State of Alaska
Fiscal Note
Bill Version: CSHB 87(FIN)
2019 Legislative Session
Fiscal Note Number: 2
(H) Publish Date: 5/11/2019
Identifier: HB087-DOR-TAX-5-09-2019 Department: Department of Revenue
Title: LIQUEFIED NATURAL GAS STORAGE TAX Appropriation: Taxation and Treasury
CREDIT Allocation: Tax Division
Sponsor: THOMPSON OMB Component Number: 2476
Requester: (H) Energy
Expenditures/Revenues
Note: Amounts do not include inflation unless otherwise noted below. (Thousands of Dollars)
Included in
FY2020 Governor's
Appropriation FY2020 Out-Year Cost Estimates
Requested Request
OPERATING EXPENDITURES FY 2020 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
Personal Services
Travel
Services
Commodities
Capital Outlay
Grants & Benefits
Miscellaneous
Total Operating 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Fund Source (Operating Only)
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Positions
Full-time
Part-time
Temporary
Change in Revenues
None *** ***
Total *** 0.0 *** 0.0 0.0 0.0 0.0
Estimated SUPPLEMENTAL (FY2019) cost: 0.0 (separate supplemental appropriation required)
Estimated CAPITAL (FY2020) cost: 0.0 (separate capital appropriation required)
Does the bill create or modify a new fund or account? No
(Supplemental/Capital/New Fund - discuss reasons and fund source(s) in analysis section)
ASSOCIATED REGULATIONS
Does the bill direct, or will the bill result in, regulation changes adopted by your agency? No
If yes, by what date are the regulations to be adopted, amended or repealed?
Why this fiscal note differs from previous version/comments:
This is for the CS (31-LS0619U). The main changes for the fiscal note are the timing of the credit expiration and the maximum
allowable credit for the extension. Version U based on the 2-13-19 Governor's FY2020 request.
Prepared By: Colleen M. Glover, Director Phone: (907)269-1033
Division: Tax Division Date: 05/09/2019 12:00 PM
Approved By: Brad Ewing, Administrative Services Director Date:
OUT OF
05/09/19
Agency: Office of Management and Budget REPORTED
Printed 5/11/2019 Page 1 of 2 HFC 05/11/2 019
Control Code: mNRJS
 CSHB 87(FIN) - Fiscal Note 2
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. HB 87
2019 LEGISLATIVE SESSION
Analysis
Background
The existing liquefied natural gas (LNG) storage facility tax credit under AS 43.20.047 applies to a facility that commences
commercial operation before January 1, 2020. This bill extends the credit to a facility that commences commercial
operation before January 1, 2021. The bill reduces the maximum amount of the credit to $5 million of the costs incurred
to establish or expand the facility if the facility commences commercial operation on or after January 1, 2020 and before
January 1, 2021. The bill does not include a lesser of provision for a facility that commences commercial operation on or
after January 1, 2020 and before January 1, 2021 (i.e. lesser of 50% of costs incurred).
The affected entities are owner(s) of LNG storage facilities. They can include corporations and partnerships. The current
maximum amount of the credit an entity may claim is the lesser of $15 million or 50% of the costs incurred to establish or
expand the facility. This credit maximum stays in place for any facility that commences operations before January 1, 2020.
The facility 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 expansion of the facility, the expansion must increase capacity by not less than 25,000 gallons of
liquefied natural gas. It must also be regulated under AS 42.05 as a utility.
If the LNG storage facility for which a credit was claimed and received ceases commercial operation during the nine
calendar years immediately following the year that the facility commences commercial operation, the credit is considered
to be earned ratably over ten years and the amount not yet earned becomes a liability to the state.
Revenue Impact
***The revenue impact of this bill is indeterminate.
This tax credit may be applied against tax liability under the Alaska Net Income Tax Act, AS 43.20. Alternatively, AS
43.20.047(e) provides that the tax credit may be purchased by the Department of Revenue from money available in the oil
and gas tax credit fund in AS 43.55.028. This could include any money disbursed to the Commissioner of Revenue for
payments under AS 43.55.028 from the Alaska Tax Credit Certificate Bond Corporation reserve fund.
Implementation Cost
As this credit is already in place and used by a limited number of entities, its extension will not result in additional costs of
administration.
The bill has an immediate effective date.
(Revised 9/05/18 OMB/LFD) Page 2 of 2
HB087-DOR-TAX-5-09-2019 Page 2 of 2 Control Code: mNRJS


Statutes affected:
HB0087A, AM HB 87, introduced 03/08/2019: 43.20.047
HB0087B, AM CSHB 87(FIN), introduced 05/13/2019, passed House 05/14/2019: 43.20.047