Bill Summary – FastDemocracy

State of Alaska
                                                             Fiscal Note
                                                                                                Bill Version:                    SCS CSHB 50(FIN)
 2024 Legislative Session
                                                                                                Fiscal Note Number:              18
                                                                                                (S) Publish Date:                5/12/2024
 Identifier:        HB050CS(SFIN)-DOR-TAX-5-12-24                                 Department:       Department of Revenue
 Title:             CARBON STORAGE                                                Appropriation: Taxation and Treasury
 Sponsor:           RLS BY REQUEST OF THE GOVERNOR                                Allocation:       Tax Division
 Requester: (S) Finance                                                           OMB Component Number:              2476
 Expenditures/Revenues
 Note: Amounts do not include inflation unless otherwise noted below.                                                                 (Thousands of Dollars)
                                                 Included in
                                    FY2025       Governor's
                                Appropriation      FY2025                                              Out-Year Cost Estimates
                                  Requested       Request
 OPERATING EXPENDITURES               FY 2025        FY 2025       FY 2026                        FY 2027           FY 2028           FY 2029         FY 2030
 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                                             ***              ***               ***               ***                ***            ***                ***
 Estimated SUPPLEMENTAL (FY2024) cost:                                      0.0             (separate supplemental appropriation required)
 Estimated CAPITAL (FY2025) cost:                                           0.0             (separate capital appropriation required)
 Does the bill create or modify a new fund or account?       Yes
 (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?                   Yes
 If yes, by what date are the regulations to be adopted, amended or repealed?                                   01/01/25
 Why this fiscal note differs from previous version/comments:
 Updated for Senate Finance CS which removed the income tax on passthrough entities producing or transporting oil or gas in the state
 and clarified allowable lease expenditures.
 Prepared By:             Fadil Limani, Deputy Commissioner                                                           Phone:      (907)465-3761
 Division:                Commissioner's Office
                                                                    REPORT                                            Date:       05/12/2024
                                                                                  ED
                                                                     SFC 05/1 OUT OF
 Approved By:             Janelle Earls, Administrative Services Director                                             Date:       05/12/24
 Agency:                  Department of Revenue
                                                                                   2/2024
Printed 5/12/2024                                                     Page 1 of 2                                                            Control Code: hNlEx
                                                                                                    SCS CSHB 50(FIN) - Fiscal Note 18
                                                 FISCAL NOTE ANALYSIS
STATE OF ALASKA                                                                  BILL NO. SCS CSHB 50(FIN)
2024 LEGISLATIVE SESSION
Analysis
   Background ‐ CCUS
   The last several years have witnessed a rapid acceleration of interest in Carbon Capture, Utilization, and Sequestration
   (CCUS) technologies and projects. CCUS projects seek to capture anthropogenic CO2, chiefly from industrial sources, and
   inject the CO2 stream into underground geologic formations in order to permanently sequester the carbon rather than
   emit it into the atmosphere.
   Federal Legislation in 2022 and 2023, primarily the Inflation Reduction Act, has increased the amount of an existing credit
   known as the "45Q." The 45Q, in short, allows for a credit against federal corporate income taxes on a per ton of CO2
   basis for either sequestration of CO2 for permanent storage or for enhanced oil recovery (at a lower credit level). Under
   current law, C‐Corporations doing business in the state are subject to corporate income tax (CIT) under AS 43.20.
   This bill would empower regulatory agencies to apply for class VI primacy from the federal government and establish a
   framework for application, storage, potential remediation of Carbon Capture, Sequestration, Utilization and Storage. It
   establishes several funds for the deposit of moneys generated from the program. The department believes that the funds
   can be established and invested using existing resources.
   Revenue Impact ‐ CCUS
   The tax revenue potential of the bill is uncertain at this stage. The current version of the bill disallows the federal pass‐
   through of the 45Q Tax Credit against the State's Corporate Income Tax, as well as excludes any carbon capture or storage
   costs as lease expenditures for Oil & Gas Production Tax, which in combination prevent a negative revenue impact.
   However, CCUS projects could potentially impact revenues from Oil & Gas Property Tax depending on new infrastructure
   placed into service.
   Implementation Cost – All Tax Changes
   The department would need to update its Tax Revenue Management System (TRMS) and Revenue Online (ROL) which
   allows a taxpayer to file a return online. The programming will not be substantial, given that both tax types are already
   programmed and will require only minor changes. The department will need to adopt regulations to clarify allowable
   lease costs when an enhanced oil recovery facility transitions to a carbon storage facility. These implementation costs will
   be absorbed by the department using existing resources.
(Revised 10/31/2023 OMB/LFD)                                                                                        Page 2 of 2
HB050CS(SFIN)-DOR-TAX-5-12-24                                  Page 2 of 2                                               Control Code: hNlEx
Statutes affected: 
HB0050A, AM HB 50, introduced 01/27/2023: 31.05.027, 38.05.180, 38.05.730, 31.05.030, 41.06.180, 41.06.155, 41.06.175, 41.06.210, 38.05.069, 38.05.135, 38.05.183, 38.05.700, 38.05.795, 38.05.070, 38.05.105, 38.05.130, 38.05.125, 38.05.131, 38.05.181, 38.05.140, 38.05.184, 38.05.710, 41.06.125, 38.05.720, 41.06.105, 38.05.715, 38.05.725, 38.05.945, 38.05.735, 38.35.020, 38.35.122, 38.35.120, 38.35.230, 41.06.005, 41.06.060, 41.06.020, 41.06.030, 41.06.035, 31.05.100, 31.05.110, 41.06.040, 41.06.050, 41.06.055, 31.05.005, 41.06.115, 41.06.120, 41.06.165, 41.06.130, 31.05.050, 41.06.135, 41.06.140, 41.06.145, 41.06.150, 41.06.160, 41.06.200, 37.07.080, 41.06.170, 37.14.850, 41.06.185, 11.46.630, 41.06.190, 41.06.195, 41.21.167, 41.21.161, 38.05.275, 41.21.491, 41.21.502, 41.21.617, 41.21.611, 41.21.610, 44.37.020
HB0050B, AM CSHB 50(RES), introduced 03/13/2023: 31.05.027, 38.05.180, 38.05.725, 31.05.030, 41.06.005, 41.06.060, 37.05.146, 41.06.160, 41.06.175, 41.06.150, 41.06.170, 41.06.210, 38.05.069, 38.05.135, 38.05.183, 38.05.700, 38.05.795, 38.05.070, 38.05.105, 38.05.130, 38.05.125, 38.05.131, 38.05.181, 38.05.140, 38.05.184, 38.05.705, 38.05.715, 41.06.105, 41.06.120, 38.05.710, 38.05.720, 38.05.945, 41.06.185, 38.05.730, 38.35.020, 38.35.122, 38.35.120, 38.35.230, 41.06.020, 41.06.030, 41.06.035, 31.05.100, 31.05.110, 41.06.040, 41.06.050, 41.06.055, 31.05.005, 41.06.110, 41.06.115, 41.06.125, 31.05.050, 41.06.130, 41.06.135, 41.06.140, 41.06.145, 41.06.155, 41.06.195, 37.05.142, 41.06.165, 37.14.850, 41.06.180, 11.46.630, 41.06.190, 41.21.167, 41.21.161, 38.05.275, 41.21.491, 41.21.502, 41.21.617, 41.21.611, 41.21.610, 43.20.036, 44.37.020, 46.03.020, 46.03.010, 46.03.040, 46.03.715, U.S.C, C.F.R
HB0050C, AM CSHB 50(FIN), introduced 03/18/2024: 31.05.027, 38.05.180, 38.05.725, 31.05.030, 41.06.005, 41.06.060, 41.06.305, 37.05.146, 41.06.160, 37.14.850, 41.06.175, 37.05.142, 37.10.071, 41.06.110, 41.06.105, 41.06.210, 38.05.069, 38.05.135, 38.05.183, 38.05.700, 38.05.795, 38.05.070, 38.05.105, 38.05.130, 38.05.125, 38.05.131, 38.05.181, 38.05.140, 38.05.184, 38.05.705, 38.05.715, 41.06.120, 38.05.710, 38.05.720, 38.05.945, 41.06.185, 38.05.730, 38.05.735, 38.35.020, 38.35.122, 38.35.120, 38.35.230, 41.06.020, 41.06.030, 41.06.035, 31.05.100, 31.05.110, 41.06.040, 41.06.050, 41.06.055, 31.05.005, 41.06.115, 41.06.125, 31.05.050, 41.06.130, 41.06.135, 41.06.140, 41.06.145, 41.06.150, 41.06.155, 41.06.195, 41.06.165, 41.06.170, 41.06.180, 11.46.630, 41.06.190, 41.21.167, 41.21.161, 38.05.275, 41.21.491, 41.21.502, 41.21.617, 41.21.611, 41.21.610, 43.20.036, 46.03.020, 46.03.010, 46.03.040, 46.03.715, U.S.C, C.F.R
HB0050D, AM SCS CSHB 50(RES), introduced 05/06/2024: 31.05.027, 38.05.180, 38.05.725, 31.05.030, 41.06.005, 41.06.060, 41.06.305, 37.05.146, 41.06.160, 37.14.850, 37.13.010, 38.05.705, 41.06.175, 37.05.142, 37.10.071, 41.06.110, 41.06.105, 41.06.210, 38.05.069, 38.05.135, 38.05.183, 38.05.700, 38.05.795, 38.05.070, 38.05.105, 38.05.130, 38.05.125, 38.05.131, 38.05.181, 38.05.140, 38.05.184, 38.05.715, 41.06.120, 38.05.710, 38.05.720, 38.05.945, 41.06.185, 38.05.730, 38.05.735, 38.05.740, 38.35.020, 38.35.122, 38.35.120, 38.35.230, 41.06.020, 41.06.030, 41.06.035, 31.05.100, 31.05.110, 41.06.040, 41.06.050, 41.06.055, 31.05.005, 41.06.115, 41.06.125, 31.05.050, 41.06.130, 41.06.135, 41.06.140, 41.06.145, 41.06.150, 41.06.155, 41.06.195, 41.06.165, 41.06.170, 41.06.180, 11.46.630, 41.06.190, 41.08.020, 41.08.017, 41.08.035, 31.05.035, 43.55.025, 41.21.167, 41.21.161, 38.05.275, 41.21.491, 41.21.502, 41.21.617, 41.21.611, 41.21.610, 42.05.141, 44.88.850, 42.05.711, 42.06.630, 42.05.381, 38.05.096, 43.20.046, 43.20.047, 31.05.032, 40.25.100, 40.25.295, 42.06.140, 43.20.011, U.S.C, 43.20.036, 43.55.165, 43.55.201, 43.55.300, 43.55.011, 43.55.014, 46.04.030, 38.05.132, 43.55.023, 46.03.826, 43.55.020, 38.05.081, 38.95.400, 38.95.499, 44.25.020, 44.83.386, 44.37.020, 44.88.855, 44.88.215, 44.88.900, 46.03.020, 46.03.010, 46.03.040, 46.03.715, C.F.R, 42.05.990, 43.20.019, 43.05.225, 43.05.220, 43.05.245, 43.05.290, 44.62.240
HB0050E, AM SCS CSHB 50(FIN), introduced 05/12/2024: 31.05.027, 38.05.180, 38.05.725, 31.05.030, 41.06.005, 41.06.060, 41.06.305, 37.05.146, 41.06.160, 37.14.850, 37.13.010, 38.05.705, 41.06.175, 37.05.142, 37.10.071, 41.06.110, 41.06.105, 41.06.210, 38.05.069, 38.05.135, 38.05.183, 38.05.700, 38.05.795, 38.05.070, 38.05.105, 38.05.130, 38.05.125, 38.05.131, 38.05.181, 38.05.140, 38.05.184, 38.05.715, 41.06.120, 38.05.710, 38.05.720, 38.05.945, 41.06.185, 38.05.730, 38.05.735, 38.05.740, 38.05.965, 38.35.020, 38.35.122, 38.35.120, 38.35.230, 41.06.020, 41.06.030, 41.06.035, 31.05.100, 31.05.110, 41.06.040, 41.06.050, 41.06.055, 31.05.005, 41.06.115, 41.06.125, 31.05.050, 41.06.130, 41.06.135, 41.06.140, 41.06.145, 41.06.150, 41.06.155, 41.06.195, 41.06.165, 41.06.170, 41.06.180, 11.46.630, 41.06.190, 41.21.167, 41.21.161, 38.05.275, 41.21.491, 41.21.502, 41.21.617, 41.21.611, 41.21.610, 42.05.141, 44.88.850, 42.05.711, 42.06.630, 42.05.381, 38.05.096, 43.20.046, 43.20.047, 31.05.032, 40.25.100, 40.25.295, 42.06.140, 43.20.036, 43.55.165, 43.55.201, 43.55.300, 43.55.011, 43.55.014, 46.04.030, 38.05.132, 43.55.023, 46.03.826, 43.55.020, 38.05.081, 38.95.400, 38.95.499, C.F.R, 44.25.020, 44.83.386, 44.37.020, 44.88.855, 44.88.215, 44.88.900, 46.03.020, 46.03.010, 46.03.040, 46.03.715, U.S.C, 42.05.990, 38.05.035
HB0050F, AM SCS CSHB 50(FIN) am S, introduced 05/15/2024, passed Senate 05/15/2024: 31.05.027, 38.05.180, 38.05.725, 31.05.030, 41.06.005, 41.06.060, 41.06.305, 37.05.146, 41.06.160, 37.14.850, 37.13.010, 38.05.705, 41.06.175, 37.05.142, 37.10.071, 41.06.110, 41.06.105, 41.06.210, 38.05.069, 38.05.135, 38.05.183, 38.05.700, 38.05.795, 38.05.070, 38.05.105, 38.05.130, 38.05.125, 38.05.131, 38.05.181, 38.05.140, 38.05.184, 38.05.715, 41.06.120, 38.05.710, 38.05.720, 38.05.945, 41.06.185, 38.05.730, 38.05.735, 38.05.740, 38.05.965, 38.35.020, 38.35.122, 38.35.120, 38.35.230, 41.06.020, 41.06.030, 41.06.035, 31.05.100, 31.05.110, 41.06.040, 41.06.050, 41.06.055, 31.05.005, 41.06.115, 41.06.125, 31.05.050, 41.06.130, 41.06.135, 41.06.140, 41.06.145, 41.06.150, 41.06.155, 41.06.195, 41.06.165, 41.06.170, 41.06.180, 11.46.630, 41.06.190, 41.21.167, 41.21.161, 38.05.275, 41.21.491, 41.21.502, 41.21.617, 41.21.611, 41.21.610, 42.05.141, 44.88.850, 42.05.711, 42.06.630, 42.05.381, 38.05.096, 43.20.046, 43.20.047, 31.05.032, 40.25.100, 40.25.295, 42.06.140, 43.20.036, 43.55.165, 43.55.201, 43.55.300, 43.55.011, 43.55.014, 46.04.030, 38.05.132, 43.55.023, 46.03.826, 43.55.020, 38.05.081, 38.95.400, 38.95.499, C.F.R, 44.25.020, 44.83.386, 44.37.020, 44.88.855, 44.88.215, 44.88.900, 46.03.020, 46.03.010, 46.03.040, 46.03.715, U.S.C, 42.05.990, 38.05.035
HB0050Z, AM Enrolled HB 50, introduced 05/15/2024: 31.05.027, 38.05.180, 38.05.725, 31.05.030, 41.06.005, 41.06.060, 41.06.305, 37.05.146, 41.06.160, 37.14.850, 37.13.010, 38.05.705, 41.06.175, 37.05.142, 37.10.071, 41.06.110, 41.06.105, 41.06.210, 38.05.069, 38.05.135, 38.05.183, 38.05.700, 38.05.795, 38.05.070, 38.05.105, 38.05.130, 38.05.125, 38.05.131, 38.05.181, 38.05.140, 38.05.184, 38.05.715, 41.06.120, 38.05.710, 38.05.720, 38.05.945, 41.06.185, 38.05.730, 38.05.735, 38.05.740, 38.05.965, 38.35.020, 38.35.122, 38.35.120, 38.35.230, 41.06.020, 41.06.030, 41.06.035, 31.05.100, 31.05.110, 41.06.040, 41.06.050, 41.06.055, 31.05.005, 41.06.115, 41.06.125, 31.05.050, 41.06.130, 41.06.135, 41.06.140, 41.06.145, 41.06.150, 41.06.155, 41.06.195, 41.06.165, 41.06.170, 41.06.180, 11.46.630, 41.06.190, 41.21.167, 41.21.161, 38.05.275, 41.21.491, 41.21.502, 41.21.617, 41.21.611, 41.21.610, 42.05.141, 44.88.850, 42.05.711, 42.06.630, 42.05.381, 38.05.096, 43.20.046, 43.20.047, 31.05.032, 40.25.100, 40.25.295, 42.06.140, 43.20.036, 43.55.165, 43.55.201, 43.55.300, 43.55.011, 43.55.014, 46.04.030, 38.05.132, 43.55.023, 46.03.826, 43.55.020, 38.05.081, 38.95.400, 38.95.499, C.F.R, 44.25.020, 44.83.386, 44.37.020, 44.88.855, 44.88.215, 44.88.900, 46.03.020, 46.03.010, 46.03.040, 46.03.715, U.S.C, 42.05.990, 38.05.035