AK SB124

Creates a new tax credit for persons constructing year-round roads extending more than 25 miles from the state highway system (as it existed December 31, 2010) to oil and gas exploration or development areas that were not previously accessible by road or sea before January 1, 2011.

Credit equals 50 percent of reasonable and necessary expenditures directly related to road construction, excluding administration, supervision, engineering, community relations, environmental costs, bonuses, taxes, and costs from fraud or misconduct.

Credit applies only against oil and gas production tax liability under AS 43.55.011(e) for production from leases or properties accessed by the road.

Credit cannot reduce annual tax liability below zero but may be carried forward to later years and transferred to other producers using the road.

Department commissioners of transportation and natural resources must determine road eligibility based on distance from highway system, year-round usability, and accessibility to previously unreachable exploration areas.