(a) If the commissioner approves an application and proposed project plan under Alaska Stat. § 43.82.140, the commissioner may develop proposed terms for inclusion in a contract under Alaska Stat. § 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:

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Terms Used In Alaska Statutes 43.82.210

  • Contract: A legal written agreement that becomes binding when signed.
  • municipality: means a political subdivision incorporated under the laws of the state that is a home rule or general law city, a home rule or general law borough, or a unified municipality. See Alaska Statutes 01.10.060
  • property: includes real and personal property. See Alaska Statutes 01.10.060
  • state: means the State of Alaska unless applied to the different parts of the United States and in the latter case it includes the District of Columbia and the territories. See Alaska Statutes 01.10.060
(1) oil and gas production taxes and oil surcharges under Alaska Stat. Chapter 43.55;
(2) oil and gas exploration, production, and pipeline transportation property taxes under Alaska Stat. Chapter 43.56;
(3)[Repealed, Sec. 6 ch 34 SLA 1999].
(4) Alaska net income tax under Alaska Stat. Chapter 43.20;
(5) municipal sales and use tax under Alaska Stat. § 29.45.650 – 29.45.710;
(6) municipal property tax under Alaska Stat. § 29.45.010 – 29.45.250 or 29.45.550 – 29.45.600;
(7) municipal special assessments under Alaska Stat. Chapter 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 Alaska Stat. § 43.82.020 is not limited to consideration of the economic rent of the approved qualified project.
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