AK HB40

Reduces coal lease royalty period from 20 years to 10 years and establishes minimum royalty rates of 5% for noncompetitive leases and 5-12% for competitive leases based on adjusted gross value.

Increases minimum annual rental for coal leases from variable tiered rates to a flat $3 per acre, with rental adjustments every 10 years based on Consumer Price Index rather than current market rates.

Establishes new mining license requirement for operations beginning after December 31, 2009, and allows new mining operations to defer tax payments during first 3.5 years, payable in 10 equal annual installments without interest.

Changes mining production royalty to a flat 3% of net smelter return or gross value at point of production, and defines "gross value at point of production" as resource value immediately after removal from mine, with provisions for fair market value substitution if price seems below fair market value.

Modifies mining license tax structure with progressive rates ranging from 5% on income over $100,000 to 11% on income over $1,000,000, and clarifies depletion allowance limitations and mining operation definitions; effective January 1, 2010.