Sec. 43.50.790. Administration of AS 43.50.710 — 43.50.849; regulations.
 (a) The department
     (1) shall administer AS 43.50.710 — 43.50.849;

     (2) may adopt regulations relating to the administration and enforcement of AS 43.50.710 — 43.50.849;

     (3) shall determine the applicable minimum price for cigarettes sold by a wholesaler or retailer as provided in AS 43.50.810;

     (4) may, after reasonable notice and hearing, revoke or suspend a license issued under AS 43.50.010 or 43.50.035 to a person who refuses or neglects to comply with a provision of AS 43.50.710 — 43.50.849.

 (b) The Department of Commerce, Community, and Economic Development may, after reasonable notice and hearing, revoke or suspend a license issued under AS 43.70.075 to a person who refuses or neglects to comply with a provision of AS 43.50.710 — 43.50.849.




Sec. 43.50.800. Presumptions applicable to determination of cost. [Repealed, § 8 ch 114 SLA 2010.]
Sec. 43.50.810. Minimum prices for cigarette sales.
 (a) For the purposes of AS 43.50.710 — 43.50.849, the department shall determine the minimum price for which a wholesaler may advertise, offer to sell, or sell cigarettes at wholesale by applying the following formula:

Wholesale Minimum Price = 1.02(M — D + T),

where M = the manufacturer’s list price;

D = trade discounts; and

T = the full face value of all cigarette taxes.

 (b) For the purposes of AS 43.50.710 — 43.50.849, the department shall determine the minimum price for which a retailer or wholesaler may advertise, offer to sell, or sell cigarettes at retail by multiplying by 1.04 the wholesale minimum price determined under (a) of this section.




Sec. 43.50.845. Short title for AS 43.50.710 — 43.50.849.
AS 43.50.710 — 43.50.849 may be known as the Unfair Cigarette Sales Tax Act.


Sec. 43.50.849. Definitions.
In AS 43.50.710 — 43.50.849,
     (1) “cigarette” has the meaning given in AS 43.50.170;

     (2) “department” means the Department of Revenue;

     (3) “person” has the meaning given in AS 43.50.170;

     (4) “retailer” has the meaning given in AS 43.50.170 and includes a person licensed or required to be licensed as a direct-buying retailer under this chapter and a person who holds or is required to hold a license endorsement under AS 43.70.075;

     (5) “sale” has the meaning given in AS 43.50.170;

     (6) “sell at retail,” “sale at retail,” or “retail sales” means a sale for consumption or use made in the ordinary course of trade or usual conduct of the seller’s business;

     (7) “sell at wholesale,” “sale at wholesale,” or “wholesale sales” means a sale made in the ordinary course of trade or usual conduct by a wholesaler to a retailer for the purpose of resale;

     (8) “trade discount” means a price reduction that is offered by a cigarette manufacturer on the date of sale, is reflected on the invoice as a deduction from the manufacturer’s list price, and is fully earned and determinable on the date of sale;

     (9) “wholesaler” means a person licensed or required to be licensed under AS 43.50.010 or AS 43.50.035 and who sells cigarettes to a retailer for the purpose of resale.




Article 1. Vehicle Rental Taxes.


Chapter 52. Transportation Taxes.

Sec. 43.52.010. Levy of passenger vehicle rental tax.
There is imposed an excise tax on the charge for the lease or rental of a passenger vehicle in this state if the lease or rental of the passenger vehicle does not exceed a period of 90 consecutive days.


Sec. 43.52.020. Rate of passenger vehicle rental tax.
The rate of the tax levied in AS 43.52.010 is 10 percent of the total fees and costs charged for the lease or rental of the passenger vehicle.


Sec. 43.52.030. Levy of recreational vehicle rental tax.
There is imposed an excise tax on the charge for the lease or rental of a recreational vehicle in this state if the lease or rental of the recreational vehicle does not exceed a period of 90 consecutive days.


Sec. 43.52.040. Rate of recreational vehicle rental tax.
The rate of the tax levied in AS 43.52.030 is three percent of the total fees and costs charged for the lease or rental of the recreational vehicle.


Sec. 43.52.050. Liability for payment of vehicle rental taxes.
 (a) The taxes imposed by AS 43.52.010 — 43.52.099 shall be collected and paid to the department
     (1) by the person who provides the leased or rented vehicle; and

     (2) in the manner and at the times required by the department by regulation.

 (b) The tax shall be stated as a separate item on the lease or rental contract or other document invoicing payment.




Sec. 43.52.060. Applicability of the tax.
The provisions of AS 43.52.010 — 43.52.099 apply to a passenger or recreational vehicle whether or not the vehicle is registered and licensed in this state.


Sec. 43.52.070. Relationship to municipal levies.
The taxes imposed by AS 43.52.010 — 43.52.099 are in addition to taxes that may be imposed on vehicle rentals by a municipality under AS 29.45.


Sec. 43.52.080. Administration of tax and sharing of information with municipalities.
 (a) The department shall administer the taxes imposed by this chapter and may adopt necessary regulations.

 (b) The proceeds of the vehicle rental taxes imposed by AS 43.52.010 — 43.52.099 shall be deposited into a special vehicle rental tax account in the general fund.

 (c) The legislature may appropriate the actual balance of the vehicle rental tax account for tourism development and marketing. This section is not intended to create a dedicated fund.

 (d) Notwithstanding AS 40.25.100(a) and AS 43.05.230(a), the department may furnish the proper officer or representative of a municipality the tax returns or reports filed with the department under AS 43.52.010 — 43.52.099 if the municipality grants substantially similar privileges to the department, provides adequate safeguards for the confidentiality of the returns and reports, and uses the returns and reports only for tax purposes.




Sec. 43.52.090. Exemption.
The tax imposed in AS 43.52.010 — 43.52.099 does not apply to leases or rentals for official use to federal, state, or local government agencies or employees.


Sec. 43.52.099. Definitions.
In AS 43.52.010 — 43.52.099,
     (1) “fees and costs” means all charges incurred by the renter before the tax imposed under AS 43.52.010 — 43.52.099 except
          (A) fees from the sale of automobile liability insurance, loss damage waiver insurance, and personal accident insurance;

          (B) parking tickets;

          (C) sales or excise taxes;

          (D) payment for damages to the vehicle during the rental period;

          (E) concession fees paid to an airport;

          (F) customer facility charges set by the commissioner of transportation and public facilities under AS 02.15.090; and

          (G) customer facility maintenance charges set by the commissioner of transportation and public facilities under AS 02.15.090;

     (2) “passenger vehicle” means a motor vehicle as defined in AS 28.90.990 that is driven or moved on a highway or other public right-of-way in the state, but does not include
          (A) a commercial motor vehicle as that term is defined in AS 28.90.990;

          (B) emergency or fire equipment that is necessary to the preservation of life or property;

          (C) a farm vehicle that is controlled and operated by a farmer, used to transport agricultural products, farm machinery, or farm supplies to or from that farmer’s farm, not used in the operations of a common or contract motor carrier, and used within 150 miles of the farmer’s farm;

          (D) a recreational vehicle;

          (E) a taxicab;

          (F) a rental truck; in this subparagraph, “rental truck” means a motor vehicle with a gross vehicle weight rating greater than 8,500 pounds that is designed, used, or maintained primarily for the transportation of personal property;

          (G) a vehicle provided by an automobile dealer to a customer as replacement transportation during warranty, recall, or service contract repairs if the dealer does not receive compensation from the customer; or

          (H) a motorcycle or a motor-driven cycle as those terms are defined in AS 28.90.990;

     (3) “recreational vehicle” means
          (A) a motor vehicle or trailer for recreational dwelling purposes;

          (B) a motor home or other vehicle with a motor home body style;

          (C) a one-piece camper vehicle; and

          (D) any other self-propelled vehicle with living quarters;

     (4) “tax” means the excise tax levied under AS 43.52.010 — 43.52.099 on the charge made for the rental of a passenger or recreational vehicle;

     (5) “vehicle” means a device in, upon, or by which a person or property may be transported or drawn upon or immediately over a highway or vehicular way or area; “vehicle” does not include
          (A) devices used exclusively upon stationary rails or tracks;

          (B) mobile homes; or

          (C) watercraft.




Article 2. Excise Tax on Travel Aboard Commercial Passenger Vessels.


Sec. 43.52.200. Levy of excise tax on overnight accommodations on commercial passenger vessels.
There is imposed an excise tax on passengers traveling on commercial passenger vessels providing overnight accommodations that anchor or moor on the state’s marine water with the intent to allow passengers to embark or disembark.


Sec. 43.52.210. Rate of tax.
The tax imposed by AS 43.52.200 — 43.52.295 is levied at a rate of $34.50 for a passenger for each voyage.


Sec. 43.52.220. Liability for payment of tax.
A passenger subject to the excise tax imposed by AS 43.52.200 — 43.52.295 is liable for the payment of the tax. The tax shall be collected from the passenger by the person who provides travel aboard a commercial vessel and shall be paid to the department in the manner and at the times required by the department by regulation.


Sec. 43.52.230. Disposition of receipts.
 (a) The proceeds from the tax imposed under AS 43.52.200 — 43.52.295 shall be deposited in a special “commercial vessel passenger tax account” in the general fund. The legislature may appropriate money from this account for the purposes described in (b) and (d) of this section.

 (b) For each voyage of a commercial passenger vessel, the commissioner shall identify the first seven ports of call in the state and the number of passengers subject to the tax imposed under AS 43.52.200 — 43.52.295 on board at each port of call. Subject to annual appropriation by the legislature, the commissioner shall distribute to each port of call $5 for each passenger subject to the tax imposed under AS 43.52.200 — 43.52.295. If the port of call is a city located within a borough not otherwise unified with the borough, the commissioner shall distribute $2.50 for each passenger to the city and $2.50 to the borough. A city or borough that receives a payment under this subsection shall use the funds for port facilities, harbor infrastructure, and other services provided to the commercial passenger vessels and the passengers on board those vessels.

 (c) [Repealed, § 12 ch 101 SLA 2010.]
 (d) In addition to making an appropriation for the payments described in (b) of this section, the legislature may appropriate money from the commercial vessel passenger tax account to projects that (1) improve port and harbor infrastructure, (2) provide services to commercial passenger vessels and the passengers on board those vessels, or (3) improve the safety and efficiency of the interstate and foreign commerce activities in which the vessels and the passengers on board those vessels are engaged.

 (e) After October 31, 2010, and before November 1, 2015, a home rule or general law municipality that imposes and collects a tax on a passenger traveling on a commercial passenger vessel under a law enacted by the municipality before December 17, 2007, may not receive an appropriation under (d) of this section.




Sec. 43.52.240. Administration.
The department shall
     (1) collect and enforce the collection of taxes due under AS 43.52.200 — 43.52.295 and penalties as provided in AS 43.05;

     (2) adopt regulations necessary for the administration of AS 43.52.200 — 43.52.295; and

     (3) subject to annual appropriation, distribute the payments described in AS 43.52.230(b).




Sec. 43.52.250. Local levies. [Repealed, § 12 ch 101 SLA 2010.]
Sec. 43.52.255. Tax reduction for local levies.
The tax imposed on a passenger by AS 43.52.200 — 43.52.295 shall be reduced by the total amount of a tax on the passenger traveling on a commercial passenger vessel that is imposed and collected by a home rule or general law municipality under a law enacted before December 17, 2007.


Sec. 43.52.260. Periodic report.
The Department of Commerce, Community, and Economic Development shall, every three years, prepare and submit to the governor, the legislature, and the public a report that
     (1) addresses the projected needs of communities to safely and efficiently host passengers that pay taxes under AS 43.52.200 — 43.52.295; and

     (2) summarizes the extent to which appropriations of the proceeds of the tax have been used to defray the cost of meeting the needs described in (1) of this section.




Sec. 43.52.295. Definitions.
In AS 43.52.200 — 43.52.295,
     (1) “commercial passenger vessel” means a boat or vessel that is used in the common carriage of passengers in commerce; “commercial passenger vessel” does not include
          (A) vessels with fewer than 250 berths or other overnight accommodations for passengers;

          (B) noncommercial vessels, warships, and vessels operated by the state, the United States, or a foreign government;

     (2) “marine water of the state” and “state marine water” have the meaning given to “waters” in AS 46.03.900, except that they include only marine waters;

     (3) “passenger” means a person whom a common carrier has contracted to carry from one place to another;

     (4) “voyage” means any trip or itinerary lasting more than 72 hours on the state’s marine water.




Article 1. Oil and Gas Production Tax.


Chapter 55. Oil and Gas Production Tax and Oil Surcharge.

Sec. 43.55.010. Gross production tax. [Repealed, § 9 ch 136 SLA 1977.]
Sec. 43.55.011. Oil and gas production tax.
 (a) [Repealed, § 34 ch 2 TSSLA 2006.]
 (b) [Repealed, § 34 ch 2 TSSLA 2006.]
 (c) [Repealed, § 34 ch 2 TSSLA 2006.]
 (d) [Repealed, § 18 ch 116 SLA 1981.]
 (e) There is levied on the producer of oil or gas a tax for all oil and gas produced each calendar year from each lease or property in the state, less any oil and gas the ownership or right to which is exempt from taxation or constitutes a landowner’s royalty interest or for which a tax is levied by AS 43.55.014. Except as otherwise provided under (f), (j), (k), (o), and (p) of this section, for oil and gas produced
     (1) before January 1, 2014, the tax is equal to the sum of
          (A) the annual production tax value of the taxable oil and gas as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and

          (B) the sum, over all months of the calendar year, of the tax amounts determined under (g) of this section;

     (2) on and after January 1, 2014, and before January 1, 2022, the tax is equal to the annual production tax value of the taxable oil and gas as calculated under AS 43.55.160(a)(1) multiplied by 35 percent;

     (3) on and after January 1, 2022, the tax for
          (A) oil is equal to the annual production tax value of the taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent;

          (B) gas is equal to 13 percent of the gross value at the point of production of the taxable gas; if the gross value at the point of production of gas produced from a lease or property is less than zero, that gross value at the point of production is considered zero for purposes of this subparagraph.

 (f) The levy of tax under (e) of this section for
     (1) oil and gas produced before January 1, 2022, from leases or properties that include land north of 68 degrees North latitude, other than gas subject to (o) of this section, may not be less than
          (A) four percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is more than $25;

          (B) three percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is over $20 but not over $25;

          (C) two percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is over $17.50 but not over $20;

          (D) one percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is over $15 but not over $17.50; or

          (E) zero percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is $15 or less; and

     (2) oil produced on and after January 1, 2022, from leases or properties that include land north of 68 degrees North latitude, may not be less than
          (A) four percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is more than $25;

          (B) three percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is over $20 but not over $25;

          (C) two percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is over $17.50 but not over $20;

          (D) one percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is over $15 but not over $17.50; or

          (E) zero percent of the gross value at the point of production when the average price per barrel for Alaska North Slope crude oil for sale on the United States West Coast during the calendar year for which the tax is due is $15 or less.

 (g) For each month of a calendar year before 2014 for which the producer’s average monthly production tax value under AS 43.55.160(a)(2) of a BTU equivalent barrel of the taxable oil and gas is more than $30, the amount of tax for purposes of (e)(1)(B) of this section is determined by multiplying the monthly production tax value of the taxable oil and gas produced during the month by the tax rate calculated as follows:
     (1) if the producer’s average monthly production tax value of a BTU equivalent barrel of the taxable oil and gas for the month is not more than $92.50, the tax rate is 0.4 percent multiplied by the number that represents the difference between that average monthly production tax value of a BTU equivalent barrel and $30; or

     (2) if the producer’s average monthly production tax value of a BTU equivalent barrel of the taxable oil and gas for the month is more than $92.50, the tax rate is the sum of 25 percent and the product of 0.1 percent multiplied by the number that represents the difference between the average monthly production tax value of a BTU equivalent barrel and $92.50, except that the sum determined under this paragraph may not exceed 50 percent.

 (h) [Repealed, § 66 ch 1 SSSLA 2007.]
 (i) There is levied on the producer of oil or gas a tax for all oil and gas produced each calendar year from each lease or property in the state the ownership or right to which constitutes a landowner’s royalty interest, except for oil and gas the ownership or right to which is exempt from taxation. The provisions of this subsection apply to a landowner’s royalty interest as follows:
     (1) the tax levied for oil is equal to five percent of the gross value at the point of production of the oil;

     (2) the tax levied for gas is equal to 1.667 percent of the gross value at the point of production of the gas;

     (3) if the department determines that, for purposes of reducing the producer’s tax liability under (1) or (2) of this subsection, the producer has received or will receive consideration from the royalty owner offsetting all or a part of the producer’s royalty obligation, other than a deduction under AS 43.55.020 related to a settlement with a royalty owner of the amount of a tax paid, then, notwithstanding (1) and (2) of this subsection, the tax is equal to 25 percent of the gross value at the point of production of the oil and gas.

 (j) For a calendar year, the tax levied by (e) of this section for gas produced from a lease or property in the Cook Inlet sedimentary basin may not exceed
     (1) for a lease or property that first commenced commercial production of gas before April 1, 2006, the product obtained by multiplying (A) the amount of taxable gas produced during the calendar year from the lease or property, times (B) the average rate of tax that was imposed under this chapter for taxable gas produced from the lease or property for the 12-month period ending on March 31, 2006, times (C) the quotient obtained by dividing the total gross value at the point of production of the taxable gas produced from the lease or property during the 12-month period ending on March 31, 2006, by the total amount of that gas;

     (2) for a lease or property that first commences commercial production of gas after March 31, 2006, the product obtained by multiplying (A) the amount of taxable gas produced during the calendar year from the lease or property, times (B) the average rate of tax that was imposed under this chapter for taxable gas produced from all leases or properties in the Cook Inlet sedimentary basin for the 12-month period ending on March 31, 2006, times (C) the average prevailing value for gas delivered in the Cook Inlet area for the 12-month period ending March 31, 2006, as determined by the department under AS 43.55.020(f).

 (k) For a calendar year, the tax levied by (e) of this section may not exceed one dollar a barrel of oil for oil produced from a lease or property in the Cook Inlet sedimentary basin.

 (l) [Repealed, § 66 ch 1 SSSLA 2007.]
 (m) [Repealed, § 33 ch. 4 4SSLA 2016.]
 (n) [Repealed, § 66 ch 1 SSSLA 2007.]
 (o) Notwithstanding other provisions of this section, for a calendar year, the tax levied under (e) of this section for each 1,000 cubic feet of gas for gas produced from a lease or property outside the Cook Inlet sedimentary basin and used in the state, other than gas subject to (p) of this section, may not exceed the amount of tax for each 1,000 cubic feet of gas that is determined under (j)(2) of this section.

 (p) For the seven years immediately following the commencement of commercial production of oil or gas produced from leases or properties in the state that are outside the Cook Inlet sedimentary basin and that do not include land located north of 68 degrees North latitude, where that commercial production began after December 31, 2012, and before January 1, 2027, the levy of tax under (e) of this section for oil and gas may not exceed four percent of the gross value at the point of production.




Sec. 43.55.012. Adjustment in tax rates. [Repealed, § 34 ch 2 TSSLA 2006.]
Sec. 43.55.013. Economic limit factor. [Repealed, § 34 ch 2 TSSLA 2006.]
Sec. 43.55.014. Payment in gas of tax for gas.
 (a) For gas produced on and after January 1, 2022, other than gas described in (e) of this section, the department shall allow a producer to make an election, under regulations adopted by the department, to pay in gas the production tax levied by this section in lieu of the tax otherwise levied for the gas by AS 43.55.011(e). An election under this subsection applies only to gas produced from oil and gas leases modified under AS 38.05.180(hh) from which the commissioner of natural resources has determined to take royalty gas in kind under AS 38.05.182.

 (b) A production tax levied by this section is equal to 13 percent of the gas otherwise taxable under AS 43.55.011(e)(3) produced from each oil and gas lease to which an effective election under (a) of this section applies, when and as that gas is produced. The producer shall pay the tax in gas by delivering that 13 percent of the gas to the state at the point of production.

 (c) The Department of Natural Resources shall manage under AS 38.05.020(b)(14) the custody and disposition of gas delivered to the state under (b) of this section.

 (d) An assessment under AS 43.05.245 against a producer for an underpayment of a tax levied by this section may be made in terms of an amount of gas or an amount of money, as determined under regulations adopted by the department. If the assessment is made in terms of money, the amount for a month of production for an oil and gas lease subject to an effective election under (a) of this section is the product of the number of units of gas by which the producer’s delivery to the state was less than the amount required by (b) of this section, multiplied by the average gross value at the point of production for each unit of the gas produced by the producer from the lease during the month other than gas that was not subject to tax or gas that was delivered to the state under (b) of this section. The department may allow a credit or refund under AS 43.05.275 for an overpayment of a tax levied by this section that may be issued in the form of gas or money, as determined under regulations adopted by the department. If the credit or refund is allowed in terms of money, the amount of the credit or refund for a month of production for an oil and gas lease subject to an effective election under (a) of this section is the product of the number of units of gas by which the producer’s delivery to the state was more than the amount required under (b) of this section, multiplied by the average gross value at the point of production for each unit of the gas produced by the producer from the lease during the month other than gas that was not subject to tax or gas that was delivered to the state under (b) of this section. Interest that is determined as a percentage of the amount of a tax underpayment or overpayment and a penalty that is a percentage of the amount of a tax underpayment are calculated as a percentage of the amount of money determined in this subsection. An amount of gas that was less than the amount required to be delivered to the state under (b) of this section or an amount of gas that was more than the amount required to be delivered to the state under (b) of this section that is adjusted as provided by a gas balancing agreement to which the state is a party under AS 38.05.020(b)(11) is not subject to assessment under AS 43.05.245 or a credit or refund under AS 43.05.275. In this subsection, “unit” means a unit of measurement for gas identified by the department under regulations adopted by the department and may be expressed as 1,000 cubic feet, 1,000,000 British thermal units, or another appropriate unit of measurement specified by the department under regulations adopted by the department.

 (e) This section does not apply to gas that, under AS 43.55.020(e), is considered as gas produced from a lease or property for the purpose of AS 43.55.011 — 43.55.180.




Sec. 43.55.015. Tax per barrel of oil. [Repealed, § 9 ch 136 SLA 1977.]
Sec. 43.55.016. Gas production tax. [Repealed, § 34 ch 2 TSSLA 2006.]
Sec. 43.55.017. Relation to other taxes.
 (a) Except as provided in this chapter, the taxes imposed by this chapter are in place of all taxes now imposed by the state or any of its municipalities, and neither the state nor a municipality may impose a tax on
     (1) producing oil or gas leases;

     (2) oil or gas produced or extracted in the state;

     (3) the value of intangible drilling and development costs, as described in 26 U.S.C. 263(c) (Internal Revenue Code), as amended through January 1, 1974.

 (b) The taxes imposed by this chapter are in place of all taxes imposed by a municipality upon oil or gas in place or nonproducing oil or gas leases or properties.

 (c) The taxes imposed by this chapter are not in place of the tax imposed by income taxes, franchise taxes, or taxes upon the retail sale of oil or gas products.




Sec. 43.55.018. Credit against tax. [Repealed, § 18 ch 116 SLA 1981.]
Sec. 43.55.019. Oil or gas producer education credit.
 (a) A producer of oil or gas is allowed a credit against the tax levied by AS 43.55.011(e) for cash contributions accepted for
     (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation or by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association;

     (2) secondary school level vocational education courses, programs, and facilities by a school district in the state;

     (3) vocational education courses, programs, equipment, and facilities by a state-operated vocational technical education and training school, a nonprofit regional training center recognized by the Department of Labor and Workforce Development, and an apprenticeship program in the state that is registered with the United States Department of Labor under 29 U.S.C. 50 — 50b (National Apprenticeship Act);

     (4) a facility or an annual intercollegiate sports tournament by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association;

     (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state;

     (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government; and

     (7) the Alaska higher education investment fund under AS 37.14.750.

 (b) The amount of the credit is
     (1) 50 percent of contributions of not more than $100,000;

     (2) 100 percent of the next $200,000 of contributions; and

     (3) 50 percent of the amount of contributions that exceed $300,000.

 (c) Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used.

 (d) A contribution claimed as a credit under this section may not
     (1) be the basis for a credit claimed under another provision of this title; and

     (2) when combined with contributions that are the basis for credits taken during the taxpayer’s tax year under AS 21.96.070, 21.96.075, AS 43.20.014, AS 43.56.018, AS 43.65.018, AS 43.75.018, or AS 43.77.045, result in the total amount of credits exceeding $5,000,000; if the taxpayer is a member of an affiliated group, then the total amount of credits may not exceed $5,000,000 for the affiliated group; in this paragraph, “affiliated group” has the meaning given in AS 43.20.145.

 (e) The credit under this section may not reduce a person’s tax liability under AS 43.55.011(e) to below zero for any tax year. An unused credit or portion of a credit not used under this section for a tax year may not be sold, traded, transferred, or applied in a subsequent tax year.

 (f) The department may, by regulation, establish procedures by which a taxpayer may allocate a pro rata share of a credit claimed under this section against monthly tax payments made during the tax year.

 (g) In this section,
     (1) “school district” has the meaning given in AS 43.20.014;

     (2) “vocational education” has the meaning given in AS 43.20.014.




Sec. 43.55.020. Payment of tax.
 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay the tax as follows:
     (1) for oil and gas produced before January 1, 2014, an installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each month of the calendar year on the last day of the following month; except as otherwise provided under (2) of this subsection, the amount of the installment payment is the sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment payment may not be less than zero:
          (A) for oil and gas not subject to AS 43.55.011(o) or (p) produced from leases or properties in the state outside the Cook Inlet sedimentary basin, other than leases or properties subject to AS 43.55.011(f), the greater of
               (i) zero; or

               (ii) the sum of 25 percent and the tax rate calculated for the month under AS 43.55.011(g) multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil and gas under AS 43.55.160 from the gross value at the point of production of the oil and gas produced from the leases or properties during the month for which the installment payment is calculated;

          (B) for oil and gas produced from leases or properties subject to AS 43.55.011(f), the greatest of
               (i) zero;

               (ii) zero percent, one percent, two percent, three percent, or four percent, as applicable, of the gross value at the point of production of the oil and gas produced from the leases or properties during the month for which the installment payment is calculated; or

               (iii) the sum of 25 percent and the tax rate calculated for the month under AS 43.55.011(g) multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil and gas under AS 43.55.160 from the gross value at the point of production of the oil and gas produced from those leases or properties during the month for which the installment payment is calculated;

          (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for each lease or property, the greater of
               (i) zero; or

               (ii) the sum of 25 percent and the tax rate calculated for the month under AS 43.55.011(g) multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible under AS 43.55.160 for the oil or gas, respectively, produced from the lease or property from the gross value at the point of production of the oil or gas, respectively, produced from the lease or property during the month for which the installment payment is calculated;

          (D) for oil and gas subject to AS 43.55.011(p), the lesser of
               (i) the sum of 25 percent and the tax rate calculated for the month under AS 43.55.011(g) multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil and gas under AS 43.55.160 from the gross value at the point of production of the oil and gas produced from the leases or properties during the month for which the installment payment is calculated, but not less than zero; or

               (ii) four percent of the gross value at the point of production of the oil and gas produced from the leases or properties during the month, but not less than zero;

     (2) an amount calculated under (1)(C) of this subsection for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable gas produced during the month for the amount of taxable gas produced during the calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced during the month for the amount of taxable oil produced during the calendar year;

     (3) an installment payment of the estimated tax levied by AS 43.55.011(i) for each lease or property is due for each month of the calendar year on the last day of the following month; the amount of the installment payment is the sum of
          (A) the applicable tax rate for oil provided under AS 43.55.011(i), multiplied by the gross value at the point of production of the oil taxable under AS 43.55.011(i) and produced from the lease or property during the month; and

          (B) the applicable tax rate for gas provided under AS 43.55.011(i), multiplied by the gross value at the point of production of the gas taxable under AS 43.55.011(i) and produced from the lease or property during the month;

     (4) any amount of tax levied by AS 43.55.011, net of any credits applied as allowed by law, that exceeds the total of the amounts due as installment payments of estimated tax is due on March 31 of the year following the calendar year of production;

     (5) for oil and gas produced on and after January 1, 2014, and before January 1, 2022, an installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each month of the calendar year on the last day of the following month; except as otherwise provided under (6) of this subsection, the amount of the installment payment is the sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment payment may not be less than zero:
          (A) for oil and gas not subject to AS 43.55.011(o) or (p) produced from leases or properties in the state outside the Cook Inlet sedimentary basin, other than leases or properties subject to AS 43.55.011(f), the greater of
               (i) zero; or

               (ii) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil and gas under AS 43.55.160 from the gross value at the point of production of the oil and gas produced from the leases or properties during the month for which the installment payment is calculated;

          (B) for oil and gas produced from leases or properties subject to AS 43.55.011(f), the greatest of
               (i) zero;

               (ii) zero percent, one percent, two percent, three percent, or four percent, as applicable, of the gross value at the point of production of the oil and gas produced from the leases or properties during the month for which the installment payment is calculated; or

               (iii) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil and gas under AS 43.55.160 from the gross value at the point of production of the oil and gas produced from those leases or properties during the month for which the installment payment is calculated, except that, for the purposes of this calculation, a reduction from the gross value at the point of production may apply for oil and gas subject to AS 43.55.160(f) or (g);

          (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for each lease or property, the greater of
               (i) zero; or

               (ii) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible under AS 43.55.160 for the oil or gas, respectively, produced from the lease or property from the gross value at the point of production of the oil or gas, respectively, produced from the lease or property during the month for which the installment payment is calculated;

          (D) for oil and gas subject to AS 43.55.011(p), the lesser of
               (i) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil and gas under AS 43.55.160 from the gross value at the point of production of the oil and gas produced from the leases or properties during the month for which the installment payment is calculated, but not less than zero; or

               (ii) four percent of the gross value at the point of production of the oil and gas produced from the leases or properties during the month, but not less than zero;

     (6) an amount calculated under (5)(C) of this subsection for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable gas produced during the month for the amount of taxable gas produced during the calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced during the month for the amount of taxable oil produced during the calendar year;

     (7) for oil and gas produced on or after January 1, 2022, an installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each month of the calendar year on the last day of the following month; except as otherwise provided under (10) of this subsection, the amount of the installment payment is the sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment payment may not be less than zero:
          (A) for oil produced from leases or properties subject to AS 43.55.011(f), the greatest of
               (i) zero;

               (ii) zero percent, one percent, two percent, three percent, or four percent, as applicable, of the gross value at the point of production of the oil produced from the leases or properties during the month for which the installment payment is calculated; or

               (iii) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil under AS 43.55.160(h)(1) from the gross value at the point of production of the oil produced from those leases or properties during the month for which the installment payment is calculated, except that, for the purposes of this calculation, a reduction from the gross value at the point of production may apply for oil subject to AS 43.55.160(f) or 43.55.160(f) and (g);

          (B) for oil produced before or during the last calendar year under AS 43.55.024(b) for which the producer could take a tax credit under AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, other than leases or properties subject to AS 43.55.011(o) or (p), the greater of
               (i) zero; or

               (ii) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil under AS 43.55.160(h)(2) from the gross value at the point of production of the oil produced from the leases or properties during the month for which the installment payment is calculated;

          (C) for oil and gas produced from leases or properties subject to AS 43.55.011(p), except as otherwise provided under (8) of this subsection, the sum of
               (i) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil under AS 43.55.160(h)(3) from the gross value at the point of production of the oil produced from the leases or properties during the month for which the installment payment is calculated, but not less than zero; and

               (ii) 13 percent of the gross value at the point of production of the gas produced from the leases or properties during the month, but not less than zero;

          (D) for oil produced from leases or properties in the state, no part of which is north of 68 degrees North latitude, other than leases or properties subject to (B), (C), or (F) of this paragraph, the greater of
               (i) zero; or

               (ii) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible for the oil under AS 43.55.160(h)(4) from the gross value at the point of production of the oil produced from the leases or properties during the month for which the installment payment is calculated;

          (E) for gas produced from each lease or property in the state outside the Cook Inlet sedimentary basin, other than a lease or property subject to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of production of the gas produced from the lease or property during the month for which the installment payment is calculated, but not less than zero;

          (F) for oil subject to AS 43.55.011(k), for each lease or property, the greater of
               (i) zero; or

               (ii) 35 percent multiplied by the remainder obtained by subtracting 1/12 of the producer’s adjusted lease expenditures for the calendar year of production under AS 43.55.165 and 43.55.170 that are deductible under AS 43.55.160 for the oil produced from the lease or property from the gross value at the point of production of the oil produced from the lease or property during the month for which the installment payment is calculated;

          (G) for gas subject to AS 43.55.011(j) or (o), for each lease or property, the greater of
               (i) zero; or

               (ii) 13 percent of the gross value at the point of production of the gas produced from the lease or property during the month for which the installment payment is calculated;

     (8) an amount calculated under (7)(C) of this subsection may not exceed four percent of the gross value at the point of production of the oil and gas produced from leases or properties subject to AS 43.55.011(p) during the month for which the installment payment is calculated;

     (9) for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point of production is determined under AS 43.55.011(f)(1) or (2) but substituting the phrase “month for which the installment payment is calculated” in AS 43.55.011(f)(1) and (2) for the phrase “calendar year for which the tax is due;

     (10) an amount calculated under (7)(F) or (G) of this subsection for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas, or set out in AS 43.55.011(k) for oil, but substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable gas produced during the month for the amount of taxable gas produced during the calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced during the month for the amount of taxable oil produced during the calendar year.

 (b) The production tax on oil and gas shall be paid to the department by or on behalf of the producer.

 (c) [Repealed, § 7 ch 101 SLA 1972.]
 (d) [Repealed, § 33, ch. 10, SLA 2013.]
 (e) Gas flared, released, or allowed to escape in excess of the amount authorized by the Alaska Oil and Gas Conservation Commission is considered, for the purpose of AS 43.55.011 — 43.55.180, as gas produced from a lease or property. Oil or gas used in the operation of a lease or property in the state in drilling for or producing oil or gas, or for repressuring, except to the extent determined by the Alaska Oil and Gas Conservation Commission to be waste, is not considered, for the purpose of AS 43.55.011 — 43.55.180, as oil or gas produced from a lease or property.

 (f) If oil or gas is produced but not sold, gas is produced but is stored in a gas storage facility, or oil or gas is produced and sold under circumstances where the sale price does not represent the prevailing value for oil or gas of like kind, character, or quality in the field or area from which the product is produced, the department may require the tax to be paid upon the basis of the value of oil or gas of the same kind, quality, and character prevailing for that field or area during the calendar month of production or sale.

 (g) Notwithstanding any contrary provision of AS 43.05.225,
     (1) before January 1, 2014, an unpaid amount of an installment payment required under (a)(1) — (3) of this section that is not paid when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date the installment payment is due until March 31 following the calendar year of production, and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued under (A) of this paragraph that remains unpaid after that March 31 is treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax due under (a)(4) of this section that is not paid when due bears interest as provided for a delinquent tax under AS 43.05.225;

     (2) on and after January 1, 2014, an unpaid amount of an installment payment required under (a)(3), (5), (6), or (7) of this section that is not paid when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date the installment payment is due until March 31 following the calendar year of production, and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued under (A) of this paragraph that remains unpaid after that March 31 is treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax due under (a)(4) of this section that is not paid when due bears interest as provided for a delinquent tax under AS 43.05.225.

 (h) Notwithstanding any contrary provision of AS 43.05.280,
     (1) an overpayment of an installment payment required under (a)(1), (2), (3), (5), (6), or (7) of this section bears interest at the rate provided for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the later of the date the installment payment is due or the date the overpayment is made, until the earlier of
          (A) the date it is refunded or is applied to an underpayment; or

          (B) March 31 following the calendar year of production;

     (2) except as provided under (1) of this subsection, interest with respect to an overpayment is allowed only on any net overpayment of the payments required under (a) of this section that remains after the later of March 31 following the calendar year of production or the date that the statement required under AS 43.55.030(a) is filed;

     (3) interest is allowed under (2) of this subsection only from a date that is 90 days after the later of March 31 following the calendar year of production or the date that the statement required under AS 43.55.030(a) is filed; interest is not allowed if the overpayment was refunded within the 90-day period;

     (4) interest under (2) and (3) of this subsection is paid at the rate and in the manner provided in AS 43.05.225(1).

 (i) Notwithstanding any contrary provision of AS 43.05.225 or (g) or (h) of this section, if the amount of a tax payment, including an installment payment, due under (a)(1) — (4) of this section is affected by the retroactive application of a regulation adopted under this chapter, the department shall determine whether the retroactive application of the regulation caused an underpayment or an overpayment of the amount due and adjust the interest due on the affected payment as follows:
     (1) if an underpayment of the amount due occurred, the department shall waive interest that would otherwise accrue for the underpayment before the first day of the second month following the month in which the regulation became effective, if
          (A) the department determines that the producer’s underpayment resulted because the regulation was not in effect when the payment was due; and

          (B) the producer demonstrates that it made a good faith estimate of its tax obligation in light of the regulations then in effect when the payment was due and paid the estimated tax;

     (2) if an overpayment of the amount due occurred and the department determines that the producer’s overpayment resulted because the regulation was not in effect when the payment was due, the obligation for a refund for the overpayment does not begin to accrue interest earlier than the following, as applicable:
          (A) except as otherwise provided under (B) of this paragraph, the first day of the second month following the month in which the regulation became effective;

          (B) 90 days after an amended statement under AS 43.55.030(a) and an application to request a refund of production tax paid is filed, if the overpayment was for a period for which an amended statement under AS 43.55.030(a) was required to be filed before the regulation became effective.

 (j) Cushion gas in a gas storage facility is not considered to be gas used in the operation of a lease or property or gas used for repressuring as described in (e) of this section. Gas withdrawn from a gas storage facility regulated under AS 42.05 is considered to be non-native gas until all non-native gas injected into the gas storage facility has been withdrawn from the gas storage facility. Non-native gas withdrawn from a gas storage facility is not considered to be gas produced for the purposes of AS 43.55.011 — 43.55.180. Gas withdrawn from a gas storage facility after all non-native gas previously injected into the gas storage facility has been withdrawn is gas considered to be produced from the lease or property for the purposes of AS 43.55.011 — 43.55.180. In this subsection, “native gas” and “non-native gas” have the meanings given in AS 31.05.032.

 (k) For oil and gas produced on and after January 1, 2014, and before January 1, 2022, in making settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes due to the amount of the tax paid. If the total deductions of installment payments of estimated tax for a calendar year exceed the actual tax for that calendar year, the producer shall, before April 1 of the following year, refund the excess to the royalty owner. Unless otherwise agreed between the producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or right to which constitutes a landowner’s royalty interest, is considered to be the gross value at the point of production of the taxable royalty oil and gas produced during the calendar year multiplied by a figure that is a quotient, in which
     (1) the numerator is the producer’s total tax liability under AS 43.55.011(e)(2) for the calendar year of production; and

     (2) the denominator is the total gross value at the point of production of the oil and gas taxable under AS 43.55.011(e) produced by the producer from all leases and properties in the state during the calendar year.

 (l) For oil and gas produced on and after January 1, 2022, in making settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes due to the amount of the tax paid. If the total deductions of installment payments of estimated tax for a calendar year exceed the actual tax for that calendar year, the producer shall, before April 1 of the following year, refund the excess to the royalty owner. In making settlement with the royalty owner for gas that is taxable under AS 43.55.014, the producer may deduct the amount of the gas paid as in-kind tax on taxable royalty gas or may deduct the gross value at the point of production of the gas paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on taxable royalty oil for a calendar year, other than oil the ownership or right to which constitutes a landowner’s royalty interest, is considered to be the gross value at the point of production of the taxable royalty oil produced during the calendar year multiplied by a figure that is a quotient, in which
     (1) the numerator is the producer’s total tax liability under AS 43.55.011(e)(3)(A) for the calendar year of production; and

     (2) the denominator is the total gross value at the point of production of the oil taxable under AS 43.55.011(e) produced by the producer from all leases and properties in the state during the calendar year.

 (m) In this section, “gas storage facility” has the meaning given in AS 31.05.032.




Sec. 43.55.021. Alaska veterans’ memorial endowment fund contribution credit. [Repealed, § 25 ch 46 SLA 2002.]
Sec. 43.55.023. Tax credits for certain losses and expenditures.
 (a) A producer or explorer may take a tax credit for a qualified capital expenditure as follows:
     (1) notwithstanding that a qualified capital expenditure may be a deductible lease expenditure for purposes of calculating the production tax value of oil and gas under AS 43.55.160(a), unless a credit for that expenditure is taken underAS 43.20.043or AS 43.55.025, a producer or explorer that incurs a qualified capital expenditure may also elect to apply a tax credit against a tax levied by AS 43.55.011(e) in the amount of 10 percent of that expenditure;

     (2) a producer or explorer may take a credit for a qualified capital expenditure incurred in connection with geological or geophysical exploration or in connection with an exploration well only if the producer or explorer
          (A) agrees, in writing, to the applicable provisions of AS 43.55.025(f)(2); and

          (B) submits to the Department of Natural Resources all data that would be required to be submitted under AS 43.55.025(f)(2);

     (3) a credit for a qualified capital expenditure incurred to explore for, develop, or produce oil or gas deposits located
          (A) north of 68 degrees North latitude may be taken only if the expenditure is incurred before January 1, 2014;

          (B) in the Cook Inlet sedimentary basin may be taken only if the expenditure is incurred before January 1, 2018.

 (b) [Repealed, § 30 ch 3 SSSLA 2017.]
 (c) A credit or portion of a credit under this section
     (1) may not be used to reduce a person’s tax liability under AS 43.55.011(e) for any calendar year below zero;

     (2) may, if not used under this subsection, be applied in a later calendar year;

     (3) may, regardless of when the credit was earned, be used to satisfy a tax, interest, penalty, fee, or other charge that
          (A) is related to the tax due under this chapter for a prior year, except for a surcharge under AS 43.55.201 — 43.55.299 or 43.55.300 or the tax levied by AS 43.55.011(i) or 43.55.014; and

          (B) has not, for the purpose of art. IX, sec. 17(a), Constitution of the State of Alaska, been subject to an administrative proceeding or litigation.

 (d) A person that is entitled to take a tax credit under this section that wishes to transfer the unused credit to another person or, for a credit for a lease expenditure incurred before July 1, 2017, obtain a cash payment under AS 43.55.028 may apply to the department for a transferable tax credit certificate. An application under this subsection must be in a form prescribed by the department and must include supporting information and documentation that the department reasonably requires. The department shall grant or deny an application, or grant an application as to a lesser amount than that claimed and deny it as to the excess, not later than 120 days after the latest of (1) March 31 of the year following the calendar year in which the qualified capital expenditure or carried-forward annual loss for which the credit is claimed was incurred; (2) the date the statement required under AS 43.55.030(a) or (e) was filed for the calendar year in which the qualified capital expenditure or carried-forward annual loss for which the credit is claimed was incurred; or (3) the date the application was received by the department. If, based on the information then available to it, the department is reasonably satisfied that the applicant is entitled to a credit, the department shall issue the applicant a transferable tax credit certificate for the amount of the credit. A certificate issued under this subsection does not expire.

 (e) A person to which a transferable tax credit certificate is issued under (d) of this section may transfer the certificate to another person, and a transferee may further transfer the certificate. Subject to the limitations set out in (a) — (d) of this section, and notwithstanding any action the department may take with respect to the applicant under (g) of this section, the owner of a certificate may apply the credit or a portion of the credit shown on the certificate
     (1) against a tax levied by AS 43.55.011(e); however, a credit shown on a transferable tax credit certificate may not be applied under this paragraph to reduce a transferee’s total tax liability under AS 43.55.011(e) for oil and gas produced during a calendar year to less than 80 percent of the tax that would otherwise be due without applying that credit; any portion of a credit not used under this paragraph may be applied in a later period; or

     (2) regardless of when the credit was earned, to satisfy a tax, interest, penalty, fee, or other charge that
          (A) is related to the tax due under this chapter, except for a surcharge under AS 43.55.201 — 43.55.299 or 43.55.300 or the tax levied by AS 43.55.011(i) or 43.55.014;

          (B) is for a calendar year before the year in which the certificate is applied; and

          (C) has not, for the purpose of art. IX, sec. 17(a), Constitution of the State of Alaska, been subject to an administrative proceeding or litigation.

 (f) [Repealed, § 67 ch 1 SSSLA 2007.]
 (g) The issuance of a transferable tax credit certificate under (d) of this section or former (m) of this section or the purchase of a certificate under AS 43.55.028 does not limit the department’s ability to later audit a tax credit claim to which the certificate relates or to adjust the claim if the department determines, as a result of the audit, that the applicant was not entitled to the amount of the credit for which the certificate was issued. The tax liability of the applicant under AS 43.55.011(e) and 43.55.017 — 43.55.180 is increased by the amount of the credit that exceeds that to which the applicant was entitled, or the applicant’s available valid outstanding credits applicable against the tax levied by AS 43.55.011(e) are reduced by that amount. If the applicant’s tax liability is increased under this subsection, the increase bears interest under AS 43.05.225 from the date the transferable tax credit certificate was issued. For purposes of this subsection, an applicant that is an explorer is considered a producer subject to the tax levied by AS 43.55.011(e).

 (h) Regulations adopted to implement this section must include provisions prescribing reporting, record keeping, and certification procedures and requirements to verify the accuracy of credits claimed and to ensure that a credit is not used more than once.

 (i) [Repealed, § 33 ch 10 SLA 2013.]
 (j) As a condition of receiving a tax credit under this section, a producer or explorer that obtains the tax credit for or directly related to a pipeline, facility, or other asset that is or becomes subject to regulation by the Federal Energy Regulatory Commission, the Regulatory Commission of Alaska, or a successor regulatory body shall at all times support and in all rate proceedings file to flow through 100 percent of the tax credits to ratepayers as a reduction in the costs of service for the pipeline, facility, or other asset.

 (k) An entity that is exempt from taxation under this chapter may not apply for a transferable tax credit certificate.

 (l) A producer or explorer may apply for a tax credit for a well lease expenditure incurred in the state south of 68 degrees North latitude after June 30, 2010, as follows:
     (1) notwithstanding that a well lease expenditure incurred in the state south of 68 degrees North latitude may be a deductible lease expenditure for purposes of calculating the production tax value of oil and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this section,AS 43.20.043, or AS 43.55.025, a producer or explorer that incurs a well lease expenditure in the state south of 68 degrees North latitude may elect to apply a tax credit against a tax levied by AS 43.55.011(e) in the amount of
          (A) 40 percent of that expenditure incurred before January 1, 2017;

          (B) 20 percent of that expenditure incurred on or after January 1, 2017;

     (2) a producer or explorer may take a credit for a well lease expenditure incurred in the state south of 68 degrees North latitude in connection with geological or geophysical exploration or in connection with an exploration well only if the producer or explorer
          (A) agrees, in writing, to the applicable provisions of AS 43.55.025(f)(2); and

          (B) submits to the Department of Natural Resources all data that would be required to be submitted under AS 43.55.025(f)(2);

     (3) a credit for a well lease expenditure incurred to explore for, develop, or produce oil or gas deposits located in the Cook Inlet sedimentary basin may be taken only if the expenditure is incurred before January 1, 2018.

 (m) [Repealed, § 32 ch 10 SLA 2013.]
 (n) For the purposes of (l) of this section, a well lease expenditure incurred in the state south of 68 degrees North latitude is a lease expenditure that is
     (1) directly related to an exploration well, a stratigraphic test well, a producing well, or an injection well other than a disposal well, located in the state south of 68 degrees North latitude, if the expenditure is a qualified capital expenditure and an intangible drilling and development cost authorized under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R. 1.612-4, regardless of the elections made under 26 U.S.C. 263(c); in this paragraph, an expenditure directly related to a well includes an expenditure for well sidetracking, well deepening, well completion or recompletion, or well workover, regardless of whether the well is or has been a producing well; or

     (2) an expense for seismic work conducted within the boundaries of a production or exploration unit.

 (o) In this section, “qualified capital expenditure”
     (1) means, except as otherwise provided in (2) of this subsection, an expenditure that is a lease expenditure under AS 43.55.165 and is
          (A) incurred for geological or geophysical exploration; or

          (B) treated as a capitalized expenditure under 26 U.S.C. (Internal Revenue Code), as amended, regardless of elections made under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is
               (i) treated as a capitalized expenditure for federal income tax reporting purposes by the person incurring the expenditure; or

               (ii) eligible to be deducted as an expense under 26 U.S.C. 263(c) (Internal Revenue Code), as amended;

     (2) does not include an expenditure incurred to acquire an asset (A) the cost of previously acquiring which was a lease expenditure under AS 43.55.165 or would have been a lease expenditure under AS 43.55.165 if it had been incurred after March 31, 2006; for purposes of this subparagraph, “asset” includes geological, geophysical, and well data and interpretations; or (B) that has previously been placed in service in the state; an expenditure to acquire an asset is not excluded under this paragraph if not more than an immaterial portion of the asset meets a description under this paragraph.

 (p) [Repealed, § 33 ch 10 SLA 2013.]




Sec. 43.55.024. Additional nontransferable tax credits.
 (a) For a calendar year for which a producer’s tax liability under AS 43.55.011(e) on oil and gas produced from leases or properties outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, exceeds zero before application of any credits under this chapter, a producer that is qualified under (e) of this section may apply a tax credit against that liability of not more than $6,000,000.

 (b) A producer may not take a tax credit under (a) of this section for any calendar year after the later of
     (1) 2016; or

     (2) the ninth calendar year after the calendar year during which the producer first has commercial oil or gas production before May 1, 2016, from at least one lease or property in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, if the producer did not have commercial oil or gas production from a lease or property in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, before April 1, 2006.

 (c) For a calendar year for which a producer’s tax liability under AS 43.55.011(e) exceeds zero before application of any credits under this chapter, other than a credit under (a) of this section but after application of any credit under (a) of this section, a producer that is qualified under (e) of this section and whose average amount of oil and gas produced a day and taxable under AS 43.55.011(e) is less than 100,000 BTU equivalent barrels a day may apply a tax credit under this subsection against that liability. A producer whose average amount of oil and gas produced a day and taxable under AS 43.55.011(e) is
     (1) not more than 50,000 BTU equivalent barrels may apply a tax credit of not more than $12,000,000 for the calendar year;

     (2) more than 50,000 and less than 100,000 BTU equivalent barrels may apply a tax credit of not more than $12,000,000 multiplied by the following fraction for the calendar year:
1 UNHANDLEDCHAR [2 X (AP UNHANDLEDCHAR 50,000)] ÷ 100,000 where AP = the average amount of oil and gas taxable under AS 43.55.011(e), produced a day during the calendar year in BTU equivalent barrels.

 (d) A producer may not take a tax credit under (c) of this section for any calendar year after the later of
     (1) 2016; or

     (2) if the producer did not have commercial oil or gas production from a lease or property in the state before April 1, 2006, the ninth calendar year after the calendar year during which the producer first has commercial oil or gas production before May 1, 2016, from at least one lease or property in the state.

 (e) On written application by a producer that includes any information the department may require, the department shall determine whether the producer qualifies for a calendar year under (a) and (c) of this section. To qualify under (a) and (c) of this section, a producer must demonstrate that its operation in the state or its ownership of an interest in a lease or property in the state as a distinct producer would not result in the division among multiple producer entities of any production tax liability under AS 43.55.011(e) that reasonably would be expected to be attributed to a single producer if the tax credit provisions of (a) or (c) of this section did not exist.

 (f) A tax credit authorized by (a) of this section may not be applied to reduce a producer’s tax liability for any calendar year under AS 43.55.011(e) on oil and gas produced from leases or properties outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, below zero.

 (g) A tax credit authorized by (c) of this section may not be applied to reduce a producer’s tax liability for any calendar year under AS 43.55.011(e) below zero.

 (h) An unused tax credit or portion of a tax credit under this section is not transferable and may not be carried forward for use in a later calendar year.

 (i) A producer may apply against the producer’s tax liability for the calendar year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under AS 43.55.011(e) that receives a reduction in the gross value at the point of production under AS 43.55.160(f) or (g) and that is produced during a calendar year after December 31, 2013. A tax credit authorized by this subsection may not reduce a producer’s tax liability for a calendar year under AS 43.55.011(e) below zero.

 (j) A producer may apply against the producer’s tax liability for the calendar year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in the gross value at the point of production under AS 43.55.160(f) or (g) and that is produced during a calendar year after December 31, 2013, from leases or properties north of 68 degrees North latitude. A tax credit under this subsection may not reduce a producer’s tax liability for a calendar year under AS 43.55.011(e) below the amount calculated under AS 43.55.011(f). The amount of the tax credit for a barrel of taxable oil subject to this subsection produced during a month of the calendar year is
     (1) $8 for each barrel of taxable oil if the average gross value at the point of production for the month is less than $80 a barrel;

     (2) $7 for each barrel of taxable oil if the average gross value at the point of production for the month is greater than or equal to $80 a barrel, but less than $90 a barrel;

     (3) $6 for each barrel of taxable oil if the average gross value at the point of production for the month is greater than or equal to $90 a barrel, but less than $100 a barrel;

     (4) $5 for each barrel of taxable oil if the average gross value at the point of production for the month is greater than or equal to $100 a barrel, but less than $110 a barrel;

     (5) $4 for each barrel of taxable oil if the average gross value at the point of production for the month is greater than or equal to $110 a barrel, but less than $120 a barrel;

     (6) $3 for each barrel of taxable oil if the average gross value at the point of production for the month is greater than or equal to $120 a barrel, but less than $130 a barrel;

     (7) $2 for each barrel of taxable oil if the average gross value at the point of production for the month is greater than or equal to $130 a barrel, but less than $140 a barrel;

     (8) $1 for each barrel of taxable oil if the average gross value at the point of production for the month is greater than or equal to $140 a barrel, but less than $150 a barrel;

     (9) zero if the average gross value at the point of production for the month is greater than or equal to $150 a barrel.




Sec. 43.55.025. Alternative tax credit for oil and gas exploration.
 (a) Subject to the terms and conditions of this section, a credit against the tax levied by AS 43.55.011(e) or, if the credit is for exploration expenditures incurred for work performed on or after July 1, 2016, against the tax levied by AS 43.20 is allowed for exploration expenditures that qualify under (b) of this section in an amount equal to one of the following:
     (1) 30 percent of the total exploration expenditures that qualify only under (b) and (c) of this section;

     (2) 30 percent of the total exploration expenditures that qualify only under (b) and (d) of this section;

     (3) 40 percent of the total exploration expenditures that qualify under (b), (c), and (d) of this section;

     (4) 40 percent of the total exploration expenditures that qualify only under (b) and (e) of this section;

     (5) 80, 90, or 100 percent, or a lesser amount described in (l) of this section, of the total exploration expenditures described in (b)(2) and (3) of this section and not excluded by (b)(4) and (5) of this section that qualify only under (l) of this section;

     (6) the lesser of $25,000,000 or 80 percent of the total exploration drilling expenditures described in (m) of this section and that qualify under (b) and (c)(1), (c)(2)(A), and (c)(2)(C) of this section; or

     (7) the lesser of $7,500,000 or 75 percent of the total seismic exploration expenditures described in (n) of this section and that qualify under (b) of this section.

 (b) To qualify for the production tax credit under (a) of this section, an exploration expenditure
     (1) must be incurred for work performed after June 30, 2008, and before July 1, 2016, except that, for exploration conducted outside of the Cook Inlet sedimentary basin and south of 68 degrees North latitude, to qualify for the production tax credit under
          (A) (a)(1), (2), or (3) of this section, an exploration expenditure must be incurred for work performed after June 30, 2008, and before January 1, 2022; and

          (B) (a)(4) of this section, an exploration expenditure must be incurred for work performed after June 30, 2008, and before January 1, 2018;

     (2) may be for seismic or other geophysical exploration costs not connected with a specific well;

     (3) if for an exploration well,
          (A) must be incurred by an explorer that holds an interest in the exploration well for which the production tax credit is claimed;

          (B) may be for either a well that encounters an oil or gas deposit or a dry hole;

          (C) must be for a well that has been completed, suspended, or abandoned at the time the explorer claims the tax credit under (f) of this section; and

          (D) must be for goods, services, or rentals of personal property reasonably required for the surface preparation, drilling, casing, cementing, and logging of an exploration well, and, in the case of a dry hole, for the expenses required for abandonment if the well is abandoned within 18 months after the date the well was spudded;

     (4) may not be for administration, supervision, engineering, or lease operating costs; geological or management costs; community relations or environmental costs; bonuses, taxes, or other payments to governments related to the well; costs, including repairs and replacements, arising from or associated with fraud, wilful misconduct, gross negligence, criminal negligence, or violation of law, including a violation of 33 U.S.C. 1319(c)(1) or 1321(b)(3) (Clean Water Act); or other costs that are generally recognized as indirect costs or financing costs; and

     (5) may not be incurred for an exploration well or seismic exploration that is included in a plan of exploration or a plan of development for any unit before May 14, 2003.

 (c) To be eligible for a production tax credit authorized by (a)(1), (3), or (6) of this section, exploration expenditures must
     (1) qualify under (b) of this section; and

     (2) be for an exploration well, subject to the following:
          (A) before the well is spudded,
               (i) the explorer shall submit to the commissioner of natural resources the information necessary to determine whether the geological objective of the well is a potential oil or gas trap that is distinctly separate from any trap that has been tested by a preexisting well;

               (ii) at the time of the submittal of information under (i) of this subparagraph, the commissioner of natural resources may request from the explorer that specific data sets, ancillary data, and reports including all results, and copies of well data collected and data analyses for the well be provided to the Department of Natural Resources upon completion of the drilling; in this sub-subparagraph, well data include all analyses conducted on physical material, and well logs collected from the well and sample analyses; testing geophysical and velocity data including vertical seismic profiles and check shot surveys; testing data and analyses; age data; geochemical analyses; and access to tangible material; and

               (iii) the commissioner of natural resources must make an affirmative determination as to whether the geological objective of the well is a potential oil or gas trap that is distinctly separate from any trap that has been tested by a preexisting well and what information under (ii) of this subparagraph must be submitted by the explorer after completion, abandonment, or suspension under AS 31.05.030; the commissioner of natural resources shall make that determination within 60 days after receiving all the necessary information from the explorer based on the information received and on other information the commissioner of natural resources considers relevant;

          (B) for an exploration well other than a well to explore a Cook Inlet prospect, the well must be located and drilled in such a manner that the bottom hole is located not less than three miles away from the bottom hole of a preexisting well drilled for oil or gas, irrespective of whether the preexisting well has been completed, suspended, or abandoned;

          (C) after completion, suspension, or abandonment under AS 31.05.030 of the exploration well, the commissioner of natural resources must determine that the well was consistent with achieving the explorer’s stated geological objective.

 (d) To be eligible for the 30 percent production tax credit authorized by (a)(2) of this section or the 40 percent production tax credit authorized by (a)(3) of this section, an exploration expenditure must
     (1) qualify under (b) of this section; and

     (2) be for an exploration well that is located not less than 25 miles outside of the outer boundary, as delineated on July 1, 2003, of any unit that is under a plan of development, except that for an exploration well for a Cook Inlet prospect to qualify under this paragraph, the exploration well must be located not less than 10 miles outside the outer boundary, as delineated on July 1, 2003, of any unit that is under a plan of development.

 (e) To be eligible for the 40 percent production tax credit authorized by (a)(4) of this section, the exploration expenditure must
     (1) qualify under (b) of this section;

     (2) be for seismic exploration; and

     (3) have been conducted outside the boundaries of a production unit or an exploration unit; however, the amount of the expenditure that is otherwise eligible under this subsection is reduced proportionately by the portion of the seismic exploration activity that crossed into a production unit or an exploration unit.

 (f) For a production tax credit under this section,
     (1) an explorer shall, in a form prescribed by the department and, except for a credit under (k) of this section, within six months of the completion of the exploration activity, claim the credit and submit information sufficient to demonstrate to the department’s satisfaction that the claimed exploration expenditures qualify under this section; in addition, the explorer shall submit information necessary for the commissioner of natural resources to evaluate the validity of the explorer’s compliance with the requirements of this section;

     (2) an explorer shall agree, in writing,
          (A) to notify the Department of Natural Resources, within 30 days after completion of seismic or geophysical data processing, completion of well drilling, or filing of a claim for credit, whichever is the latest, for which exploration costs are claimed, of the date of completion and submit a report to that department describing the processing sequence and providing a list of data sets available;

          (B) to provide to the Department of Natural Resources, within 30 days after the date of a request, unless a longer period is provided by the Department of Natural Resources, specific data sets, ancillary data, and reports identified in (A) of this paragraph; in this subparagraph,
               (i) a seismic or geophysical data set includes the data for an entire seismic survey, irrespective of whether the survey area covers nonstate land in addition to state land or land in a unit in addition to land outside a unit;

               (ii) well data include all analyses conducted on physical material, and well logs collected from the well, results, and copies of data collected and data analyses for the well, including well logs; sample analyses; testing geophysical and velocity data including seismic profiles and check shot surveys; testing data and analyses; age data; geochemical analyses; and tangible material;

          (C) that, notwithstanding any provision of AS 38, information provided under this paragraph will be held confidential by the Department of Natural Resources,
               (i) in the case of well data, until the expiration of the 24-month period of confidentiality described in AS 31.05.035(c), at which time the Department of Natural Resources will release the information after 30 days” public notice unless, in the discretion of the commissioner of natural resources, it is necessary to protect information relating to the valuation of unleased acreage in the same vicinity, or unless the well is on private land and the owner, including the lessor but not the lessee, of the oil and gas resources has not given permission to release the well data;

               (ii) in the case of seismic or other geophysical data, other than seismic data acquired by seismic exploration subject to (k) of this section, for 10 years following the completion date, at which time the Department of Natural Resources will release the information after 30 days” public notice, except as to seismic or other geophysical data acquired from private land, unless the owner, including a lessor but not a lessee, of the oil and gas resources in the private land gives permission to release the seismic or other geophysical data associated with the private land;

               (iii) in the case of seismic data obtained by seismic exploration subject to (k) of this section, only until the expiration of 30 days” public notice issued on or after the date the production tax credit certificate is issued under (5) of this subsection;

     (3) if more than one explorer holds an interest in a well or seismic exploration, each explorer may claim an amount of credit that is proportional to the explorer’s cost incurred;

     (4) the department may exercise the full extent of its powers as though the explorer were a taxpayer under this title, in order to verify that the claimed expenditures are qualified exploration expenditures under this section; and

     (5) if the department is satisfied that the explorer’s claimed expenditures are qualified under this section and that all data required to be submitted under this section have been submitted, the department shall issue to the explorer a production tax credit certificate for the amount of credit to be allowed against production taxes levied by AS 43.55.011(e) and, if the credit is for exploration expenditures incurred for work performed on or after July 1, 2016, against taxes levied by AS 43.20; notwithstanding any contrary provision of AS 38, AS 40.25.100, or AS 43.05.230, the following information is not confidential:
          (A) the explorer’s name;

          (B) the date of the application;

          (C) the location of the well or seismic exploration;

          (D) the date of the department’s issuance of the certificate; and

          (E) the date on which the information required to be submitted under this section will be released.

 (g) An explorer, other than an entity that is exempt from taxation under this chapter, may transfer, convey, or sell its production tax credit certificate to any person, and any person who receives a production tax credit certificate may also transfer, convey, or sell the certificate. A production tax credit certificate that is transferred, conveyed, or sold under this section may not be applied against the tax levied by AS 43.20.

 (h) A producer that purchases a production tax credit certificate may apply the credits against its production tax levied by AS 43.55.011(e). Regardless of the price the producer paid for the certificate, the producer may receive a credit against its production tax liability for the full amount of the credit, but for not more than the amount for which the certificate is issued. A production tax credit or a portion of a production tax credit or a production tax credit certificate or a portion of a production tax credit certificate allowed under this section
     (1) may not be applied more than once;

     (2) may be applied in a later calendar year;

     (3) may, regardless of when the credit was earned, be applied to satisfy a tax, interest, penalty, fee, or other charge that
          (A) is related to the tax due under this chapter for a prior year, except for a surcharge under AS 43.55.201 — 43.55.299 or 43.55.300 or the tax levied by AS 43.55.011(i) or 43.55.014; and

          (B) has not, for the purpose of art. IX, sec. 17(a), Constitution of the State of Alaska, been subject to an administrative proceeding or litigation.

 (i) For a production tax credit under this section,
     (1) a credit may not be applied to reduce a taxpayer’s tax liability under AS 43.55.011(e) below zero for a calendar year;

     (2) if the production tax credit is for exploration expenditures incurred for work performed on or after July 1, 2016, the explorer may apply the credit to reduce the explorer’s tax liability under AS 43.20, except that the credit may not be applied to reduce the explorer’s tax liability under AS 43.20 below zero for a tax year; and

     (3) an amount of the production tax credit in excess of the amount that may be applied for a calendar or tax year under this subsection may be carried forward and applied against the taxpayer’s tax liability under AS 43.55.011(e) in one or more later calendar years or under AS 43.20 in one or more later tax years.

 (j) Notwithstanding any other provision of this title, of AS 31.05, or of AS 40.25.100, the department shall provide to the Department of Natural Resources information submitted with a claim under this section to support the eligibility of an exploration expenditure, including seismic exploration data and well data, and any information described in (f)(2) of this section received by the department.

 (k) Subject to the terms and conditions of this section, if a claim is filed under (f)(1) of this section before January 1, 2016, a credit against the production tax levied by AS 43.55.011(e) is allowed in an amount equal to five percent of an eligible expenditure under this subsection incurred for seismic exploration performed before July 1, 2003. To be eligible under this subsection, an expenditure must
     (1) have been for seismic exploration that
          (A) obtained data that the commissioner of natural resources considers to be in the best interest of the state to acquire for public distribution; and

          (B) was conducted outside the boundaries of a production unit; however, the amount of the expenditure that is otherwise eligible under this section is reduced proportionately by the portion of the seismic exploration activity that crossed into a production unit; and

     (2) qualify under (b)(4) of this section.

 (l) The first three unaffiliated persons that drill an offshore exploration well for the purpose of discovering oil or gas in Cook Inlet that penetrates and evaluates a prospect in the pre-Tertiary zone using a jack-up rig are eligible for the credit under this subsection. The person that drills the first exploration well is entitled to a credit in the amount of 100 percent of its exploration expenditures or $25,000,000, whichever is less; the person that drills the second exploration well using the same jack-up rig is entitled to a credit in the amount of 90 percent of its exploration expenditures or $22,500,000, whichever is less; and the person that drills the third exploration well using the same jack-up rig is entitled to a credit in the amount of 80 percent of its exploration expenditures or $20,000,000, whichever is less. A person or an affiliate of a person drilling an exploration well is not entitled to a credit for more than one exploration well under this subsection. The department shall make a determination of the order in which the wells are drilled based on the date and time that the drill bit first turns to the right against the seafloor for the purpose of drilling the well. Exploration expenditures eligible for the credit in this subsection may include the necessary and reasonable costs to modify an existing jack-up rig for use in Cook Inlet, may not include the cost to construct or manufacture a jack-up rig, and, notwithstanding (b) of this section, must be incurred for work performed after March 31, 2010. If the exploration well for which a credit is received under this subsection results in sustained production of oil or gas from a reservoir discovered by the exploration well, and notwithstanding that the credit may have been transferred under (g) of this section, 50 percent of the amount of the credit received shall be repaid to the department by the person that received the credit in equal monthly installments over a 10-year period commencing 60 days after the start of sustained production of oil or gas. Whether the exploration well for which a credit is requested under this subsection penetrated and evaluated a prospect in the pre-Tertiary zone and the exploration well resulted in sustained production of oil or gas from a reservoir discovered by the exploration well shall be determined by the commissioner of natural resources and reported to the commissioner. A taxpayer that obtains a credit under this subsection may not claim a tax credit under AS 43.55.023 or another provision in this section for the same exploration expenditure. In this subsection,
     (1) “jack-up rig” means a mobile drilling platform with extendible legs for support on the ocean floor;

     (2) “reservoir” means an oil and gas accumulation, discovered and evaluated by testing, that is separate from any other accumulation of oil and gas;

     (3) “sustained production” means production of oil or gas from a reservoir into a pipeline or other means of transportation to market, but does not include testing, evaluation, or pilot production.

 (m) The persons that drill the first four exploration wells in the state and within the areas described in (o) of this section on state lands, private lands, or federal onshore lands for the purpose of discovering oil or gas that penetrate and evaluate a prospect in a basin described in (o) of this section are eligible for a credit under (a)(6) of this section. A credit under this subsection may not be taken for more than two exploration wells in a single area described in (o)(1) — (6) of this section. Notwithstanding (b) of this section, exploration expenditures eligible for the credit in this subsection must be incurred for work performed after June 1, 2012, and before July 1, 2017, except that expenditures to complete an exploration well that was spudded but not completed before July 1, 2017, are eligible for the credit under this subsection. A person planning to drill an exploration well on private land and to apply for a credit under this subsection shall obtain written consent from the owner of the oil and gas interest for the full public release of all well data after the expiration of the confidentiality period applicable to information collected under (f) of this section. The written consent of the owner of the oil and gas interest must be submitted to the commissioner of natural resources before approval of the proposed exploration well. In addition to the requirements in (c)(1), (c)(2)(A), and (c)(2)(C) of this section and submission of the written consent of the owner of the oil and gas interest, a person planning to drill an exploration well shall obtain approval from the commissioner of natural resources before the well is spudded. The commissioner of natural resources shall make a written determination approving or rejecting an exploration well within 60 days after receiving the request for approval or as soon as is practicable thereafter. Before approving the exploration well, the commissioner of natural resources shall consider the following: the location of the well; the proximity to a community in need of a local energy source; the proximity of existing infrastructure; the experience and safety record of the explorer in conducting operations in remote or roadless areas; the projected cost schedule; whether seismic mapping and seismic data sufficiently identify a particular trap for exploration; whether the targeted and planned depth and range are designed to penetrate and fully evaluate the hydrocarbon potential of the proposed prospect and reach the level below which economic hydrocarbon reservoirs are likely to be found, or reach 12,000 feet or more true vertical depth; and whether the exploration plan provides for a full evaluation of the wellbore below surface casing to the depth of the well. Whether the exploration well for which a credit is requested under this subsection is located within an area and a basin described under (o) of this section shall be determined by the commissioner of natural resources and reported to the commissioner. A taxpayer that obtains a credit under this subsection may not claim a tax credit under AS 43.55.023 or another provision in this section for the same exploration expenditure.

 (n) The persons that conduct the first four seismic exploration projects in the state and within the areas described in (o) of this section for the purpose of discovering oil or gas in a basin are eligible for the credit under (a)(7) of this section. A credit under this subsection may not be taken for more than one seismic exploration project in a single area described in (o)(1) — (6) of this section. Exploration expenditures eligible for the credit in this subsection must be incurred for work performed after June 1, 2012, and before July 1, 2016. A person planning to conduct a seismic exploration project on private land and to apply for a credit under this subsection shall obtain written consent from the owner of the oil and gas interest for the full public release of all geophysical data and compliance with the data submission requirements in (f)(2) of this section. Notwithstanding (f)(2)(C)(ii) of this section, to qualify for a credit under this subsection, a person shall submit the written consent of the owner of the oil and gas interest for the release of data if applicable, and all data required under (f)(2) of this section to the Department of Natural Resources and shall agree in writing that all seismic data requirements submitted under the requirements of (f)(2) of this section may be made public two years after receiving a credit under this subsection. A person intending to qualify for the tax credit under this subsection shall obtain approval from the commissioner of natural resources before the commencement of the seismic exploration activities. The commissioner of natural resources shall make a written determination approving or rejecting a seismic project within 60 days after receiving the request for approval or as soon as is practicable thereafter. Before approving a seismic exploration project, the commissioner shall consider the following: the location of the project; the projected cost schedule; the data acquisition and data processing plan; the reasons for choosing the particular area for seismic exploration; and the experience and safety record of the person in conducting seismic exploration operations in remote or roadless areas. Whether the seismic exploration project for which a credit is requested under this subsection is located in a basin described in (o) of this section shall be determined by the commissioner of natural resources and reported to the commissioner. A taxpayer that obtains a credit under this subsection may not claim a tax credit under AS 43.55.023 or another provision in this section for the same exploration expenditure.

 (o) The activity that is the basis for a credit claimed under (a)(6) and (m) of this section or (a)(7) and (n) of this section must be for the exploration of a basin and within the following areas whose central points are determined using the World Geographic System of 1984 datum,
     (1) 100 miles from 66.896128 degrees North, -162.598187 degrees West;

     (2) 150 miles from 64.839474 degrees North, -147.72094 degrees West;

     (3) 50 miles from 62.776428 degrees North, -164.495201 degrees West;

     (4) 50 miles from 62.110357 degrees North, -145.530551 degrees West;

     (5) 100 miles from 58.189868 degrees North, -157.371104 degrees West;

     (6) 100 miles from 56.005988 degrees North, -160.56083 degrees West.

 (p) In this section,
     (1) “Cook Inlet prospect” means a location within the Cook Inlet sedimentary basin, as that term is defined by regulation adopted to implement AS 38.05.180(f)(4);

     (2) “preexisting well” means a well that was spudded more than 540 days but less than 35 years before the date on which the exploration well to which it is compared is spudded.

 (q) On the day on which an application for a tax credit certificate is submitted under (f) of this section, the department shall issue to the explorer a conditional tax credit certificate. For the purposes of AS 43.55.028(e), the department may, at the time of an application under AS 43.55.028(e), accept from an explorer a conditional tax credit certificate issued under this subsection; however, the department may not purchase a conditional tax credit certificate. A conditional tax credit certificate under this subsection
     (1) may be used to apply for the purchase of a tax credit certificate under AS 43.55.028(e) if the conditional tax credit certificate is for exploration expenditures incurred before July 1, 2017;

     (2) may not be sold, transferred, or conveyed;

     (3) has no value; and

     (4) expires on the day on which the department issues a transferable tax credit certificate under (f) of this section.




Sec. 43.55.028. Oil and gas tax credit fund established; cash purchases of tax credit certificates.
 (a) The oil and gas tax credit fund is established as a separate fund of the state. The purpose of the fund is to purchase transferable tax credit certificates issued under AS 43.55.023 and production tax credit certificates issued under AS 43.55.025 and to pay refunds and payments claimed under AS 43.20.046, 43.20.047, or 43.20.053. The oil and gas tax credit fund established under this subsection may not be used to purchase a tax credit certificate for a credit earned under this chapter for activity occurring on or after July 1, 2017.

 (b) The oil and gas tax credit fund consists of
     (1) money appropriated to the fund, including any appropriation of the percentage provided under (c) of this section of all revenue from taxes levied by AS 43.55.011 that is not required to be deposited in the constitutional budget reserve fund established in art. IX, sec. 17(a), Constitution of the State of Alaska; and

     (2) earnings on the fund.

 (c) The applicable percentage for a fiscal year under (b)(1) of this section is determined with reference to the average price or value forecast by the department for Alaska North Slope oil sold or otherwise disposed of on the United States West Coast during the fiscal year for which the appropriation of revenue from taxes levied by AS 43.55.011 is made. If that forecast is
     (1) $60 a barrel or higher, the applicable percentage is 10 percent;

     (2) less than $60 a barrel, the applicable percentage is 15 percent.

 (d) The department shall manage the fund.

 (e) The department, on the written application of a person to whom a transferable tax credit certificate has been issued under AS 43.55.023(d) or former AS 43.55.023(m) for an expenditure incurred before July 1, 2017, or to whom a production tax credit certificate has been issued under AS 43.55.025(f) for an expenditure incurred before July 1, 2017, may use available money in the oil and gas tax credit fund to purchase, in whole or in part, the certificate. The department may not purchase a total of more than $70,000,000 in tax credit certificates from a person in a calendar year. Before purchasing a certificate or part of a certificate, the department shall find that
     (1) the calendar year of the purchase is not earlier than the first calendar year for which the credit shown on the certificate would otherwise be allowed to be applied against a tax;

     (2) the application is not the result of the division of a single entity into multiple entities that would reasonably be expected to apply as a single entity if the $70,000,000 limitation in this subsection did not exist;

     (3) the applicant’s total tax liability under AS 43.55.011(e), after application of all available tax credits, for the calendar year in which the application is made is zero;

     (4) the applicant’s average daily production of oil and gas taxable under AS 43.55.011(e) during the calendar year preceding the calendar year in which the application is made was not more than 50,000 BTU equivalent barrels; and

     (5) the purchase is consistent with this section and regulations adopted under this section.

 (f) Money in the fund remaining at the end of a fiscal year does not lapse and remains available for expenditure in successive fiscal years.

 (g) The department shall adopt regulations to carry out the purposes of this section, including standards and procedures to allocate available money among applications for purchases under this chapter and claims for refunds and payments under AS 43.20.046, 43.20.047, or 43.20.053 when the total amount of the applications for purchase and claims for refund exceed the amount of available money in the fund. The regulations adopted by the department;
     (1) may not, when allocating available money in the fund under this section, distinguish an application for the purchase of a credit certificate issued under former AS 43.55.023(m) or a claim for a refund or payment under AS 43.20.046, 43.20.047, or 43.20.053;

     (2) must, when allocating available money in the fund under this section, grant a preference, between two applicants, to the applicant with a higher percentage of resident workers in the applicant's workforce, including workers employed by the applicant's direct contractors, in the state in the previous calendar year; in this paragraph, "resident worker" has the meaning given in AS 43.40.092(b);

     (3) must provide for the purchase of the amount equal to the first 50 percent of the credit repurchase limit for each person under (e) of this section at a rate of 100 percent of the value of the certificate or portion of the certificate requested to be purchased and the amount equal to the next 50 percent of the credit repurchase limit for each person under (e) of this section at a rate of 75 percent of the value of the certificate or portion of the certificate requested to be purchased.

 (h) Nothing in this section creates a dedicated fund.

 (i) In this section, “qualified capital expenditure” has the meaning given in AS 43.55.023.

 (j) If an applicant or claimant has an outstanding liability to the state directly related to the applicant's or claimant's oil or gas exploration, development, or production and the department has not previously reduced the amount paid to that applicant or claimant for a certificate or refund because of that outstanding liability, the department may purchase only that portion of a certificate or pay only that portion of a refund that exceeds the outstanding liability. After notifying the applicant or claimant, the department may apply the amount by which the department reduced its purchase of a certificate or payment for a refund because of an outstanding liability to satisfy the outstanding liability. Satisfaction of an outstanding liability under this subsection does not affect the applicant's ability to contest that liability. The department may enter into contracts or agreements with another department to which the outstanding liability is owed. In this subsection, "outstanding liability" means an amount of tax, interest, penalty, fee, rental, royalty, or other charge for which the state has issued a demand for payment that has not been paid when due and, if contested, has not been finally resolved against the state.




Sec. 43.55.029. Assignment of tax credit certificate.
 (a) An explorer or producer that has applied for a production tax credit under AS 43.55.023(a) or (l) or 43.55.025(a) may make a present assignment of the production tax credit certificate expected to be issued by the department to a third-party assignee. The assignment may be made either at the time the application is filed with the department or not later than 30 days after the date of filing with the department. Once a notice of assignment in compliance with this section is filed with the department, the assignment is irrevocable and cannot be modified by the explorer or producer without the written consent of the assignee named in the assignment. If a production tax credit certificate is issued to the explorer or producer, the notice of assignment remains effective and shall be filed with the department by the explorer or producer together with any application for the department to purchase the certificate under AS 43.55.028(e).

 (b) To be effective, the assignment does not require the approval or consent of the department. The assignment must, at a minimum,
     (1) be made in writing and signed by an officer or legally qualified agent of the explorer or producer making the assignment and the assignee, respectively;

     (2) identify the explorer or producer making the assignment, the assignee in whose favor the assignment is being made, and the production tax credit application that is the subject of the assignment;

     (3) define the interest in the production tax credit being assigned, expressed as either an amount in dollars, which may not exceed 90 percent of the credit applied for, or a percentage of the credit to be issued by the department;

     (4) specify an account with a bank located in the state, with sufficient information for the electronic transfer of funds, to receive any future proceeds from the purchase of the tax credit certificate under AS 43.55.028(e);

     (5) cite this section and acknowledge that, once filed with the department, the assignment is irrevocable and cannot be modified without the written consent of the assignee.

 (c) An assignment complying with this section creates a property interest owned by the assignee in the application and any production tax credit certificates issued by the department to the explorer or producer and any future proceeds resulting from the application, in the amount or to the extent set out in the assignment. An assignee may create a valid and enforceable security interest in that property as otherwise provided by law.

 (d) Notwithstanding any other provision of law, and to the maximum extent permitted under federal laws, an assignment complying with this section shall give the assignee a first priority claim, not dischargeable in bankruptcy, against the proceeds received by the explorer or producer, including its estate, trustee, or other representative, resulting from the production tax credit application that is the subject of the assignment under this section, if the assignee has taken the steps necessary under state and federal law to perfect a security interest in the assignment.

 (e) Nothing in this section affects the terms and conditions otherwise required for an explorer or producer to qualify for a production tax credit or the determination by the department of the amount of credit the explorer or producer is qualified to receive.

 (f) Neither the state nor the department, or any other agency, officer, or employee of the state, shall be subject to suit or any claim arising out of or in connection with an assignment made under this section, whether by act or omission.

 (g) The department may adopt regulations to carry out the purposes of this section.




Sec. 43.55.030. Filing of statements.
 (a) A producer that produces oil or gas from a lease or property in the state during a calendar year, whether or not any tax payment is due under AS 43.55.020(a) for that oil or gas, shall file with the department on March 31 of the following year a statement, under oath, in a form prescribed by the department, giving, with other information required, the following:
     (1) a description of each lease or property from which oil or gas was produced, by name, legal description, lease number, or accounting codes assigned by the department;

     (2) the names of the producer and, if different, the person paying the tax, if any;

     (3) the gross amount of oil and the gross amount of gas produced from each lease or property, separately identifying the gross amount of gas produced from each oil and gas lease to which an effective election under AS 43.55.014(a) applies, the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of the gross amount of oil and gas owned by the producer;

     (4) the gross value at the point of production of the oil and of the gas produced from each lease or property owned by the producer and the costs of transportation of the oil and gas;

     (5) the name of the first purchaser and the price received for the oil and for the gas, unless relieved from this requirement in whole or in part by the department;

     (6) the producer’s qualified capital expenditures, as defined in AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other payments or credits under AS 43.55.170;

     (7) the production tax values of the oil and gas under AS 43.55.160(a) or of the oil under AS 43.55.160(h), as applicable;

     (8) any claims for tax credits to be applied; and

     (9) calculations showing the amounts, if any, that were or are due under AS 43.55.020(a) and interest on any underpayment or overpayment.

 (b) [Repealed, § 11 ch 101 SLA 1972.]
 (c) [Repealed, § 11 ch 101 SLA 1972.]
 (d) Reports required under this section are delinquent the first day following the day the report is due. The person required to file the report is liable for a penalty, as determined by the department under standards adopted in regulation by the department, of not more than $1,000 for each day the person fails to file the report at the time required. The penalty is in addition to the penalties in AS 43.05.220 and 43.05.290 and is assessed, collected, and paid in the same manner as a tax deficiency under this title. In this subsection, “report” includes a statement.

 (e) An explorer or producer that incurs a lease expenditure under AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar year but does not produce oil or gas from a lease or property in the state during the calendar year shall file with the department, on March 31 of the following year, a statement, under oath, in a form prescribed by the department, giving, with other information required, the following:
     (1) the explorer’s or producer’s qualified capital expenditures, as defined in AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other payments or credits under AS 43.55.170; and

     (2) if the explorer or producer receives a payment or credit under AS 43.55.170, calculations showing whether the explorer or producer is liable for a tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount.

 (f) The department may require a producer, an explorer, or an operator of a lease or property to file monthly reports, as applicable, of
     (1) the amounts and gross value at the point of production of oil and gas produced;

     (2) transportation costs of the oil and gas;

     (3) any unscheduled interruption of, or reduction in the rate of, oil or gas production;

     (4) lease expenditures and adjustments under AS 43.55.165 and 43.55.170;

     (5) joint interest billings;

     (6) contracts for the sale or transportation of oil or gas;

     (7) information and calculations used in determining monthly installment payments of estimated tax under AS 43.55.020(a); and

     (8) other records and information the department considers necessary for the administration of this chapter.




Sec. 43.55.040. Powers of Department of Revenue.
Except as provided in AS 43.05.405 — 43.05.499, the department may
     (1) require a person engaged in production and the agent or employee of the person, and the purchaser of oil or gas, or the owner of a royalty interest in oil or gas to furnish, whether by the filing of regular statements or reports or otherwise, additional information that is considered by the department as necessary to compute the amount of the tax; notwithstanding any contrary provision of law, the disclosure of additional information under this paragraph to the producer obligated to pay the tax does not violate AS 40.25.100(a) or AS 43.05.230(a); before disclosing information under this paragraph that is otherwise required to be held confidential under AS 40.25.100(a) or AS 43.05.230(a), the department shall
          (A) provide the person that furnished the information a reasonable opportunity to be heard regarding the proposed disclosure and the conditions to be imposed under (B) of this paragraph; and

          (B) impose appropriate conditions limiting
               (i) access to the information to those legal counsel, consultants, employees, officers, and agents of the producer who have a need to know that information for the purpose of determining or contesting the producer’s tax obligation; and

               (ii) the use of the information to use for that purpose;

     (2) examine the books, records, and files of the person;

     (3) conduct hearings and compel the attendance of witnesses and the production of books, records, and papers of any person;

     (4) make an investigation or hold an inquiry that is considered necessary to a disclosure of the facts as to
          (A) the amount of production from any oil or gas location, or of a company or other producer of oil or gas; and

          (B) the rendition of the oil and gas for taxing purposes;

     (5) require a producer, an explorer, or an operator of a lease or property to file reports and copies of records that the department considers necessary to forecast state revenue under this chapter; in the case of reports and copies of records relating to proposed, expected, or approved unit expenditures for a unit for which one or more working interest owners other than the operator have authority to approve unit expenditures, the required reports and copies of records are limited to those reports or copies of records that constitute or disclose communications between the operator and the working interest owners relating to unit budget matters;

     (6) require a producer that has an average total production in the state of more than 100,000 barrels a day for a calendar year to report the gross value at the point of production of the producer’s taxable oil and gas in the state for a calendar year and the total amount of lease expenditures in the state for that calendar year; and

     (7) assess against a person required under this section to file a report, statement, or other document a penalty, as determined by the department under standards adopted in regulation by the department, of not more than $1,000 for each day the person fails to file the report, statement, or other document after notice by the department; the penalty is in addition to any penalties under AS 43.05.220 and 43.05.290 and is assessed, collected, and paid in the same manner as a tax deficiency under this title; the penalty shall bear interest at the rate specified under AS 43.05.225(1).




Sec. 43.55.050. Incorrect returns.
The department may determine whether or not a return required by this chapter to be filed with it is correct. If a person makes an untrue or incorrect return of the gross production or the value of it, or fails or refuses to make a return, the department shall, under regulations adopted by it, determine the correct amount of gross production or the value of it, and compute the tax.


Sec. 43.55.060. Delinquency.
When the tax provided for in this chapter becomes delinquent, it bears interest as provided in AS 43.05.225(1). If any person fails to make a report required by this chapter, within the time prescribed by law for the report, the department shall examine the books, records and files of the person to determine the amount and value of the production to compute the tax, and the department shall add to the tax the cost of the examination, together with any penalties accrued.


Sec. 43.55.070. Lien for tax. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.10.035.]
Sec. 43.55.075. Limitation on assessment and amended returns.
 (a) Except as provided in AS 43.05.260(c), the amount of a tax imposed by this chapter must be assessed within six years after the return was filed.

 (b) A decision of a regulatory agency, court, or other body with authority to resolve disputes that results in a retroactive change to a lease expenditure, to an adjustment to a lease expenditure, to costs of transportation, to sale price, to prevailing value, or to consideration of quality differentials relating to the commingling of oils has a corresponding effect, either an increase or decrease, as applicable, on the production tax value of oil or gas or the amount or availability of a tax credit as determined under this chapter. For purposes of this section, a change to a lease expenditure includes a change in the categorization of a lease expenditure as a qualified capital expenditure or as not a qualified capital expenditure. The producer shall
     (1) within 60 days after the change, notify the department in writing; and

     (2) within 120 days after the change, file amended returns covering all periods affected by the change, unless the department agrees otherwise or a stay is in place that affects the filing or payment, regardless of the pendency of appeals of the decision.

 (c) If an alteration in or modification of a producer’s federal income tax return or a recomputation of the producer’s federal income tax or determination of deficiency occurs that affects the amount of a tax imposed on the producer under this chapter, the producer shall
     (1) within 60 days after the final determination of the alteration, modification, recomputation, or deficiency, notify the department in writing; and

     (2) within 120 days after the final determination of the alteration, modification, recomputation, or deficiency, file amended returns covering all affected periods.

 (d) In this section,
     (1) “qualified capital expenditure” has the meaning given in AS 43.55.023;

     (2) “return” includes a report, a statement, and an amended return, report, or statement.




Sec. 43.55.080. Collection and deposit of revenue.
Except as otherwise provided under art. IX, sec. 17, Constitution of the State of Alaska, the department shall deposit in the general fund the money collected by it under AS 43.55.011 — 43.55.180.


Sec. 43.55.090. Refunds.
In case of overpayment, duplicate payment or payment made in error, the department may refund the amount of the overpayment under AS 43.10.210.


Sec. 43.55.100. Acceptance of deductions. [Repealed, § 15 ch 101 SLA 1972.]
Sec. 43.55.110. Administration.
 (a) The department may adopt regulations for the purpose of making and filing reports required by this chapter and otherwise necessary to the enforcement of this chapter.

 (b) The department may require a sufficient bond from every person charged with the making and filing of reports and the payment of the tax. The bond shall run to the state and shall be conditioned upon the making and filing of reports as required by law, upon compliance with the regulations of the department, and for the prompt payment, by the principal on the bond, of all taxes due the state by virtue of this chapter.

 (c) If reports required have not been filed, or are insufficient to furnish the information required by the department, the department shall institute, in the name of the state upon relation of the department, the necessary action or proceedings to enjoin the person from continuing operations until the reports are filed.

 (d) Upon showing that the state is in danger of losing its claims or the property is being mismanaged, dissipated or concealed, a receiver shall be appointed at the suit of the state.

 (e) The department may require that returns, statements, reports, notifications, and applications filed under this chapter be filed electronically in a form and manner approved or prescribed by the department.

 (f) The department may require that payments required under this chapter be made electronically in a form and manner approved or prescribed by the department.

 (g) Notwithstanding AS 44.62, the department may issue, for the information and guidance of producers, explorers, and other interested persons, advisory bulletins stating the department’s interpretation of provisions of this chapter and of regulations adopted under this chapter. Unless otherwise provided by the department by regulation, interpretations stated in the advisory bulletins are not binding on the department or others.

 (h) Subject to legislative appropriation, the department may compensate a person who provides information to the department about noncompliance with the provisions of this chapter by an explorer or a producer of oil or gas if that information leads to the collection of additional taxes, penalties, or interest from the producer. The amount of compensation under this subsection may not exceed the lesser of $500,000 or 10 percent of the additional tax, penalty, or interest collected as a result of the information. A state employee or an agent of the state is not eligible for compensation under this subsection.

 (i) A person who, under (h) of this section, provides, in bad faith, to the department erroneous information about noncompliance with the provisions of this chapter by an explorer or producer of oil or gas shall pay to the
     (1) department all expenses related to the department’s investigation of the alleged noncompliance; and

     (2) explorer or producer about whom the noncompliance was alleged all expenses that are incurred by the explorer or producer relating to the department’s investigation of the alleged noncompliance.




Secs. 43.55.120 — 43.55.130. Noncompliance and false reports. [Repealed, § 46 ch 113 SLA 1980. For criminal penalties, see AS 43.05.290.]
Sec. 43.55.135. Measurement.
For the purposes of AS 43.55.011 — 43.55.180, except as otherwise provided, oil is measured in terms of a “barrel of oil” and gas is measured in terms of a “cubic foot of gas.”


Sec. 43.55.140. [Renumbered as AS 43.55.900.]
Sec. 43.55.150. Determination of gross value at the point of production.
 (a) For the purposes of AS 43.55.011 — 43.55.180, the gross value at the point of production is calculated using the actual costs of transportation of the oil or gas, except when the
     (1) shipper of oil or gas is affiliated with the transportation carrier or with a person that owns an interest in the transportation facility;

     (2) contract for the transportation of oil or gas is not an arm’s length transaction; or

     (3) method or terms of transportation of oil or gas are not reasonable in view of existing alternative transportation options.

 (b) If the department finds that a condition in (a)(1), (2), or (3) of this section is present, the gross value at the point of production is calculated using the actual costs of transportation, or the reasonable costs of transportation as determined under this subsection, whichever is lower. The department shall determine the reasonable costs of transportation, using the fair market value of like transportation, the fair market value of equally efficient and available alternative modes of transportation, or other reasonable methods. Transportation costs fixed by tariff rates that have been adjudicated as just and reasonable by the Regulatory Commission of Alaska or another regulatory agency and transportation costs in an arm’s length transaction paid by parties not affiliated with an owner of the method of transportation shall be considered prima facie reasonable.

 (c) In determining the gross value of oil under this section, the department may not allow as reasonable costs of transportation
     (1) the amount of loss of or damage to, or of expense incurred due to the loss of or damage to, a vessel used to transport oil if the loss, damage, or expense is incurred in connection with a catastrophic oil discharge from the vessel into the marine or inland waters of the state;

     (2) the incremental costs of transportation of the oil that are attributable to temporary use of or chartered or substituted service provided by another vessel due to the loss of or damage to a vessel regularly used to transport oil and that are incurred in connection with a catastrophic oil discharge into the marine or inland waters of the state; and

     (3) the costs incurred to charter, contract, or hire vessels and equipment used to contain or clean up a catastrophic oil discharge.




Sec. 43.55.160. Determination of production tax value of oil and gas.
 (a) For oil and gas produced before January 1, 2022, except as provided in (b), (f), and (g) of this section, for the purposes of
     (1) AS 43.55.011(e)(1) and (2), the annual production tax value of taxable oil, gas, or oil and gas produced during a calendar year in a category for which a separate annual production tax value is required to be calculated under this paragraph is the gross value at the point of production of that oil, gas, or oil and gas taxable under AS 43.55.011(e), less the producer’s lease expenditures under AS 43.55.165 for the calendar year applicable to the oil, gas, or oil and gas in that category produced by the producer during the calendar year, as adjusted under AS 43.55.170; a separate annual production tax value shall be calculated for
          (A) oil and gas produced from leases or properties in the state that include land north of 68 degrees North latitude, other than gas produced before 2022 and used in the state;

          (B) oil and gas produced from leases or properties in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a) and (b); this subparagraph does not apply to
               (i) gas produced before 2022 and used in the state; or

               (ii) oil and gas subject to AS 43.55.011(p);

          (C) oil produced before 2022 from each lease or property in the Cook Inlet sedimentary basin;

          (D) gas produced before 2022 from each lease or property in the Cook Inlet sedimentary basin;

          (E) gas produced before 2022 from each lease or property in the state outside the Cook Inlet sedimentary basin and used in the state, other than gas subject to AS 43.55.011(p);

          (F) oil and gas subject to AS 43.55.011(p) produced from leases or properties in the state;

          (G) oil and gas produced from leases or properties in the state no part of which is north of 68 degrees North latitude, other than oil or gas described in (B), (C), (D), (E), or (F) of this paragraph;

     (2) AS 43.55.011(g), for oil and gas produced before January 1, 2014, the monthly production tax value of the taxable
          (A) oil and gas produced during a month from leases or properties in the state that include land north of 68 degrees North latitude is the gross value at the point of production of the oil and gas taxable under AS 43.55.011(e) and produced by the producer from those leases or properties, less 1/12 of the producer’s lease expenditures under AS 43.55.165 for the calendar year applicable to the oil and gas produced by the producer from those leases or properties, as adjusted under AS 43.55.170; this subparagraph does not apply to gas subject to AS 43.55.011(o);

          (B) oil and gas produced during a month from leases or properties in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, is the gross value at the point of production of the oil and gas taxable under AS 43.55.011(e) and produced by the producer from those leases or properties, less 1/12 of the producer’s lease expenditures under AS 43.55.165 for the calendar year applicable to the oil and gas produced by the producer from those leases or properties, as adjusted under AS 43.55.170; this subparagraph does not apply to gas subject to AS 43.55.011(o);

          (C) oil produced during a month from a lease or property in the Cook Inlet sedimentary basin is the gross value at the point of production of the oil taxable under AS 43.55.011(e) and produced by the producer from that lease or property, less 1/12 of the producer’s lease expenditures under AS 43.55.165 for the calendar year applicable to the oil produced by the producer from that lease or property, as adjusted under AS 43.55.170;

          (D) gas produced during a month from a lease or property in the Cook Inlet sedimentary basin is the gross value at the point of production of the gas taxable under AS 43.55.011(e) and produced by the producer from that lease or property, less 1/12 of the producer’s lease expenditures under AS 43.55.165 for the calendar year applicable to the gas produced by the producer from that lease or property, as adjusted under AS 43.55.170;

          (E) gas produced during a month from a lease or property outside the Cook Inlet sedimentary basin and used in the state is the gross value at the point of production of that gas taxable under AS 43.55.011(e) and produced by the producer from that lease or property, less 1/12 of the producer’s lease expenditures under AS 43.55.165 for the calendar year applicable to that gas produced by the producer from that lease or property, as adjusted under AS 43.55.170.

 (b) A production tax value calculated under this section may not be less than zero.

 (c) Notwithstanding any contrary provision of AS 43.55.150, for purposes of calculating a monthly production tax value under (a)(2) of this section, the gross value at the point of production of the oil and gas is calculated under regulations adopted by the department that provide for using an appropriate monthly share of the producer’s costs of transportation for the calendar year.

 (d) Irrespective of whether a producer produces taxable oil or gas during a calendar year or month, the producer is considered to have generated a positive production tax value if a calculation described in (a) of this section yields a positive number because the producer’s adjusted lease expenditures for a calendar year under AS 43.55.165 and 43.55.170 are less than zero as a result of the producer’s receiving a payment or credit under AS 43.55.170. An explorer that has obtained a transferable tax credit certificate under AS 43.55.023(d) for the amount of a tax credit under former AS 43.55.023(b) is considered a producer, subject to the tax levied by AS 43.55.011(e), to the extent that the explorer generates a positive production tax value as the result of the explorer’s receiving a payment or credit under AS 43.55.170.

 (e) Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 incurred to explore for, develop, or produce oil or gas from a lease or property outside the Cook Inlet sedimentary basin that would otherwise be deductible by a producer in a calendar year but whose deduction would cause an annual production tax value calculated under (a)(1) or (h) of this section of taxable oil or gas produced during the calendar year to be less than zero may be used to establish a carried- forward annual loss under AS 43.55.165(a)(3). A reduction under (f) or (g) of this section must be added back to the calculation of production tax values for that calendar year before the determination of a carried-forward annual loss under this subsection. However, the department shall provide by regulation a method to ensure that, for a period for which a producer’s tax liability is limited by AS 43.55.011(o) or (p), any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that would otherwise be deductible by a producer for that period but whose deduction would cause a production tax value calculated under (a)(1)(E) or (F) or (h)(3) of this section to be less than zero are accounted for as though the adjusted lease expenditures had first been used as deductions in calculating the production tax values of oil or gas subject to any of the limitations under AS 43.55.011(o) or (p) that have positive production tax values so as to reduce the tax liability calculated without regard to the limitation to the maximum amount provided for under the applicable provision of AS 43.55.011(o) or (p). Only the amount of those adjusted lease expenditures remaining after the accounting provided for under this subsection may be used to establish a carried-forward annual loss under AS 43.55.165(a)(3). In this subsection, “producer” includes “explorer.”

 (f) On and after January 1, 2014, in the calculation of an annual production tax value of a producer under (a)(1)(A) or (h)(1) of this section, the gross value at the point of production of oil or gas produced from a lease or property north of 68 degrees North latitude meeting one or more of the following criteria is reduced by 20 percent: (1) the oil or gas is produced from a lease or property that does not contain a lease that was within a unit on January 1, 2003; (2) the oil or gas is produced from a participating area established after December 31, 2011, that is within a unit formed under AS 38.05.180(p) before January 1, 2003, if the participating area does not contain a reservoir that had previously been in a participating area established before December 31, 2011; (3) the oil or gas is produced from acreage that was added to an existing participating area by the Department of Natural Resources on and after January 1, 2014, and the producer demonstrates to the department that the volume of oil or gas produced is from acreage added to an existing participating area. This subsection does not apply to gas produced before 2022 that is used in the state or to gas produced on and after January 1, 2022. For oil and gas first produced from a lease or property after December 31, 2016, a reduction allowed under this subsection applies from the date of commencement of regular production of oil and gas from that lease or property and expires after three years, consecutive or nonconsecutive, in which the average annual price per barrel for Alaska North Slope crude oil for sale on the United States West Coast is more than $70 or after seven years, whichever occurs first. For oil and gas first produced from a lease or property before January 1, 2017, a reduction allowed under this subsection expires on the earlier of January 1, 2023, or January 1 following three years, consecutive or nonconsecutive, in which the average annual price per barrel for Alaska North Slope crude oil for sale on the United States West Coast is more than $70. The Alaska Oil and Gas Conservation Commission shall determine the commencement of regular production of oil and gas for purposes of this subsection. A reduction under this subsection may not reduce the gross value at the point of production below zero. In this subsection, “participating area” means a reservoir or portion of a reservoir producing or contributing to production as approved by the Department of Natural Resources.

 (g) On and after January 1, 2014, in addition to the reduction under (f) of this section, in the calculation of an annual production tax value of a producer under (a)(1)(A) or (h)(1) of this section, the gross value at the point of production of oil or gas produced from a lease or property north of 68 degrees North latitude that does not contain a lease that was within a unit on January 1, 2003, is reduced by 10 percent if the oil or gas is produced from a unit made up solely of leases that have a royalty share of more than 12.5 percent in amount or value of the production removed or sold from the lease as determined under AS 38.05.180(f). This subsection does not apply if the royalty obligation for one or more of the leases in the unit has been reduced to 12.5 percent or less under AS 38.05.180(j) for all or part of the calendar year for which the annual production tax value is calculated. This subsection does not apply to gas produced before 2022 that is used in the state or to gas produced on and after January 1, 2022. For oil and gas first produced from a lease or property after December 31, 2016, a reduction allowed under this subsection applies from the date of commencement of regular production of oil and gas from that lease or property and expires after three years, consecutive or nonconsecutive, in which the average annual price per barrel for Alaska North Slope crude oil for sale on the United States West Coast is more than $70 or after seven years, whichever occurs first. For oil and gas first produced from a lease or property before January 1, 2017, a reduction allowed under this subsection expires on the earlier of January 1, 2023, or January 1 following three years, consecutive or nonconsecutive, in which the average annual price per barrel for Alaska North Slope crude oil for sale on the United States West Coast is more than $70. The Alaska Oil and Gas Conservation Commission shall determine the commencement of regular production for purposes of this subsection. A reduction under this subsection may not reduce the gross value at the point of production below zero.

 (h) For oil produced on and after January 1, 2022, except as provided in (b), (f), and (g) of this section, for the purposes of AS 43.55.011(e)(3), the annual production tax value of oil taxable under AS 43.55.011(e) produced by a producer during a calendar year
     (1) from leases or properties in the state that include land north of 68 degrees North latitude is the gross value at the point of production of that oil, less the producer’s lease expenditures under AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil and gas deposits located in the state north of 68 degrees North latitude or located in leases or properties in the state that include land north of 68 degrees North latitude, as adjusted under AS 43.55.170;

     (2) before or during the last calendar year under AS 43.55.024(b) for which the producer could take a tax credit under AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, other than leases or properties subject to AS 43.55.011(p), is the gross value at the point of production of that oil, less the producer’s lease expenditures under AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil and gas deposits located in the state outside the Cook Inlet sedimentary basin and south of 68 degrees North latitude, other than oil and gas deposits located in a lease or property that includes land north of 68 degrees North latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from which commercial production has not begun, as adjusted under AS 43.55.170;

     (3) from leases or properties subject to AS 43.55.011(p) is the gross value at the point of production of that oil, less the producer’s lease expenditures under AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil and gas deposits located in leases or properties subject to AS 43.55.011(p) or, before January 1, 2027, located in leases or properties in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude from which commercial production has not begun, as adjusted under AS 43.55.170;

     (4) from leases or properties in the state no part of which is north of 68 degrees North latitude, other than leases or properties subject to (2) or (3) of this subsection, is the gross value at the point of production of that oil less the producer’s lease expenditures under AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil and gas deposits located in the state south of 68 degrees North latitude, other than oil and gas deposits located in a lease or property in the state that includes land north of 68 degrees North latitude, and excluding lease expenditures that are deductible under (2) or (3) of this subsection or would be deductible under (2) or (3) of this subsection if not prohibited by (b) of this section, as adjusted under AS 43.55.170; a separate annual production tax value shall be calculated for
          (A) oil produced from each lease or property in the Cook Inlet sedimentary basin;

          (B) oil produced from each lease or property outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, other than leases or properties subject to (3) of this subsection.




Sec. 43.55.165. Lease expenditures.
 (a) For purposes of this chapter, a producer’s lease expenditures for a calendar year are
     (1) costs, other than items listed in (e) of this section, that are
          (A) incurred by the producer during the calendar year after March 31, 2006, to explore for, develop, or produce oil or gas deposits located within the producer’s leases or properties in the state or, in the case of land in which the producer does not own an operating right, operating interest, or working interest, to explore for oil or gas deposits within other land in the state; and

          (B) allowed by the department by regulation, based on the department’s determination that the costs satisfy the following three requirements:
               (i) the costs must be incurred upstream of the point of production of oil and gas;

               (ii) the costs must be ordinary and necessary costs of exploring for, developing, or producing, as applicable, oil or gas deposits; and

               (iii) the costs must be direct costs of exploring for, developing, or producing, as applicable, oil or gas deposits;

     (2) a reasonable allowance for that calendar year, as determined under regulations adopted by the department, for overhead expenses that are directly related to exploring for, developing, or producing, as applicable, the oil or gas deposits; and

     (3) lease expenditures incurred in a previous calendar year, subject to (l) — (r) of this section, that
          (A) met the requirements of AS 43.55.160(e) in the year in which the lease expenditures were incurred;

          (B) have not been deducted in the determination of the production tax value of oil and gas under AS 43.55.160(a) or (h) in a previous calendar year;

          (C) were not the basis of a credit under this title; and

          (D) were incurred to explore for, develop, or produce an oil or gas deposit located in the state outside the Cook Inlet sedimentary basin.

 (b) For purposes of (a) of this section,
     (1) direct costs include
          (A) an expenditure, when incurred, to acquire an item if the acquisition cost is otherwise a direct cost, notwithstanding that the expenditure may be required to be capitalized rather than treated as an expense for financial accounting or federal income tax purposes;

          (B) payments of or in lieu of property taxes, sales and use taxes, motor fuel taxes, and excise taxes;

     (2) an activity does not need to be physically located on, near, or within the premises of the lease or property within which an oil or gas deposit being explored for, developed, or produced is located in order for the cost of the activity to be a cost upstream of the point of production of the oil or gas;

     (3) in determining whether costs are lease expenditures, the department may consider, among other factors, the
          (A) typical industry practices and standards in the state that determine the costs, other than items listed in (e) of this section, that an operator is allowed to bill a producer that is not the operator, under unit operating agreements or similar operating agreements that were in effect before December 2, 2005, and were subject to negotiation with at least one producer with substantial bargaining power, other than the operator; and

          (B) standards adopted by the Department of Natural Resources that determine the costs, other than items listed in (e) of this section, that a lessee is allowed to deduct from revenue in calculating net profits under a lease issued under AS 38.05.180(f)(3)(B), (D), or (E).

 (c) [Repealed, § 66 ch 1 SSSLA 2007.]
 (d) [Repealed, § 66 ch 1 SSSLA 2007.]
 (e) For purposes of this section, lease expenditures do not include
     (1) depreciation, depletion, or amortization;

     (2) oil or gas royalty payments, production payments, lease profit shares, or other payments or distributions of a share of oil or gas production, profit, or revenue, except that a producer’s lease expenditures applicable to oil and gas produced from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net profit paid to the state under that lease;

     (3) taxes based on or measured by net income;

     (4) interest or other financing charges or costs of raising equity or debt capital;

     (5) acquisition costs for a lease or property or exploration license;

     (6) costs arising from fraud, wilful misconduct, gross negligence, violation of law, or failure to comply with an obligation under a lease, permit, or license issued by the state or federal government;

     (7) fines or penalties imposed by law;

     (8) costs of arbitration, litigation, or other dispute resolution activities that involve the state or concern the rights or obligations among owners of interests in, or rights to production from, one or more leases or properties or a unit;

     (9) costs incurred in organizing a partnership, joint venture, or other business entity or arrangement;

     (10) amounts paid to indemnify the state; the exclusion provided by this paragraph does not apply to the costs of obtaining insurance or a surety bond from a third-party insurer or surety;

     (11) surcharges levied under AS 43.55.201 or 43.55.300;

     (12) an expenditure otherwise deductible under (b) of this section that is a result of an internal transfer, a transaction with an affiliate, or a transaction between related parties, or is otherwise not an arm’s length transaction, unless the producer establishes to the satisfaction of the department that the amount of the expenditure does not exceed the fair market value of the expenditure;

     (13) an expenditure incurred to purchase an interest in any corporation, partnership, limited liability company, business trust, or any other business entity, whether or not the transaction is treated as an asset sale for federal income tax purposes;

     (14) a tax levied under AS 43.55.011 or 43.55.014;

     (15) costs incurred for dismantlement, removal, surrender, or abandonment of a facility, pipeline, well pad, platform, or other structure, or for the restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in conjunction with dismantlement, removal, surrender, or abandonment; a cost is not excluded under this paragraph if the dismantlement, removal, surrender, or abandonment for which the cost is incurred is undertaken for the purpose of replacing, renovating, or improving the facility, pipeline, well pad, platform, or other structure;

     (16) costs incurred for containment, control, cleanup, or removal in connection with any unpermitted release of oil or a hazardous substance and any liability for damages imposed on the producer or explorer for that unpermitted release; this paragraph does not apply to the cost of developing and maintaining an oil discharge prevention and contingency plan under AS 46.04.030;

     (17) costs incurred to satisfy a work commitment under an exploration license under AS 38.05.132;

     (18) that portion of expenditures, that would otherwise be qualified capital expenditures, as defined in AS 43.55.023, incurred during a calendar year that are less than the product of $0.30 multiplied by the total taxable production from each lease or property, in BTU equivalent barrels, during that calendar year, except that, when a portion of a calendar year is subject to this provision, the expenditures and volumes shall be prorated within that calendar year;

     (19) costs incurred for repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or equipment, other than a well, that results in or is undertaken in response to a failure, problem, or event that results in an unscheduled interruption of, or reduction in the rate of, oil or gas production; or costs incurred for repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or equipment, other than a well, that is undertaken in response to, or is otherwise associated with, an unpermitted release of a hazardous substance or of gas; however, costs under this paragraph that would otherwise constitute lease expenditures under (a) and (b) of this section may be treated as lease expenditures if the department determines that the repair or replacement is solely necessitated by an act of war, by an unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which could not have been prevented or avoided by the exercise of due care or foresight, or by an intentional or negligent act or omission of a third party, other than a party or its agents in privity of contract with, or employed by, the producer or an operator acting for the producer, but only if the producer or operator, as applicable, exercised due care in operating and maintaining the facility, pipeline, structure, or equipment, and took reasonable precautions against the act or omission of the third party and against the consequences of the act or omission; in this paragraph,
          (A) “costs incurred for repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or equipment” includes costs to dismantle and remove the facility, pipeline, structure, or equipment that is being replaced;

          (B) “hazardous substance” has the meaning given in AS 46.03.826;

          (C) “replacement” includes renovation or improvement;

     (20) costs incurred to construct, acquire, or operate a refinery or crude oil topping plant, regardless of whether the products of the refinery or topping plant are used in oil or gas exploration, development, or production operations; however, if a producer owns a refinery or crude oil topping plant that is located on or near the premises of the producer’s lease or property in the state and that processes the producer’s oil produced from that lease or property into a product that the producer uses in the operation of the lease or property in drilling for or producing oil or gas, the producer’s lease expenditures include the amount calculated by subtracting from the fair market value of the product used the prevailing value, as determined under AS 43.55.020(f), of the oil that is processed;

     (21) costs of lobbying, public relations, public relations advertising, or policy advocacy.

 (f) For purposes of AS 43.55.023(a)and only as to expenditures incurred to explore for an oil or gas deposit located within land in which an explorer does not own a working interest, the term “producer” in this section includes “explorer.”

 (g) The department shall specify or approve a reasonable allocation method for determining the portion of a cost that is appropriately treated as a lease expenditure under this section if a cost that would otherwise constitute a lease expenditure under this section is incurred to explore for, develop, or produce
     (1) both an oil or gas deposit located within land outside the state and an oil or gas deposit located within a lease or property, or other land, in the state; or

     (2) an oil or gas deposit located partly within land outside the state and partly within a lease or property, or other land, in the state.

 (h) The department shall adopt regulations that provide for reasonable methods of allocating costs between oil and gas, between gas subject to AS 43.55.011(o) and other gas, and between leases or properties in those circumstances where an allocation of costs is required to determine lease expenditures that are costs of exploring for, developing, or producing oil deposits or costs of exploring for, developing, or producing gas deposits, or that are costs of exploring for, developing, or producing oil or gas deposits located within different leases or properties.

 (i) The department may adopt regulations that establish additional standards necessary to carrying out the purposes of this section and AS 43.55.170, including the incorporation of the concepts of 26 U.S.C. 482 (Internal Revenue Code), as amended, the related or accompanying regulations of that provision, and any ruling or guidance issued by the United States Internal Revenue Service that relates to that provision.

 (j) [Repealed, § 34 ch 4 4SSLA 2016, effective January 1, 2018.]
 (k) [Repealed, § 34 ch 4 4SSLA 2016, effective January 1, 2018.]
 (l) In a calendar year, after application of a producer’s lease expenditures that are incurred in that calendar year, the producer may choose to apply all or a portion of a carried-forward annual loss or carry any unused portion forward. The department may not require a producer to apply all or a portion of a carried-forward annual loss in a calendar year.

 (m) During a calendar year in which a taxpayer’s liability under AS 43.55.011(e) is determined under AS 43.55.011(f), the maximum amount of carried-forward annual loss that a taxpayer may apply in that year is equal to the amount, when combined with the lease expenditures of the current year and any credits under this chapter, necessary to reduce the amount calculated under AS 43.55.011(e) to the equivalent amount of tax due under AS 43.55.011(f) before the application of any credits under this chapter. An amount of carried-forward annual loss not applied under this subsection may continue to be carried forward.

 (n) A carried-forward annual loss may only be applied
     (1) to determine the production tax value of oil or gas for a category for which a separate annual production tax value is required to be calculated under AS 43.55.160(a) or (h) if the lease expenditure resulting in the carried-forward annual loss was incurred in the same category;

     (2) beginning in the calendar year in which regular production of oil or gas from the lease or property where the lease expenditure resulting in the carried- forward annual loss was incurred commences.

 (o) A carried-forward annual loss for a lease expenditure incurred on a lease or property that
     (1) did not commence regular production of oil or gas before or during the year the lease expenditure was incurred decreases in value each year by one-tenth of the value of the carried-forward annual loss in the preceding year, beginning January 1 of the 11th calendar year after the lease expenditure is carried forward under (a)(3) of this section; a decrease in value under this paragraph does not apply for a year in which the department determines that regular production of oil or gas did not commence because of a natural disaster, an injunction or other court order, or an administrative order;

     (2) commenced regular production of oil or gas before or during the year the lease expenditure was incurred decreases in value each year by one-tenth of the value of the carried-forward annual loss in the preceding year, beginning January 1 of the eighth calendar year after the lease expenditure is carried forward under (a)(3) of this section.

 (p) A carried-forward annual loss under (o) of this section may not decrease in value for a partial calendar year.

 (q) For purposes of (n)(2) and (o) of this section, the Alaska Oil and Gas Conservation Commission shall determine the commencement of regular production.

 (r) In adopting a regulation that defines the lease or property where a lease expenditure resulting in a carried-forward annual loss is incurred for purposes of (n) and (o) of this section, the department shall include an exploration lease expenditure that is reasonably related to the lease or property.

 (s) For purposes of this section,
     (1) “carried-forward annual loss” means a loss established under (a)(3) of this section;

     (2) “explore” includes conducting geological or geophysical exploration, including drilling a stratigraphic test well;

     (3) “ordinary and necessary” has the meaning given in 26 U.S.C. 162 (Internal Revenue Code), as amended, and regulations adopted under that section;

     (4) “stratigraphic test well” means a well drilled for the sole purpose of obtaining geological information to aid in exploring for an oil or gas deposit and the target zones of which are located in the state.




Sec. 43.55.170. Adjustments to lease expenditures.
 (a) A producer’s lease expenditures under AS 43.55.165 must be adjusted by subtracting payments or credits, other than tax credits, received by the producer or by an operator acting for the producer for
     (1) the use by another person of a production facility in which the producer has an ownership interest or the management by the producer of a production facility under a management agreement providing for the producer to receive a management fee;

     (2) a reimbursement or similar payment that offsets the producer’s lease expenditures, including an insurance recovery from a third-party insurer and a payment from the state or federal government for reimbursement of the producer’s upstream costs, including costs for gathering, separating, cleaning, dehydration, compressing, or other field handling associated with the production of oil or gas upstream of the point of production;

     (3) the sale or other transfer of
          (A) an asset, including geological, geophysical, or well data or interpretations, acquired by the producer as a result of a lease expenditure or an expenditure that would be a lease expenditure if it were incurred after March 31, 2006; for purposes of this subparagraph,
               (i) if a producer removes from the state, for use outside the state, an asset described in this subparagraph, the value of the asset at the time it is removed is considered a payment received by the producer for sale or transfer of the asset;

               (ii) for a transaction that is an internal transfer or is otherwise not an arm’s length transaction, if the sale or transfer of the asset is made for less than fair market value, the amount subtracted must be the fair market value; and

          (B) oil or gas
               (i) that is not considered produced from a lease or property under AS 43.55.020(e); and

               (ii) the cost of acquiring which is a lease expenditure incurred by the person that acquires the oil or gas.

 (b) Except as otherwise provided under this subsection, if one or more payments or credits subject to this section are received by a producer or by an operator acting for the producer during a calendar year and if either the total amount of the payments or credits exceeds the amount of the producer’s applicable lease expenditures for that calendar year or the producer has no lease expenditures for that calendar year, the producer shall nevertheless subtract those payments or credits from the lease expenditures or from zero, respectively, and the producer’s applicable adjusted lease expenditures for that calendar year are a negative number and shall be applied to the pertinent calculation under AS 43.55.160(a) as a negative number.

 (c) For purposes of AS 43.55.023(a)and only as to expenditures incurred to explore for an oil or gas deposit located within land in which an explorer does not own a working interest, the term “producer” in this section includes “explorer.”




Sec. 43.55.180. Required report.
 (a) The department shall study
     (1) the effects of the provisions of this chapter on oil and gas exploration, development, and production in the state, on investment expenditures for oil and gas exploration, development, and production in the state, on the entry of new producers into the oil and gas industry in the state, on state revenue, and on tax administration and compliance, giving particular attention to the tax rates provided under AS 43.55.011, the tax credits provided under AS 43.55.023 — 43.55.025, and the deductions for and adjustments to lease expenditures provided under AS 43.55.160 — 43.55.170; and

     (2) the effects of the tax rates under AS 43.55.011(i) on state revenue and on oil and gas exploration, development, and production on private land, and the fairness of those tax rates for private landowners.

 (b) The department shall prepare a report on or before the first day of the 2011 regular session of the legislature on the results of the study made under (a) of this section, including recommendations as to whether any changes should be made to this chapter. The department shall notify the legislature that the report prepared under this subsection is available.




Article 2. Conservation Surcharge on Oil.


Sec. 43.55.200. Surcharge levied. [Repealed, § 43 ch 128 SLA 1994.]
Sec. 43.55.201. Surcharge levied.
 (a) Every producer of oil shall pay a surcharge of $.01 per barrel of oil produced from each lease or property in the state, less any oil the ownership or right to which is exempt from taxation.

 (b) The surcharge imposed by (a) of this section is in addition to the tax imposed by AS 43.55.011 and is due on the last day of the month on oil produced from each lease or property during the preceding month. The surcharge is in addition to the surcharge imposed by AS 43.55.300 — 43.55.310.

 (c) A producer of oil shall make a report of production on March 31 of the year following the calendar year of production and in the same manner and under the same penalties as required under AS 43.55.011 — 43.55.180.

 (d) Oil not considered under AS 43.55.020(e) to be produced from a lease or property is not considered to be produced from a lease or property for purposes of this section.




Sec. 43.55.210. Disposition of proceeds of surcharge. [Repealed, § 43 ch 128 SLA 1994.]
Sec. 43.55.211. Use of revenue derived from surcharge.
The legislature may appropriate the annual estimated balance of the account maintained under AS 37.05.142 for deposits into the general fund of the proceeds of the surcharge levied under AS 43.55.201 to the response account in the oil and hazardous substance release prevention and response fund established by AS 46.08.010.


Sec. 43.55.220. Use of revenue derived from surcharge. [Repealed, § 43 ch 128 SLA 1994.]
Sec. 43.55.221. Suspension and reimposition of the surcharge.
 (a) Not later than 30 days after the end of each calendar quarter, the commissioner of administration shall determine, as of the end of that quarter, the fiscal year’s
     (1) unreserved and unobligated balance in the response account of the oil and hazardous substance release prevention and response fund established in AS 46.08.010; for purposes of this paragraph, the “unreserved and unobligated balance in the response account” means the cash balance of the account less the sum of
          (A) reserves for outstanding appropriations from the account;

          (B) encumbrances of money in the account; and

          (C) other liabilities of the account;

     (2) balance of the account maintained under AS 37.05.142 that accounts for the proceeds of the surcharge that are deposited in the general fund;

     (3) the balance of the response mitigation account established by AS 46.08.025(b) that originated from the sources described in AS 46.08.025(a)(3) and that is available for appropriation to the response account of the fund established in AS 46.08.010.

 (b) Within 15 days after making the determinations required by (a) of this section, the commissioner of administration shall
     (1) add the amounts determined under (a)(1) — (3) of this section; and

     (2) report the sum calculated under (1) of this subsection to the commissioner of revenue.

 (c) In making the determination required by (a) of this section, the commissioner of administration may not consider money described in (a) of this section that is subject to a dedication imposed by law that restricts the use of the money to a specific purpose for which the response account of the oil and hazardous substance release prevention and response fund established in AS 46.08.010 may not be lawfully expended.

 (d) If the commissioner of administration reports that the sum reported under (b) of this section equals or exceeds $50,000,000, the commissioner of revenue shall suspend imposition and collection of the surcharge levied and collected under AS 43.55.201. Suspension of the imposition and collection of the surcharge begins on the first day of the calendar quarter next following the commissioner’s receipt of the commissioner of administration’s report under (b) of this section. Before the first day of a suspension authorized by this subsection, the commissioner shall make a reasonable effort to notify all persons who are known to the department to be paying the surcharge under AS 43.55.201 that the surcharge will be suspended.

 (e) Except as provided in AS 43.55.231, if the commissioner of administration reports that the sum reported under (b) of this section is less than $50,000,000, the commissioner of revenue shall require imposition and collection of the surcharge authorized under AS 43.55.201. If the surcharge is not in effect, reimposition of the surcharge begins on the first day of the calendar quarter next following the commissioner’s receipt of the commissioner of administration’s report under (b) of this section. Before the first day of reimposition of the surcharge authorized by this subsection, the commissioner shall make a reasonable effort to notify all persons who are known to the department to be required to pay the surcharge under AS 43.55.201 that the surcharge will be reimposed.




Sec. 43.55.230. Suspension and reimposition of the surcharge. [Repealed, § 43 ch 128 SLA 1994.]
Sec. 43.55.231. Surcharge not imposed.
 (a) The surcharge authorized by AS 43.55.201 is not levied during any fiscal year for which
     (1) the legislature does not, during the regular or a special legislative session preceding the first day of the fiscal year, appropriate at least an amount equal to the amount determined under (b) of this section from the general fund to the response account in the oil and hazardous substance release prevention and response fund; or

     (2) the legislature, during the regular or a special legislative session preceding the first day of the fiscal year, appropriates at least the amount of money equal to the amount determined under (b) of this section from the general fund to the response account in the oil and hazardous substance release prevention and response fund and that appropriation is vetoed or reduced by the governor.

 (b) The amount of money required to be appropriated from the general fund to the response account in the oil and hazardous substance release prevention and response fund by (a) of this section is the amount, determined for the last day of the preceding fiscal year, that is the sum of the actual or estimated balance of
     (1) the account maintained under AS 37.05.142 to account for all proceeds of the surcharge that are deposited into the general fund; and

     (2) the portion of the balance of the response mitigation account established by AS 46.08.025(b) that originated from the recovery of money described in AS 46.08.025(a)(3).




Sec. 43.55.240. Surcharge not imposed. [Repealed, § 43 ch 128 SLA 1994.]
Sec. 43.55.299. Definitions.
In AS 43.55.201 — 43.55.299,
     (1) “response account” means the oil and hazardous substance release response account established in AS 46.08.010(a)(2);

     (2) “response mitigation account” means the oil and hazardous substance release response mitigation account established in AS 46.08.025(b).




Article 3. Additional Conservation Surcharge on Oil.


Sec. 43.55.300. Surcharge levied.
 (a) Every producer of oil shall pay a surcharge of $.04 per barrel of oil produced from each lease or property in the state, less any oil the ownership or right to which is exempt from taxation.

 (b) The surcharge imposed by (a) of this section is in addition to the tax imposed by AS 43.55.011 and is due on the last day of the month on oil produced from each lease or property during the preceding month. The surcharge is in addition to the surcharge imposed by AS 43.55.201 — 43.55.231.

 (c) A producer of oil shall make a report of production on March 31 of the year following the calendar year of production and in the same manner and under the same penalties as required under AS 43.55.011 — 43.55.180.

 (d) Oil not considered under AS 43.55.020(e) to be produced from a lease or property is not considered to be produced from a lease or property for purposes of this section.




Sec. 43.55.310. Use of revenue derived from surcharge.
The legislature may appropriate the annual estimated balance of the account maintained under AS 37.05.142 for deposits into the general fund of the proceeds of the surcharge levied under AS 43.55.300 to the oil and hazardous substance release prevention account in the oil and hazardous substance release prevention and response fund established by AS 46.08.010.


Article 4. General Provisions.


Sec. 43.55.890. Disclosure of tax information.
Notwithstanding any contrary provision of AS 40.25.100, and regardless of whether the information is considered under AS 43.05.230(e) to constitute statistics classified to prevent the identification of particular returns or reports, the department may publish the following information under this chapter, if aggregated among three or more producers or explorers, showing by month or calendar year and by lease or property, unit, or area of the state:
     (1) the amount of oil or gas production;

     (2) the amount of taxes levied under this chapter or paid under this chapter;

     (3) the effective tax rates under this chapter;

     (4) the gross value of oil or gas at the point of production;

     (5) the transportation costs for oil or gas;

     (6) qualified capital expenditures, as defined in AS 43.55.023;

     (7) exploration expenditures under AS 43.55.025;

     (8) production tax values of oil or gas under AS 43.55.160;

     (9) lease expenditures under AS 43.55.165;

     (10) adjustments to lease expenditures under AS 43.55.170;

     (11) tax credits applicable or potentially applicable against taxes levied by this chapter.




Sec. 43.55.895. Applicability to municipal entities.
 (a) Notwithstanding AS 29.35.670(a) or other provision of law, a producer that is a municipal entity is subject to taxation and payment of surcharges under this chapter for oil and gas that it sells to another party.

 (b) A municipal entity subject to taxation because of this section
     (1) is eligible for tax credits proportionate to its production taxable under AS 43.55.011(e); and

     (2) shall allocate its lease expenditures in proportion to its production taxable under AS 43.55.011(e).

 (c) In this section, “municipal entity” means a municipality, municipally owned utility, public corporation of a municipality, or entity established by more than one municipality.




Sec. 43.55.900. Definitions.
In this chapter,
     (1) “barrel of oil” means 42 United States gallons of oil of 231 cubic inches a gallon computed at a temperature of 60 degrees Fahrenheit;

     (2) “British thermal unit” means the quantity of heat required to raise the temperature of one pound of water from 58.5 degrees Fahrenheit to 59.5 degrees Fahrenheit at a constant pressure of one atmosphere;

     (3) “BTU equivalent barrel” means
          (A) in the case of oil, one barrel;

          (B) in the case of gas, the amount of gas that has a heating value of 6,000,000 British thermal units;

     (4) “catastrophic oil discharge” has the meaning given in AS 46.04.900;

     (5) “Cook Inlet sedimentary basin” has the meaning given in regulations adopted to implement AS 38.05.180(f)(4);

     (6) “cubic foot of gas” means the volume of gas contained in one cubic foot of space measured at a pressure base of 14.65 pounds per square inch absolute and a temperature base of 60 degrees Fahrenheit;

     (7) “explorer” means a person who, in exploring for new oil or gas reserves, incurs expenditures;

     (8) “gas” means
          (A) all natural, associated, or casinghead gas;

          (B) all hydrocarbons that
               (i) are recovered by mechanical separation of well fluids or by gas processing in a gas processing plant; and

               (ii) exist in a gaseous phase at the completion of mechanical separation and any gas processing in a gas processing plant; and

          (C) all other hydrocarbons produced from a well not defined as oil;

     (9) “gas processing”
          (A) means processing a gaseous mixture of hydrocarbons
               (i) by means of absorption, adsorption, externally applied refrigeration, artificial compression followed by adiabatic expansion using the Joule-Thomson effect, or another physical process that is not mechanical separation; and

               (ii) for the purpose of extracting and recovering liquid hydrocarbons;

          (B) does not include gas treatment;

     (10) “gas processing plant” means a facility that
          (A) extracts and recovers liquid hydrocarbons from a gaseous mixture of hydrocarbons by gas processing; and

          (B) is located upstream of the inlet of any pipeline transporting gas to a gas treatment plant and upstream of the inlet of any gas pipeline system transporting gas to a market;

     (11) “gas treatment”
          (A) means conditioning gas and removing from gas nonhydrocarbon substances for the purpose of rendering the gas acceptable for tender and acceptance into a gas pipeline system;

          (B) includes incidentally removing liquid hydrocarbons from the gas;

          (C) does not include
               (i) dehydration required to facilitate the movement of gas from the well to the point where gas processing takes place;

               (ii) the scrubbing of liquids from gas to facilitate gas processing;

     (12) “gas treatment plant” means a facility that performs gas treatment, regardless of whether the facility also performs gas processing;

     (13) “gross value at the point of production” means
          (A) for oil, the value of the oil at its point of production without deduction of any costs upstream of that point of production;

          (B) for gas, the value of the gas at its point of production without deduction of any costs upstream of that point of production;

     (14) “heating value” means the gross number of BTUs released by complete combustion of an amount of gas;

     (15) “landowner’s royalty interest” means
          (A) a lessor’s royalty interest under an oil and gas lease; or

          (B) a royalty interest that is
               (i) held by a surface owner of land from which oil or gas is produced; and

               (ii) granted in exchange for the right to use the surface of that land or as compensation for damage to the surface of that land;

     (16) “lease or property” means any right, title, or interest in or the right to produce or recover oil or gas including:
          (A) a mineral interest;

          (B) a leasehold interest;

          (C) a working interest, royalty interest, overriding royalty interest, production payment, net profit interest, or any other interest in a lease, concession, joint venture, or other agreement for exploration, development, or production of oil and gas or of gas only;

          (D) a working interest, royalty interest, overriding royalty interest, production payment, net profit interest or any other interest in an agreement for unitization or pooling under the provisions of 26 U.S.C. 614(b)(3) (Internal Revenue Code) as defined on January 1, 1974;

     (17) “oil” means
          (A) crude petroleum oil; and

          (B) all liquid hydrocarbons that are recovered by mechanical separation of well fluids or by gas processing in a gas processing plant;

     (18) “oil and gas lease” includes an oil and gas lease, a gas only lease, and an oil only lease;

     (19) “ownership or right to which is exempt from taxation” means any ownership interest of the federal government or the state;

     (20) “pipeline quality” means good and merchantable condition;

     (21) “point of production” means
          (A) for oil, the automatic custody transfer meter or device through which the oil enters into the facilities of a carrier pipeline or other transportation carrier in a condition of pipeline quality; in the absence of an automatic custody transfer meter or device, “point of production” means the mechanism or device to measure the quantity of oil that has been approved by the department for that purpose, through which the oil is tendered and accepted in a condition of pipeline quality into the facilities of a carrier pipeline or other transportation carrier or into a field topping plant;

          (B) for gas that is
               (i) not subjected to or recovered by mechanical separation or run through a gas processing plant, the farthest upstream of the following locations: the first point where the gas is accurately metered, the inlet of any pipeline transporting the gas to a gas treatment plant, or the inlet of any gas pipeline system transporting the gas to a market;

               (ii) subjected to or recovered by mechanical separation but not run through a gas processing plant, the farthest upstream of the following locations: the first point where the gas is accurately metered after completion of mechanical separation, the inlet of any pipeline transporting the gas after completion of mechanical separation to a gas treatment plant, or the inlet of any gas pipeline system transporting the gas after completion of mechanical separation to a market;

               (iii) run through a gas processing plant, the farthest upstream of the following locations: the first point where the gas is accurately metered downstream of the gas processing plant, the inlet of any pipeline downstream of the gas processing plant transporting the gas to a gas treatment plant, or the inlet of any gas pipeline system downstream of the gas processing plant transporting the gas to a market;

     (22) “producer” means an owner of an operating right, operating interest, or working interest in a mineral interest in oil or gas;

     (23) “regular production” has the meaning given in AS 31.05.170.

     (24) “surcharge” means
          (A) when used in AS 43.55.201 — 43.55.299, the surcharge levied by AS 43.55.201;

          (B) when used in AS 43.55.300 — 43.55.310, the surcharge levied by AS 43.55.300;

     (25) “unit” means a group of tracts of land that is
          (A) subject to a cooperative or a unit plan of development or operation that has been certified by the commissioner of natural resources under AS 38.05.180(p);

          (B) subject to a cooperative or a unit plan of development or operation that has been certified by the United States Secretary of the Interior under 30 U.S.C. 226(m);

          (C) subject to an agreement of the owners of interests in the tracts of land to validly integrate their interests to provide for the unitized management, development, and operation of the tracts of land as a unit, within the meaning of AS 31.05.110(a); or

          (D) within the unit area of a unit created by order of the Alaska Oil and Gas Conservation Commission under AS 31.05.110(b);

     (26) “used in the state” means delivered for consumption as fuel in the state, including as fuel consumed to generate electricity.




Chapter 56. Oil and Gas Exploration, Production, and Pipeline Transportation Property Taxes.

Sec. 43.56.010. Levy of tax.
 (a) An annual tax of 20 mills is levied each tax year beginning January 1, 1974, on the full and true value of taxable property taxable under this chapter.

 (b) A municipality may levy and collect a tax under AS 29.45.080 at the rate of taxation that applies to other property taxed by the municipality. The tax shall be levied at a rate no higher than the rate applicable to other property taxable by the municipality. A municipality may not exempt from taxation property authorized to be taxed under this chapter. Exemptions shall be limited to those in AS 29.45.030, 29.45.050, and AS 43.56.020.

 (c) If the total value of assessed property of a municipality taxing under AS 29.45.080(c) exceeds the product of the percentage, as determined in AS 29.45.080(f), of the average per capita assessed full and true value of property in the state, to be determined by the department and reported to each municipality by January 15 of each year, multiplied by the number of residents of the taxing municipality, the department shall designate the portion of the tax base against which the local tax may be applied.

 (d) A tax paid to a municipality under AS 29.45.080 or former AS 29.53.045 on or before June 30 of the tax year shall be credited against the tax levied under (a) of this section for that tax year. If, however, a tax is not paid to a municipality until after June 30 of the taxable year, the department upon application shall refund to the taxpayer the amount of tax paid to the municipality under AS 29.45.080 or former AS 29.53.045. The credit or refund of taxes paid to a municipality may not exceed the total amount of tax levied by the department upon the taxpayer for the tax year, under (a) of this section.




Sec. 43.56.018. Property tax education credit.
 (a) The owner of property taxable under this chapter is allowed a credit against the tax due under this chapter for cash contributions accepted for
     (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation or by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association;

     (2) secondary school level vocational education courses, programs, and facilities by a school district in the state;

     (3) vocational education courses, programs, and facilities by a state-operated vocational technical education and training school;

     (4) a facility or an annual intercollegiate sports tournament by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association;

     (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state;

     (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government; and

     (7) the Alaska higher education investment fund under AS 37.14.750.

 (b) The amount of the credit is
     (1) 50 percent of contributions of not more than $100,000;

     (2) 100 percent of the next $200,000 of contributions; and

     (3) 50 percent of the amount of contributions that exceed $300,000.

 (c) Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used.

 (d) A contribution claimed as a credit under this section may not
     (1) be the basis for a credit claimed under another provision of this title; and

     (2) when combined with contributions that are the basis for credits taken during the taxpayer’s tax year under AS 21.96.070, 21.96.075, AS 43.20.014, AS 43.55.019, AS 43.65.018, AS 43.75.018, or AS 43.77.045, result in the total amount of credits exceeding $5,000,000; if the taxpayer is a member of an affiliated group, then the total amount of credits may not exceed $5,000,000 for the affiliated group; in this paragraph, “affiliated group” has the meaning given in AS 43.20.145.

 (e) The credit under this section may not reduce a person’s tax liability under this chapter to below zero for any tax year. An unused credit or portion of a credit not used under this section for a tax year may not be sold, traded, transferred, or applied in a subsequent tax year.

 (f) In this section,
     (1) “school district” has the meaning given in AS 43.20.014;

     (2) “vocational education” has the meaning given in AS 43.20.014.




Sec. 43.56.019. Alaska veterans’ memorial endowment fund contribution credit. [Repealed, § 25 ch 46 SLA 2002.]
Sec. 43.56.020. Exemptions.
 (a) The following are exempt from local taxes levied or authorized under AS 43.56.010(b):
     (1) property rights attached to or inherent in the right to explore for or produce oil or gas;

     (2) oil or gas leases or properties, whether producing or not;

     (3) oil or gas in place;

     (4) oil or gas produced or extracted in the state;

     (5) the value of intangible drilling expenses and exploration expenses;

     (6) an interest in property described in AS 43.55.017(a).

 (b) There is exempt from state taxes levied or authorized under AS 43.56.010(a), before the construction commencement date, property that is committed by contract or other agreement for use in this state primarily for the production or pipeline transportation of gas or unrefined oil, or in the operation or maintenance of facilities for the production or pipeline transportation of gas or unrefined oil.

 (c) In (a)(2) of this section, “properties” means mineral interests in oil and gas and working interests, royalty interests, and overriding royalty interests in oil and gas leases.

 (d) Taxable property of a natural gas pipeline project owned or financed by the Alaska Gasline Development Corporation or a joint venture, partnership, or other entity that includes the Alaska Gasline Development Corporation is exempt from state taxes levied or authorized under AS 43.56.010(a) and municipal taxes levied or authorized under AS 43.56.010(b) before the commencement of commercial operations of that natural gas pipeline project. In this subsection, “commencement of commercial operations” means the first flow of natural gas in the project that generates revenue to the owners of the natural gas pipeline project.




Sec. 43.56.030. In place of other taxes.
Except for those taxes imposed under AS 43.55, the taxes levied or authorized under AS 43.56.010(b) are in place of
     (1) all other ad valorem taxes or other taxes imposed by a municipality on property subject to tax under this chapter or exempted from taxation by AS 43.56.020; and

     (2) all other taxes imposed by a municipality on or with respect to the property subject to tax under this chapter or exempted from taxation by AS 43.56.020, including, but not limited to,
          (A) taxes on the retail sale or use of the property except for the retail sales tax on the first $1,000 of each sale;

          (B) taxes on the sale or use of gas or unrefined oil;

          (C) taxes on the sale or use of services used in or associated with the property or in its maintenance or operation except for the sales tax on the first $1,000 of each sale;

          (D) taxes on or measured by gross or net income from the property, including income from the exploration for, production of, or pipeline transportation of gas or unrefined oil or property; and

          (E) any license, excise, fee, charge or other tax on or pertaining to the property or services.




Sec. 43.56.040. State Assessment Review Board.
The State Assessment Review Board is created within the department. The board consists of five persons appointed by the governor to serve at the pleasure of the governor, each of whom must be knowledgeable of assessment procedures. Each board member is subject to confirmation by a majority of the members of the legislature in joint session.


Sec. 43.56.050. Per diem and expenses.
Members of the board shall receive per diem and expenses authorized by law for boards and commissions.


Sec. 43.56.060. Assessment.
 (a) The department shall assess property for the tax levied under AS 43.56.010(b) and AS 29.45.080 on property used or committed by contract or other agreement for use for the pipeline transportation of gas or unrefined oil or for the production of gas or unrefined oil at its full and true value as of January 1 of the assessment year.

 (b) The department shall assess property for the taxes levied under AS 43.56.010(a) at its full and true value as of January 1 of the assessment year except that in the case of taxable property used or committed by contract or other agreement for the pipeline transportation of gas or unrefined oil or for the production of gas or unrefined oil to be transported by that pipeline, the first assessment date shall be the construction commencement date. If the construction commencement date is used as the assessment date, the tax payable shall be prorated on the basis of the assessment year remaining.

 (c) The full and true value of taxable property used or committed by contract or other agreement for use in the exploration for gas or unrefined oil, or in the operation or maintenance of facilities for the exploration for gas or unrefined oil, is the estimated price that the property would bring in an open market and under the then prevailing market conditions in a sale between a willing seller and a willing buyer both conversant with the property and with prevailing general price levels.

 (d) The full and true value of taxable property used or committed by contract or other agreement for the production of gas or unrefined oil or in the operation or maintenance of facilities for the production of gas or unrefined oil is:
     (1) on the construction commencement date the actual cost incurred or accrued with respect to the property as of the date of assessment;

     (2) determined on each January 1 thereafter on the basis of replacement cost less depreciation based on the economic life of proven reserves.

 (e) The full and true value of taxable property used or committed by contract or other agreement for pipeline transportation of gas or unrefined oil or in the operation or maintenance of facilities for the pipeline transportation of gas or unrefined oil is:
     (1) on the construction commencement date and until January 1 following the date the pipeline begins to transport gas or unrefined oil, the actual cost incurred or accrued with respect to the property as of the date of assessment;

     (2) determined on each January 1 thereafter with due regard to the economic value of the property based on the estimated life of the proven reserves of gas or unrefined oil then technically, economically, and legally deliverable into the transportation facility; however, if the proven reserves of gas or unrefined oil then technically, economically, and legally deliverable indicate an economic life materially shorter than the estimated physical life of the transportation facility, the full and true value is the actual cost reduced by an annual allowance for depreciation on a straight line basis over an economic life based on the actual elapsed life from the commencement of full operation to the date of assessment plus the estimated remaining life of the proven reserves of gas and unrefined oil then technically, economically, and legally deliverable into the transportation facility as of the date of the assessment;

     (3) on the assessment date next following inability to use or construct all or a substantial part of the facility for a period of 90 or more consecutive days because of natural disaster or legal prohibition, or other events beyond the control of a person having ownership or control of the property, adjusted to take into account any diminution in value.

 (f) For purposes of this section, “actual cost” and “replacement cost” do not include interest capitalized before or during the period of construction nor the value of intangible drilling expenses. In the case of taxable property under construction, “actual cost” for purposes of this section means the costs incurred or accrued with respect to the property as of the date of assessment.

 (g) The department may enter into agreements with a municipality for the cooperative or joint administration of the assessing authority conferred on the department by this section.




Sec. 43.56.070. Returns.
 (a) The department may require by notice every person having ownership or control of an interest in property taxable under this chapter to submit a return in the form prescribed by the department, based on property values existing on January 1 of each year, except as otherwise provided in this chapter.

 (b) The department by written notice may require a person to provide additional information within 30 days of the notice.




Sec. 43.56.080. Investigation.
 (a) The department may make an investigation of property on which a return has been filed or of taxable property upon which no return has been filed. In either case, the department may make its own valuation of the taxable property, which is prima facie evidence of full and true value.

 (b) An employee or agent of the department may enter any premise necessary for the investigation during reasonable hours and may examine property and appropriate records. The owner of the taxable property upon request shall furnish to the employee or agent of the department reasonable assistance required for the investigation. If refused entry, the department may seek a court order to compel entry.

 (c) For the purpose of the investigation the owner of the taxable property or a representative of the owner may be required to appear for examination under oath by the department.




Sec. 43.56.090. Assessment roll.
The department shall prepare annually the assessment roll for taxation under this chapter. The roll must contain:
     (1) a description of all taxable property;

     (2) the assessed value of all taxable property;

     (3) the names and addresses of persons owning property subject to assessment and taxation.




Sec. 43.56.100. Assessment notice.
 (a) On or before March 1 of each year, the department shall send to every owner of taxable property named in the assessment roll a notice of assessment, showing the assessed value of the property. Notice of assessment is effective on the date of mailing.

 (b) The department shall send to a municipality a copy of the notice of assessment on any taxable property that is assessed under the provisions of this chapter and that is located in the municipality and on which a tax is authorized under AS 43.56.010(b).




Sec. 43.56.110. Appeal to the department.
 (a) An owner of taxable property or a municipality receiving an assessment notice may object to the assessment by advising the department in writing of the objections to the assessment within 20 days of the effective date of the notice.

 (b) The department shall provide by regulation for notices of appeals to interested persons and municipalities.

 (c) Following an objection the department may adjust the assessment and the assessment roll. An adjustment based on an objection from an owner of taxable property or a municipality shall be made within 30 days of the effective date of the notice of assessment.




Sec. 43.56.120. Appeal to the board.
 (a) After a ruling by the department on an appeal made under AS 43.56.110, the owner or a municipality may further appeal to the board. The appeal must be filed in writing within 50 days of the effective date of the notice of assessment.

 (b) The board shall provide by regulation for notices of appeals to interested persons and municipalities.




Sec. 43.56.130. Hearings of the board.
 (a) The board shall hear appeals filed under AS 43.56.120(a).

 (b) A majority of the board constitutes a quorum required to transact business.

 (c) The board shall provide by regulation for notices of hearings to interested persons and municipalities.

 (d) If an appellant fails to appear at the hearing, the board may proceed with the hearing in the absence of the appellant.

 (e) The appellant bears the burden of proof at the hearing.

 (f) The only grounds for adjustment of assessed value is proof of unequal, excessive, or improper valuation or valuation not determined in accordance with the standards set out in this chapter, based on facts stated in a written appeal timely filed or proved at the hearing.

 (g) The board shall certify its determinations to the department within seven days of the hearing.

 (h) [Repealed, § 5 ch 107 SLA 1976.]
 (i) An owner or municipality may appeal to the superior court for, and is entitled to, trial de novo of the board’s action.




Sec. 43.56.135. Certification.
No later than June 1 of each year, the department shall certify the final assessment roll and mail to the owner of the taxable property or an authorized agent a statement of the amount of tax due.


Sec. 43.56.140. Supplementary assessment rolls.
The department shall include property omitted from the assessment roll on a supplementary roll, using the procedures set out in this chapter for the original roll.


Sec. 43.56.150. Collection and deposit.
 (a) The tax levied by AS 43.56.010(a) is payable to the department on or before June 30 of the taxable year.

 (b) The department may provide for voluntary prepayment and for payment by installments.

 (c) The tax levied under AS 43.56.010(a), interest and penalties collected with respect to this levy shall be deposited in the general fund.




Sec. 43.56.160. Interest and penalty.
When the tax levied by AS 43.56.010(a) becomes delinquent, a penalty of 10 percent shall be added. Before January 1, 2014, interest on the delinquent taxes, exclusive of penalty, shall be assessed at a rate of eight percent a year. On and after January 1, 2014, interest on the delinquent taxes, exclusive of penalty, shall be assessed at the rate specified in AS 43.05.225.


Sec. 43.56.170. Lien for tax. [Repealed, § 4 ch 84 SLA 1976. For current law, see AS 43.10.035.]
Sec. 43.56.180. Remedy.
The remedy of distraint of property set out in AS 43.20.270 applies to the tax levied by AS 43.56.010(a). However, only property subject to the tax may be distrained.


Sec. 43.56.190. Penalties. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.290.]
Sec. 43.56.200. Regulations.
The board and the department may adopt regulations under AS 44.62 (Administrative Procedure Act) as appropriate to carry out their respective duties under this chapter.


Sec. 43.56.210. Definitions.
In this chapter,
     (1) “board” means State Assessment Review Board;

     (2) “construction commencement date” means the earlier of April 1, 1974 or the date the following occur:
          (A) there has been issued to the owner or an agent of the owner right-of-way permits, leases, and title and other rights in land, and other approvals, permits, licenses, and certificates, by federal, state and local agencies that a reasonable and prudent person would consider adequate to commence construction of the facilities in the expectation that all other approvals, permits, licenses, and certificates necessary for the completion of facilities will be obtained;

          (B) all approvals, permits, licenses, and certificates are in full force and effect, unrevoked, and without any modification that might jeopardize the completion or continued construction of the facilities; and

          (C) no order, judgment, decree, determination, or award of a federal, state, or local court or administrative or regulatory agency enjoining, either temporarily or permanently, the construction or the continuation of construction of the facilities is in effect;

     (3) “gas” includes all natural gas and all hydrocarbons produced at the wellhead not defined as oil;

     (4) “intangible drilling expenses” means those expenses defined in 26 U.S.C. 263(c) (Internal Revenue Code) as defined on January 1, 1974;

     (5) “taxable property”
          (A) means real and tangible personal property used or committed by contract or other agreement for use within this state primarily in the exploration for, production of, or pipeline transportation of gas or unrefined oil (except for property used solely for the retail distribution or liquefaction of natural gas), or in the operation or maintenance of facilities used in the exploration for, production of, or pipeline transportation of gas or unrefined oil; “taxable property” includes
               (i) machinery, appliances, supplies, and equipment;

               (ii) drilling rigs, wells (whether producing or not), gathering lines and transmission lines, pumping stations, compressor stations, power plants, topping plants, and processing units;

               (iii) roads, tank farms, tanker terminals, docks and other port facilities, and air strips;

               (iv) aircraft and motor vehicles owned by a person whose principal business in the state is the exploration for, production of, or pipeline transportation of gas or unrefined oil and whose operation of the aircraft or motor vehicle directly relates to the conduct of that business;

               (v) maintenance equipment and facilities, and maintenance camps and other related facilities; and

               (vi) communications facilities owned by a person whose principal business in the state is the exploration for, production of, or pipeline transportation of gas or unrefined oil and whose operation of the communications facilities directly relates to the conduct of that business;

          (B) does not include
               (i) permanent residences;

               (ii) office buildings requiring substantial local government services;

               (iii) oil and gas pipeline systems owned and operated by a public utility that is certificated under AS 42.05.221 and is regulated by the Regulatory Commission of Alaska;

               (iv) aircraft and motor vehicles, except aircraft and motor vehicles taxable under (A)(iv) of this paragraph; and

               (v) communications facilities, except communications facilities taxable under (A)(vi) of this paragraph;

     (6) “unrefined oil” includes crude petroleum oil and other hydrocarbons regardless of gravity that are produced at the wellhead in liquid form and the liquid hydrocarbons known as distillate or condensate recovered or extracted from gas other than gas produced in association with oil and commonly known as casinghead gas.




Chapter 57. Oil and Gas Conservation Tax.

[Repealed, § 6 ch 34 SLA 1999.]

Chapter 58. Oil and Gas Reserves Ad Valorem Tax.

[Repealed, § 120 ch 6 SLA 1984.]

Chapter 60. Excise Tax on Alcoholic Beverages.

Sec. 43.60.010. Alcoholic beverage tax.
 (a) Except as provided in (c) of this section, every brewer, distiller, bottler, jobber, retailer, wholesaler, or manufacturer who sells alcoholic beverages in the state or who consigns shipments of alcoholic beverages into the state, whether or not the alcoholic beverages are brewed, distilled, bottled, or manufactured in the state, shall pay on all malt beverages (alcoholic content of one percent or more by volume), wines, and hard or distilled alcoholic beverages, the following taxes:
     (1) malt beverages at the rate of $1.07 a gallon or fraction of a gallon;

     (2) cider with at least 0.5 percent alcohol by volume but not more than seven percent alcohol by volume, at the rate of $1.07 a gallon or fraction of a gallon;

     (3) wine or other beverages, other than beverages described in (1) or (2) of this subsection, of 21 percent alcohol by volume or less, at the rate of $2.50 a gallon or fraction of a gallon; and

     (4) other beverages having a content of more than 21 percent alcohol by volume at the rate of $12.80 a gallon.

 (b) [Repealed, § 3 ch 235 SLA 1976.]
 (c) A brewer shall pay a tax at the rate of 35 cents a gallon on sales of the first 60,000 barrels of beer sold in the state each fiscal year beginning July 1, 2001, for beer produced in the United States if the producing brewery meets the qualifications of 26 U.S.C. 5051(a)(2). To qualify for the tax rate under this subsection, the brewer must file with the department a copy of an Alcohol and Tobacco Tax and Trade Bureau acknowledged copy of the brewer’s notice of intent to pay reduced rate of tax required under 27 C.F.R. 25.167 for the calendar year in which the fiscal year begins for which the partial exemption is sought. If proof of eligibility is not received by the department before June 1, the tax rate under this subsection does not apply until the first day of the second month after the month the notice is received by the department. For purposes of applying this subsection, a barrel of beer may contain not more than 31 gallons.




Sec. 43.60.011. Consigned beverage inventories.
The tax imposed in AS 43.60.010 may not be levied on consigned shipments of alcoholic beverages into the state if the consignments are to state licensed bonded warehouses in this state until the alcoholic beverage is removed from the warehouse for sale or consignment to retailers.


Sec. 43.60.020. Monthly statement and payments.
 (a) Each brewer, distiller, bottler, jobber, wholesaler, manufacturer, or other consignor shall submit a report to the department on or before the last day of each calendar month. The report must contain an account of the alcoholic beverages sold or consigned to buyers or consignees in the state during the preceding month, setting out
     (1) the total number of gallons, including fractional gallons sold or consigned;

     (2) the names and Alaska address of each buyer and consignee; and

     (3) the gallonage of each kind of beverage sold or consigned to the respective buyers or consignees.

 (b) The brewer, distiller, bottler, jobber, wholesaler, manufacturer, or other consignor shall pay monthly to the department, all taxes, computed at the rates prescribed in this chapter, on the respective total quantities of the classes of beverage sold or consigned during the preceding month. The monthly return shall be filed and the tax paid on or before the last day of each month to cover the preceding month.

 (c) [Repealed, § 1 ch 72 SLA 1971.]
 (d) [Repealed, § 1 ch 72 SLA 1971.]
 (e) [Repealed, § 1 ch 72 SLA 1971.]




Sec. 43.60.030. Delinquency. [Repealed, § 3 ch 166 SLA 1976. For civil penalty, see AS 43.05.220.]
Sec. 43.60.040. Administration and enforcement of tax.
 (a) Each brewer, distiller, bottler, jobber, wholesaler, or manufacturer is primarily liable for the payment of the excise taxes on alcoholic beverages sold, and shall furnish a good and sufficient surety bond of $25,000 payable to the department and approved by the Department of Law. If a wholesaler fails to pay the tax to the state the wholesaler forfeits the bond and the wholesaler’s license shall be revoked. The department, in its discretion, may issue permits in place of bonds to resident holders of wholesale, malt beverage, and wine licenses doing business wholly in the state who pay the tax before shipment.

 (b) Upon receipt of the bond and its subsequent approval, the department shall issue a license certificate authorizing the brewer, distiller, bottler, jobber, wholesaler, or manufacturer, liable for the payment of the tax, to sell alcoholic beverages in the state or to consign shipments of alcoholic beverages to the state. It is unlawful for a brewer, distiller, bottler, jobber, wholesaler, or manufacturer to sell alcoholic beverages in the state or to consign shipments of alcoholic beverages into the state without first furnishing the required bond and obtaining the license certificate or permit from the department. The license certificate does not constitute permission to sell alcoholic beverages in the state or to consign them to the state without having complied with other requirements of state or federal law.

 (c) The retailer or buyer is secondarily liable for the taxes on alcoholic beverages that are sold to the retailer or buyer. The state has a lien upon the beverages, and may seize, confiscate, and sell them to satisfy the payment of the taxes and the costs of the proceedings, without regard to where or in whose possession the beverages are found. If the beverages are not found or not identifiable, the state may seize, confiscate, and sell an equal quantity of the same kind of beverage found in the possession of the retailer or other buyer to whom the beverages on which the taxes were not paid were sold.

 (d) [Repealed, § 46 ch 113 SLA 1980.]
 (e) [Repealed, § 46 ch 113 SLA 1980.]
 (f) [Repealed, § 46 ch 113 SLA 1980.]
 (g) A license issued under this section must include
     (1) the name and address of the licensee;

     (2) the nature or type of alcoholic beverage business to be conducted; and

     (3) the year for which the license is issued.

 (h) In this section “person” includes an officer, agent, or employee of a corporation or a member, agent, or employee of a partnership, who, as officer, agent, employee, or member, is under duty to perform the act in respect to which the violation occurs.




Sec. 43.60.050. Disposition of proceeds; alcohol and other drug abuse treatment and prevention fund.
 (a) The alcohol and other drug abuse treatment and prevention fund is established in the general fund. The Department of Administration shall separately account for 50 percent of the tax collected under AS 43.60.010 and deposit it into the alcohol and other drug abuse treatment and prevention fund.

 (b) The legislature may use the annual estimated balance in the fund to make appropriations to the Department of Health and Social Services to establish and maintain programs for the prevention and treatment of alcoholism, drug abuse, and misuse of hazardous volatile materials and substances by inhalant abusers under AS 47.37.030.

 (c) Nothing in this section creates a dedicated fund.




Chapter 61. Excise Tax on Marijuana.

Sec. 43.61.010. Marijuana tax.
 (a) An excise tax is imposed on the sale or transfer of marijuana from a marijuana cultivation facility to a retail marijuana store or marijuana product manufacturing facility. Every marijuana cultivation facility shall pay an excise tax at the rate of $50 per ounce, or proportionate part thereof, on marijuana that is sold or transferred from a marijuana cultivation facility to a retail marijuana store or marijuana product manufacturing facility.

 (b) The department may exempt certain parts of the marijuana plant from the excise tax described in (a) of this section or may establish a rate lower than $50 per ounce for certain parts of the marijuana plant.

 (c) The recidivism reduction fund is established in the general fund. The Department of Administration shall separately account for 50 percent of the tax collected under this section and deposit it into the recidivism reduction fund.

 (d) The legislature may use the annual estimated balance in the fund to make appropriations to the Department of Corrections, the Department of Health and Social Services, or the Department of Public Safety for recidivism reduction programs.

 (e) Nothing in this section creates a dedicated fund.




Sec. 43.61.020. Monthly statement and payments.
 (a) Each marijuana cultivation facility shall send a statement by mail or electronically to the department on or before the last day of each calendar month. The statement must contain an account of the amount of marijuana sold or transferred to retail marijuana stores and marijuana product manufacturing facilities in the state during the preceding month, setting out
     (1) the total number of ounces, including fractional ounces, sold or transferred;

     (2) the names and Alaska address of each buyer and transferee; and

     (3) the weight of marijuana sold or transferred to the respective buyers or transferees.

 (b) The marijuana cultivation facility shall pay monthly to the department, all taxes, computed at the rates prescribed in this chapter, on the respective total quantities of the marijuana sold or transferred during the preceding month. The monthly return shall be filed and the tax paid on or before the last day of each month to cover the preceding month.




Sec. 43.61.030. Administration and enforcement of tax.
 (a) Delinquent payments under this chapter shall subject the marijuana cultivation facility to civil penalties under AS 43.05.220.

 (b) If a marijuana cultivation facility fails to pay the tax to the state the marijuana cultivation facility’s registration may be revoked in accordance with procedures established under AS 17.38.190(a)(1).




Chapter 65. Mining License Tax.

Sec. 43.65.010. Mining license.
 (a) A person prosecuting or attempting to prosecute, or engaging in the business of mining in the state shall obtain a license from the department. All new mining operations are exempt from the tax levied by this chapter for three and one-half years after production begins.

 (b) The Department of Natural Resources shall certify to the department the date upon which production begins, and the department shall issue a certificate of exemption to the producer accordingly.

 (c) The license tax on mining is as follows: upon the net income of the taxpayer from the property in the state, computed with allowable depletion, plus royalty received in connection with mining property in the state


     over $40,000 and not over $50,000 ................... 3 percent          over $50,000 and not over $100,000 ................... $1,500 plus            5 percent of the excess over $50,000          over $100,000 ................... $4,000 plus          7 percent of the excess over $100,000.      (d) Where mining operations are conducted in two or more places by one person the operations are considered a single mining operation and the tax under this chapter is computed upon the aggregate income derived from all the mining operations. The lessor of a mine operated under a lease is considered to be engaged in mining within this chapter, and the royalties received by the lessor are considered to be the net income of the lessor’s mining operations. If the lessor receives royalties from more than one mine or mining operation, the tax payable under this chapter by the lessor is computed upon the aggregate royalties received by the lessor from all the mines or mining operations as though they were a single mining operation.

 (e) The allowance for depletion included as an allowable deduction from gross income is a percentage of the gross income from the property during the taxable year, excluding from the gross income an amount equal to the rents or royalties paid by the taxpayer in respect to the property, as follows:

 (1) coal mines: 10 percent;

 (2) metal mines, fluorspar, flake graphite, vermiculite, beryl, feldspar, mica, talc, lepidolite, spodumene, varite, ball and sagger clay, or rock asphalt mines and potash mines or deposits: 15 percent; and

 (3) sulphur mines or deposits: 23 percent.

 (f) The allowance for depletion may not exceed 50 percent of the net income of the taxpayer, computed without allowance for depletion, from the property, except that in no case may the depletion allowable be less than it would be if computed on a reasonable cost basis.

 (g) Deductions that are not directly attributable to particular properties or processes shall be fairly allocated. To illustrate: If the taxpayer engages in activities in addition to mineral extraction in the state and to ordinary treatment processes, deductions for depreciation, taxes, general expenses, and overhead, which cannot be directly attributed to a specific activity, shall be fairly apportioned between (1) the mineral extraction and ordinary treatment processes, and (2) the additional activities, taking into account the ratio which the operating expenses directly attributable to the mineral extraction and ordinary treatment processes bear to the operating expenses directly attributable to the additional activities. If more than one mineral property is involved, the deductions apportioned to the mineral extraction and ordinary treatment processes shall, in turn, be fairly apportioned to the several properties taking into account their relative production.

 (h) Taxes upon royalties shall be paid by the taxpayer receiving the royalties and no deduction, excepting depletion, is allowed.

 (i) A license issued under this section must include
     (1) the name and address of the licensee;

     (2) the nature or type of mining activity to be conducted; and

     (3) the year for which the license is issued.




Sec. 43.65.018. Mining business education credit.
 (a) A person engaged in the business of mining in the state is allowed a credit against the tax due under this chapter for cash contributions accepted for
     (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state;

     (2) secondary school level vocational education courses, programs, and facilities by a school district in the state;

     (3) vocational education courses, programs, and facilities by a state-operated vocational technical education and training school;

     (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association or by a public or private nonprofit elementary or secondary school in the state;

     (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state;

     (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government;

     (7) the Alaska higher education investment fund under AS 37.14.750;

     (8) funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of
          (A) tuition and textbooks;

          (B) registration, course, and programmatic student fees;

          (C) on-campus room and board at the postsecondary institution in the state that provides the dual-credit course;

          (D) transportation costs to and from a residential school approved by the Department of Education and Early Development under AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and

          (E) other related educational and programmatic costs;

     (9) constructing, operating, or maintaining a residential housing facility by a residential school approved by the Department of Education and Early Development under AS 14.16.200;

     (10) childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant;

     (11) science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and

     (12) the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state.

 (b) The amount of the credit is
     (1) 50 percent of contributions of not more than $100,000;

     (2) 100 percent of the next $200,000 of contributions; and

     (3) 50 percent of the amount of contributions that exceed $300,000.

 (c) Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used.

 (d) A contribution claimed as a credit under this section may not
     (1) be the basis for a credit claimed under another provision of this title; and

     (2) when combined with contributions that are the basis for credits taken during the taxpayer’s tax year under AS 21.96.070, 21.96.075, AS 43.20.014, AS 43.55.019, AS 43.56.018, AS 43.75.018, or AS 43.77.045, result in the total amount of the credits exceeding $5,000,000; if the taxpayer is a member of an affiliated group, then the total amount of credits may not exceed $5,000,000 for the affiliated group; in this paragraph, “affiliated group” has the meaning given in AS 43.20.145.

 (e) The credit under this section may not reduce a person’s tax liability under this chapter to below zero for any tax year. An unused credit or portion of a credit not used under this section for a tax year may not be sold, traded, transferred, or applied in a subsequent tax year.

 (f) In this section,
     (1) “dual-credit student” means a secondary level student in the state who simultaneously earns college and high school credit for a course;

     (2) “nonprofit organization” means a charitable or educational organization in the state that is exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue Code);

     (3) “school district” has the meaning given in AS 43.20.014;

     (4) “vocational education” has the meaning given in AS 43.20.014.




Sec. 43.65.019. Alaska veterans’ memorial endowment fund contribution credit. [Repealed, § 25 ch 46, SLA 2002.]
Sec. 43.65.020. Taxpayer’s duties.
 (a) A person subject to tax under this chapter shall make a return stating specifically the items of gross income from the property, including royalty received and the deductions and credits allowed by this chapter and the exploration incentive credit authorized by AS 27.30, and other information for carrying out this chapter that the department prescribes. The return must show the mining license number and must be signed by the taxpayer or an authorized agent of the taxpayer, under penalty of unsworn falsification in the second degree. If receivers, trustees, or assigns are operating the property or business, they shall make returns for the person engaged in mining, or the recipient of royalty in connection with mining property. The tax due on the basis of the returns shall be collected in the same manner as if collected from the person of whose business they have custody and control. In a tax year in which a taxpayer applies against the tax levied under this chapter the exploration incentive credit authorized by AS 27.30, the commissioner shall require the taxpayer to submit the accounting of mining operation activities form required by AS 27.30.030(b).

 (b) A return made on the basis of the calendar year shall be made before May 1 of the next year. A return made on the basis of a fiscal year shall be made before the first day of the fifth month of the next fiscal year.

 (c) The department may grant a reasonable extension of time for filing returns, under regulations adopted by it. Except in the case of a taxpayer going abroad, an extension may not be made for more than six months.

 (d) A taxpayer shall make a return either on a calendar year or fiscal year basis, in conformance with the basis used in making the taxpayer’s return for federal income tax purposes.

 (e) The total amount of tax imposed by this chapter shall be paid on the 30th day of April of the next calendar year, or, if the return is made on the basis of the fiscal year, then on the last day of the fourth month of the next fiscal year.

 (f) Every person prosecuting or attempting to prosecute or engaging in the business of mining in the state shall comply with the department’s regulations and shall keep such records, give such statements under oath, and make such returns as the department prescribes.

 (g) When the department considers it necessary, it may require a person, by notice served upon the person, to make a return, give statements under oath, or keep records as it considers sufficient to show whether or not the person is liable to tax under this chapter. If a person fails to file a return at the time prescribed by law or regulation, or makes, wilfully or otherwise, a false or fraudulent return, the department shall make the return from its own knowledge and from such information as it can obtain through testimony or otherwise. A return so made and subscribed by the department is prima facie good and sufficient for all legal purposes.




Sec. 43.65.030. Application for renewals.
Application for renewal of a mining license shall be made before May 1 of each year.


Sec. 43.65.040. Limitation. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.05.260.]
Sec. 43.65.050. Violations and penalties. [Repealed, § 4 ch 94 SLA 1976; § 3 ch 166 SLA 1976; §§ 45, 46 ch 113 SLA 1980. For current law, see AS 43.05.220 and 43.05.290.]
Sec. 43.65.060. Definitions.
In this chapter, unless the context otherwise requires,
     (1) “gross income from property” means the gross income from mining in the state;

     (2) “mining” means an operation by which valuable metals, ores, minerals, asbestos, gypsum, coal, or stone, or any of them are extracted, mined, or taken from the earth; “mining” includes the ordinary treatment processes normally applied by mine owners or operators to obtain the commercially marketable product, but does not include the extraction or production of oil and gas, marketable earth, quarry rock, or sand and gravel;

     (3) “net income of the taxpayer (computed without allowances for depletion) from the property” means the gross income from the property, less allowable deductions attributable to the mineral property upon which the depletion is claimed and the allowable deductions attributable to ordinary treatment processes insofar as they relate to the product of the property, including overhead and operating expenses, development costs properly charged to expense, depreciation, taxes, losses sustained, etc., but excluding allowances for depletion, and deductions for federal income taxes, or for the tax imposed by this chapter;

     (4) “new mining operations” means mining operations which began production after January 1, 1953, or which have not been liable to pay a mining license tax under this chapter on net income since January 1, 1948;

     (5) “ordinary treatment processes” includes
          (A) in the case of coal: cleaning, breaking, sizing, and loading for shipment,

          (B) in the case of sulphur: pumping to vats, cooling, breaking, and loading for shipment,

          (C) in the case of iron ore, bauxite, ball and sagger clay, rock asphalt, and minerals which are customarily sold in the form of crude mineral product: sorting, concentrating, and sintering to bring to shipping grade and form, and loading for shipment, and

          (D) in the case of lead, zinc, copper, gold, silver, platinum metals or fluorspar ores, potash and ores which are not customarily sold in the form of the crude mineral product: crushing, grinding, and beneficiation by concentration (gravity, flotation, amalgamation, electrostatic, or magnetic), cyanidation, leaching, crystallization, precipitation (but excluding electrolytic deposition roasting, thermal or electric smelting or refining), or by substantially equivalent processes or combination of processes used in the separation or extraction of a product from the ore, including the furnacing or quicksilver ore;

     (6) “production” means the date on which the initial shipment of products from mining operations is made.




Chapter 70. Alaska Business License Act.

Sec. 43.70.010. Exemptions. [Repealed, § 5 ch 144 SLA 1978.]
Sec. 43.70.020. License required; application.
 (a) For the privilege of engaging in a business in the state, a person shall first apply, on forms prescribed by the commissioner, and obtain a license, and pay the license fee provided for in AS 43.70.030. A license issued to a firm for a particular line of business covers all its operations in the state regardless of the number of its establishments. A license issued under this subsection must include
     (1) the name and address of the licensee;

     (2) the primary and secondary line of business to be conducted;

     (3) the dates for which the license is issued; and

     (4) the business name to be used by the licensee.

 (b) [Repealed, § 10 ch 45 SLA 1988.]
 (c) [Repealed, § 10 ch 45 SLA 1988.]
 (d) A person engaging in a business subject to licensing provisions of a regulatory nature (for example, the requirement of posting a bond before beginning business as a collection agency) must, in addition to filing the regular application required by this section, comply with those regulatory provisions before being entitled to a license under this chapter. The department may establish that a license that is issued under this section expires at the same time as a license, certificate, permit, registration, or similar document issued under AS 08.

 (e) If a person knowingly engages in a business in the state without having a current license issued under (a) of this section, the department may impose a civil fine of up to $300. In this subsection, “knowingly” has the meaning given in AS 11.81.900.

 (f) A person may apply for a business license under (a) of this section covering multiple lines of business. The department shall prepare an application form that allows an applicant to list multiple lines of business.




Sec. 43.70.025. Bond or cash deposit required for an oil or gas business.
 (a) At the time of applying for a license under this chapter, an applicant engaged in the business of oil or gas exploration, development, or production shall file a surety bond in the amount of $250,000 running to the state, conditioned upon the applicant’s promise to pay all
     (1) taxes and contributions due the state and political subdivisions; and

     (2) persons furnishing labor or material or renting or supplying equipment to the applicant.

 (b) In lieu of the surety bond required under this section, the applicant may file with the commissioner a cash deposit or other negotiable security acceptable to the commissioner in the amount of $250,000.

 (c) The bond required by this section remains in effect until cancelled by action of the surety, the principal, or if the commissioner finds that the business is producing oil or gas in commercial quantities, by the commissioner.




Sec. 43.70.028. Claims against an oil or gas business.
 (a) A person having a claim against a person required to file a surety bond under AS 43.70.025 because of the failure to pay a liability described in AS 43.70.025(a) may bring suit upon the bond. A copy of the complaint shall be served by registered or certified mail on the commissioner at the time suit is filed, and the commissioner shall maintain a record, available for public inspection, of all suits commenced. This service on the commissioner shall constitute service on the surety, and the commissioner shall transmit the complaint or a copy of it to the surety within 72 hours after it is received. The surety on the bond is not liable in an aggregate amount in excess of that named in the bond, but if claims pending at any one time exceed the amount of the bond, the claims shall be satisfied from the bond in the following order:
     (1) material, equipment, and supplies delivered in the state;

     (2) labor, including employee benefits;

     (3) taxes and other amounts due to the city and borough, in that order;

     (4) repair of public facilities;

     (5) taxes and other amounts due to the state.

 (b) If a judgment is entered against a cash deposit, the commissioner, upon receipt of a certified copy of a final judgment, shall pay the judgment from the amount of the deposit in accordance with the priorities set out in (a) of this section.

 (c) An action described in (a) of this section may not be commenced on the bond more than three years after the cancellation of the bond.




Sec. 43.70.030. Levy and computation of license fee.
 (a) The fee for each business license is $50 a year, except that the fee is $25 if the business is a sole proprietorship and the sole proprietor is
     (1) 65 years of age or older when the sole proprietor applies for the license or will reach 65 years of age at any time during the year for which the license is issued; or

     (2) a disabled veteran.

 (b) [Repealed, § 1 ch 98 SLA 1984.]
 (c) The license for the privilege of taking orders through use of catalogs and by mail order offices in the state is the same as set out in this chapter for business generally.

 (d) [Repealed, § 72 ch 14 SLA 1987.]
 (e) A license holder may request a new business license without payment of an additional license fee
     (1) at any time during the period for which the license is valid to correct an error made by the department; or

     (2) within 30 days after the issuance of the license to make a change to the license.

 (f) The expiration date of a license issued under (e) of this section is the same as the expiration date of the original license.




Sec. 43.70.040. Review and determination of license tax. [Repealed, § 72 ch 14 SLA 1987.]
Sec. 43.70.050. Appeals. [Repealed, § 3 ch 166 SLA 1976. For current law, see AS 43.05.240.]
Sec. 43.70.060. Civil penalty. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.05.220.]
Sec. 43.70.070. Security. [Repealed, § 4 ch 94 SLA 1976; § 5 ch 144 SLA 1978.]
Sec. 43.70.075. License endorsement.
 (a) Unless a person has a business license endorsement issued under this section for each location or outlet in a location where the person offers tobacco products for sale, a person may not sell or allow a vending machine to sell in its location or outlet cigarettes, cigars, tobacco, or other products containing tobacco as a retailer at that location or outlet. Each endorsement required under this section is in addition to any other license or endorsement required by law. A person may not apply for an endorsement under this section for a location or outlet if an endorsement issued for the same location or outlet is currently suspended or revoked. An endorsement issued for a location or outlet to a person in violation of this subsection is void.

 (b) The department, upon payment of a fee of $100, shall issue a business license endorsement to a person who applies for a business license under this chapter, and may renew the endorsement issued under this subsection for a fee of $100. The endorsement expires at the same time as the license to which it attaches. Upon issuance of an endorsement, the department shall also issue to the person receiving the endorsement notice of the penalties that may be imposed under this section.

 (c) The department may refuse to issue an endorsement under this section if there is reasonable cause to believe that the information submitted in the application is false or misleading and is not made in good faith.

 (d) If a person who holds an endorsement issued under this section, or an agent or an employee of a person who holds an endorsement issued under this section acting within the scope of the agency or employment, has been convicted of violating AS 11.76.100, 11.76.106, or 11.76.107, the department shall impose a civil penalty as set out in this subsection. However, following a hearing under (m) of this section, and based on evidence admitted at that hearing concerning questions specified in (m)(4) and (6) of this section, the department may reduce by not more than 10 days a suspension under (1) of this subsection, or by not more than 20 days a suspension under (2) of this subsection, or increase by not more than 10 days a suspension under (1) of this subsection, or by not more than 20 days a suspension under (2) of this subsection. If a hearing is not requested, or if a hearing is requested and the department determines that the evidence admitted does not support increasing or decreasing the suspension, the department shall suspend the endorsement for a period of
     (1) 20 days and impose a civil penalty of $300 if the person has not been previously convicted of violating AS 11.76.100, 11.76.106, or 11.76.107 and is not otherwise subject to the sanctions described in (2) — (4) of this subsection;

     (2) 45 days and impose a civil penalty of $500 if, within the 24 months before the date of the department’s notice under (m) of this section, the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, was convicted once of violating AS 11.76.100, 11.76.106, or 11.76.107;

     (3) 90 days and impose a civil penalty of $1,000 if, within the 24 months before the date of the department’s notice under (m) of this section, the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, was convicted twice of violating AS 11.76.100, 11.76.106, or 11.76.107, or a provision of this section or a regulation implementing this section adopted under AS 43.70.090; or

     (4) one year and impose a civil penalty of $2,500 if, within the 24 months before the date of the department’s notice under (m) of this section, the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, was convicted more than twice of violating AS 11.76.100, 11.76.106, or 11.76.107.

 (e) If a person who receives an endorsement under this section has multiple retail locations or outlets in a location, a suspension or revocation imposed under this section applies only to the retail outlet in the location in which the violation occurs.

 (f) A person who holds a license endorsement issued under this section shall post on the licensed premises a warning sign as described in this subsection. A warning sign required by this subsection must be at least 6 inches by 18 inches and must read, in lettering at least 1.25 inches high: “The sale of tobacco products to persons under age 19 is illegal.” A person holding an endorsement issued under this section shall display the sign in a manner conspicuous to a person purchasing or consuming tobacco products on the licensed premises. The department shall, without charge, furnish warning signs required under this section to a person who holds an endorsement issued under this section or a person who requests the sign with the intention of displaying it.

 (g) A person who is required to hold a business license endorsement under this section, or who is required to be licensed or agrees to be licensed under AS 43.50.010, or an agent or employee of the person, may not
     (1) sell cigarettes to another person unless the cigarettes are sold in groups of at least 20 and the cigarettes are in the manufacturer’s original cigarette pack or contained in a cigarette carton or box; or

     (2) sell or possess cigarettes if the cigarette package
          (A) differs in any respect from the requirements of 15 U.S.C. 1331 — 1341 (Federal Cigarette Labeling and Advertising Act) for the placement of warnings or of any other information upon a package of cigarettes that is sold within the United States;

          (B) is labeled “For Export Only,” “U.S. Tax Exempt,” “For Use Outside U.S.,” or with similar wording indicating that the manufacturer did not intend that the product be sold in the United States; this subparagraph does not apply to cigarettes sold or intended to be sold as duty-free merchandise by a duty-free sales enterprise under 19 U.S.C. 1555(b); however, this subparagraph does apply to duty-free cigarettes that are brought back into the state for resale in the state;

          (C) has been altered by adding, masking, or deleting wording described in (B) of this paragraph.

 (h) A violation of (g) of this section is an unfair or deceptive act or practice under AS 45.50.471.

 (i) The commissioner or the commissioner of revenue may seize cigarettes that do not comply with this section. After notice and an opportunity for a hearing, the commissioner or the commissioner of revenue shall destroy cigarettes seized under this subsection.

 (j) A person who violates (g) of this section is guilty of a class B misdemeanor.

 (k) If a person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, violates a provision of (a) or (g) of this section, the department may suspend the person’s business license endorsement or right to obtain a business license endorsement for a period of not more than
     (1) 45 days; or

     (2) 90 days if, within the 24 months before the date of the department’s notice under (m) of this section, the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, violates a provision of (a) or (g) of this section.

 (l) Notwithstanding (a) of this section, a person owning vending machines that offer tobacco products for sale need obtain only one business license endorsement under this section even if the person has vending machines in more than one outlet or location in the state. The person who owns a vending machine that offers tobacco products for sale and the person who owns the premises where the vending machine is located are both required to obtain a business license endorsement issued under this section. If the endorsement of the person owning the vending machine is suspended or revoked, the person may not sell cigarettes, cigars, or other products containing tobacco during the period of suspension or revocation through the use of vending machines at the location or outlet where the violation occurred. During the period of suspension or revocation, the person owning that vending machine may not use that machine to sell tobacco products at another location or outlet.

 (m) The department may initiate suspension of a business license endorsement or the right to obtain a business license endorsement under this section by sending the person subject to the suspension a notice by certified mail, return receipt requested, or by delivering the notice to the person. The notice must contain information that informs the person of the grounds for suspension, the length of any suspension sought, and the person’s right to administrative review. A suspension begins 30 days after receipt of notice described in this subsection unless the person delivers a timely written request for a hearing to the department in the manner provided by regulations of the department. If a hearing is requested under this subsection, an administrative law judge of the office of administrative hearings (AS 44.64.010) shall determine the issues by using the preponderance of the evidence test and shall, to the extent they do not conflict with regulations adopted under AS 44.64.060, conduct the hearing in the manner provided by regulations of the department. A hearing under this subsection is limited to the following questions:
     (1) was the person holding the business license endorsement, or an agent or employee of the person while acting within the scope of the agency or employment of the person, convicted by plea or judicial finding of violating AS 11.76.100, 11.76.106, or 11.76.107;

     (2) if the department does not allege a conviction of AS 11.76.100, 11.76.106, or 11.76.107, did the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, violate a provision of (a) or (g) of this section;

     (3) within the 24 months before the date of the department’s notice under this subsection, was the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, convicted of violating AS 11.76.100, 11.76.106, or 11.76.107 or adjudicated for violating a provision of (a) or (g) of this section;

     (4) did the person holding the business license endorsement establish that the person holding the business license endorsement had adopted and enforced an education, a compliance, and a disciplinary program for agents and employees of the person as provided in (t) of this section;

     (5) did the person holding the business license endorsement overcome the rebuttable presumption established in (w) of this section;

     (6) within five years before the date of the violation that is the subject of the hearing, did the department establish that the person holding the business license endorsement
          (A) previously violated (a) or (g) of this section;

          (B) previously violated AS 11.76.100, 11.76.106, or 11.76.107 at a location or outlet in a location for which the person holds a business license endorsement, or had an agent or employee previously violate AS 11.76.100, 11.76.106, or 11.76.107; this subparagraph does not apply to a prior conviction that served to enhance a suspension period under (d)(2) — (4) of this section; or

          (C) engaged at a location owned by the person in other conduct that was or is likely to result in the sale of tobacco to a person under 19 years of age in violation of AS 11.76.100, 11.76.106, or 11.76.107.

 (n) The commissioner may
     (1) adopt the proposed decision of a hearing officer under this section;

     (2) remand the matter for further proceedings; or

     (3) reject the proposed decision, review the record, and issue a decision based on the record.

 (o) After notice and a hearing, the department may revoke a business license endorsement or increase a period of suspension if the department finds that, during a period of suspension, a person continues the conduct for which the endorsement or the right to obtain an endorsement was suspended. A person whose endorsement or right to obtain an endorsement is revoked or suspended under this subsection may not apply for or obtain an endorsement under this chapter. A period of revocation or suspension imposed under this subsection may not exceed two years.

 (p) If a person who holds an endorsement issued under this section violates (f) of this section, the department may impose a civil penalty not to exceed $250 for each day of the violation, but the department may not suspend or revoke a business license endorsement. The total civil penalty imposed under this subsection for each violation may not exceed $5,000.

 (q) The department may adopt regulations that do not conflict with regulations adopted under AS 44.64.010 to establish an administrative hearing process for actions taken under this section. AS 44.62 (Administrative Procedure Act) does not apply to a hearing under this section.

 (r) For purposes of this section, the sale of a product containing tobacco by an agent or employee of a person who holds or is required to hold a business license endorsement under this section at the location or outlet in a location for which the endorsement was or was required to be issued is rebuttably presumed to have been a sale within the person’s scope of agency or employment.

 (s) If a person violates (a) of this section, the department may impose a civil penalty not to exceed $250 for each day of the violation. The total civil penalty imposed under this subsection for each violation may not exceed $5,000. The civil penalty described in this subsection may be imposed in addition to a suspension of a business license endorsement or the right to obtain a business license endorsement ordered by the department under (k) or (o) of this section.

 (t) Based on evidence provided at the hearing under (m)(4) — (6) of this section, the department may reduce the license suspension period under (d) of this section if the person holding the business license endorsement establishes that, before the date of the violation, the person had
     (1) adopted and enforced a written policy against selling cigarettes, cigars, tobacco, or products containing tobacco to a person under 19 years of age in violation of AS 11.76.100, 11.76.106, or 11.76.107;

     (2) informed the person’s agents and employees of the applicable laws and their requirements and conducted training on complying with the laws and requirements;

     (3) required each agent and employee of the person to sign a form stating that the agent and employee has been informed of and understands the written policy and the requirements of AS 11.76.100, 11.76.106, and 11.76.107;

     (4) determined that the agents and employees of the person had sufficient experience and ability to comply with the written policy and requirements of AS 11.76.100, 11.76.106, and 11.76.107;

     (5) required the agents and employees of the person to verify the age of purchasers of cigarettes, cigars, tobacco, or other products containing tobacco by means of a valid government issued photographic identification;

     (6) established and enforced disciplinary sanctions for noncompliance with the written policy or the requirements of AS 11.76.100, 11.76.106, and 11.76.107; and

     (7) monitored the compliance of the agents and employees of the person with the written policy and the requirements of AS 11.76.100, 11.76.106, and 11.76.107.

 (u) A reduction in the period of suspension under this section may not be granted more than once in a 12-month period for a location or outlet in a location for which the person holds a business license.

 (v) Notwithstanding (d) of this section, in place of a hearing under (m) of this section, the department and the person holding the business license endorsement may enter into a memorandum of agreement regarding the imposition of a suspension and civil penalties based on a violation of AS 11.76.100, 11.76.106, or 11.76.107. The memorandum of agreement must contain a provision that the person holding the business license endorsement admits or does not contest that a violation of AS 11.76.100, 11.76.106, or 11.76.107 occurred and accepts the imposition of suspension and civil penalty under this section. Based on the memorandum of agreement, the department may reduce the period of suspension. For violations involving AS 11.76.100, 11.76.106, or 11.76.107, the department may not reduce the period of suspension by more than 10 days under (d)(1) of this section or by more than 20 days under (d)(2) of this section. The department may not agree to a reduction in the period of suspension more than once in a 12-month time period for a location or outlet in a location for which the person holds a business license endorsement.

 (w) For purposes of (m)(5) of this section, a conviction for a violation of AS 11.76.100, 11.76.106, or 11.76.107 by the agent or employee of the person who holds the business license endorsement is rebuttably presumed to constitute proof of the fact that the agent or employee negligently sold a cigarette, a cigar, or tobacco, or a product containing tobacco to a person under 19 years of age. The person who holds the business license endorsement may overcome the presumption by establishing by clear and convincing evidence that the agent or employee did not negligently sell a cigarette, a cigar, or tobacco, or a product containing tobacco to a person under 19 years of age in violation of AS 11.76.100, 11.76.106, or 11.76.107 as alleged in the citation issued to the agent or employee. The presentation of evidence authorized by this subsection does not constitute a collateral attack on the conviction described in this subsection.

 (x) Notwithstanding (d), (t), or (v) of this section, a period of suspension may not be reduced for a violation of AS 11.76.100(a)(4).




Sec. 43.70.080. Disposal of money.
All money collected by the department under this chapter shall be deposited in the general fund.


Sec. 43.70.090. Regulations.
The department may adopt regulations necessary to implement this chapter.


Sec. 43.70.100. Penal provisions. [Repealed, § 46 ch 113 SLA 1980. For current provisions, see AS 43.05.290.]
Sec. 43.70.105. Exemptions.
 (a) This chapter does not apply to
     (1) a fisheries business;

     (2) the sale of liquor under a license issued under AS 04.11;

     (3) an insurance business;

     (4) a mining business;

     (5) supplying services as an employee;

     (6) furnishing goods or services by a person who does not represent to be regularly engaged in furnishing goods or services;

     (7) the activities of an investment club; in this paragraph,
          (A) “investment club” means a group of individuals, incorporated or otherwise organized, that engages primarily in investing in securities, that does not sell investment services to another person, that does not advertise, and the primary purpose of which is educational;

          (B) “security” has the meaning given in AS 45.55.990.

 (b) Notwithstanding an exemption provided by (a) of this section, a person who sells cigarettes, cigars, tobacco, or other products containing tobacco as a retailer must have a business license under AS 43.70.020 and a business license endorsement required under AS 43.70.075.




Sec. 43.70.110. Definitions.
In this chapter, unless the context otherwise requires,
     (1) “business” means a for profit or nonprofit entity engaging or offering to engage in a trade, a service, a profession, or an activity with the goal of receiving a financial benefit in exchange for the provision of services, or goods or other property;

     (2) “commissioner” means the commissioner of commerce, community, and economic development;

     (3) “department” means the Department of Commerce, Community, and Economic Development;

     (4) “line of business” means the particular trade, service, profession, or activity engaged in by a for-profit or nonprofit entity with the goal of receiving a financial benefit;

     (5) “person” includes an individual, firm, partnership, joint venture, association, corporation, estate trust, business trust, receiver, or any group or combination acting as a unit.




Sec. 43.70.120. Short title.
This chapter may be cited as the Alaska Business License Act.


Article 1. Taxes and Licenses.


Chapter 75. Fisheries Business License and Taxes.

Sec. 43.75.010. Fisheries business licenses. [Repealed, § 13 ch 79 SLA 1979.]
Sec. 43.75.011. Fisheries business license.
 (a) A person engaging or attempting to engage in a fisheries business or in an activity described in AS 43.75.100 shall first apply for and obtain a license as provided in AS 43.75.020.

 (b) The commissioner may assess a civil penalty against a person required to have a license under (a) of this section who fails to obtain the license. The civil penalty for a violation of (a) of this section may not exceed $5,000 the first time a civil penalty is assessed, $10,000 for a second assessment, $15,000 for a third assessment, $20,000 for a fourth assessment, and $25,000 for a fifth or subsequent assessment. The commissioner may not assess a person more than one civil penalty for a violation of (a) of this section in a 30-day period.

 (c) Proceedings to suspend or revoke a license under AS 43.75.020(b)(3)(B) are governed by AS 44.62.




Sec. 43.75.015. Fisheries business tax.
 (a) A person engaged in a fisheries business is liable for and shall pay the tax levied by this section on the value of each of the following fisheries resources processed during the year at the rate set out after each:
     (1) salmon canned at a shore-based fisheries business — four and one-half percent;

     (2) salmon processed by a shore-based fisheries business, except salmon for which the tax is due under (1) of this subsection, and all other fisheries resources processed by a shore-based fisheries business — three percent;

     (3) fisheries resources processed by a floating fisheries business — five percent.

 (b) Instead of the taxes levied by (a) of this section, a person who processes a developing commercial fish species is liable for and shall pay a tax equal to
     (1) one percent of the value of the developing commercial fish species processed by a shore-based fisheries business during the year; and

     (2) three percent of the value of the developing commercial fish species processed by a floating fisheries business during the year.

 (c) A person engaging or attempting to engage in a fisheries business who first actually and physically processes the fishery resource, or a person who purchases a fishery resource that is processed from a person excluded by AS 43.75.017 from liability for the tax, is liable for and shall pay to the department the entire tax imposed by this section. In determining this tax liability, the person may deduct from the value of the fishery resources processed the value of fishery resources that are canned or processed for other fisheries businesses. A person taking the deduction authorized by this subsection shall report all information relating to the deduction in accordance with regulations adopted by the department.

 (d) Instead of the taxes levied under (a) or (b) of this section, a person who processes a fishery resource under a direct marketing fisheries business license is liable for and shall pay a tax equal to
     (1) one percent of the value of the developing commercial fish species processed during the year; and

     (2) three percent of the value of a commercial fish species not subject to (1) of this subsection.

 (e) For purposes of determining the value of a fishery resource on which a tax is levied under this section, the department may establish a presumption of market value for a fishery resource in a region or market area based on a volume weighted average of market values for the fishery resource reported on returns filed under this chapter by fisheries businesses operating in the region or market area. A taxpayer who appeals an assessment of taxes based on a presumption of market value determined by the department under this subsection may rebut the presumption with substantial evidence of
     (1) the prevailing price paid to fishermen for the fishery resource of the same kind and quality by fisheries businesses in the same region or market area where the fishery resource was taken, if the taxpayer holds a direct marketing fisheries business license under AS 43.75.020(c) and the fishery resource on which the tax is levied is processed under that license; or

     (2) the true market value of the fishery resources if the taking of the fishery resource is done in a company-owned or company-subsidized boat operated by employees of a fisheries business, a subsidiary of the fisheries business, or a parent company of the fisheries business.




Sec. 43.75.017. Exclusion from fisheries business tax.
A person is not liable for the fisheries business tax under AS 43.75.015 when the fishery resource is processed aboard a fishing vessel if
     (1) the vessel is operated as a commercial fishing vessel under a valid commercial fishing license;

     (2) the fishery resource is not processed beyond heading, gutting or cleaning, freezing, and glazing;

     (3) the fishery resource was caught by the vessel; and

     (4) the fishery resource is sold to a fisheries business licensed under this chapter.




Sec. 43.75.018. Fisheries business education credit.
 (a) A person engaged in a fisheries business is allowed a credit against the tax due under this chapter for cash contributions accepted for
     (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state;

     (2) secondary school level vocational education courses, programs, and facilities by a school district in the state;

     (3) vocational education courses, programs, and facilities by a state-operated vocational technical education and training school;

     (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association or by a public or private nonprofit elementary or secondary school in the state;

     (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state;

     (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government;

     (7) the Alaska higher education investment fund under AS 37.14.750;

     (8) funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of
          (A) tuition and textbooks;

          (B) registration, course, and programmatic student fees;

          (C) on-campus room and board at the postsecondary institution in the state that provides the dual-credit course;

          (D) transportation costs to and from a residential school approved by the Department of Education and Early Development under AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and

          (E) other related educational and programmatic costs;

     (9) constructing, operating, or maintaining a residential housing facility by a residential school approved by the Department of Education and Early Development under AS 14.16.200;

     (10) childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant;

     (11) science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and

     (12) the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state.

 (b) The amount of the credit is
     (1) 50 percent of contributions of not more than $100,000;

     (2) 100 percent of the next $200,000 of contributions; and

     (3) 50 percent of the amount of contributions that exceed $300,000.

 (c) Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used.

 (d) A contribution claimed as a credit under this section may not
     (1) be the basis for a credit claimed under another provision of this title; and

     (2) when combined with contributions that are the basis for credits taken during the taxpayer’s tax year under AS 21.96.070, 21.96.075, AS 43.20.014, AS 43.55.019, AS 43.56.018, AS 43.65.018, or AS 43.77.045, result in the total amount of the credits exceeding $5,000,000; if the taxpayer is a member of an affiliated group, then the total amount of credits may not exceed $5,000,000 for the affiliated group; in this paragraph, “affiliated group” has the meaning given in AS 43.20.145.

 (e) The credit under this section may not reduce a person’s tax liability under this chapter to below zero for any tax year. An unused credit or portion of a credit not used under this section for a tax year may not be sold, traded, transferred, or applied in a subsequent tax year.

 (f) In this section,
     (1) “dual-credit student” means a secondary level student in the state who simultaneously earns college and high school credit for a course;

     (2) “nonprofit organization” means a charitable or educational organization in the state that is exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue Code);

     (3) “school district” has the meaning given in AS 43.20.014;

     (4) “vocational education” has the meaning given in AS 43.20.014.




Sec. 43.75.019. Alaska veterans’ memorial endowment fund contribution credit. [Repealed, § 25 ch 46 SLA 2002.]
Sec. 43.75.020. Application for license.
 (a) Application for a license shall be filed with the department and accompanied by an annual fee of $25. A separate annual fee is required for each plant specified in the application covered by the license. The application must contain the name of the applicant, the line of business to be licensed, place of business, and other facts that the department prescribes. The applicant shall state that the applicant, as a condition of obtaining and maintaining the license, agrees to pay
     (1) the taxes levied under this title, and that the applicant will make a return and pay the taxes at the time provided by law;

     (2) any seafood marketing assessment levied under AS 16.51;

     (3) contributions imposed under AS 23.20 (Alaska Employment Security Act);

     (4) any administrative penalties assessed under AS 18.60.093 for a violation of a provision of AS 18.60.010 — 18.60.105;

     (5) any applicable fishery sales, use, or severance taxes imposed by a municipality in the state; and

     (6) any industry fee levied under a fishing capacity reduction program authorized under 16 U.S.C. 1861a (Magnuson-Stevens Fishery Conservation and Management Act).

 (b) Upon receipt of an application in proper form under (a) or (c) of this section, accompanied by the annual fee, the department shall issue the license if the
     (1) applicant has paid in full, including interest and penalties, the following:
          (A) taxes levied under this title; and

          (B) any assessments under AS 16.51;

     (2) department has not received notification from the Department of Labor and Workforce Development that the applicant has failed to pay in full
          (A) an assessment of delinquent contributions that is final under AS 23.20.205(c) or 23.20.220(c); or

          (B) an administrative penalty that is final under AS 18.60.093 or 18.60.097; and

     (3) department has not received a copy of
          (A) a final judgment obtained against the applicant for unpaid fishery sales, use, or severance taxes imposed by a municipality in the state;

          (B) a final administrative determination against the applicant from a municipality in the state for unpaid fishery sales, use, or severance taxes imposed by the municipality; the administrative determination must be accompanied by a certification by the municipality that the municipal administrative process is consistent with constitutional requirements of due process and that the applicant has exhausted all administrative remedies under the applicable municipal administrative process; or

          (C) a final administrative determination against the applicant from the National Marine Fisheries Service for unpaid industry fees levied under a fishing capacity reduction; the administrative determination must be accompanied by a certification by the National Marine Fisheries Service that the federal administrative process is consistent with constitutional requirements of due process and that the applicant has exhausted all applicable administrative remedies.

 (c) Instead of a license issued under (a) of this section, the department may issue a direct marketing fisheries business license to a licensed commercial fisherman who processes fishery resources caught using a vessel that does not exceed 65 feet in overall length and is owned or leased by the commercial fisherman. The licensee may place into commerce in the state and outside of the state processed or unprocessed fishery resources caught using the vessel described in the license. Fishery resources that are caught using the vessel and owned by the licensee from the time of harvest through sale, as defined by the department by regulation, may be processed by the licensee on the vessel, at a shore-based facility, or by means of custom processing services obtained by the licensee. An application for a direct marketing fisheries business license shall be filed with the department and accompanied by an annual fee of $25. A separate direct marketing fisheries business license and annual license fee are required for each vessel on which processing is performed. The application must state the name and address of the applicant, the fishery resources for which the applicant holds a commercial fishing entry permit or interim-use permit or quota share, a description of the vessel and each shore-based facility where the applicant will process fishery resources, and other information that the department prescribes by regulation. The application must state that the applicant, as a condition of obtaining and maintaining the license, agrees to pay the taxes, assessment, employment security contributions, and penalties as set out in (a)(1) — (5) of this section. A person who holds a direct marketing fisheries business license may not under that license (1) purchase fishery resources for resale or processing for sale; or (2) process fishery resources for another licensed commercial fisherman or for a fisheries business licensed under this chapter. In this subsection, “licensed commercial fisherman” means a natural person who holds a commercial fishing entry permit or interim-use permit issued under AS 16.43 or a quota share issued under federal law.




Sec. 43.75.030. Filing return and payment of tax.
 (a) A person subject to the tax shall file a return stating the value of fisheries resources processed during the license year, computed as required by this chapter, and such other information as the department prescribes by regulation. The return must show the license number and must be signed by the taxpayer or an authorized agent, under penalty of unsworn falsification in the second degree. If a receiver, trustee, or assign is operating the property or business, that person shall file the return for the person. A tax due on the basis of such a return shall be collected in the same manner as if collected from the person of whose business the receiver, trustee, or assign has custody and control.

 (b) The return shall be made on a calendar year basis and submitted to the department before April 1 after the close of the calendar year.

 (c) The department may adopt regulations for the granting of a reasonable extension of time for filing and may grant an extension of time for filing.

 (d) Except for tax paid monthly under AS 43.75.055(c)(1), the tax shall be paid before April 1 after the close of the calendar year.

 (e) Every person engaging or attempting to engage in a business for which a license is required under this chapter shall keep records, make statements under oath, file returns, and comply with all regulations that the commissioner may adopt.

 (f) When the department considers it is necessary, it may require a person, by notice served upon the person, to file a return, make such statements under oath, or keep and display to it such records as it considers sufficient to show the tax for which the person is liable. If a person fails to file a return as prescribed by law or by regulation, or makes, wilfully or otherwise, a false or fraudulent return, the department shall make the return from the information that it can obtain. A return made by the department is prima facie good and sufficient for all legal purposes.




Sec. 43.75.032. Tax credit for scholarship contributions.

Sec. 43.75.034. Tax credit report. [Repealed, § 8 ch 79 SLA 1986.]
Sec. 43.75.035. Salmon and herring product development tax credit.
 (a) A taxpayer that is a fisheries business may claim a product development tax credit of 50 percent of qualified investment in new property first placed into service in a shore-based plant or on a vessel in the state in the tax year.

 (b) The amount of the tax credit applied against taxes under this section may not
     (1) exceed 50 percent of the taxpayer’s tax liability incurred under this chapter for processing of salmon and herring during the tax year; or

     (2) be claimed for property first placed into service after December 31, 2020.

 (c) If the property for which a tax credit is claimed is installed on a vessel, the amount of qualified investment under (a) of this section is determined by multiplying the investment cost of the qualified investment property by a fraction, the numerator of which is the weight of raw salmon or raw herring processed on the vessel by the taxpayer in the state in the tax year in which the property is first placed into service, and the denominator of which is the weight of raw salmon or raw herring processed on the vessel by the taxpayer in and outside of the state in the tax year in which the property is first placed into service.

 (d) An unused credit under this section may be carried forward and applied against the tax liability incurred on salmon and herring in the following three tax years.

 (e) Qualified investment costs upon which a tax credit is claimed under this section may not be considered for another tax credit in this title. A tax credit applied under this section may not exceed 50 percent of the taxpayer’s tax liability incurred for the processing of salmon during the tax year.

 (f) A taxpayer may not claim the tax credit allowed under this section if the taxpayer is in arrears in the payment of assessments under AS 16.51.120, contributions under AS 23.20, or taxes or assessments collected or owed under this title. For purposes of this subsection, a taxpayer is not in arrears if the liability for the assessment, contribution, or tax is under administrative or judicial appeal.

 (g) If, during a tax year, property for which a credit was claimed under this section is disposed of by the taxpayer, ceases to be qualified investment property, or is removed from service in the state, the tax due under this chapter is increased by the recapture percentage of the aggregate decrease in the credit allowed under this section for all prior tax years that would have resulted solely from reducing to zero the credit allowed for the qualified investment property under this section. The amount of tax credit attributable to the qualified investment that is carried forward from prior tax years is terminated as of the first day of the tax year in which the qualified investment property is disposed of by the taxpayer, ceases to be qualified investment property, or is removed from service in the state. For purposes of this subsection,
     (1) the recapture percentage during the year in which the property is first placed into service or during the first year following the year in which the property is first placed into service is 100 percent;

     (2) the recapture percentage during the second year following the year in which the property is first placed into service is 75 percent;

     (3) the recapture percentage during the third year following the year in which the property is first placed into service is 50 percent;

     (4) the recapture percentage during the fourth or subsequent year following the year in which the property is first placed into service is zero percent;

     (5) qualified investment property used on a vessel is considered to have been removed from the state on the first day of a tax year in which the proportion of raw salmon or raw herring processed in the state on the vessel is less than 50 percent of total weight of raw salmon or raw herring processed on the vessel in and outside of the state.

 (h) The amount of a tax credit recaptured under (g)(1) — (3) of this section may not be included in the determination of the amount of that tax credit that is allowable under this section.

 (i) The department shall develop and implement procedures by which a taxpayer that is a fisheries business may submit the taxpayer’s proposed investment to the department and request a preliminary determination of whether the investment qualifies for the product development tax credit under this section. A preliminary determination by the department that the taxpayer’s submission qualifies for the credit is binding, unless the department determines that the taxpayer has made a material misrepresentation in the taxpayer’s submission.

 (j) In this section,
     (1) “first placed into service” means the moment when property is first used for its intended purpose;

     (2) “new property” means property whose original use commences with the taxpayer and does not include property first used by another person;

     (3) “qualified investment” means the investment cost to purchase or convert depreciable tangible personal property with a useful life of three years or more to be used predominantly to perform an ice making, processing, packaging, or product finishing function that is a significant component in producing value-added salmon or herring products, including canned salmon products in can sizes other than 14.75 ounces or 7.5 ounces; in this paragraph, “property”
          (A) includes
               (i) equipment used to fillet, skin, portion, mince, form, extrude, stuff, inject, mix, marinate, preserve, dry, smoke, brine, package, freeze, scale, grind, separate meat from bone, or remove pin bones;

               (ii) new parts necessary for, or costs associated with, converting a canned salmon line to produce can sizes other than 14.75 ounces or 7.5 ounces;

               (iii) conveyors used specifically in the act of producing a value-added salmon or herring product;

               (iv) ice making machines;

               (v) new canning equipment for herring products; and

               (vi) equipment used to transform salmon or herring byproduct that is discarded as waste into saleable product;

          (B) does not include
               (i) vehicles, forklifts, conveyors not used specifically in the act of producing a value-added salmon or herring product, cranes, pumps, or other equipment used to transport salmon or herring, or salmon or herring products, knives, gloves, tools, supplies and materials, equipment, other than ice making machines, that is not processing, packaging, or product finishing equipment, or other equipment, the use of which is incidental to the production, packaging, or finishing of value-added salmon or herring products;

               (ii) the overhaul, retooling, or modification of new or existing property, except for new parts necessary for, or costs associated with, converting a canned salmon line to produce can sizes other than 14.75 ounces or 7.5 ounces; or

               (iii) property used predominantly to produce a salmon or herring product that is not taxed under this chapter;

     (4) “tax liability” means the liability for all taxes under this chapter before all credits allowed by this chapter;

     (5) “useful life” means the useful life of the property that is or would be applicable for purposes of depreciation;

     (6) “value-added salmon or herring product” means the product of a salmon or herring that is processed beyond heading, gutting, or separation in a manner that enhances the value or quality of the salmon or herring product, such as shelf-stable, retort pouched, smoked, pickled, or filleted salmon, ikura, leather, jerky, or a saleable product made from waste byproduct of salmon or herring; “value-added salmon or herring product” does not include a salmon or herring or salmon or herring product that
          (A) has been subjected to only one or more of heading, gutting, freezing, or packaging;

          (B) is salmon skeins or other unprocessed salmon or unprocessed herring products whether fresh or frozen; or

          (C) is produced out of the state.




Sec. 43.75.036. Salmon utilization tax credit. [Repealed, § 20, 34, ch. 61, SLA 2014, effective January 1, 2016]
Sec. 43.75.050. Violations and penalties. [Repealed, § 4 ch 94 SLA 1976; § 3 ch 166 SLA 1976; §§ 45, 46 ch 113 SLA 1980. For current law, see AS 43.05.220 and 43.05.290.]
Sec. 43.75.055. Security for collection of taxes.
 (a) An applicant for a license under this chapter shall, in or with the application, state under oath the amount of each of the products that the applicant expects to produce during the license year. The applicant shall further state the extent of lienable real property owned by the applicant in the state against which the tax may be collected and other information with respect to description, location, and value of the property that the department prescribes.

 (b) Except as provided in (c) and (e) of this section, if the lienable value of the property is not equal to three times the amount of the tax for which the applicant will probably be liable under this section, the department may not issue the license until the applicant files with the department a surety bond approved by the attorney general in a penal sum equal to twice the probable amount of the tax for which the applicant will be liable, conditioned upon payment of the tax in full when due, with interest and penalties if not paid before delinquency.

 (c) An applicant may elect to avoid the requirements of (a) and (b) of this section if the applicant
     (1) files a report as prescribed by the department and pays the taxes due under this chapter on or before the 15th day of the month following the month in which liability for the payment of the taxes was incurred;

     (2) pays the taxes and assessments for which the applicant is liable under AS 16.51, AS 43.76, and AS 43.77 on or before the 15th day of the month following the month in which the liability for the payment of the taxes or assessments was incurred;

     (3) remits to the department the taxes and assessments that the applicant is required to collect under AS 43.76 on or before the 15th day of the month following the month in which the taxes or assessments were required to be collected; and

     (4) either
          (A) files a bond in the amount of $50,000; or

          (B) provides the department with proof that the applicant is the owner of lienable real property in the state of a value of at least $100,000.

 (d) A bond filed under (c) of this section must be conditioned upon the payment of the taxes under (c)(1) of this section in full when due.

 (e) The department may waive the bond requirement under (b) or (c) of this section if the applicant posts other security in the form of collateral acceptable to the department or prepays the estimated tax.

 (f) An applicant that fails to pay amounts due under this section is subject to civil penalties set out under AS 43.05.220.

 (g) Real property, a surety bond, or other security being used to secure payment of the tax for the year preceding the application year may also be used to secure payment of the estimated tax for the application year if the security is acceptable to the department and the applicant has not failed to pay a tax under this chapter in a timely manner during any of the three years preceding the application year.




Secs. 43.75.060 — 43.75.095. Cold storage and other fish processors. [Repealed, § 13 ch 79 SLA 1979.]

Article 2. Fisheries Products Sold Outside Taxing Jurisdiction.


Sec. 43.75.100. Tax imposed on taking of fishery resource.
 (a) A person taking, purchasing, or otherwise acquiring a fishery resource that has not been subject to the tax imposed in AS 43.75.015 is subject to the tax levied in AS 43.75.015 on the value of the fishery resource if the person
     (1) transports the fishery resource to a point outside the taxing jurisdiction of the state for subsequent processing or sale outside the taxing jurisdiction of the state;

     (2) sells the fishery resource outside the taxing jurisdiction of the state; or

     (3) has the fishery resource processed by a fisheries business in the state.

 (b) The rate of tax that shall be paid by a person whose liability for the tax is established by this section is the rate of tax that would have been due under AS 43.75.015 if the fisheries business that first actually and physically processed the fish had been liable to pay the tax.




Sec. 43.75.110. Duty of taxpayer and payment of tax.
A person subject to taxes under AS 43.75.100 shall make a return stating the value of fisheries resources taken, purchased, or otherwise acquired during the license year for sale to fisheries businesses outside of the taxing jurisdiction of the state computed as required by AS 43.75.100, and other information to carry out the provisions of AS 43.75.100 as may be prescribed by the department. The return must contain the license number and must be signed by the taxpayer or an authorized agent, under penalty of unsworn falsification in the second degree. If a receiver, trustee, or assign is operating the property or business, that person shall make the return for the person. A tax due on the basis of such return shall be collected in the same manner as if collected from the person of whose business the receiver, trustee, or assign has custody and control. The requirements for time and place of payment of tax, and the obligation to keep records and make the records available to the commissioner are the same as those prescribed in AS 43.75.011 — 43.75.050.


Sec. 43.75.120. Violations and penalties. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.220 and 43.05.290.]

Article 3. Refunds to Local Governments.


Sec. 43.75.130. Refund to local governments.
 (a) Except as provided in (d) of this section, the commissioner shall pay
     (1) to each unified municipality and to each city located in the unorganized borough, 50 percent of the amount of tax revenue collected in the municipality from taxes levied under this chapter;

     (2) to each city located within a borough, 25 percent of the amount of tax revenue collected in the city from taxes levied under this chapter; and

     (3) to each borough
          (A) 50 percent of the amount of tax revenue collected in the area of the borough outside cities from taxes levied under this chapter; and

          (B) 25 percent of the amount of tax revenue collected in cities located within the borough from taxes levied under this chapter.

 (b) [Repealed, {/n 20 ch 61 SLA 2014.]
 (c) [Repealed, § 7 ch 79 SLA 1986.]
 (d) Notwithstanding the provisions of (a)(2) and (a)(3)(B) of this section, the commissioner shall pay
     (1) to each city that is located in a borough incorporated after June 16, 1987 the following percentages of the tax revenue collected in the city from taxes levied under this chapter:
          (A) 45 percent of the taxes collected during the calendar year in which the borough is incorporated;

          (B) 40 percent of the taxes collected during the first calendar year after the calendar year in which the borough is incorporated;

          (C) 35 percent of the taxes collected during the second calendar year after the calendar year in which the borough is incorporated; and

          (D) 30 percent of the taxes collected during the third calendar year after the calendar year in which the borough is incorporated; and

     (2) to each borough that is incorporated after June 16, 1987 the following percentages of the tax revenue collected in the cities located within the borough from taxes levied under this chapter:
          (A) 5 percent of the taxes collected during the calendar year in which the borough is incorporated;

          (B) 10 percent of the taxes collected during the first calendar year after the calendar year in which the borough is incorporated;

          (C) 15 percent of the taxes collected during the second calendar year after the calendar year in which the borough is incorporated; and

          (D) 20 percent of the taxes collected during the third calendar year after the calendar year in which the borough is incorporated.

 (e) Notwithstanding the provisions of (d) of this section, a city may adopt an ordinance to transfer a portion of the funds received under (d)(1) of this section to the borough in which the city is located.

 (f) For purposes of this section, tax revenue collected under AS 43.75.015 from a person entitled to a credit under AS 43.75.035 shall be calculated as if the person’s tax were collected without applying the credit; tax revenue collected does not include the amount of a tax credit recaptured under AS 43.75.035(g).

 (g) In this section, “tax revenue collected” includes the amount credited against taxes under AS 43.75.018.




Sec. 43.75.133. Provision of information to municipalities.
 (a) If the mayor, manager, or administrator of a municipality makes a written request, the department shall furnish the mayor, manager, or administrator of the municipality the names of all fisheries businesses that have filed tax returns under this chapter in which the fisheries business listed the municipality as the location in which the fisheries business processed a fisheries resource subject to the tax imposed under this chapter.

 (b) If the mayor, manager, or administrator of a municipality makes a written request, the department shall verify that, as to a tax levied and collected by the municipality that is based on the value of fisheries resource processed in or transported to or within the municipality, the value of the fisheries resources reported by a fisheries business to the municipality and the value of the fisheries resources reported by the fisheries business to the department under this chapter are substantially the same. If the values are not substantially the same, the department shall permit the mayor, manager, or administrator of the municipality to inspect tax returns filed by the fisheries business with the department under this chapter, or shall furnish to the municipal officer a copy of the tax returns, if the department determines that the municipality provides adequate safeguards for the confidentiality of the returns and that the returns will be used by the municipality only for purposes of collection of its tax levied and collected on fisheries resources. In this subsection, the value of the fisheries resources reported by the fisheries business to the department and the value reported to the municipality are substantially the same if the values are equal or the variance between them does not exceed one percent of the greater value.




Sec. 43.75.135. Additional refund to boroughs and cities. [Repealed, § 13 ch 79 SLA 1979.]
Sec. 43.75.136. Appropriations to Commercial Fishing and Agriculture Bank. [Repealed, § 20 ch 117 SLA 1981.]
Sec. 43.75.137. Additional refund.
To the extent that appropriations are available for the purpose, and notwithstanding the requirement of AS 37.07.080(e) that approval of the office of management and budget is required, an amount equal to 50 percent of the tax revenue that is collected under this chapter from fisheries businesses and is not subject to division with a municipality under AS 43.75.130 shall be transmitted each fiscal year, without the approval of the office of management and budget, by the department to the Department of Commerce, Community, and Economic Development for disbursal to eligible municipalities under AS 29.60.450.


Sec. 43.75.140. [Renumbered as AS 43.75.290.]

Article 4. General Provisions.


Sec. 43.75.290. Definitions.
In this chapter,
     (1) “developing commercial fish species” means those species of fish and shellfish annually designated by the commissioner of fish and game under AS 16.05.050(a)(10);

     (2) “fisheries business” means a person who engages in processing fisheries resources for sale by freezing, cooking, salting, or other method and includes but is not limited to canneries, cold storages, freezer ships, and processing plants;

     (3) “fishery resource” means finfish, shellfish, and fish by-products, including but not limited to salmon, halibut, herring, flounder, crab, clam, cod, shrimp, and pollock;

     (4) “floating fisheries business” means a fisheries business which is not a shore-based fisheries business; the term includes, but is not limited to, a shore-based fisheries business as defined in (5)(B) of this section when it is removed from the state;

     (5) “shore-based fisheries business” means a fisheries business
          (A) operated from a facility which is permanently attached to the land; or

          (B) operated from a facility which remains in the same location in the state for the entire tax year;

     (6) “taking” means pursuing, fishing, capturing, or harvesting a fisheries resource in any manner;

     (7) “value” means
          (A) the market value of the fishery resource as determined by the prevailing price paid to fishermen for the unprocessed fishery resource of the same kind and quality by fisheries businesses in the same region or market area where the fishery resource was taken if
               (i) the taking of the fishery resource is done in a boat owned or leased by a person who holds a direct marketing fisheries business license under AS 43.75.020(c); and

               (ii) the fishery resource was sold to a buyer other than a fishery business licensed under AS 43.75.020(a);

          (B) for fisheries resources other than those described in (A) of this paragraph, the market value of the fishery resource if the taking of the fishery resource is done in company-owned or company-subsidized boats operated by employees of the company or in boats that are operated under lease to or from the company or other arrangement with the company and if the fishery resource is delivered to the company; in this subparagraph, “company” means a fisheries business, a subsidiary of a fisheries business, or a subsidiary of a parent company of a fisheries business; “company” does not include a direct marketing fisheries business licensed under AS 43.75.020(c); or

          (C) for fishery resources other than those described in (A) or (B) of this paragraph, the actual price paid for the fishery resource by the fisheries business to the fisherman, including indirect consideration and bonus amounts paid for fuel, supplies, gear, ice, handling, tender fees, or delivery, whether paid at the time of purchase of the fishery resource or tendered as a deferred or delayed payment; in this subparagraph, “delivery” means
               (i) transportation of the fishery resource from the boat or vessel on which the product was taken to a tender; or

               (ii) if delivery was not to a tender, transportation of the fishery resource from the boat or vessel on which the product was taken to a shore-based facility in which delivery of the fishery resource is normally accepted.




Article 1. Salmon Enhancement Tax.


Chapter 76. Fisheries Taxes and Assessments.

Sec. 43.76.001. Thirty percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of 30 percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A 30 percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the 30 percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.002. Twenty percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of 20 percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A 20 percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the 20 percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.003. Ten percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of 10 percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A 10 percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the 10 percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.004. Nine percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of nine percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A nine percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the nine percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.005. Eight percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of eight percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) An eight percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the eight percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.006. Seven percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of seven percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A seven percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the seven percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.007. Six percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of six percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A six percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the six percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.008. Five percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of five percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A five percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the five percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.009. Four percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of four percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A four percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the four percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.010. Three percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of three percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A three percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the three percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.011. Two percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of two percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A two percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the two percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.012. One percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of one percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A one percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in the region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the one percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.013. Fifteen percent salmon enhancement tax.
 (a) A person holding a limited entry permit under AS 16.43 shall pay a salmon enhancement tax at the rate of 15 percent of the value of salmon, as defined in AS 43.75.290, that the person removes from the state or transfers to a buyer in the state. The buyer shall collect the salmon enhancement tax at the time the salmon is acquired by the buyer.

 (b) A 15 percent salmon enhancement tax may only be levied or collected under (a) of this section
     (1) in a region designated by the commissioner of fish and game for the purpose of salmon production under AS 16.10.375;

     (2) if there exists in that region an association determined by the commissioner of fish and game to be a qualified regional association under AS 16.10.380; and

     (3) if the qualified regional association approves the 15 percent salmon enhancement tax under AS 43.76.015.




Sec. 43.76.015. Election to approve or terminate salmon enhancement tax.
 (a) A qualified regional association may conduct an election under this section after the commissioner of commerce, community, and economic development approves
     (1) the notice to be published by the qualified regional association;

     (2) the ballot to be used in the election; and

     (3) the registration and voting procedure for the approval or termination of the salmon enhancement tax.

 (b) The salmon enhancement tax is levied under AS 43.76.001 — 43.76.013 in a region on the effective date stated on the ballot if
     (1) it is approved by a majority vote of the eligible interim-use permit and entry permit holders voting in an election held under this section in the region; and

     (2) the election results are certified by the commissioner of commerce, community, and economic development.

 (c) In conducting an election under this section, a qualified regional association shall adopt the following procedures:
     (1) the qualified regional association for the region shall hold at least one public meeting not less than 30 days before the date on which ballots must be postmarked to be counted in the election to explain the reason for the proposed salmon enhancement tax and to explain the registration and voting procedure to be used in the election; the qualified regional association shall provide notice of the meeting by
          (A) mailing the notice to each eligible interim-use permit and entry permit holder;

          (B) posting the notice in at least three public places in the region; and

          (C) publishing the notice in at least one newspaper of general circulation in the region at least once a week for two consecutive weeks before the meeting;

     (2) the qualified regional association shall mail two ballots to each eligible interim-use permit and entry permit holder; the first ballot shall be mailed not more than 45 days before the dates ballots must be postmarked to be counted in the election; the second ballot shall be mailed not less than 15 days before the date ballots must be postmarked to be counted in the election; the qualified regional association shall adopt procedures to ensure that only one ballot from each eligible interim-use permit and entry permit holder is counted in the election;

     (3) the ballot must
          (A) indicate whether the election relates to a salmon enhancement tax under AS 43.76.001, 43.76.002, 43.76.003, 43.76.004, 43.76.005, 43.76.006, 43.76.007, 43.76.008, 43.76.009, 43.76.010, 43.76.011, 43.76.012, or 43.76.013;

          (B) ask the question whether the salmon enhancement tax shall be levied;

          (C) indicate the boundaries of the region in which the salmon enhancement tax will be levied;

          (D) provide an effective date for the levy of the salmon enhancement tax; and

          (E) indicate the date on which returned ballots must be postmarked in order to be counted;

     (4) the ballots shall be returned by mail and shall be counted by the commissioner of commerce, community, and economic development or by a person approved by the commissioner of commerce, community, and economic development.

 (d) The commissioner of commerce, community, and economic development shall certify the results of an election under this section if the commissioner determines that the requirements of (a) and (c) of this section have been satisfied.

 (e) Except as provided in AS 43.76.020(b)(2), an election to terminate a salmon enhancement tax shall be conducted under the same procedures established under (a), (c) and (d) of this section for an election to approve a salmon enhancement tax.

 (f) In this section, “eligible interim-use permit and entry permit holder” means an individual who, 90 days before the date ballots must be postmarked to be counted in an election under this section, is listed in the records of the Alaska Commercial Fisheries Entry Commission as the legal owner of an interim-use permit or an entry permit which authorizes the individual to fish commercially in an administrative area established by the Alaska Commercial Fisheries Entry Commission under AS 16.43.200, which is included, in whole or in part, in the region in which the election is held.




Sec. 43.76.020. Termination of salmon enhancement tax.
 (a) The salmon enhancement tax levied under AS 43.76.001 — 43.76.013 may be terminated by the commissioner of revenue upon majority vote at an election held under AS 43.76.015 in the region in which the salmon enhancement tax is levied.

 (b) A salmon enhancement tax shall be terminated by the commissioner of revenue under (a) of this section following an election in a region if
     (1) a petition is presented to the commissioner of commerce, community, and economic development requesting termination of the salmon enhancement tax which is signed by at least 25 percent of the number of persons who voted under AS 43.76.015 in the election approving the salmon enhancement tax in the region;

     (2) the commissioner of commerce, community, and economic development determines that there are no outstanding loans to the qualified regional association under AS 16.10.510 that are secured by the tax;

     (3) an election is held in accordance with AS 43.76.015; the ballot must ask the question whether the salmon enhancement tax for the region shall be terminated; the ballot must be worded so that a “yes” vote is for continuation of the salmon enhancement tax and a “no” vote is for termination of the salmon enhancement tax;

     (4) a majority of the eligible interim-use permit and entry permit holders who vote in the election cast a ballot for the termination of the salmon enhancement tax; and

     (5) the qualified regional association provides notice of the election in accordance with AS 43.76.015 within two months after receiving notice from the commissioner of commerce, community, and economic development that a valid petition under (1) of this subsection has been received.




Sec. 43.76.025. Collection of tax and disposition of proceeds.
 (a) Except as otherwise provided under (d) of this section, a buyer who acquires fishery resources that are subject to a salmon enhancement tax imposed under AS 43.76.001 — 43.76.013 shall collect the salmon enhancement tax at the time of purchase, and shall remit the total salmon enhancement tax collected during each month to the Department of Revenue by the last day of the next month.

 (b) A buyer who collects the salmon enhancement tax shall
     (1) maintain records reflecting the region designated under AS 16.10.375 in which the fishery resource was caught; and

     (2) report to the Department of Revenue by March 1 of each year the total value, as defined in AS 43.75.290, of the salmon caught in each region designated under AS 16.10.375 which the buyer has acquired during the preceding year.

 (c) The salmon enhancement tax collected under AS 43.76.001 — 43.76.028 shall be deposited in the general fund. The legislature may make appropriations based on this revenue to the Department of Commerce, Community, and Economic Development for the purpose of providing financing for qualified regional associations. The legislature may base an appropriation for a qualified regional association operating within a region designated under AS 16.10.375 on the value of the fisheries resources caught in that region rather than the value of the fisheries resources sold in that region if those values differ.

 (d) A direct marketing fisheries business licensed under AS 43.75.020(c) or a commercial fisherman who transfers possession of salmon to a buyer who is not a fisheries business licensed under AS 43.75 is liable for the payment of a salmon enhancement tax imposed by AS 43.76.001, 43.76.002, 43.76.003, 43.76.004, 43.76.005, 43.76.006, 43.76.007, 43.76.008, 43.76.009, 43.76.010, 43.76.011, 43.76.012, or 43.76.013 if, at the time possession of the salmon is transferred to a buyer, the salmon enhancement tax payable on the salmon has not been collected. If a direct marketing fisheries business or commercial fisherman is liable for payment of the salmon enhancement tax under this subsection, the direct marketing fisheries business or commercial fisherman shall comply with the requirements of (b) of this section to maintain records and to report the liability for payment of the tax. Notwithstanding (a) of this section, a person subject to this subsection shall remit the total salmon enhancement tax payable during the calendar year to the Department of Revenue before April 1 after close of the calendar year.




Sec. 43.76.028. Liability for tax on salmon shipped from state.
 (a) The owner of salmon removed from the state is liable for payment of a salmon enhancement tax imposed under AS 43.76.001 — 43.76.013 if, at the time the salmon are removed from the state, the tax payable on the salmon has not been collected by a buyer.

 (b) If the owner of salmon is liable for payment of the salmon enhancement tax under (a) of this section, the owner shall comply with the requirement of AS 43.76.025(b) to report the owner’s liability for payment of the tax.




Sec. 43.76.030. Accounting of financing received as a result of the salmon enhancement tax. [Repealed, § 19 ch 6 SLA 1998.]
Sec. 43.76.035. Exemption.
 (a) Except as provided under (b) of this section, AS 43.76.001 — 43.76.040 do not apply to salmon harvested under a special harvest area entry permit issued under AS 16.43.400.

 (b) Salmon harvested in a common property fishery conducted in a terminal harvest area under AS 16.10.455 are subject to a salmon enhancement tax levied under AS 43.76.001 — 43.76.040.




Sec. 43.76.040. Definition.
In AS 43.76.001 — 43.76.040, unless the context otherwise requires, “buyer” means a person who acquires possession of salmon from the person who caught the salmon regardless of whether there is an actual sale of the salmon but excluding a transfer to a person engaged solely in interstate transportation of goods for hire.


Secs. 43.76.110 — 43.76.130. Salmon marketing tax; Collection of tax; Definition. [Repealed, § 9, ch. 55, SLA 1993, as amended by § 1, ch. 111, SLA 1998, § 3, ch. 136, SLA 2002, and § 16, ch. 31, SLA 2004.]

Article 2. Dive Fishery Management Assessment.


Sec. 43.76.150. Dive fishery management assessment.
 (a) A dive fishery management assessment on fishery resources taken by dive gear shall be levied on the value of the fishery resource taken in a dive gear fishery. The species of fishery resources subject to the assessment and the rate of the assessment, as determined under (b) — (h) of this section, shall be determined by an election under AS 43.76.160.

 (b) A person holding a limited entry permit for dive gear or an interim-use permit for dive gear issued under AS 16.43 shall pay a dive fishery management assessment of one percent on a species of fishery resources that is subject to the assessment as determined by an election under AS 43.76.160, that is taken by dive gear, and that the person removes from the state or transfers to a buyer in the state.

 (c) A person holding a limited entry permit for dive gear or an interim-use permit for dive gear issued under AS 16.43 shall pay a dive fishery management assessment of two percent on a species of fishery resources that is subject to the assessment as determined by an election under AS 43.76.160, that is taken by dive gear, and that the person removes from the state or transfers to a buyer in the state.

 (d) A person holding a limited entry permit for dive gear or an interim-use permit for dive gear issued under AS 16.43 shall pay a dive fishery management assessment of three percent on a species of fishery resources that is subject to the assessment as determined by an election under AS 43.76.160, that is taken by dive gear, and that the person removes from the state or transfers to a buyer in the state.

 (e) A person holding a limited entry permit for dive gear or an interim-use permit for dive gear issued under AS 16.43 shall pay a dive fishery management assessment of four percent on a species of fishery resources that is subject to the assessment as determined by an election under AS 43.76.160, that is taken by dive gear, and that the person removes from the state or transfers to a buyer in the state.

 (f) A person holding a limited entry permit for dive gear or an interim-use permit for dive gear issued under AS 16.43 shall pay a dive fishery management assessment of five percent on a species of fishery resources that is subject to the assessment as determined by an election under AS 43.76.160, that is taken by dive gear, and that the person removes from the state or transfers to a buyer in the state.

 (g) A person holding a limited entry permit for dive gear or an interim-use permit for dive gear issued under AS 16.43 shall pay a dive fishery management assessment of six percent on a species of fishery resources that is subject to the assessment as determined by an election under AS 43.76.160, that is taken by dive gear, and that the person removes from the state or transfers to a buyer in the state.

 (h) A person holding a limited entry permit for dive gear or an interim-use permit for dive gear issued under AS 16.43 shall pay a dive fishery management assessment of seven percent on a species of fishery resources that is subject to the assessment as determined by an election under AS 43.76.160, that is taken by dive gear, and that the person removes from the state or transfers to a buyer in the state.

 (i) A dive fishery management assessment may only be levied or collected on a fishery resource in an administrative area if
     (1) there exists in that administrative area an association determined by the commissioner of fish and game to be a qualified regional dive fishery development association under AS 16.40.240; and

     (2) the species of fishery resource subject to the dive fishery management assessment and the rate of the dive fishery management assessment, as provided under (b) — (h) of this section, is approved by an election under AS 43.76.160.




Sec. 43.76.160. Election to approve, amend, or terminate dive fishery management assessment.
 (a) A qualified regional dive fishery development association may conduct an election under this section after the commissioner of fish and game approves
     (1) the notice to be published by the qualified regional dive fishery development association; the notice must describe the species of fishery resources subject to the dive fishery management assessment and the rate of the dive fishery management assessment to be approved, amended, or terminated at the election;

     (2) the ballot to be used in the election; and

     (3) the registration and voting procedure for the approval, amendment, or termination of the dive fishery management assessment.

 (b) The dive fishery management assessment is levied under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h) in an administrative area on the effective date stated on the ballot if
     (1) the assessment is approved by a majority vote of the eligible interim-use permit and entry permit holders voting in an election held in the administrative area under this section; and

     (2) the election results are certified by the commissioner of fish and game.

 (c) In conducting an election under this section, a qualified regional dive fishery development association shall adopt the following procedures:
     (1) the qualified regional dive fishery development association in the administrative area shall hold at least one public meeting not less than 30 days before the date on which ballots must be postmarked to be counted in the election to explain, as appropriate, the reason for approval or amendment of the proposed dive fishery management assessment, the reason for the proposed rate of the dive fishery management assessment, or the reason for termination of the dive fishery management assessment and to explain the registration and voting procedure to be used in the election; the qualified regional dive fishery development association shall provide notice of the meeting by
          (A) mailing the notice to each eligible interim-use permit and entry permit holder;

          (B) posting the notice in at least three public places in the administrative area; and

          (C) publishing the notice in at least one newspaper of general circulation in the administrative area at least once a week for two consecutive weeks before the meeting;

     (2) the qualified regional dive fishery development association shall mail two ballots to each eligible interim-use permit and entry permit holder; the first ballot shall be mailed not more than 45 days before the date ballots must be postmarked to be counted in the election; the second ballot shall be mailed not less than 15 days before the date ballots must be postmarked to be counted in the election; the qualified regional dive fishery development association shall adopt procedures to ensure that only one ballot from each eligible interim-use permit and entry permit holder is counted in the election;

     (3) the ballot must
          (A) indicate the species of fishery resources subject to the dive fishery management assessment;

          (B) indicate whether the election relates to a dive fishery management assessment under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h);

          (C) ask the question whether the dive fishery management assessment on the fishery resources addressed on the ballot shall be approved, amended, or terminated, as appropriate;

          (D) indicate the boundaries of the administrative area in which the dive fishery management assessment will be levied or terminated;

          (E) provide an effective date for the approval, amendment, or termination of the dive fishery management assessment; and

          (F) indicate the date on which returned ballots must be postmarked in order to be counted;

     (4) the ballots shall be returned by mail and shall be counted by an auditor selected by the qualified regional dive fishery development association and approved by the commissioner of fish and game; the qualified regional dive fishery development association shall pay the costs of counting the ballots.

 (d) The commissioner of fish and game shall certify the results of an election under this section if the commissioner determines that the requirements of (a) and (c) of this section have been satisfied.

 (e) A qualified regional dive fishery development association may employ or contract with another person to administer an election under this section subject to the supervision of the association.

 (f) Except as otherwise provided under AS 43.76.170 and 43.76.180, an election to amend the rate of a dive fishery management assessment or to terminate a dive fishery management assessment shall be conducted under the same procedures established under (a), (c), and (d) of this section for an election to approve a dive fishery management assessment.

 (g) In this section, “eligible interim-use permit and entry permit holder” means an individual who, 90 days before the date ballots must be postmarked to be counted in an election under this section, is listed in the records of the Alaska Commercial Fisheries Entry Commission as the legal holder of an interim-use permit for dive gear or an entry permit for dive gear that authorizes the individual to fish commercially in the administrative area for the species of fishery resource for which the dive fishery management assessment is to be approved, amended, or terminated.




Sec. 43.76.170. Amendment of dive fishery management assessment.
 (a) The rate of the dive fishery management assessment levied on a species of fishery resources under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h) may be amended by the commissioner of revenue upon majority vote at an election held under AS 43.76.160 in the administrative area in which the dive fishery management assessment is levied.

 (b) The commissioner of revenue shall amend the rate of a dive fishery management assessment under (a) of this section following an election in an administrative area if
     (1) a petition, that is signed by at least 25 percent of the number of persons who voted under AS 43.76.160 in the most recent election approving or amending the dive fishery management assessment on the species of fishery resources in the administrative area that are the subject of the petition, is presented to the commissioner of fish and game requesting amendment of the rate of the dive fishery management assessment on a species of fishery resources; the petition must state whether the proposed rate of the dive fishery management assessment is to be levied under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h); only a person who would be eligible to vote in an election to amend the rate of the assessment may validly sign the petition;

     (2) an election is held in accordance with AS 43.76.160; the ballot must ask the question whether the dive fishery management assessment on a species of fishery resources taken in the administrative area shall be amended and must state whether the dive fishery management assessment on the species of fishery resources is to be levied under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h) if the assessment is amended; the ballot must be worded so that a “yes” vote is for amendment of the dive fishery management assessment and a “no” vote is for continuation of the current dive fishery management assessment;

     (3) a majority of the eligible interim-use permit and entry permit holders who vote in the election cast a ballot for the amendment of the dive fishery management assessment; in this paragraph, “eligible interim-use permit and entry permit holders” has the meaning given in AS 43.76.160; and

     (4) the qualified regional dive fishery development association provides notice of the election in accordance with AS 43.76.160 within two months after receiving notice from the commissioner of fish and game that a valid petition under (1) of this subsection has been received.




Sec. 43.76.180. Termination of dive fishery management assessment.
 (a) The dive fishery management assessment levied on a species of fishery resources under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h) shall be terminated by the commissioner of revenue upon majority vote at an election held under AS 43.76.160 in the administrative area in which the dive fishery management assessment is levied.

 (b) The commissioner of revenue shall terminate a dive fishery management assessment under (a) of this section following an election in an administrative area if
     (1) a petition, that is signed by at least 25 percent of the number of persons who voted under AS 43.76.160 in the most recent election approving or amending the dive fishery management assessment on the species of fishery resources in the administrative area that are the subject of the petition, is presented to the commissioner of fish and game requesting termination of the dive fishery management assessment on a species of fishery resources; only a person who would be eligible to vote in an election to repeal the assessment may validly sign the petition;

     (2) an election is held in accordance with AS 43.76.160; the ballot must ask the question whether the dive fishery management assessment on a species of fishery resources taken in the administrative area shall be terminated; the ballot must be worded so that a “yes” vote is for continuation of the dive fishery management assessment and a “no” vote is for termination of the dive fishery management assessment;

     (3) a majority of the eligible interim-use permit and entry permit holders who vote in the election cast a ballot for the termination of the dive fishery management assessment; in this paragraph, “eligible interim-use permit and entry permit holders” has the meaning given in AS 43.76.160; and

     (4) the qualified regional dive fishery development association provides notice of the election in accordance with AS 43.76.160 within two months after receiving notice from the commissioner of fish and game that a valid petition under (1) of this subsection has been received.




Sec. 43.76.190. Collection of assessment.
 (a) Except as otherwise provided under (e) of this section, a buyer who acquires a fishery resource that is subject to a dive fishery management assessment levied under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h) shall collect the dive fishery management assessment at the time of purchase and shall remit the total dive fishery management assessment collected during each calendar quarter to the Department of Revenue by the last day of the month following the end of the calendar quarter. In this subsection, “calendar quarter” means each of the three-month periods ending March 31, June 30, September 30, and December 31.

 (b) A buyer who collects the dive fishery management assessment shall maintain records of the value of each species of fishery resources that is subject to an assessment that is purchased in each administrative area of the state.

 (c) The owner of fishery resources removed from the state is liable for payment of the dive fishery management assessment levied under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h) if, at the time the fishery resource is removed from the state, the assessment payable on the fishery resource has not been collected by a buyer. If the owner of the fishery resource is liable for payment of the dive fishery management assessment under this subsection, the owner shall comply with the requirements under (a) and (b) of this section to remit the assessment to the Department of Revenue and to maintain records.

 (d) The dive fishery management assessment collected under this section shall be deposited in the state treasury. Under AS 37.05.146(c), assessment receipts shall be accounted for separately, and appropriations from the account are not made from the unrestricted general fund.

 (e) A direct marketing fisheries business licensed under AS 43.75.020(c) or a commercial fisherman who transfers possession of a fishery resource to a buyer who is not a fisheries business licensed under AS 43.75 is liable for payment of a dive fishery management assessment levied under AS 43.76.150(b), (c), (d), (e), (f), (g), or (h) if, at the time possession of the fishery resource is transferred to a buyer, the dive fishery management assessment payable on the fishery resource has not been collected. If a direct marketing fisheries business or commercial fisherman is liable for payment of a dive fishery management assessment under this subsection, the direct marketing fisheries business or commercial fisherman shall comply with the requirement to maintain records under (b) of this section. Notwithstanding (a) of this section, a person subject to this subsection shall remit the total dive fishery management assessment payable during the calendar year to the Department of Revenue before April 1 after close of the calendar year.




Sec. 43.76.200. Funding for qualified regional dive fishery development associations.
 (a) The legislature may make appropriations of revenue collected under AS 43.76.190 to the Department of Fish and Game for funding of the qualified regional dive fishery development association in the administrative area in which the assessment was collected. Appropriations under this section are not made from the unrestricted general fund. Funds received under this section by a qualified regional dive fishery development association may be expended in accordance with the annual operating plan developed under (b) of this section.

 (b) The Department of Fish and Game shall develop an annual operating plan with the cooperation of the regional dive fishery development association and the Department of Environmental Conservation on or before a date specified by the Department of Fish and Game. The qualified regional dive fishery development association and the Department of Environmental Conservation shall cooperate with the Department of Fish and Game in the development of the annual operating plan. The annual operating plan must describe the activities for which the funding will be expended, including identification of species and areas for which bioassessment surveys will be conducted, a description of management and research activities to be performed, planning for dive fisheries, and administrative activities of the association. Funds appropriated to the Department of Fish and Game for funding of qualified regional dive fishery development associations may not be disbursed by the department or expended by the association, except for administration of the association, unless the annual operating plan has been approved by the association and the Department of Fish and Game. If an annual operating plan has not been approved by the association and the Department of Fish and Game, the Department of Fish and Game may not disburse and the association may not expend funds received from the department for administration of the association in an amount that exceeds the amount of administrative expenses authorized under the annual operating plan for the prior fiscal year.

 (c) A qualified regional dive fishery development association receiving funding under this section shall submit an annual financial report to the Department of Fish and Game on a form provided by the Department of Fish and Game. The Department of Fish and Game may, by regulation, require that a qualified regional dive fishery development association use a uniform system of accounting and may audit the use of funding received under this section by the association.

 (d) This section does not establish a dedication of a state tax or license.

 (e) This section does not restrict or qualify the authority of the Department of Fish and Game or the Board of Fisheries under AS 16.




Sec. 43.76.210. Definitions.
In AS 43.76.150 — 43.76.210,
     (1) “administrative area” means an area established by the Alaska Commercial Fisheries Entry Commission under AS 16.43.200 for regulating and controlling entry into fisheries using dive gear;

     (2) “buyer” means a person who acquires possession of a fishery resource from the person who caught the fishery resource, regardless of whether there is an actual sale of the fishery resource, but does not include a person engaged solely in interstate transportation of goods for hire;

     (3) “fishery resource” means fish, shellfish, or marine invertebrates taken or landed under the authority of a limited entry permit or interim-use permit issued under AS 16.43 for dive gear;

     (4) “qualified regional dive fishery development association” means an association that is qualified under AS 16.40.240;

     (5) “value” has the meaning given in AS 43.75.290.




Article 3. Salmon Fishery Assessment.


Sec. 43.76.220. Salmon fishery assessment.
 (a) A salmon fishery assessment shall be levied on the value of the salmon sold in a salmon fishery. The rate of the assessment, not to exceed five percent, and the termination date of the assessment shall be determined by an election under AS 43.76.230.

 (b) A salmon fishery assessment may only be levied or collected on salmon sold in a fishery if
     (1) there exists for that fishery an association determined by the commissioner of fish and game to be a qualified salmon fishery association under AS 16.40.250; and

     (2) the rate of the salmon fishery assessment is determined by an election under AS 43.76.230.




Sec. 43.76.230. Election to approve, amend, or terminate salmon fishery assessment.
 (a) A qualified salmon fishery association may conduct an election under this section after the commissioner of fish and game approves
     (1) the notice to be published by the qualified salmon fishery association; the notice must state that all salmon sold in the fishery are subject to the salmon fishery assessment, the rate of the salmon fishery assessment to be approved, amended, or terminated at the election, and the date on which the assessment would terminate under AS 43.76.250(a);

     (2) the ballot to be used in the election; and

     (3) the registration and voting procedure for the approval, amendment, or termination of the salmon fishery assessment.

 (b) The salmon fishery assessment is levied under AS 43.76.220 in a fishery on the effective date stated on the ballot if
     (1) the assessment is approved by a two-thirds majority vote of the eligible interim-use permit and entry permit holders in the fishery; and

     (2) the election results are certified by the commissioner of fish and game.

 (c) In conducting an election under this section, a qualified salmon fishery association shall adopt the following procedures:
     (1) the qualified salmon fishery association for the fishery shall make copies of the articles of incorporation and bylaws of the association available to all interim-use permit and entry permit holders in the fishery;

     (2) the qualified salmon fishery association for the fishery shall hold at least one public meeting not less than 30 days before the date on which ballots must be postmarked to be counted in the election to explain, as appropriate, the reason for approval or amendment of the proposed salmon fishery assessment, the reason for the proposed rate and the proposed termination date of the salmon fishery assessment, or the reason for termination of the salmon fishery assessment, and to explain the registration and voting procedure to be used in the election; the qualified salmon fishery association shall provide notice of the meeting by
          (A) mailing the notice to each eligible interim-use permit and entry permit holder;

          (B) posting the notice in at least three public places in the administrative area in which the fishery occurs; and

          (C) publishing the notice in at least one newspaper of general circulation in the administrative area in which the fishery occurs at least once a week for two consecutive weeks before the meeting;

     (3) the qualified salmon fishery association shall mail two ballots to each eligible interim-use permit and entry permit holder; the first ballot shall be mailed not more than 45 days before the date ballots must be postmarked to be counted in the election; the second ballot shall be mailed not less than 15 days before the date ballots must be postmarked to be counted in the election; the qualified salmon fishery association shall adopt procedures to ensure that only one ballot from each eligible interim-use permit and entry permit holder is counted in the election;

     (4) the ballot must
          (A) state that all salmon sold in the fishery are subject to the salmon fishery assessment;

          (B) state the rate of the assessment to be levied under AS 43.76.220 and the date on which the assessment would terminate under AS 43.76.250(a);

          (C) ask the question whether the salmon fishery assessment addressed on the ballot shall be approved, amended, or terminated, as appropriate;

          (D) indicate the fishery for which the salmon fishery assessment will be levied or terminated;

          (E) provide an effective date for the approval, amendment, or termination of the salmon fishery assessment; and

          (F) indicate the date on which returned ballots must be postmarked in order to be counted;

     (5) the ballots shall be returned by mail and shall be counted by an auditor selected by the qualified salmon fishery association and approved by the commissioner of fish and game; the qualified salmon fishery association shall pay the costs of counting the ballots.

 (d) The commissioner of fish and game shall certify the results of an election under this section if the commissioner determines that the requirements of (a) and (c) of this section have been satisfied.

 (e) A qualified salmon fishery association may employ or contract with another person to administer an election under this section subject to the supervision of the association.

 (f) Except as otherwise provided under AS 43.76.240 and 43.76.250, an election to amend the rate or termination date of a salmon fishery assessment or to terminate a salmon fishery assessment shall be conducted under the same procedures established under (a), (c), and (d) of this section for an election to approve a salmon fishery assessment.

 (g) In this section, “eligible interim-use permit and entry permit holder” means an individual who, 90 days before the date ballots must be postmarked to be counted in an election under this section, is listed in the records of the Alaska Commercial Fisheries Entry Commission as the legal holder of an interim-use permit for salmon fishing gear or an entry permit for salmon fishing gear that authorizes the individual to fish commercially in the salmon fishery for which the salmon fishery assessment is to be approved, amended, or terminated.




Sec. 43.76.240. Amendment of salmon fishery assessment.
 (a) The rate or termination date of the salmon fishery assessment levied on salmon under AS 43.76.220 may be amended by the commissioner of revenue upon a two-thirds majority vote at an election held under AS 43.76.230 among the eligible permit holders for the fishery in which the salmon fishery assessment is levied.

 (b) The commissioner of revenue shall amend the rate or termination date of a salmon fishery assessment under (a) of this section following an election among the eligible permit holders for the fishery if
     (1) a petition that is signed by at least 25 percent of the interim-use permit and entry permit holders in the fishery that is the subject of the petition is presented to the commissioner of fish and game requesting amendment of the rate or termination date of the salmon fishery assessment; the petition must state, as appropriate, the proposed rate or termination date of the salmon fishery assessment to be levied under AS 43.76.220; only a person who holds an interim-use permit or entry permit for the fishery at the time of signing the petition may validly sign the petition;

     (2) an election is held in accordance with AS 43.76.230; a ballot to amend the rate of the salmon fishery assessment must ask the question whether the rate of the salmon fishery assessment on salmon sold in the fishery shall be amended and must state the salmon fishery assessment to be levied under AS 43.76.220 and the termination date of the assessment if the assessment is amended; a ballot to amend the termination date of the salmon fishery assessment must ask the question whether the termination date of the salmon fishery assessment on salmon sold in the fishery shall be amended and must state the termination date of the salmon fishery assessment if the termination date is amended; the ballot must be worded so that a “yes” vote is for amendment of the salmon fishery assessment and a “no” vote is for continuation of the current salmon fishery assessment;

     (3) a two-thirds majority of the eligible interim-use permit and entry permit holders in the fishery casts a ballot for the amendment of the salmon fishery assessment; in this paragraph, “eligible interim-use permit and entry permit holder” has the meaning given in AS 43.76.230; and

     (4) the qualified salmon fishery association provides notice of the election in accordance with AS 43.76.230 within six months after receiving notice from the commissioner of fish and game that a valid petition under (1) of this subsection has been received.




Sec. 43.76.250. Termination of salmon fishery assessment.
 (a) The salmon fishery assessment levied under AS 43.76.220 shall be terminated by the commissioner of revenue on the termination date determined at an election held under AS 43.76.230 to establish or amend the assessment.

 (b) Notwithstanding (a) of this section, the commissioner of revenue shall terminate the salmon fishery assessment before the termination date determined at an election held under AS 43.76.230 to establish or amend the assessment, upon a two-thirds majority vote at an election held under AS 43.76.230 among the eligible permit holders for the fishery in which the salmon fishery assessment is levied.

 (c) The commissioner of revenue shall terminate a salmon fishery assessment under (b) of this section following an election among the eligible permit holders for the fishery if
     (1) a petition that is signed by at least 25 percent of the interim-use permit and entry permit holders in the fishery that is the subject of the petition is presented to the commissioner of fish and game requesting termination of the salmon fishery assessment; only a person who holds an interim-use permit or entry permit for the fishery at the time of signing the petition may validly sign the petition;

     (2) an election is held in accordance with AS 43.76.230; the ballot must ask the question whether the salmon fishery assessment shall be terminated; the ballot must be worded so that a “yes” vote is for continuation of the salmon fishery assessment and a “no” vote is for termination of the salmon fishery assessment;

     (3) a two-thirds majority of the eligible interim-use permit and entry permit holders in the fishery casts a ballot for the termination of the salmon fishery assessment; in this paragraph, “eligible interim-use permit and entry permit holder” has the meaning given in AS 43.76.230; and

     (4) the qualified salmon fishery association provides notice of the election in accordance with AS 43.76.230 within six months after receiving notice from the commissioner of fish and game that a valid petition under (1) of this subsection has been received.




Sec. 43.76.260. Collection of assessment.
 (a) Except as otherwise provided under (f) of this section, a buyer who acquires salmon that is subject to a salmon fishery assessment levied under AS 43.76.220 shall collect the salmon fishery assessment at the time of purchase and shall remit the total salmon fishery assessment collected during each month to the Department of Revenue by the last day of the next month.

 (b) A buyer who collects the salmon fishery assessment shall maintain records of the value of salmon that is subject to the assessment that is purchased in each salmon fishery of the state.

 (c) The owner of salmon removed from the state is liable for payment of the salmon fishery assessment levied under AS 43.76.220 if, at the time the salmon is removed from the state, the assessment payable on the salmon has not been collected by a buyer. If the owner of the salmon is liable for payment of the salmon fishery assessment under this subsection, the owner shall comply with the requirements under (a) and (b) of this section to remit the assessment to the department and to maintain records.

 (d) The salmon fishery assessment collected under this section shall be deposited in the state treasury.

 (e) The provisions of AS 43.05 and AS 43.10 apply to the enforcement and collection of a salmon fishery assessment levied under AS 43.76.220 — 43.76.280.

 (f) A direct marketing fisheries business licensed under AS 43.75.020(c) or a commercial fisherman who transfers possession of salmon to a buyer who is not a fisheries business licensed under AS 43.75 is liable for the payment of a salmon fishery assessment levied under AS 43.76.220 if, at the time possession of the fishery resource is transferred to a buyer, the salmon fishery assessment payable on the salmon has not been collected. If a direct marketing fisheries business or commercial fisherman is liable for payment of the salmon fishery assessment under this subsection, the direct marketing fisheries business or commercial fisherman shall comply with the requirement under (b) of this section to maintain records. Notwithstanding (a) of this section, a person subject to this subsection shall remit the total salmon fishery assessment payable during the calendar year to the Department of Revenue before April 1 after close of the calendar year.




Sec. 43.76.270. Funding for qualified salmon fishery associations.
 (a) The legislature may make appropriations of revenue collected under AS 43.76.260 to the Department of Fish and Game for funding of the qualified salmon fishery association for the fishery in which the assessment was collected. Funds received under this section by a qualified salmon fishery association may be expended in accordance with the annual operating plan developed under (b) of this section.

 (b) The Department of Fish and Game may assist a salmon fishery association in developing an annual operating plan. The annual operating plan must describe the activities for which the association intends to expend the funding received under this section, including consolidation of the fishing fleet in the salmon fishery, financial assistance to permit holders in the fishery to promote consolidation of the fishing fleet for the fishery, and administrative activities of the association.

 (c) A qualified salmon fishery association receiving funding under this section shall submit an annual report to the Department of Fish and Game and to the members of the association describing the activities of the association and how those activities are consistent with the articles of incorporation and bylaws of the association.

 (d) This section does not establish a dedication of a state tax or license.

 (e) This section does not restrict or qualify the authority of the Department of Fish and Game or the Board of Fisheries under AS 16.




Sec. 43.76.280. Definitions.
In AS 43.76.220 — 43.76.280,
     (1) “administrative area” means an area established by the Alaska Commercial Fisheries Entry Commission under AS 16.43.200 for regulating and controlling entry into salmon fisheries;

     (2) “buyer” has the meaning given in AS 43.76.040;

     (3) “fishery” has the meaning given in AS 16.43.990;

     (4) “qualified salmon fishery association” means an association that is qualified under AS 16.40.250;

     (5) “salmon” means salmon sold under the authority of a limited entry permit or interim-use permit issued under AS 16.43 for salmon;

     (6) “sold” means the transfer of ownership of salmon from an interim-use permit or entry permit holder to a buyer at the first point of sale;

     (7) “value” has the meaning given in AS 43.75.290.




Article 4. Permit Buy-Back Assessment.


Sec. 43.76.300. Permit buy-back assessment.
A person holding a limited entry permit or interim-use permit under AS 16.43 for a fishery subject to a permit buy-back assessment established by the Alaska Commercial Fisheries Entry Commission under AS 16.43.310 shall pay the permit buy-back assessment at the rate established by the commission on the value, as defined in AS 43.75.290, of fish that the person removes from the state or transfers to a buyer in the state under the authority conferred by the limited entry permit or interim-use permit. The buyer shall collect the permit buy-back assessment at the time the fish is acquired by the buyer.


Sec. 43.76.310. Collection of assessment.
 (a) Except as otherwise provided under (f) of this section, a buyer who acquires fish that are subject to a permit buy-back assessment imposed by AS 43.76.300 shall collect the permit buy-back assessment at the time of purchase and shall remit the total permit buy-back assessment collected during each month to the Department of Revenue by the last day of the next month.

 (b) A buyer who collects a permit buy-back assessment shall
     (1) maintain records of the value of fish purchased in the state that were subject to a permit buy-back assessment;

     (2) report the total value, as defined in AS 43.75.290, of the fish acquired during the preceding year that were subject to a permit buy-back assessment to the department by March 1 of each year.

 (c) The owner of fish removed from the state is liable for payment of a permit buy-back assessment imposed by AS 43.76.300 if, at the time the fish is removed from the state, the assessment payable on the fish has not been collected by a buyer. If the owner of the fish is liable for payment of the permit buy-back assessment under this subsection, the owner shall comply with the requirements under (a) and (b) of this section to remit the assessment to the department, to maintain records, and to report to the department.

 (d) A permit buy-back assessment collected under this section shall be deposited in the state treasury. The department shall separately account for the amounts collected and interest accrued on the amounts collected for each permit buy-back assessment imposed under AS 43.76.300. The legislature may appropriate revenue generated by a permit buy-back assessment and interest accrued on the assessment to the buy-back fund established for the fishery in which the assessment was collected for the purpose of supporting the buy-back program for that fishery under AS 16.43.310 and 16.43.320.

 (e) The provisions of AS 43.05 and AS 43.10 apply to the enforcement and collection of a permit buy-back assessment levied under AS 43.76.300 — 43.76.320.

 (f) A direct marketing fisheries business licensed under AS 43.75.020(c) or a commercial fisherman who transfers possession of fish to a buyer who is not a fisheries business licensed under AS 43.75 is liable for the payment of a permit buy-back assessment imposed by AS 43.76.300 if, at the time possession of the fish is transferred to a buyer, the permit buy-back assessment payable on the fish has not been collected. If a direct marketing fisheries business or commercial fisherman is liable for payment of a permit buy-back assessment under this subsection, the direct marketing fisheries business or commercial fisherman shall comply with the requirements under (b) of this section to maintain records and report the value of fish acquired during the preceding year. Notwithstanding (a) of this section, a person subject to this subsection shall remit the total permit buy-back assessment payable during the calendar year to the Department of Revenue before April 1 after close of the calendar year.




Sec. 43.76.320. Definition.
In AS 43.76.300 — 43.76.320, “buyer” means a person who acquires possession of fish from the person who caught the fish regardless of whether there is an actual sale of the fish, but does not include a person engaged solely in interstate transportation of goods for hire.


Article 5. Seafood Development Tax.


Sec. 43.76.350. Two percent seafood development tax.
 (a) A person holding a limited entry permit or interim-use permit under AS 16.43 shall pay a seafood development tax at the rate of two percent of the value, as defined in AS 43.75.290, of fishery resources taken in a fishery that the person removes from the state or transfers to a buyer in the state.

 (b) A two percent seafood development tax on fishery resources taken in a fishery may only be levied and collected under (a) of this section if
     (1) the commissioner of commerce, community, and economic development has designated an organization to be the qualified regional seafood development association for the seafood development region in which the fishery occurs; and

     (2) the two percent seafood development tax for the fishery is approved under AS 43.76.370.




Sec. 43.76.355. One and one-half percent seafood development tax.
 (a) A person holding a limited entry permit or interim-use permit under AS 16.43 shall pay a seafood development tax at the rate of 1.5 percent of the value, as defined in AS 43.75.290, of fishery resources taken in a fishery that the person removes from the state or transfers to a buyer in the state.

 (b) A 1.5 percent seafood development tax on fishery resources taken in a fishery may only be levied and collected under (a) of this section if
     (1) the commissioner of commerce, community, and economic development has designated an organization to be the qualified regional seafood development association for the seafood development region in which the fishery occurs; and

     (2) the 1.5 percent seafood development tax for the fishery is approved under AS 43.76.370.




Sec. 43.76.360. One percent seafood development tax.
 (a) A person holding a limited entry permit or interim-use permit under AS 16.43 shall pay a seafood development tax at the rate of one percent of the value, as defined in AS 43.75.290, of fishery resources taken in a fishery that the person removes from the state or transfers to a buyer in the state.

 (b) A one percent seafood development tax on fishery resources taken in a fishery may only be levied and collected under (a) of this section if
     (1) the commissioner of commerce, community, and economic development has designated an organization to be the qualified regional seafood development association for the seafood development region in which the fishery occurs; and

     (2) the one percent seafood development tax for the fishery is approved under AS 43.76.370.




Sec. 43.76.365. One-half percent seafood development tax.
 (a) A person holding a limited entry permit or interim-use permit under AS 16.43 shall pay a seafood development tax at the rate of 0.5 percent of the value, as defined in AS 43.75.290, of fishery resources taken in a fishery that the person removes from the state or transfers to a buyer in the state.

 (b) A 0.5 percent seafood development tax on fishery resources taken in a fishery may only be levied or collected under (a) of this section if
     (1) the commissioner of commerce, community, and economic development has designated an organization to be the qualified regional seafood development association for the seafood development region in which the fishery occurs; and

     (2) the 0.5 percent seafood development tax for the fishery is approved under AS 43.76.370.




Sec. 43.76.370. Election to approve, amend, or terminate seafood development tax.
 (a) A qualified regional seafood development association for a seafood development region may conduct an election under this section to approve, amend, or terminate a seafood development tax in one or more fisheries in a seafood development region after
     (1) the association pays a fee of $500 for each fishery in which an election is held; and

     (2) the commissioner of commerce, community, and economic development approves
          (A) the notice to be published by the qualified regional seafood development association;

          (B) the ballot to be used in the election; and

          (C) the registration and voting procedure for the approval, amendment, or termination of the seafood development tax.

 (b) The seafood development tax is levied under AS 43.76.350, 43.76.355, 43.76.360, or 43.76.365 on fishery resources taken in a fishery, or is amended or terminated, on the effective date stated on the ballot if
     (1) the levy, amendment, or termination of the tax is approved by a majority vote of the eligible interim-use permit and entry permit holders in the fishery who vote in an election held under this section;

     (2) at least 30 percent of the eligible interim-use permit and entry permit holders in the fishery cast a ballot in the election to levy, amend, or terminate the tax; and

     (3) the election results are certified by the commissioner of commerce, community, and economic development under (d) of this section.

 (c) In conducting an election under this section, the qualified regional seafood development association shall adopt the following procedures:
     (1) the association shall hold at least one public meeting, not less than 30 days before the date on which ballots must be postmarked to be counted in the election, to explain the reason for the proposed seafood development tax, the amendment of the tax, or the termination of the tax and to explain the registration and voting procedure to be used in the election; the association shall provide notice of the meeting by
          (A) mailing the notice to each eligible interim-use permit and entry permit holder;

          (B) posting the notice in at least three public places in the seafood development region in which the fishery occurs; and

          (C) publishing the notice in at least one newspaper of general circulation in the region at least once a week for two consecutive weeks before the meeting;

     (2) the association shall mail two ballots to each eligible interim-use permit and entry permit holder; the first ballot shall be mailed not more than 45 days before the date ballots must be postmarked to be counted in the election; the second ballot shall be mailed not less than 15 days before the date ballots must be postmarked to be counted in the election; the association shall adopt procedures to ensure that only one ballot from each eligible interim-use permit and entry permit holder is counted in the election;

     (3) the ballot must
          (A) indicate whether the election relates to a seafood development tax under AS 43.76.350, 43.76.355, 43.76.360, or 43.76.365;

          (B) indicate the fishery that is or will be subject to the seafood development tax to be levied or amended;

          (C) ask the question whether the seafood development tax shall be levied or amended, as appropriate;

          (D) indicate the geographic boundaries of the seafood development region in which the seafood development tax will be levied;

          (E) provide an effective date for the levy or amendment of the seafood development tax in the fishery; and

          (F) indicate the date on which returned ballots must be postmarked in order to be counted;

     (4) the ballots shall be returned by mail and shall be counted by the commissioner of commerce, community, and economic development or by a person approved by the commissioner of commerce, community, and economic development.

 (d) The commissioner of commerce, community, and economic development shall certify the results of an election under this section if the commissioner determines that the requirements of (a) — (c) of this section have been satisfied.

 (e) The rate of the seafood development tax levied in a seafood development region shall be uniform for all fisheries and fishery resources in the region.

 (f) If a seafood development tax has not been levied on a fishery resource in a seafood development region, the initial tax levied in any fishery in the region may be set at a rate set under AS 43.76.350, 43.76.355, 43.76.360, or 43.76.365 in accordance with procedures set out in this section. If a seafood development tax is currently levied on fishery resources in any fishery in a seafood development region, an election to approve the initial levy of a seafood development tax in another fishery in the region shall be for a levy of the tax at the current rate in the region. The election to approve the levy of a seafood development tax within a fishery shall be conducted among the eligible interim-use permit and entry permit holders in the fishery.

 (g) An election to amend the current rate of the seafood development tax within a seafood development region shall be conducted among the eligible interim-use permit holders and entry permit holders in each fishery within the region that has approved the levy of the tax under this section. In an election to amend the current rate of the seafood development tax within a region, a person shall receive, and may cast and have counted, a separate ballot for each fishery in the seafood development region that is subject to the tax for which the person is an eligible interim-use permit or entry permit holder.

 (h) Except as provided in AS 43.76.375, an election to terminate a seafood development tax within one or more fisheries in a seafood development region shall be conducted under the same procedures established under (a) — (d) of this section for an election to approve or amend a seafood development tax.

 (i) In this section, “eligible interim-use permit and entry permit holder” means an individual who, 90 days before the date ballots must be postmarked to be counted in an election under this section, is listed in the records of the Alaska Commercial Fisheries Entry Commission as the legal owner of an interim-use permit or an entry permit that authorizes the individual to operate commercial fishing gear in the fishery that is or will be subject to the seafood development tax that is the subject of the election.




Sec. 43.76.375. Termination of seafood development tax.
 (a) The seafood development tax levied under AS 43.76.350, 43.76.355, 43.76.360, or 43.76.365 may be terminated by the commissioner of revenue upon majority vote of eligible permit holders who vote in an election held under AS 43.76.370 in which at least 30 percent of the eligible permit holders cast a ballot. The seafood development tax may be terminated in one or more fisheries within a seafood development region under this section.

 (b) The commissioner of revenue shall terminate a seafood development tax under (a) of this section following an election conducted by the qualified seafood development association for the seafood development region if
     (1) a petition is presented to the commissioner of commerce, community, and economic development requesting termination of the seafood development tax in a fishery that is signed by at least 10 percent of the number of persons who are eligible to vote in an election under AS 43.76.370 to approve the levy of the seafood development tax in the fishery;

     (2) an election is held in accordance with AS 43.76.370; the ballot must ask the question whether the seafood development tax for the fishery shall be terminated; the ballot must be worded so that a “yes” vote is for continuation of the seafood development tax and a “no” vote is for termination of the seafood development tax;

     (3) a majority of the votes cast in the election by eligible interim-use permit and entry permit holders are for the termination of the seafood development tax;

     (4) at least 30 percent of the permit holders who are eligible to vote in the election cast a ballot in the election; and

     (5) the qualified regional seafood development association for the fishery provides notice of the election in accordance with AS 43.76.370 within two months after receiving notice from the commissioner of commerce, community, and economic development that a valid petition under (1) of this subsection has been received.




Sec. 43.76.380. Liability for tax on fishery resources sold to a buyer.
 (a) Except as provided under (c) of this section, a buyer who acquires a fishery resource that is subject to a seafood development tax levied under AS 43.76.350, 43.76.355, 43.76.360, or 43.76.365 shall collect the seafood development tax at the time of purchase, and shall remit the total tax collected during each month to the department by the last day of the next month.

 (b) A buyer who collects the seafood development tax shall
     (1) maintain records reflecting the fishery in which the fishery resource was caught; and

     (2) report to the Department of Revenue by March 1 of each year the total value, as defined in AS 43.75.290, of the fishery resources caught in each fishery that the buyer has acquired during the preceding year.

 (c) A commercial fisherman who transfers possession of a fishery resource to a buyer who is not a fisheries business licensed under AS 43.75 is liable for the payment of a seafood development tax levied under AS 43.76.350, 43.76.355, 43.76.360, or 43.76.365 if, at the time possession of the fishery resource is transferred to a buyer, the seafood development tax payable on the fishery resource has not been collected. If a commercial fisherman is liable for payment of the seafood development tax under this subsection, the commercial fisherman shall comply with the requirements under (b) of this section to maintain records and to make reports to the Department of Revenue. Notwithstanding (a) of this section, a person subject to this subsection shall remit the total seafood development tax payable during the calendar year to the Department of Revenue before April 1 after close of the calendar year.

 (d) The Department of Revenue shall deposit the seafood development tax collected under AS 43.76.350 — 43.76.399 in the general fund. The legislature may make appropriations based on this revenue to the Department of Commerce, Community, and Economic Development for the purpose of providing financing for qualified regional seafood development associations.




Sec. 43.76.385. Liability for tax on fishery resources shipped from the state.
 (a) The owner of fishery resources removed from the state is liable for payment of a seafood development tax levied under AS 43.76.350, 43.76.355, 43.76.360, or 43.76.365 if, at the time the fishery resources are removed from the state, the seafood development tax payable on the fishery resources has not been collected by a buyer.

 (b) If the owner of fishery resources is liable for payment of the seafood development tax under (a) of this section, the owner shall comply with the requirement of AS 43.76.380(b) to report the owner’s liability for payment of the tax.




Sec. 43.76.390. Exemption.
AS 43.76.350 — 43.76.399 do not apply to salmon harvested under a special harvest area entry permit issued under AS 16.43.400.


Sec. 43.76.399. Definitions.
In AS 43.76.350 — 43.76.399, unless the context otherwise requires,
     (1) “buyer” means a person who acquires possession of fishery resources from the person who caught the fishery resources regardless of whether there is an actual sale of the fishery resources but excluding a transfer to a person engaged solely in interstate transportation of goods for hire;

     (2) “fishery” has the meaning given in AS 16.43.990;

     (3) “qualified regional seafood development association” means an association designated as qualified under AS 44.33.065(a);

     (4) “seafood development region” means a region established under AS 44.33.065(b).




Chapter 77. Fishery Resource Landing Tax.

Sec. 43.77.010. Landing tax.
A person who engages or attempts to engage in a floating fisheries business in the state and who owns a fishery resource that is not subject to AS 43.75 but that is brought into the jurisdiction of, and first landed in, this state is liable for and shall pay a landing tax on the value of the fishery resource. The amount of the landing tax is
     (1) for a developing commercial fish species, as defined under AS 43.75.290, one percent of the value of the fishery resource at the place of landing;

     (2) for a fish species other than a developing commercial fish species, three percent of the value of the fishery resource at the place of the landing.




Sec. 43.77.015. Obligations and payments under fishery cooperative contracts.
 (a) The department shall deposit a payment made to the state under a contract subject to sec. 210(f), American Fisheries Act, P.L. 105-277, into the separate account established under AS 43.77.050(b).

 (b) An obligation imposed by a contract subject to sec. 210(f), American Fisheries Act, P.L. 105-277, shall be treated as if it were a tax under this chapter for purposes of AS 43.77.020. A payment made to satisfy the obligation imposed by the contract shall be treated as if it were tax revenue collected under this chapter for purposes of AS 43.77.060.




Sec. 43.77.020. Filing return and payment of tax.
 (a) A person subject to the tax under this chapter shall file a return stating the value of fishery resources landed in the state that are subject to the tax, the point of landing of the fishery resource, and other information the department requires by regulation.

 (b) The return shall be made on the basis of the calendar year. The return is due on the last day of the month following the month that the department posts the statewide average fish price calculated by the Department of Fish and Game for the calendar year for which the return is made, and any unpaid tax shall be paid with the return.

 (c) The department may, under regulations it adopts, grant a reasonable extension of time for the filing. A grant of an extension of time for filing does not extend the time for payment of the tax.

 (d) A person subject to the tax under this chapter shall make quarterly payments of the tax estimated to be due for the year, as required under (e) of this section. A taxpayer will be subject to an estimated tax penalty, determined by applying the interest rate specified in AS 43.05.225 to the underpayment for each quarter, unless the taxpayer makes estimated tax payments as required under (e) of this section.

 (e) A person subject to tax under this chapter shall make estimated quarterly tax payments on or before March 31, June 30, September 30, and December 31 of each year using one of the following methods:
     (1) four equal installments the sum of which is at least equal to the taxpayer’s tax liability under this chapter for the immediately preceding calendar year;

     (2) four equal installments the sum of which equals at least 90 percent of the taxpayer’s tax liability under this chapter for the current calendar year; or

     (3) four installments, calculated in each quarter, equal to 90 percent of the sum of the number of pounds of unprocessed fish of each species landed in the state during the quarter that are subject to tax under this chapter, multiplied by the respective statewide average price for each species posted by the department in the immediately preceding calendar year, multiplied by the applicable tax rate under this chapter.

 (f) By March 31 of each year, a taxpayer electing to use the method under (e)(3) of this section shall notify the department of the election. Once the election is made, the taxpayer may not change the estimated payment method until the following calendar year. If a taxpayer does not notify the department of an election to use the method under (e)(3) of this section, the department shall calculate the taxpayer’s estimated liability under (e)(1) and (2) of this section, and apply the estimated payment method that results in the lowest tax liability to determine the taxpayer’s underpayment and estimated tax penalty.




Sec. 43.77.030. Credit for other taxes paid.
The department shall grant a credit, not to exceed the taxpayer’s liability for the tax under this chapter on a fishery resource, to a taxpayer for taxes equivalent in nature to those imposed under AS 43.75 and AS 43.76 that are paid to another jurisdiction in which the fishery resource was either caught, processed, or sold.


Sec. 43.77.035. Tax credit for scholarship contributions.

Sec. 43.77.040. Credit for approved contributions.
 (a) A taxpayer who harvests a fishery resource under the provisions of a community development quota may claim as a credit, against not more than 45.45 percent of the tax under this chapter that is due on the value of the fishery resource harvested under the community development quota, the taxpayer’s contributions made during the tax year to a nonprofit corporation incorporated under the laws of the state that are used by the recipient for one or more of the following purposes:
     (1) scholarships for study in the state in the disciplines of fisheries management, fisheries business administration, or another related course or discipline;

     (2) training in the state for employment in the seafood industry;

     (3) making contributions of capital, in the form of loans or grants, to construct or improve
          (A) transportation facilities in the state such as airports and docks that are used for the unloading, transferring, or shipment of fisheries products; or

          (B) facilities in the state at which fisheries products are canned, frozen, or otherwise processed for inventory, including floating facilities that are documented under the laws of the United States as defined in 46 U.S.C. App. 801;

     (4) awarding grants for research projects relating to Alaska fisheries.

 (b) A taxpayer who makes a contribution that qualifies for the credit authorized by (a) of this section must apply to obtain the credit. The taxpayer shall apply to the department in the manner provided by the department by regulation, and shall provide to the commissioner all information relating to the contribution that may be required by the department. Upon receipt of a complete application, the department, in consultation with the Department of Commerce, Community, and Economic Development, shall approve or disapprove the application for the credit within 60 days.

 (c) The department shall revoke a prior approval of a tax credit and may not allow a tax credit under this section if (1) the department determines that the contribution does not qualify under (a) of this section; or (2) the taxpayer claiming the credit is in arrears in the payment of a tax levied in this title. For purposes of this subsection, a taxpayer is not in arrears if the payment is under administrative or judicial appeal.

 (d) A contribution allowed as a credit under this section may not be claimed as a credit under another provision of this title.




Sec. 43.77.045. Fisheries resource landing tax education credit.
 (a) In addition to the credit allowed under AS 43.77.040, a person engaged in a floating fisheries business is allowed a credit against the tax due under this chapter for cash contributions accepted for
     (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state;

     (2) secondary school level vocational education courses, programs, and facilities by a school district in the state;

     (3) vocational education courses, programs, and facilities by a state-operated vocational technical education and training school;

     (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association or by a public or private nonprofit elementary or secondary school in the state;

     (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state;

     (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government;

     (7) the Alaska higher education investment fund under AS 37.14.750;

     (8) funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of
          (A) tuition and textbooks;

          (B) registration, course, and programmatic student fees;

          (C) on-campus room and board at the postsecondary institution in the state that provides the dual-credit course;

          (D) transportation costs to and from a residential school approved by the Department of Education and Early Development under AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and

          (E) other related educational and programmatic costs;

     (9) constructing, operating, or maintaining a residential housing facility by a residential school approved by the Department of Education and Early Development under AS 14.16.200;

     (10) childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant;

     (11) science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and

     (12) the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state.

 (b) The amount of the credit is
     (1) 50 percent of contributions of not more than $100,000;

     (2) 100 percent of the next $200,000 of contributions; and

     (3) 50 percent of the amount of contributions that exceed $300,000.

 (c) Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used.

 (d) A contribution claimed as a credit under this section may not
     (1) be the basis for a credit claimed under another provision of this title; and

     (2) when combined with contributions that are the basis for credits taken during the taxpayer’s tax year under AS 21.96.070, 21.96.075, AS 43.20.014, AS 43.55.019, AS 43.56.018, AS 43.65.018, or AS 43.75.018, result in the total amount of the credits exceeding $5,000,000; if the taxpayer is a member of an affiliated group, then the total amount of credits may not exceed $5,000,000 for the affiliated group; in this paragraph, “affiliated group” has the meaning given in AS 43.20.145.

 (e) The credit under this section may not reduce a person’s tax liability under this chapter to below zero for any tax year. An unused credit or portion of a credit not used under this section for a tax year may not be sold, traded, transferred, or applied in a subsequent tax year.

 (f) In this section,
     (1) “dual-credit student” means a secondary level student in the state who simultaneously earns college and high school credit for a course;

     (2) “nonprofit organization” means a charitable or educational organization in the state that is exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue Code);

     (3) “school district” has the meaning given in AS 43.20.014;

     (4) “vocational education” has the meaning given in AS 43.20.014.




Sec. 43.77.046. Alaska veterans’ memorial endowment fund contribution credit. [Repealed, § 25 ch 46 SLA 2002.]
Sec. 43.77.050. Separate accounting.
 (a) [Repealed, § 28 ch 81 SLA 1996.]
 (b) The tax collected under this chapter shall be paid into a separate account in the general fund. The annual balance in the account may be appropriated by the legislature for revenue sharing under AS 43.77.060. The amount of all tax credits approved by the commissioner under AS 43.77.040(b) shall be deducted from amounts paid to municipalities under AS 43.77.060(a) — (c).




Sec. 43.77.060. Revenue sharing.
 (a) Subject to appropriation by the legislature and except as provided in (b) of this section, the commissioner shall pay to each
     (1) unified municipality and to each city located in the unorganized borough, 50 percent of the amount of tax revenue collected from taxes levied under this chapter on the fishery resource landed in the municipality and accounted for under AS 43.77.050(b);

     (2) city located within a borough, 25 percent of the amount of the tax revenue collected from taxes levied under this chapter on fishery resources landed in the city and accounted for under AS 43.77.050(b); and

     (3) borough
          (A) 50 percent of the amount of the tax revenue collected from taxes levied under this chapter on fishery resources landed in the area of the borough outside cities and accounted for under AS 43.77.050(b); and

          (B) 25 percent of the amount of the tax revenue collected from taxes levied under this chapter on fishery resources landed in cities located within the borough and accounted for under AS 43.77.050(b).

 (b) Notwithstanding the provisions of (a)(2) and (a)(3)(B) of this section, and subject to appropriation by the legislature, the commissioner shall pay to each
     (1) city that is located in a borough incorporated after January 1, 1994, the following percentages of the tax revenue collected from taxes levied under this chapter on fishery resources landed in the city and accounted for under AS 43.77.050(b):
          (A) 45 percent of the tax revenue collected during the calendar year in which the borough is incorporated;

          (B) 40 percent of the tax revenue collected during the first calendar year after the calendar year in which the borough is incorporated;

          (C) 35 percent of the tax revenue collected during the second calendar year after the calendar year in which the borough is incorporated; and

          (D) 30 percent of the tax revenue collected during the third calendar year after the calendar year in which the borough is incorporated; and

     (2) borough that is incorporated after January 1, 1994, the following percentages of the tax revenue collected from taxes levied under this chapter on fishery resources landed in the cities located within the borough and accounted for under AS 43.77.050(b):
          (A) five percent of the tax revenue collected during the calendar year in which the borough is incorporated;

          (B) 10 percent of the tax revenue collected during the first calendar year after the calendar year in which the borough is incorporated;

          (C) 15 percent of the tax revenue collected during the second calendar year after the calendar year in which the borough is incorporated; and

          (D) 20 percent of the tax revenue collected during the third calendar year after the calendar year in which the borough is incorporated.

 (c) Notwithstanding the provisions of (b) of this section, a city may adopt an ordinance to transfer a portion of the funds received under (b)(1) of this section to the borough in which the city is located.

 (d) To the extent that appropriations are available for the purpose, and notwithstanding the requirement of AS 37.07.080(e) that approval of the office of management and budget is required, an amount equal to 50 percent of the tax revenue that is collected under this chapter and is not subject to division with a municipality under (a) — (c) of this section shall be transmitted each fiscal year, without the approval of the office of management and budget, by the department to the Department of Commerce, Community, and Economic Development for disbursal to eligible municipalities under AS 29.60.450.

 (e) For purposes of this section, tax revenue collected under AS 43.77.010 from a person entitled to a credit under AS 43.77.045 shall be calculated as if the person’s tax had been collected without applying the credits.




Sec. 43.77.070. Regulations.
The department shall adopt regulations to implement and interpret this chapter.


Sec. 43.77.200. Definitions.
In this chapter,
     (1) “community development quota” has the meaning given that term in a regulation adopted by the Office of the Governor, under authority granted by art. III, secs. 1 and 24, Constitution of the State of Alaska, to implement a program of the North Pacific Fishery Management Council to set aside fisheries resources for community development purposes in western Alaska;

     (2) “engages or attempts to engage in a floating fishery business in the state” means conducting in the state an activity as part of an integrated mobile business involving the harvesting or taking, processing, transportation, or delivery of a fishery resource, including transfer of fishery resources or processed products, taking on and disembarking crew, taking on fuel or supplies, obtaining vessel or gear repairs, discharging wastes, seeking protection in sheltered waters, and any other related activity that makes a claim on the resources of the state;

     (3) “fishery resource” means finfish, shellfish, and fish by-products, including salmon, halibut, herring, flounder, crab, clams, cod, shrimp, and pollock;

     (4) “landing” means the act of unloading or transferring a fishery resource;

     (5) “process”
          (A) means any activity that modifies the physical condition of the resource, including butchering, freezing, salting, cooking, canning, dehydrating, or smoking;

          (B) does not include decapitating shrimp, or gutting, gilling, sliming, washing, or icing a resource solely for the purpose of maintaining the quality of the fresh resource;

     (6) “tax” means the fishery resource landing tax levied and collected under this chapter;

     (7) “value” means the unprocessed value of the fishery resource based on the statewide average price paid for the fisheries resource as reported during the year to the Department of Fish and Game under AS 16.05.690.




Chapter 80. Salmon Price Reports.

Sec. 43.80.010. [Renumbered as AS 43.99.010.]
Sec. 43.80.015. [Renumbered as AS 43.98.015.]
Sec. 43.80.020. Prosecution for failure to secure license. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.290(h).]
Sec. 43.80.030. Production of license. [Repealed, § 45 ch 113 SLA 1980.]
Sec. 43.80.035. Reporting of salmon prices. [Repealed, § 2 ch 49 SLA 1983.]
Sec. 43.80.040. [Renumbered as AS 43.99.950.]
Sec. 43.80.050. Reporting of wholesale salmon prices.
 (a) A fish processor engaged in the business of selling salmon products at wholesale and whose business sells more than 1,000,000 pounds of salmon products at wholesale during a calendar year shall submit to the department during the following calendar year, on a form provided by the department, reports of the prices received for and quantity of salmon products sold at wholesale by the processor or an affiliate of the processor. Not later than May 31 of each reporting year, a processor shall submit a report for the period January 1 through April 30 of the reporting year. Not later than September 30 of each reporting year, a processor shall submit a report for the period May 1 through August 31 of the reporting year. Not later than January 31 of each reporting year, a processor shall submit a report for the period September 1 through December 31 of the reporting year.

 (b) A report submitted by a processor under (a) or (c) of this section must include
     (1) the requested information for the following salmon product forms:
          (A) thermally processed salmon products;

          (B) fresh headed and gutted salmon products;

          (C) fresh fillet salmon products;

          (D) frozen headed and gutted salmon products;

          (E) frozen fillet salmon products;

          (F) salmon roe products;

     (2) the requested information regarding the total quantity of each salmon product form sold by providing the total number of
          (A) each size of container in which thermally processed salmon products were sold by the processor or its affiliate; and

          (B) pounds for each of the other salmon product forms sold by the processor or its affiliate; and

     (3) for sales to buyers that are not affiliates of the processor, the total quantity of each salmon product form sold by area of production by species, and the wholesale price received.

 (c) A sale to an affiliate of the processor may not be included in a report submitted under this section by a processor. However, the processor shall report sales by an affiliate at wholesale of salmon products that were obtained from the processor. The report must include a description of the products and the total quantity of each salmon product form sold by the affiliate by area of production by species and the wholesale prices received by the affiliate.

 (d) Information shall be reported for each size of the container in which the salmon is sold.

 (e) A person excluded from the fisheries business tax under AS 43.75.017 is exempt from the requirements of this section.

 (f) Each fish processor who submits a report under (a) of this section during a reporting year shall also submit an annual report of the quantity of salmon products produced by the processor or an affiliate of the processor between January 1 and December 31 of the reporting year. The report shall be submitted to the department not later than January 31 of the following reporting year. The report must include
     (1) a description of the products and the total quantity of each salmon product form produced by area of production by species for each of the salmon product forms listed in (b)(1) of this section; and

     (2) the requested information regarding the total quantity of each salmon product form produced by providing the total number of
          (A) each size of container in which thermally processed salmon products were produced by the processor or its affiliate; and

          (B) pounds for each of the other salmon product forms produced by the processor or its affiliate.




Sec. 43.80.055. Wholesale price averages; Alaska salmon price report.
 (a) Based on the information provided in reports submitted under AS 43.80.050, the department shall determine the average wholesale prices paid to fish processors and their affiliates for the sale of salmon products.

 (b) The department shall determine under this section the monthly and annual wholesale price averages for
     (1) each species of salmon for each size of the container in which thermally processed salmon products are sold;

     (2) each pound of other salmon products by area of production by species by product form.

 (c) The department shall publish the average wholesale prices paid for salmon products in a report entitled the “Alaska Salmon Price Report.”




Sec. 43.80.060. Report to the legislature.
Not later than March 15 of each year, the department shall make available to the legislature a report of average wholesale prices paid for salmon products and a report of the quantity of salmon products produced during the preceding calendar year. The department shall notify the legislature that the report is available.


Sec. 43.80.065. Confidentiality of reports.
Information in reports submitted under AS 43.80.050, and price averages calculated by the department from the information in the reports, are public information, except that information that identifies or could be used to identify a particular fish processor is confidential.


Sec. 43.80.095. Penalty.
The department may levy and collect a civil penalty of $50 per day on a fish processor that fails to submit a report as required under AS 43.80.050.


Sec. 43.80.100. Definitions.
In AS 43.80.050 — 43.80.100,
     (1) “affiliate of the processor” means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the processor;

     (2) “area of production” means the area in which a salmon product was processed by a fish processor; in this paragraph, “area” means one of the following areas:
          (A) Southeastern and Yakutat;

          (B) Prince William Sound;

          (C) Cook Inlet;

          (D) Kodiak;

          (E) Chignik;

          (F) Aleutian Islands, Atka-Amlia Islands, and Alaska Peninsula;

          (G) Bristol Bay; or

          (H) Kuskokwim, Yukon-Northern, Norton Sound-Port Clarence, and Kotzebue;

     (3) “container” means the can, pouch, or other similar container in which the salmon is thermally processed;

     (4) “control” means
          (A) owning directly or indirectly, or having the power to vote, not less than 10 percent of any class of voting securities of a corporation; or

          (B) influencing or affecting in any substantive manner the election of a majority of the directors or trustees of a corporation;

     (5) “fish processor” means a person engaging or attempting to engage in a business for which a license is required under AS 43.75.010 — 43.75.055;

     (6) “produce” means to process salmon into a salmon product;

     (7) “reporting year” means the calendar year after the calendar year in which a fish processor’s business sells more than 1,000,000 pounds of salmon products at wholesale;

     (8) “thermally processed” means processed by the application of heat to render the salmon free of microorganisms that are capable of reproducing in the salmon under normal nonrefrigerated conditions of storage or distribution;

     (9) “wholesale” means the first sale of a salmon product at wholesale after the fishery business tax was paid or became payable on the salmon from which the salmon product was produced;

     (10) “wholesale price” includes all receipts, whether in the form of money, credits, or other consideration, from the sale of a salmon product at wholesale, without deduction for the costs of property sold, materials used, insurance, labor, services, labeling, transportation, storage, interest, taxes, losses, or any other expense.




Article 1. Contracts for Payments in Lieu of Other Taxes.


Chapter 82. Alaska Stranded Gas Development Act.

Sec. 43.82.010. Purpose.
The purpose of this chapter is to
     (1) encourage new investment to develop the state’s stranded gas resources by authorizing establishment of fiscal terms related to that new investment without significantly altering tax and royalty methodologies and rates on existing oil and gas infrastructure and production;

     (2) allow the fiscal terms applicable to a qualified sponsor or the members of a qualified sponsor group, with respect to a qualified project, to be tailored to the particular economic conditions of the project and to establish those fiscal terms in advance with as much certainty as the Constitution of the State of Alaska allows; and

     (3) maximize the benefit to the people of the state of the development of the state’s stranded gas resources.




Sec. 43.82.020. Contracts for payments in lieu of other taxes and for royalty adjustments.
The commissioner may, under this chapter, negotiate terms for inclusion in a proposed contract with a qualified sponsor or qualified sponsor group providing for
     (1) periodic payment in lieu of one or more taxes that otherwise would be imposed by the state or a municipality on the qualified sponsor or members of the qualified sponsor group as a consequence of the sponsor’s or group’s participation in an approved qualified project under this chapter; and

     (2) certain adjustments regarding royalty under AS 43.82.220.




Article 2. Qualification and Application Procedures.


Sec. 43.82.100. Qualified project.
Based on information available to the commissioner, the commissioner may determine that a proposal for new investment is a qualified project under this chapter if the project
     (1) principally involves
          (A) the transportation of natural gas by pipeline to one or more markets, together with any associated processing or treatment;

          (B) the export of liquefied natural gas from the state to one or more other states or countries; or

          (C) any other technology that commercializes the shipment of natural gas within the state or from the state to one or more other states or countries;

     (2) would produce at least 500,000,000,000 cubic feet of stranded gas within 20 years from the commencement of commercial operations; and

     (3) is capable, subject to applicable commercial regulation and technical and economic considerations, of making gas available to meet the reasonably foreseeable demand in this state for gas within the economic proximity of the project.




Sec. 43.82.110. Qualified sponsor or qualified sponsor group.
The commissioner may determine that a person or group is a qualified sponsor or qualified sponsor group if the person or a member of the group
     (1) intends to own an equity interest in a qualified project, intends to commit gas that it owns to a qualified project, or holds the permits that the department determines are essential to construct and operate a qualified project; and

     (2) meets one or more of the following criteria:
          (A) owns a working interest in at least 10 percent of the stranded gas proposed to be developed by a qualified project;

          (B) has the right to purchase at least 10 percent of the stranded gas proposed to be developed by a qualified project;

          (C) has the right to acquire, control, or market at least 10 percent of the stranded gas proposed to be developed by a qualified project;

          (D) has a net worth equal to at least 10 percent of the estimated cost of constructing a qualified project;

          (E) has an unused line of credit equal to at least 15 percent of the estimated cost of constructing a qualified project.




Sec. 43.82.120. Applications.
 (a) A qualified sponsor or qualified sponsor group may submit to the department an application for development of a contract under AS 43.82.020 evidencing that the requirements of AS 43.82.100 and 43.82.110 are met. The application must be submitted in the manner and form and contain the information required by the department.

 (b) Along with an application submitted under (a) of this section, an applicant shall submit a proposed project plan for a qualified project that contains the following information based on the information known to the applicant at the time of application:
     (1) a description of the work accomplished as of the date of the application to further the project;

     (2) a schedule of proposed development activity leading to the projected commencement of commercial operations of the project;

     (3) a description of the development activity proposed to be accomplished under the proposed project plan;

     (4) a description of each lease or property that the applicant believes to contain the stranded gas that would be developed if the project was built;

     (5) a description of the methods and terms under which the applicant is prepared to make gas available to meet the reasonably foreseeable demand in this state for gas within the economic proximity of the project during the term of the proposed contract, including proposed pipeline transportation and expansion rules if pipeline transportation is a part of the proposed project;

     (6) a detailed description of options to mitigate the increased demand for public services and other negative effects caused by the project;

     (7) a detailed description of options for the safe management and operation of the project once it is constructed;

     (8) other information that the commissioner of revenue, in consultation with the commissioner of natural resources, considers necessary to make a determination that
          (A) the work accomplished as of the date of application, the schedule of proposed development activity, and the development activity proposed to be accomplished under the proposed project plan reflect a proposal for diligent development on the part of the applicant;

          (B) the proposed project plan does not materially conflict with the obligations of a lessee to the state under a lease or under a pool, unit, or other agreement with the state; and

          (C) the proposed project plan describes satisfactory methods and terms for accommodating reasonably foreseeable demand for gas in this state within the economic proximity of the project during the term of the proposed contract.

 (c) The requirements of (b) of this section do not diminish the obligations of a qualified sponsor or member of a qualified sponsor group to the state or restrict the authority of the commissioner of revenue or the commissioner of natural resources under any other law or agreement relating to a plan of development for a lease, pool, or unit.




Sec. 43.82.130. Qualified project plan.
A proposed project plan submitted under AS 43.82.120 may be approved as a qualified project plan under AS 43.82.140 if the proposed project plan
     (1) reflects a proposal for diligent development of the project on the part of the applicant;

     (2) does not materially conflict with the obligations of a lessee to the state under a lease or under a pool, unit, or other agreement with the state; and

     (3) describes satisfactory methods and terms for making gas available to meet the reasonably foreseeable demand in this state for gas within the economic proximity of the project during the term of the proposed contract.




Sec. 43.82.140. Review of applications and determination of qualifications.
 (a) The commissioner shall review an application submitted under AS 43.82.120 to determine whether the provisions of AS 43.82.100 concerning a qualified project and AS 43.82.110 concerning a qualified sponsor or qualified sponsor group have been met. The commissioner may approve an application only if those provisions have been met.

 (b) If the commissioner approves an application under (a) of this section, the commissioner and the commissioner of natural resources shall review the proposed project plan submitted with the application to determine whether the provisions of AS 43.82.130 have been met. The commissioner may approve the proposed project plan as a qualified project plan only if the commissioner of natural resources concurs in the approval.

 (c) The commissioner shall send to the applicant written notice of and the reasons for the determinations made under (a) and (b) of this section.




Sec. 43.82.150. Actions challenging determinations on applications.
 (a) Only an applicant under AS 43.82.120 who is aggrieved by a determination of the commissioner of revenue or the commissioner of natural resources under AS 43.82.140 may seek judicial review of the determination.

 (b) The only grounds for judicial review of a determination made under AS 43.82.140 are
     (1) failure to follow the qualification and application procedures set out in AS 43.82.100 — 43.82.180; or

     (2) abuse of discretion that is so capricious, arbitrary, or confiscatory as to constitute a denial of due process.




Sec. 43.82.160. Multiple applications for similar or competing qualified projects.
Nothing in this chapter prohibits different qualified sponsors or different qualified sponsor groups from submitting applications under AS 43.82.120 relating to similar or competing qualified projects or prohibits the commissioner of revenue or the commissioner of natural resources from reviewing and approving applications and proposed project plans under AS 43.82.140 relating to similar or competing qualified projects.


Sec. 43.82.170. Application deadline.
The commissioner of revenue or the commissioner of natural resources may not act on an application for a contract submitted under AS 43.82.120 unless the application is received by the Department of Revenue no later than March 31, 2005.


Sec. 43.82.180. Withdrawal of applications.
Subject to the terms of a reimbursement agreement under AS 43.82.240 or other agreement with the Department of Revenue, the Department of Natural Resources, the commissioner of revenue, or the commissioner of natural resources affecting the withdrawal of an application, a qualified sponsor or qualified sponsor group may withdraw an application submitted under AS 43.82.120 at any time before the date that the commissioner of revenue submits a contract to the governor under AS 43.82.430 without further obligation under this chapter.


Article 3. Contract Development.


Sec. 43.82.200. Contract development.
If the commissioner approves an application and proposed project plan under AS 43.82.140, the commissioner may develop a contract that may include
     (1) terms concerning periodic payment in lieu of one or more taxes as provided in AS 43.82.210;

     (2) terms developed under AS 43.82.220 relating to
          (A) timing and notice of the state’s right to take royalty in kind or in value; and

          (B) royalty value;

     (3) terms regarding the hiring of Alaska residents and contracting with Alaska businesses under AS 43.82.230;

     (4) terms regarding periodic payment to, or an equity or other interest in a project for, municipalities under AS 43.82.500;

     (5) terms regarding arbitration or alternative dispute resolution procedures;

     (6) terms and conditions for administrative termination of a contract under AS 43.82.445; and

     (7) other terms or conditions that are
          (A) necessary to further the purposes of this chapter; or

          (B) in the best interests of the state.




Sec. 43.82.210. Contract terms relating to payment in lieu of one or more taxes.
 (a) If the commissioner approves an application and proposed project plan under AS 43.82.140, the commissioner may develop proposed terms for inclusion in a contract under AS 43.82.020 for periodic payment in lieu of one or more of the following taxes that otherwise would be imposed by the state or a municipality on the qualified sponsor or member of a qualified sponsor group as a consequence of participating in an approved qualified project:
     (1) oil and gas production taxes and oil surcharges under AS 43.55;

     (2) oil and gas exploration, production, and pipeline transportation property taxes under AS 43.56;

     (3) [Repealed, § 6 ch 34 SLA 1999.]
     (4) Alaska net income tax under AS 43.20;

     (5) municipal sales and use tax under AS 29.45.650 — 29.45.710;

     (6) municipal property tax under AS 29.45.010 — 29.45.250 or 29.45.550 — 29.45.600;

     (7) municipal special assessments under AS 29.46;

     (8) a comparable tax or levy imposed by the state or a municipality after June 18, 1998;

     (9) other state or municipal taxes or categories of taxes identified by the commissioner.

 (b) If the commissioner chooses to develop proposed terms under (a) of this section, the commissioner shall, if practicable and consistent with the long-term fiscal interests of the state, develop the terms in a manner that attempts to balance the following principles:
     (1) the terms should, in conjunction with other factors such as cost reduction of the project, cost overrun risk reduction of the project, increased fiscal certainty, and successful marketing, improve the competitiveness of the approved qualified project in relation to other development efforts aimed at supplying the same market;

     (2) the terms should accommodate the interests of the state, affected municipalities, and the project sponsors under a wide range of economic conditions, potential project structures, and marketing arrangements;

     (3) the state’s and affected municipalities’ combined share of the economic rent of the approved qualified project under the contract should be relatively progressive; that is, the state’s and affected municipalities’ combined annual share of the economic rent of the approved qualified project generally should not increase when there are decreases in project profitability, or decrease when there are increases in project profitability;

     (4) the state’s and affected municipalities’ combined share of the economic rent of the approved qualified project under the contract should be relatively lower in the earlier years than in the later years of the approved qualified project;

     (5) the terms should allow the project sponsors to retain a share of the economic rent of the approved qualified project that is sufficient to compensate the sponsors for risks under a range of economic circumstances;

     (6) the terms should provide the state and affected municipalities with a significant share of the economic rent of the approved qualified project, when discounted to present value, under favorable price and cost conditions;

     (7) the method for calculating the periodic payment in lieu of certain taxes under the contract should be clear and unambiguous; and

     (8) while cost calculations for the approved qualified project under the contract should be based on amounts that closely approximate actual costs, agreed-upon formulas reflecting reasonable economic assumptions should be used if possible to promote administrative certainty and efficiency.

 (c) Except as provided in (b) of this section, the commissioner’s discretion under this section in developing proposed terms for a contract under AS 43.82.020 is not limited to consideration of the economic rent of the approved qualified project.




Sec. 43.82.220. Contract terms relating to royalty.
 (a) Notwithstanding any contrary provisions of AS 38, the commissioner of natural resources, with the concurrence of the commissioner of revenue and the affected parties holding a state lease or unit agreement, may develop proposed terms for inclusion in a contract under AS 43.82.020 that modify the timing and notice provisions of the applicable oil and gas leases and unit agreements pertaining to the state’s rights to receive its royalty on gas in kind or in value if
     (1) the viability of the approved qualified project depends on long-term gas purchase and sale agreements;

     (2) certainty over time regarding the quantity of royalty gas that the state may be taking in kind is needed to secure the long-term purchase and sale agreements;

     (3) the specified period of the state’s commitment to take its royalty share in value or in kind does not exceed the term of the purchase and sale agreements; and

     (4) the modification does not impair the ability of the approved qualified project or the state to meet the reasonably foreseeable demand in this state for gas within economic proximity of the project during the term of the contract developed under AS 43.82.020.

 (b) Notwithstanding any contrary provisions of AS 38, the commissioner of natural resources, with the concurrence of the commissioner of revenue and the affected parties holding a state lease or unit agreement, may develop proposed terms for inclusion in a contract under AS 43.82.020 that establish a valuation method for the state’s royalty share of the gas production from an approved qualified project.

 (c) The commissioner of revenue shall include any proposed terms relating to royalty developed in accordance with this section in the proposed contract under AS 43.82.400.

 (d) Nothing in this chapter permits modification of the state’s rights that relate to timing, notice, and rights to receive oil royalty in kind or in value under oil and gas leases or unit agreements.




Sec. 43.82.230. Contract terms relating to hiring of Alaska residents and contracting with Alaska businesses.
 (a) The commissioner shall include in a contract under AS 43.82.020 a term requiring the qualified sponsor or qualified sponsor group and contractors of the qualified sponsor or qualified sponsor group to comply with all valid federal, state, and municipal laws relating to hiring Alaska residents and contracting with Alaska businesses to work in the state on the approved qualified project and not to discriminate against Alaska residents or Alaska businesses. Within the constraints of law, the commissioner shall also include in a contract under AS 43.82.020 a term that requires the qualified sponsor or qualified sponsor group and contractors of the qualified sponsor or qualified sponsor group to employ Alaska residents and to contract with Alaska businesses to work in the state on the approved qualified project to the extent the residents and businesses are available, competitively priced, and qualified.

 (b) The commissioner shall include in a contract under AS 43.82.020 a term requiring the qualified sponsor or qualified sponsor group and contractors of the qualified sponsor or qualified sponsor group to
     (1) advertise for available positions in newspapers in the location where the work is to be performed and in other publications distributed throughout the state, including in rural areas; and

     (2) use Alaska job service organizations located throughout the state and not just in the location where the work is to be performed in order to notify Alaskans of work opportunities on the approved qualified project.

 (c) Subject to the voluntary agreement of the qualified sponsor, the commissioner may include a term in the contract providing for incentives to encourage training and hiring of Alaska residents.

 (d) This section does not create or abridge individual rights and does not create a private right of action for any person.

 (e) For purposes of this section,
     (1) “Alaska business” means a firm or contractor that
          (A) has held an Alaska business license for the preceding 12 months;

          (B) maintains, and has maintained for the preceding 12 months, a place of business in the state that competently and professionally deals in supplies, services, or construction of the nature required for the approved qualified project; and

          (C) is
               (i) a sole proprietorship and the proprietor is an Alaska resident;

               (ii) a partnership and more than 50 percent of the partnership interest is held by Alaska residents;

               (iii) a limited liability company and more than 50 percent of the membership interest is held by Alaska residents;

               (iv) a corporation that has been incorporated in the state or is authorized to do business in the state; or

               (v) a joint venture and a majority of the venturers qualify as Alaska businesses under this paragraph;

     (2) “Alaska job service organizations” means those offices maintained by the state and recommended by the Department of Labor and Workforce Development whose functions are to aid the unemployed or underemployed in finding employment;

     (3) “Alaska resident” means a natural person who
          (A) receives a permanent fund dividend under AS 43.23; or

          (B) is registered to vote under AS 15 and qualifies for a resident fishing, hunting, or trapping license under AS 16;

     (4) “available,” as applied to an Alaska resident or Alaska business, means that the resident or business is available for employment at the time required and is located anywhere in the state, not just in the area of the state where the work is to be performed;

     (5) “qualified,” as applied to an Alaska resident or Alaska business, means that the resident or business possesses the requisite education, training, skills, certification, or experience to perform the work necessary for a particular position or to perform a particular service.




Sec. 43.82.240. Use of an independent contractor.
 (a) The commissioner may use independent contractors to assist in the evaluation of an application or in the development of contract terms under AS 43.82.200. The commissioner may condition the development of a contract under AS 43.82.020 on an agreement by the applicant to reimburse the state for the reasonable expenses of independent contractors under this section. A reimbursement of expenses that is required in an agreement authorized by this subsection may not exceed $1,500,000 for each application.

 (b) An independent contractor selected under this section must sign an agreement regarding confidentiality and disclosures consistent with the determinations made under AS 43.82.310 before the contractor may review information that is determined confidential under AS 43.82.310.

 (c) Selection of an independent contractor under this section is not subject to AS 36.30 (State Procurement Code).




Sec. 43.82.250. Term of contract; effective date.
The term of a contract developed under AS 43.82.020 may be for no longer than is necessary to develop the stranded gas that is subject to the contract; however, the term of the contract may not exceed 35 years from the commencement of commercial operations of the approved qualified project.


Sec. 43.82.260. Change of parties to an application or a contract; assignment of interests.
 (a) A qualified sponsor or member of a qualified sponsor group may assign an interest in or add or withdraw a party to an application under AS 43.82.120 only if the commissioner has
     (1) made a finding that the assignment, addition, or withdrawal is consistent with the requirements of AS 43.82.110; and

     (2) given prior written approval for the assignment, addition, or withdrawal.

 (b) A contract developed under this chapter may provide for the assignment to or withdrawal of a qualified sponsor or member of a qualified sponsor group.

 (c) Upon being added to an application under this section, a party becomes a qualified sponsor or a member of a qualified sponsor group, as appropriate, for the relevant project.

 (d) The commissioner may not unreasonably withhold approval under (a) of this section, but may condition the approval in any way reasonably necessary to protect the fiscal interests of the state and to further the purposes of this chapter.

 (e) For purposes of this section, an assignment includes a transfer of stock or a partnership interest in a manner that changes control of a qualified sponsor or member of a qualified sponsor group.




Sec. 43.82.270. Project plans and work commitments.
A contract under AS 43.82.020 must include the qualified project plan approved under AS 43.82.140 and provisions for updating the plan at reasonable intervals until the commencement of commercial operations of the approved qualified project. The commissioner of revenue, in consultation with the commissioner of natural resources, may, as a term in a contract under AS 43.82.020, include work commitments or other obligations in the contract to be accomplished before the commencement of commercial operations of the approved qualified project.


Article 4. Requests for Information; Confidentiality; Disclosure of Information.


Sec. 43.82.300. Requests for information.
The commissioner of revenue or the commissioner of natural resources may request from an applicant information that the respective commissioner determines is necessary to perform the respective commissioner’s responsibilities under AS 43.82.140. If the application is approved under AS 43.82.140, the respective commissioner shall require the successful applicant to provide financial, technical, and market information regarding the qualified project that the respective commissioner determines is necessary for the purpose of developing contract terms for the qualified project under AS 43.82.200. If requested information is not provided, the commissioner of revenue may not continue to review the application under AS 43.82.140 or develop the contract under AS 43.82.200 — 43.82.270, as applicable.


Sec. 43.82.310. Disclosure of information; confidentiality.
 (a) An applicant may request confidential treatment of information that the applicant provides under AS 43.82.300 by clearly identifying the information and the reasons supporting the request for confidential treatment. The commissioner of revenue or the commissioner of natural resources, as appropriate, shall keep the information confidential until the commissioner determines whether the requirements of (b) of this section are met. If the commissioner of revenue or the commissioner of natural resources has not made a determination under (b) of this section within 14 days after receiving a request for confidential treatment, the request is considered denied. If the appropriate commissioner determines that the information does not meet the requirements of (b) of this section or if the commissioner fails to make a determination within 14 days, the commissioner shall return the information and any copies of it at the request of the applicant. If the commissioner of revenue or the commissioner of natural resources, as appropriate, returns information under this subsection, the commissioner shall cease review of the application or cease contract development under AS 43.82.200 — 43.82.270, as appropriate, unless the commissioner determines that the returned information is unnecessary to make a determination on the application or to develop contract terms under AS 43.82.200 — 43.82.270.

 (b) If requested by the applicant, information provided to the commissioner of revenue or the commissioner of natural resources under AS 43.82.300 shall be kept confidential if the commissioner receiving the information determines, upon an adequate showing by the applicant, that the information
     (1) is a trade secret or other proprietary research, development, or commercial information that the applicant treats as confidential;

     (2) affects the applicant’s competitive position; and

     (3) has commercial value that may be significantly diminished by public disclosure or that public disclosure is not in the long-term fiscal interests of the state.

 (c) Information determined to be confidential under (b) of this section is confidential under that subsection only so long as is necessary to protect the competitive position of the applicant, to prevent the significant diminution of the commercial value of the information, or to protect the long-term fiscal interests of the state. The commissioner of revenue or the commissioner of natural resources, as appropriate, may not release information that the commissioner has previously determined to be confidential under (b) of this section without providing the applicant notice and an opportunity to be heard.

 (d) Notwithstanding the limitation in (c) of this section, the Department of Revenue and the Department of Natural Resources may provide to one another, to the Department of Law, to the legislature, and to the Office of the Governor any information provided under AS 43.82.300 relevant to the implementation of this chapter or to the enforcement of state or federal laws. Information that is exchanged under this subsection that was determined to be confidential under (b) of this section remains confidential except as provided in (c) of this section. The portions of the records and files of the Department of Revenue, the Department of Natural Resources, the Department of Law, the legislature, and the Office of the Governor that reflect, incorporate, or analyze information that is determined to be confidential under (b) of this section are not public records except as provided in (c) of this section.

 (e) Notwithstanding the limitation in (c) of this section, information that is determined to be confidential under (b) of this section shall be disclosed on request by the commissioner of revenue, the commissioner of natural resources, or the attorney general to a legislator; to the legislative auditor; and, as directed by the chair or vice-chair of the Legislative Budget and Audit Committee, to the director of legislative finance, to the permanent employees of those divisions who are responsible for evaluating a contract under AS 43.82.020, and to agents or contractors of the legislative auditor or the director of legislative finance who are engaged to evaluate a contract under AS 43.82.020. Information that is determined to be confidential under (b) of this section may also be disclosed by the commissioner of revenue or the commissioner of natural resources to an independent contractor under AS 43.82.240 or to a municipal advisory group established under AS 43.82.510. Before confidential information is disclosed under this subsection, the person receiving the information must sign an appropriate confidentiality agreement.

 (f) If the commissioner of revenue chooses to develop a contract under AS 43.82.020, the portions of the records and files of the Department of Revenue, the Department of Natural Resources, the Department of Law, and a municipal advisory group established under AS 43.82.510 that reflect, incorporate, or analyze information that is relevant to the development of the position or strategy of the commissioner of revenue, the commissioner of natural resources, or the attorney general with respect to a particular provision that may be incorporated into the contract are not public records until the commissioner of revenue gives public notice under AS 43.82.410 of the commissioner’s preliminary findings and determination under AS 43.82.400. Nothing in this subsection
     (1) makes a record or file of the Department of Revenue, the Department of Natural Resources, or the Department of Law a public record that otherwise would not be a public record under AS 40.25.100 — 40.25.220;

     (2) affects the confidentiality provisions of (a) — (e) of this section; or

     (3) abridges a privilege recognized under the laws of this state, whether at common law or by statute or by court rule.




Article 5. Contract Review, Approval, and Termination.


Sec. 43.82.400. Preliminary findings and determination regarding the contract.
 (a) If the commissioner develops a proposed contract under AS 43.82.200 — 43.82.270, the commissioner shall
     (1) make preliminary findings and a determination that the proposed contract terms are in the long-term fiscal interests of the state and further the purposes of this chapter; and

     (2) prepare a proposed contract that includes those terms and shall submit the contract to the governor.

 (b) To make the preliminary findings and determination required by (a)(1) of this section, the commissioner shall compare the projected public revenue anticipated from the approved qualified project with the estimated operating and capital costs of the additional state and municipal services anticipated to arise from the construction and operation of the approved qualified project. The commissioner shall address the reasonably foreseeable effects of the proposed contract on the public revenue.

 (c) In conjunction with the making of preliminary findings and determination required by (a)(1) of this section, the commissioner shall describe the principal factors, including the projected price of gas, projected production rate or volume of gas, and projected recovery, development, construction, and operating costs, upon which the determination made under (a)(1) of this section is based. If the commissioner has previously submitted a proposed contract to the governor, the commissioner shall describe any material differences between the terms of the currently proposed contract and the previously proposed contract.




Sec. 43.82.410. Notice and comment regarding the contract.
The commissioner shall
     (1) give reasonable public notice of the preliminary findings and determination made under AS 43.82.400;

     (2) make copies of the proposed contract, the commissioner’s preliminary findings and determination, and, to the extent the information is not required to be kept confidential under AS 43.82.310, the supporting financial, technical, and market data, including the work papers, analyses, and recommendations of any independent contractors used under AS 43.82.240 available to the public and to
          (A) the presiding officer of each house of the legislature;

          (B) the chairs of the finance and resources committees of the legislature; and

          (C) the chairs of the special committees on oil and gas, if any, of the legislature;

     (3) offer to appear before the Legislative Budget and Audit Committee to provide the committee a review of the commissioner’s preliminary findings and determination, the proposed contract, and the supporting financial, technical, and market data; if the Legislative Budget and Audit Committee accepts the commissioner’s offer, the committee shall give notice of the committee’s meeting to the public and all members of the legislature; if the financial, technical, and market data that is to be provided must be kept confidential under AS 43.82.310, the commissioner may not release the confidential information during a public portion of a committee meeting; and

     (4) establish a period of at least 30 days for the public and members of the legislature to comment on the proposed contract and the preliminary findings and determination made under AS 43.82.400.




Sec. 43.82.420. Coordination of public and legislative review.
To the extent practicable, the commissioner shall coordinate the public comment opportunity provided under AS 43.82.410(4) with a review by the Legislative Budget and Audit Committee under AS 43.82.410(3).


Sec. 43.82.430. Final findings, determination, and proposed amendments; execution of the contract.
 (a) Within 30 days after the close of the public comment period under AS 43.82.410(4), the commissioner of revenue shall
     (1) prepare a summary of the public comments received in response to the proposed contract and the preliminary findings and determination;

     (2) after consultation with the commissioner of natural resources, if appropriate, and with the pertinent municipal advisory group established under AS 43.82.510, prepare a list of proposed amendments, if any, to the proposed contract that the commissioner of revenue determines are necessary to respond to public comments;

     (3) make final findings and a determination as to whether the proposed contract and any proposed amendments prepared under (2) of this subsection meet the requirements and purposes of this chapter.

 (b) After considering the material described in (a) of this section and securing the agreement of the other parties to the proposed contract regarding any proposed amendments prepared under (a) of this section, if the commissioner determines that the contract is in the long-term fiscal interests of the state, the commissioner shall submit the contract to the governor.

 (c) The commissioner’s final findings and determination under (a) of this section are final agency decisions under this chapter.




Sec. 43.82.435. Legislative authorization.
The governor may transmit a contract developed under this chapter to the legislature together with a request for authorization to execute the contract. A contract developed under this chapter is not binding upon or enforceable against the state or other parties to the contract unless the governor is authorized to execute the contract by law. The state and the other parties to the contract may execute the contract within 60 days after the effective date of the law authorizing the contract.


Sec. 43.82.440. Judicial review.
A person may not bring an action challenging the constitutionality of a law authorizing a contract enacted under AS 43.82.435 or the enforceability of a contract executed under a law authorizing a contract enacted under AS 43.82.435 unless the action is commenced within 120 days after the date that the contract was executed by the state and the other parties to the contract.


Sec. 43.82.445. Administrative termination of a contract.
 (a) The commissioner shall include terms in a contract developed under AS 43.82.020 that provide for administrative termination of a party’s rights under the procedures and conditions set out in this section if the party has
     (1) ceased to meet the requirements of AS 43.82.110 as a qualified sponsor or qualified sponsor group;

     (2) intentionally or fraudulently misrepresented, in whole or in part, material facts or circumstances upon which the contract was made;

     (3) failed to comply with a condition or material term of the contract or a provision of this chapter; or

     (4) failed to comply with the approved qualified project plan or any updated project plan.

 (b) Before administrative termination of a contract under this section, the commissioner shall give notice to the parties of the commissioner’s intent to terminate the contract and an opportunity to be heard. The commissioner may also provide the parties an opportunity to cure any deficiency that is the basis for the termination if the commissioner determines that curing the deficiency is appropriate under the circumstances.

 (c) Notwithstanding (a) and (b) of this section, the commissioner may not administratively terminate a contract after the party has committed full project funding except as provided in (e) of this section.

 (d) A party to a contract who is affected by the commissioner’s action to terminate under (a) of this section may file an appeal with the superior court under the Alaska Rules of Appellate Procedure.

 (e) The commissioner may provide terms and conditions in a contract developed under AS 43.82.020 upon which a party’s rights under the contract may be administratively terminated after the party commits full project funding.




Article 6. Municipal Participation.


Sec. 43.82.500. Obligation to share payments with municipalities.
If the commissioner develops a contract under AS 43.82.020 that includes terms that exempt a party to the contract, and the property, gas, products, and activities associated with the approved qualified project that is subject to the contract, from a municipal tax or assessment in accordance with AS 29.45.810 or AS 29.46.010(b), or AS 43.82.200 and 43.82.210, the commissioner shall include a term in the contract that the party pay a portion of the periodic payments due under the contract to the revenue-affected municipality.


Sec. 43.82.505. Payments to economically affected municipalities.
If the commissioner executes a contract under AS 43.82.020 that will produce one or more economically affected municipalities, the commissioner shall include a term in the contract that provides for a portion of the periodic payments to the economically affected municipalities under the principles in AS 43.82.520.


Sec. 43.82.510. Municipal advisory group.
 (a) If the commissioner approves an application and proposed project plan under AS 43.82.140 and decides to develop a contract under AS 43.82.020 and 43.82.200, the commissioner shall notify each revenue-affected municipality and economically affected municipality.

 (b) The mayor of a municipality notified by the commissioner under (a) of this section may appoint one representative to a municipal advisory group in relation to the application.

 (c) Each municipal advisory group serves until a final action is taken on the application for which the group was appointed.

 (d) Each municipal advisory group shall elect a chair.




Sec. 43.82.520. Duties of the commissioner of revenue in relation to municipal participation.
 (a) The commissioner shall meet with each municipal advisory group periodically to report on the development of the contract provisions that affect the municipalities.

 (b) In developing a contract under AS 43.82.200 — 43.82.270, the commissioner shall ensure that each revenue-affected municipality and economically affected municipality receives a fair and reasonable share of the payments provided under AS 43.82.210 in accordance with the following principles:
     (1) the share of the payments to revenue-affected municipalities should be given priority over payments to economically affected municipalities with due regard to the anticipated size of the tax base that the contract would exempt from municipal taxation by revenue-affected municipalities;

     (2) the share of the payments to municipalities should be determined with due regard to the anticipated economic and social burdens that would be imposed on the municipality by construction and operation of the project;

     (3) the respective shares of the total payments to the state and to municipalities should be fixed in a manner to ensure that their respective interests are aligned;

     (4) to the extent practicable, the periodic amounts paid to each of the municipalities should be stable and predictable; and

     (5) to the extent practicable, the provisions for sharing payments with municipalities should be consistent with the principles established in AS 43.82.210(b).

 (c) In establishing the municipal shares under (b) of this section, the commissioner shall consult with the pertinent municipal advisory group.




Article 7. Miscellaneous Provisions.


Sec. 43.82.600. Governing law.
If a provision of this chapter conflicts with another provision of state or municipal law, the provision of this chapter governs.


Sec. 43.82.610. Regulations.
The commissioner of revenue, the commissioner of natural resources, and the commissioner of labor and workforce development may adopt regulations to carry out their respective duties under this chapter.


Sec. 43.82.620. Procedures for collection of amounts due; security.
 (a) The commissioner may adopt procedures for the collection of amounts due the state under a contract developed under AS 43.82.020, including the collection of interest and penalties.

 (b) The commissioner may require a party to a contract developed under AS 43.82.020 to provide security sufficient to guarantee amounts due under the contract.




Sec. 43.82.630. Reports and audits.
The commissioner may require periodic reports from and may at reasonable intervals conduct audits and inspect the books of a party that has entered into a contract developed under AS 43.82.020 to ensure compliance with the provisions of this chapter and the regulations adopted under this chapter and of the terms of the contract.


Sec. 43.82.640. Annual report of the commissioner of labor and workforce development.
On an annual basis, the commissioner of labor and workforce development shall prepare and present to the legislature a comprehensive report on each party to a contract with the state developed under AS 43.82.020, and its contractors, regarding the state residency of the employees working in this state on the approved qualified proj