Current through August 30, 2024
(a) If the coal is
sold in a bona fide arm's-length transaction between independent parties,
adjusted gross value is the full consideration received by the lessee minus the
following costs if those costs were borne by the lessee:
(1) reasonable beneficiation costs as defined
in (e)(1) of this section; and
(2)
reasonable transportation costs from the mine mouth to the point of sale, as
defined in (e)(2) of this section.
(b) Notwithstanding (a) of this section, the
commissioner will determine the adjusted gross value of the coal, taking into
account the consideration being paid for coal in the same general area or other
relevant areas including areas outside Alaska, reasonable transportation costs,
beneficiation costs, composition and special characteristics of the deposit,
the Btu content of the coal, and other relevant factors, if the commissioner
determines that the coal produced from the leased area is
(1) sold or disposed of in other than a bona
fide arm's-length transaction between independent parties;
(2) sold or disposed of under a contract
which sets a single price for coal without adjustments tied to market
conditions;
(3) sold or disposed of
under a contract which does not reflect the value of the coal at the time the
coal is produced; or
(4) consumed
by the lessee.
(c) The
commissioner will, in his discretion, and upon petition by the lessee, convert
the percent-of-value royalty rate to a comparable cents-per-ton rate in a
written determination that it is in the best interest of the state to make the
conversion and that the commissioner has adequate information to make an
adjustment which is equitable to the state and the lessee. This cents-per-ton
rate will be readjusted as necessary to reflect changes in adjusted gross
value.
(d) The commissioner will
allow deductions under (a) of this section when, in his judgment, the lessee
provides him with an accurate account and description of the reasonable costs.
When requested by the commissioner, the lessee shall promptly file with the
commissioner all information that relates to royalty value computation. All
royalty value computations are subject to audit by the commissioner.
(e) In this section
(1) "reasonable beneficiation costs" means
the reasonable costs of any processing performed before sale that adds value to
the coal as compared to its run-of-mine value; these deductible processing
costs include the costs of grinding, washing, drying, grading, sorting,
briquetting, any other means of beneficiation, and any reasonable
transportation costs necessitated solely by this beneficiation; primary
crushing, loading, and storing costs are not included whether or not they are
incurred on or away from the leased premises;
(2) "reasonable transportation costs" means
actual costs of transportation occurring after the coal leaves the mine mouth,
including the use of tankers, roads, conveyor belts, trucks, rail
transportation and slurry pipelines; for any coal lease for which a coal
royalty statement was timely filed for the month of July 1982, "reasonable
transportation costs" also includes the actual costs of transportation from the
point of extraction to the mine mouth; if the transportation facilities are
owned by the lessee, then actual costs are limited to direct operating expenses
and depreciation on capital equipment and do not include overhead or an
internal rate of return on the capital investment; the commissioner will
determine the reasonable transportation costs when any of the following
conditions exist:
(A) the transportation
contract is not an arm's-length transaction or is not representative of the
market value of the transportation; or
(B) the method of transportation of coal is
not reasonable in view of existing alternative methods of
transportation;
(3)
"mine mouth" means the tipple, railroad, or other loadout facility, where the
coal is initially weighed or measured and loaded for transport to a buyer or
user;
(4) "point of extraction"
means that point where the coal first enters the lessee's coal transport
system; and
(5) "point of sale"
means the point of first transfer for value, if title also transfers, or the
point of entry into a free market place.
Authority:AS
38.05.020
AS 38.05.145
AS
38.05.150
