00 CS FOR HOUSE BILL NO. 111(FIN) 01 "An Act relating to the oil and gas production tax, tax payments, and credits; relating to 02 interest applicable to delinquent oil and gas production tax; relating to carried-forward 03 lease expenditures based on losses and limiting those lease expenditures to an amount 04 equal to the gross value at the point of production of oil and gas produced from the lease 05 or property where the lease expenditure was incurred; relating to information 06 concerning tax credits, lease expenditures, and oil and gas taxes; relating to the 07 disclosure of that information to the public; relating to an adjustment in the gross value 08 at the point of production; relating to a legislative working group; and providing for an 09 effective date." 10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 11 * Section 1. AS 31.05.030(n) is amended to read: 12 (n) Upon request of the commissioner of revenue, the commission shall 01 determine the commencement of regular production from a lease or property for 02 purposes of AS 43.55.160(f) [AND (g)]. 03 * Sec. 2. AS 40.25.100(a) is amended to read: 04 (a) Information in the possession of the Department of Revenue that discloses 05 the particulars of the business or affairs of a taxpayer or other person, including 06 information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement 07 under AS 38.05.020(b)(12), is not a matter of public record, except as provided in 08 AS 43.05.230(i) - (n) [AS 43.05.230(i) - (l)] or for purposes of investigation and law 09 enforcement. The information shall be kept confidential except when its production is 10 required in an official investigation, administrative adjudication under AS 43.05.405 - 11 43.05.499, or court proceeding. These restrictions do not prohibit the publication of 12 statistics presented in a manner that prevents the identification of particular reports 13 and items, prohibit the publication of tax lists showing the names of taxpayers who are 14 delinquent and relevant information that may assist in the collection of delinquent 15 taxes, or prohibit the publication of records, proceedings, and decisions under 16 AS 43.05.405 - 43.05.499.  17  * Sec. 3. AS 43.05.225 is amended to read: 18 Sec. 43.05.225. Interest. Unless otherwise provided, 19 (1) a delinquent tax 20 (A) under this title, before January 1, 2014, bears interest in 21 each calendar quarter at the rate of five percentage points above the annual rate 22 charged member banks for advances by the 12th Federal Reserve District as of 23 the first day of that calendar quarter, or at the annual rate of 11 percent, 24 whichever is greater, compounded quarterly as of the last day of that quarter; 25 (B) under this title, on and after January 1, 2014, except as 26 provided in (C) of this paragraph, bears interest in each calendar quarter at the 27 rate of three percentage points above the annual rate charged member banks 28 for advances by the 12th Federal Reserve District as of the first day of that 29 calendar quarter; 30 (C) under AS 43.55, on and after January 1, 2017, 31 [(i) FOR THE FIRST THREE YEARS AFTER A TAX 01 BECOMES DELINQUENT,] bears interest in each calendar quarter at 02 the rate of seven percentage points above the annual rate charged 03 member banks for advances by the 12th Federal Reserve District as of 04 the first day of that calendar quarter, compounded quarterly as of the 05 last day of that quarter; [AND 06 (ii) AFTER THE FIRST THREE YEARS AFTER A 07 TAX BECOMES DELINQUENT, DOES NOT BEAR INTEREST;] 08 (2) the interest rate is 12 percent a year for 09 (A) delinquent fees payable under AS 05.15.095(c); and 10 (B) unclaimed property that is not timely paid or delivered, as 11 allowed by AS 34.45.470(a). 12  * Sec. 4. AS 43.05.230(l) is amended to read: 13 (l) The [FOR TAX CREDIT CERTIFICATES PURCHASED BY THE 14 DEPARTMENT IN THE PRECEDING CALENDAR YEAR UNDER AS 43.55.028, 15 THE] department shall make the following information public by April 30 of each 16 year: 17 (1) for tax credit certificates issued or purchased by the  18 department in the preceding calendar year under AS 43.55.028:  19 (A) the name of each person to which a transferable tax  20 certificate was issued or from which the department purchased a transferable 21 tax credit certificate; and 22 (B) [(2)] the aggregate amount of the tax credit certificates 23 purchased from the person in the preceding calendar year;  24 (C) the aggregate amount of the tax credit certificates  25 issued to the person in the preceding calendar year; and  26 (2) unless otherwise prohibited by law, information submitted  27 during the previous calendar year under AS 43.55.030(a)(10) and (e)(3).  28  * Sec. 5. AS 43.05.230 is amended by adding new subsections to read: 29 (m) The department may disclose information otherwise publicly available 30 (1) on a return filed for a tax due under AS 43.55; or 31 (2) related to a credit received under AS 43.20.046, 43.20.047, 01 43.20.049, 43.20.052, or 43.20.053. 02 (n) The name of each person claiming a credit, the amount of credit received 03 for each oil refinery, and a description of the expenditures for which each credit is 04 claimed under AS 43.20.053 is public information. The department shall make the 05 following information public by April 30 of each year: 06 (1) the name of each person who claimed a tax credit under 07 AS 43.20.053 in the preceding calendar year; 08 (2) for each refinery for which a tax credit was claimed under 09 AS 43.20.053 in the preceding calendar year, 10 (A) the aggregate amount of tax credits claimed for that 11 refinery; 12 (B) a description of any potential benefits to the state or 13 residents of the state, including the estimated monetary value; 14 (3) a brief description of the qualified infrastructure expenditures for 15 which each tax credit claimed under AS 43.20.053 in the preceding calendar year was 16 claimed; and 17 (4) for each refinery for which an expenditure is the basis of a credit 18 under AS 43.20.053, the aggregate amount of unused tax credits or portions of tax 19 credits.  20  * Sec. 6. AS 43.55.011(e) is amended to read: 21 (e) There is levied on the producer of oil or gas a tax for all oil and gas 22 produced each calendar year from each lease or property in the state, less any oil and 23 gas the ownership or right to which is exempt from taxation or constitutes a 24 landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as 25 otherwise provided under (f), (j), (k), (o), and (p) of this section, for oil and gas 26 produced 27 (1) before January 1, 2014, the tax is equal to the sum of 28 (A) the annual production tax value of the taxable oil and gas 29 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 30 (B) the sum, over all months of the calendar year, of the tax 31 amounts determined under (g) of this section; 01 (2) on and after January 1, 2014, and before January 1, 2018 [2022], 02 the tax is equal to the annual production tax value of the taxable oil and gas as 03 calculated under AS 43.55.160(a)(1) multiplied by 35 percent; 04 (3) on and after January 1, 2018, and before January 1, 2022, the  05 tax is equal to the sum of  06 (A) the annual production tax value of the taxable oil and  07 gas as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and  08 (B) the sum, over all the months of the calendar year, of the  09 amounts determined under (g) of this section;  10 (4) on and after January 1, 2022, the tax for 11 (A) oil is equal to the sum of 12 (i) the annual production tax value of the taxable oil as 13 calculated under AS 43.55.160(h)(1) [AS 43.55.160(h)] multiplied by 14 25 [35] percent; and  15 (ii) the sum, over all the months of the calendar  16 year, of the amounts determined under (g) of this section;  17 (B) gas is equal to 13 percent of the gross value at the point of 18 production of the taxable gas; if the gross value at the point of production of 19 gas produced from a lease or property is less than zero, that gross value at the 20 point of production is considered zero for purposes of this subparagraph. 21  * Sec. 7. AS 43.55.011(g) is amended to read: 22 (g) For purposes of (e) of this section,  23 (1) before January 1, 2014, for [FOR] each month of a calendar year 24 [BEFORE 2014] for which the producer's average monthly production tax value under 25 AS 43.55.160(a)(2) of a BTU equivalent barrel of the taxable oil and gas is more than 26 $30, the amount of tax for purposes of (e)(1)(B) of this section is determined by 27 multiplying the monthly production tax value of the taxable oil and gas produced 28 during the month by the tax rate calculated as follows: 29 (A) [(1)] if the producer's average monthly production tax 30 value of a BTU equivalent barrel of the taxable oil and gas for the month is not 31 more than $92.50, the tax rate is 0.4 percent multiplied by the number that 01 represents the difference between that average monthly production tax value of 02 a BTU equivalent barrel and $30; or 03 (B) [(2)] if the producer's average monthly production tax value 04 of a BTU equivalent barrel of the taxable oil and gas for the month is more 05 than $92.50, the tax rate is the sum of 25 percent and the product of 0.1 percent 06 multiplied by the number that represents the difference between the average 07 monthly production tax value of a BTU equivalent barrel and $92.50, except 08 that the sum determined under this subparagraph [PARAGRAPH] may not 09 exceed 50 percent;  10 (2) on or after January 1, 2018, and before January 1, 2022, for  11 each month of a calendar year for which the producer's production tax value  12 under AS 43.55.160(a)(2) of a BTU equivalent barrel of the taxable oil and gas is  13 more than $60, the difference between the monthly production tax value of a  14 BTU equivalent barrel and $60 multiplied by the volume of oil and gas produced  15 by the producer for the month multiplied by 15 percent;  16 (3) on or after January 1, 2022, for each month of a calendar year  17 for which the producer's production tax value under AS 43.55.160(h)(2) of a BTU  18 equivalent barrel of taxable oil is more than $60, the difference between the  19 monthly production tax value of a BTU equivalent barrel and $60 multiplied by  20 the volume of oil produced by the producer for the month multiplied by 15  21 percent.  22  * Sec. 8. AS 43.55.011 is amended by adding new subsections to read: 23 (q) Except as otherwise provided in this subsection, a credit under this chapter 24 may not be applied to reduce the tax determined under (f) of this section. A credit 25 under AS 43.55.024(c) may reduce the tax determined under (f) of this section, but not 26 below zero. A credit under AS 43.55.024(i) may reduce the tax determined under (f) 27 of this section, but not below 28 (1) for gas produced on and after January 1, 2018, and before 29 January 1, 2022, 30 (A) four percent of the adjusted gross value at the point of 31 production when the average price per barrel for Alaska North Slope crude oil 01 for sale on the United States West Coast during the calendar year for which the 02 tax is due is more than $25; 03 (B) three percent of the adjusted gross value at the point of 04 production when the average price per barrel for Alaska North Slope crude oil 05 for sale on the United States West Coast during the calendar year for which the 06 tax is due is more than $20 but not more than $25; 07 (C) two percent of the adjusted gross value at the point of 08 production when the average price per barrel for Alaska North Slope crude oil 09 for sale on the United States West Coast during the calendar year for which the 10 tax is due is more than $17.50 but not more than $20; 11 (D) one percent of the adjusted gross value at the point of 12 production when the average price per barrel for Alaska North Slope crude oil 13 for sale on the United States West Coast during the calendar year for which the 14 tax is due is more than $15 but not more than $17.50; or 15 (E) zero percent of the adjusted gross value at the point of 16 production when the average price per barrel for Alaska North Slope crude oil 17 for sale on the United States West Coast during the calendar year for which the 18 tax is due is $15 or less; 19 (2) for oil produced on and after January 1, 2018, 20 (A) four percent of the adjusted gross value at the point of 21 production when the average price per barrel for Alaska North Slope crude oil 22 for sale on the United States West Coast during the calendar year for which the 23 tax is due is more than $25; 24 (B) three percent of the adjusted gross value at the point of 25 production when the average price per barrel for Alaska North Slope crude oil 26 for sale on the United States West Coast during the calendar year for which the 27 tax is due is more than $20 but not more than $25; 28 (C) two percent of the adjusted gross value at the point of 29 production when the average price per barrel for Alaska North Slope crude oil 30 for sale on the United States West Coast during the calendar year for which the 31 tax is due is more than $17.50 but not more than $20; 01 (D) one percent of the adjusted gross value at the point of 02 production when the average price per barrel for Alaska North Slope crude oil 03 for sale on the United States West Coast during the calendar year for which the 04 tax is due is more than $15 but not more than $17.50; or 05 (E) zero percent of the adjusted gross value at the point of 06 production when the average price per barrel for Alaska North Slope crude oil 07 for sale on the United States West Coast during the calendar year for which the 08 tax is due is $15 or less.  09 (r) In (q) of this section, "adjusted gross value at the point of production" 10 means the gross value at the point of production less a reduction from the gross value 11 at the point of production under AS 43.55.160(f). 12  * Sec. 9. AS 43.55.014(b) is amended to read: 13 (b) A production tax levied by this section is equal to 13 percent of the gas 14 otherwise taxable under AS 43.55.011(e)(4) [AS 43.55.011(e)(3)] produced from each 15 oil and gas lease to which an effective election under (a) of this section applies, when 16 and as that gas is produced. The producer shall pay the tax in gas by delivering that 13 17 percent of the gas to the state at the point of production. 18  * Sec. 10. AS 43.55.020(a) is amended to read: 19 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 20 the tax as follows: 21 (1) for oil and gas produced before January 1, 2014, an installment 22 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 23 as allowed by law, is due for each month of the calendar year on the last day of the 24 following month; except as otherwise provided under (2) of this subsection, the 25 amount of the installment payment is the sum of the following amounts, less 1/12 of 26 the tax credits that are allowed by law to be applied against the tax levied by 27 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 28 not be less than zero: 29 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 30 produced from leases or properties in the state outside the Cook Inlet 31 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 01 the greater of 02 (i) zero; or 03 (ii) the sum of 25 percent and the tax rate calculated for 04 the month under AS 43.55.011(g) multiplied by the remainder obtained 05 by subtracting 1/12 of the producer's adjusted lease expenditures for the 06 calendar year of production under AS 43.55.165 and 43.55.170 that are 07 deductible for the oil and gas under AS 43.55.160 from the gross value 08 at the point of production of the oil and gas produced from the leases or 09 properties during the month for which the installment payment is 10 calculated; 11 (B) for oil and gas produced from leases or properties subject 12 to AS 43.55.011(f), the greatest of 13 (i) zero; 14 (ii) zero percent, one percent, two percent, three 15 percent, or four percent, as applicable, of the gross value at the point of 16 production of the oil and gas produced from the leases or properties 17 during the month for which the installment payment is calculated; or 18 (iii) the sum of 25 percent and the tax rate calculated for 19 the month under AS 43.55.011(g) multiplied by the remainder obtained 20 by subtracting 1/12 of the producer's adjusted lease expenditures for the 21 calendar year of production under AS 43.55.165 and 43.55.170 that are 22 deductible for the oil and gas under AS 43.55.160 from the gross value 23 at the point of production of the oil and gas produced from those leases 24 or properties during the month for which the installment payment is 25 calculated; 26 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 27 each lease or property, the greater of 28 (i) zero; or 29 (ii) the sum of 25 percent and the tax rate calculated for 30 the month under AS 43.55.011(g) multiplied by the remainder obtained 31 by subtracting 1/12 of the producer's adjusted lease expenditures for the 01 calendar year of production under AS 43.55.165 and 43.55.170 that are 02 deductible under AS 43.55.160 for the oil or gas, respectively, 03 produced from the lease or property from the gross value at the point of 04 production of the oil or gas, respectively, produced from the lease or 05 property during the month for which the installment payment is 06 calculated; 07 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 08 (i) the sum of 25 percent and the tax rate calculated for 09 the month under AS 43.55.011(g) multiplied by the remainder obtained 10 by subtracting 1/12 of the producer's adjusted lease expenditures for the 11 calendar year of production under AS 43.55.165 and 43.55.170 that are 12 deductible for the oil and gas under AS 43.55.160 from the gross value 13 at the point of production of the oil and gas produced from the leases or 14 properties during the month for which the installment payment is 15 calculated, but not less than zero; or 16 (ii) four percent of the gross value at the point of 17 production of the oil and gas produced from the leases or properties 18 during the month, but not less than zero; 19 (2) an amount calculated under (1)(C) of this subsection for oil or gas 20 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 21 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 22 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 23 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 24 gas produced during the month for the amount of taxable gas produced during the 25 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 26 during the month for the amount of taxable oil produced during the calendar year; 27 (3) an installment payment of the estimated tax levied by 28 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 29 on the last day of the following month; the amount of the installment payment is the 30 sum of 31 (A) the applicable tax rate for oil provided under 01 AS 43.55.011(i), multiplied by the gross value at the point of production of the 02 oil taxable under AS 43.55.011(i) and produced from the lease or property 03 during the month; and 04 (B) the applicable tax rate for gas provided under 05 AS 43.55.011(i), multiplied by the gross value at the point of production of the 06 gas taxable under AS 43.55.011(i) and produced from the lease or property 07 during the month; 08 (4) any amount of tax levied by AS 43.55.011, net of any credits 09 applied as allowed by law, that exceeds the total of the amounts due as installment 10 payments of estimated tax is due on March 31 of the year following the calendar year 11 of production; 12 (5) for oil and gas produced on and after January 1, 2014, and before 13 January 1, 2018 [JANUARY 1, 2022], an installment payment of the estimated tax 14 levied by AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for 15 each month of the calendar year on the last day of the following month; except as 16 otherwise provided under (7) [(6)] of this subsection, the amount of the installment 17 payment is the sum of the following amounts, less 1/12 of the tax credits that are 18 allowed by law to be applied against the tax levied by AS 43.55.011(e) for the 19 calendar year, but the amount of the installment payment may not be less than zero: 20 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 21 produced from leases or properties in the state outside the Cook Inlet 22 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 23 the greater of 24 (i) zero; or 25 (ii) 35 percent multiplied by the remainder obtained by 26 subtracting 1/12 of the producer's adjusted lease expenditures for the 27 calendar year of production under AS 43.55.165 and 43.55.170 that are 28 deductible for the oil and gas under AS 43.55.160 from the gross value 29 at the point of production of the oil and gas produced from the leases or 30 properties during the month for which the installment payment is 31 calculated; 01 (B) for oil and gas produced from leases or properties subject 02 to AS 43.55.011(f), the greatest of 03 (i) zero; 04 (ii) the percentage applicable under AS 43.55.011(f) 05 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 06 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 07 value at the point of production of the oil and gas produced from the 08 leases or properties during the month for which the installment 09 payment is calculated; or 10 (iii) 35 percent multiplied by the remainder obtained by 11 subtracting 1/12 of the producer's adjusted lease expenditures for the 12 calendar year of production under AS 43.55.165 and 43.55.170 that are 13 deductible for the oil and gas under AS 43.55.160 from the gross value 14 at the point of production of the oil and gas produced from those leases 15 or properties during the month for which the installment payment is 16 calculated, except that, for the purposes of this calculation, a reduction 17 from the gross value at the point of production may apply for oil and 18 gas subject to AS 43.55.160(f) [OR (g)]; 19 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 20 each lease or property, the greater of 21 (i) zero; or 22 (ii) 35 percent multiplied by the remainder obtained by 23 subtracting 1/12 of the producer's adjusted lease expenditures for the 24 calendar year of production under AS 43.55.165 and 43.55.170 that are 25 deductible under AS 43.55.160 for the oil or gas, respectively, 26 produced from the lease or property from the gross value at the point of 27 production of the oil or gas, respectively, produced from the lease or 28 property during the month for which the installment payment is 29 calculated; 30 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 31 (i) 35 percent multiplied by the remainder obtained by 01 subtracting 1/12 of the producer's adjusted lease expenditures for the 02 calendar year of production under AS 43.55.165 and 43.55.170 that are 03 deductible for the oil and gas under AS 43.55.160 from the gross value 04 at the point of production of the oil and gas produced from the leases or 05 properties during the month for which the installment payment is 06 calculated, but not less than zero; or 07 (ii) four percent of the gross value at the point of 08 production of the oil and gas produced from the leases or properties 09 during the month, but not less than zero; 10 (6) for oil and gas produced on and after January 1, 2018, and  11 before January 1, 2022, an installment payment of the estimated tax levied by  12 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each  13 month of the calendar year on the last day of the following month; except as  14 otherwise provided under (7) of this subsection, the amount of the installment  15 payment is the sum of the following amounts, less 1/12 of the tax credits that are  16 allowed by law to be applied against the tax levied by AS 43.55.011(e) for the  17 calendar year, but the amount of the installment payment may not be less than  18 zero:  19 (A) for oil and gas not subject to AS 43.55.011(o) or (p)  20 produced from leases or properties in the state outside the Cook Inlet  21 sedimentary basin, other than leases or properties subject to  22 AS 43.55.011(f), the greater of  23 (i) zero; or  24 (ii) the amount calculated for the month under  25 AS 43.55.011(g), as applicable, and 25 percent multiplied by the  26 remainder obtained by subtracting 1/12 of the producer's adjusted  27 lease expenditures for the calendar year of production under  28 AS 43.55.165 and 43.55.170 that are deductible for the oil and gas  29 under AS 43.55.160 from the gross value at the point of production  30 of the oil and gas produced from the leases or properties during the  31 month for which the installment payment is calculated;  01 (B) for oil and gas produced from leases or properties  02 subject to AS 43.55.011(f), the greatest of  03 (i) zero;  04 (ii) the percentage applicable under AS 43.55.011(f)  05 of the gross value at the point of production of the oil and gas  06 produced from the leases or properties during the month for which  07 the installment payment is calculated; or  08 (iii) the amount calculated for the month under  09 AS 43.55.011(g), as applicable, and 25 percent multiplied by the  10 remainder obtained by subtracting 1/12 of the producer's adjusted  11 lease expenditures for the calendar year of production under  12 AS 43.55.165 and 43.55.170 that are deductible for the oil and gas  13 under AS 43.55.160 from the gross value at the point of production  14 of the oil and gas produced from those leases or properties during  15 the month for which the installment payment is calculated, except  16 that, for the purposes of this calculation, a reduction from the gross  17 value at the point of production may apply for oil and gas subject  18 to AS 43.55.160(f);  19 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for  20 each lease or property, the greater of  21 (i) zero; or  22 (ii) the amount calculated for the month under  23 AS 43.55.011(g), as applicable, and 25 percent multiplied by the  24 remainder obtained by subtracting 1/12 of the producer's adjusted  25 lease expenditures for the calendar year of production under  26 AS 43.55.165 and 43.55.170 that are deductible under AS 43.55.160  27 for the oil or gas, respectively, produced from the lease or property  28 from the gross value at the point of production of the oil or gas,  29 respectively, produced from the lease or property during the  30 month for which the installment payment is calculated;  31 (D) for oil and gas subject to AS 43.55.011(p), the lesser of  01 (i) the amount calculated for the month under  02 AS 43.55.011(g), as applicable, and 25 percent multiplied by the  03 remainder obtained by subtracting 1/12 of the producer's adjusted  04 lease expenditures for the calendar year of production under  05 AS 43.55.165 and 43.55.170 that are deductible for the oil and gas  06 under AS 43.55.160 from the gross value at the point of production  07 of the oil and gas produced from the leases or properties during the  08 month for which the installment payment is calculated, but not less  09 than zero; or  10 (ii) four percent of the gross value at the point of  11 production of the oil and gas produced from the leases or  12 properties during the month, but not less than zero;  13 (7) [(6)] an amount calculated under (5)(C) or (6)(C) of this subsection 14 for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product 15 obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 16 43.55.011(o), as applicable, for gas or set out in AS 43.55.011(k) for oil, but 17 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 18 amount of taxable gas produced during the month for the amount of taxable gas 19 produced during the calendar year and substituting in AS 43.55.011(k) the amount of 20 taxable oil produced during the month for the amount of taxable oil produced during 21 the calendar year; 22 (8) [(7)] for oil and gas produced on or after January 1, 2022, an 23 installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax 24 credits applied as allowed by law, is due for each month of the calendar year on the 25 last day of the following month; except as otherwise provided under (11) [(10)] of this 26 subsection, the amount of the installment payment is the sum of the following 27 amounts, less 1/12 of the tax credits that are allowed by law to be applied against the 28 tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment 29 payment may not be less than zero: 30 (A) for oil produced from leases or properties subject to 31 AS 43.55.011(f), the greatest of 01 (i) zero; 02 (ii) the percentage applicable under AS 43.55.011(f) 03 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 04 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 05 value at the point of production of the oil produced from the leases or 06 properties during the month for which the installment payment is 07 calculated; or 08 (iii) the amount calculated for the month under  09 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 10 remainder obtained by subtracting 1/12 of the producer's adjusted lease 11 expenditures for the calendar year of production under AS 43.55.165 12 and 43.55.170 that are deductible for the oil under 13 AS 43.55.160(h)(1)(A) [AS 43.55.160(h)(1)] from the gross value at 14 the point of production of the oil produced from those leases or 15 properties during the month for which the installment payment is 16 calculated, except that, for the purposes of this calculation, a reduction 17 from the gross value at the point of production may apply for oil 18 subject to AS 43.55.160(f) [OR 43.55.160(f) AND (g)]; 19 (B) for oil produced before or during the last calendar year 20 under AS 43.55.024(b) for which the producer could take a tax credit under 21 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 22 sedimentary basin, no part of which is north of 68 degrees North latitude, other 23 than leases or properties subject to AS 43.55.011(o) or (p), the greater of 24 (i) zero; or 25 (ii) the amount calculated for the month under  26 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 27 remainder obtained by subtracting 1/12 of the producer's adjusted lease 28 expenditures for the calendar year of production under AS 43.55.165 29 and 43.55.170 that are deductible for the oil under 30 AS 43.55.160(h)(1)(B) [AS 43.55.160(h)(2)] from the gross value at 31 the point of production of the oil produced from the leases or properties 01 during the month for which the installment payment is calculated; 02 (C) for oil and gas produced from leases or properties subject 03 to AS 43.55.011(p), except as otherwise provided under (9) [(8)] of this 04 subsection, the sum of 05 (i) the amount calculated for the month under  06 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 07 remainder obtained by subtracting 1/12 of the producer's adjusted lease 08 expenditures for the calendar year of production under AS 43.55.165 09 and 43.55.170 that are deductible for the oil under 10 AS 43.55.160(h)(1)(C) [AS 43.55.160(h)(3)] from the gross value at 11 the point of production of the oil produced from the leases or properties 12 during the month for which the installment payment is calculated, but 13 not less than zero; and 14 (ii) 13 percent of the gross value at the point of 15 production of the gas produced from the leases or properties during the 16 month, but not less than zero; 17 (D) for oil produced from leases or properties in the state, no 18 part of which is north of 68 degrees North latitude, other than leases or 19 properties subject to (B), (C), or (F) of this paragraph, the greater of 20 (i) zero; or 21 (ii) the amount calculated for the month under  22 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 23 remainder obtained by subtracting 1/12 of the producer's adjusted lease 24 expenditures for the calendar year of production under AS 43.55.165 25 and 43.55.170 that are deductible for the oil under 26 AS 43.55.160(h)(1)(D) [AS 43.55.160(h)(4)] from the gross value at 27 the point of production of the oil produced from the leases or properties 28 during the month for which the installment payment is calculated; 29 (E) for gas produced from each lease or property in the state 30 outside the Cook Inlet sedimentary basin, other than a lease or property subject 31 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of 01 production of the gas produced from the lease or property during the month for 02 which the installment payment is calculated, but not less than zero; 03 (F) for oil subject to AS 43.55.011(k), for each lease or 04 property, the greater of 05 (i) zero; or 06 (ii) the amount calculated for the month under  07 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 08 remainder obtained by subtracting 1/12 of the producer's adjusted lease 09 expenditures for the calendar year of production under AS 43.55.165 10 and 43.55.170 that are deductible under AS 43.55.160 for the oil 11 produced from the lease or property from the gross value at the point of 12 production of the oil produced from the lease or property during the 13 month for which the installment payment is calculated; 14 (G) for gas subject to AS 43.55.011(j) or (o), for each lease or 15 property, the greater of 16 (i) zero; or 17 (ii) 13 percent of the gross value at the point of 18 production of the gas produced from the lease or property during the 19 month for which the installment payment is calculated; 20 (9) [(8)] an amount calculated under (8)(C) [(7)(C)] of this subsection 21 may not exceed four percent of the gross value at the point of production of the oil and 22 gas produced from leases or properties subject to AS 43.55.011(p) during the month 23 for which the installment payment is calculated; 24 (10) [(9)] for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), 25 (6)(B)(ii), and (8)(A)(ii) [(7)(A)(ii)] of this subsection, the applicable percentage of 26 the gross value at the point of production is determined under AS 43.55.011(f)(1) or 27 (2) but substituting the phrase "month for which the installment payment is calculated" 28 in AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is due"; 29 (11) [(10)] an amount calculated under (8)(F) or (G) [(7)(F) OR (G)] 30 of this subsection for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed 31 the product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or 01 (2) or 43.55.011(o), as applicable, for gas, or set out in AS 43.55.011(k) for oil, but 02 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 03 amount of taxable gas produced during the month for the amount of taxable gas 04 produced during the calendar year and substituting in AS 43.55.011(k) the amount of 05 taxable oil produced during the month for the amount of taxable oil produced during 06 the calendar year. 07 * Sec. 11. AS 43.55.020(g) is amended to read: 08 (g) Notwithstanding any contrary provision of AS 43.05.225, 09 (1) before January 1, 2014, an unpaid amount of an installment 10 payment required under (a)(1) - (3) of this section that is not paid when due bears 11 interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal 12 Revenue Code), as amended, compounded daily, from the date the installment 13 payment is due until March 31 following the calendar year of production, and (B) as 14 provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued 15 under (A) of this paragraph that remains unpaid after that March 31 is treated as an 16 addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax 17 due under (a)(4) of this section that is not paid when due bears interest as provided for 18 a delinquent tax under AS 43.05.225; 19 (2) on and after January 1, 2014, an unpaid amount of an installment 20 payment required under (a)(3), (5), (6), [OR] (7), or (8) of this section that is not paid 21 when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C. 22 6621 (Internal Revenue Code), as amended, compounded daily, from the date the 23 installment payment is due until March 31 following the calendar year of production, 24 and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31; 25 interest accrued under (A) of this paragraph that remains unpaid after that March 31 is 26 treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid 27 amount of tax due under (a)(4) of this section that is not paid when due bears interest 28 as provided for a delinquent tax under AS 43.05.225. 29  * Sec. 12. AS 43.55.020(h) is amended to read: 30 (h) Notwithstanding any contrary provision of AS 43.05.280, 31 (1) an overpayment of an installment payment required under (a)(1), 01 (2), (3), (5), (6), [OR] (7), or (8) of this section bears interest at the rate provided for 02 an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended, 03 compounded daily, from the later of the date the installment payment is due or the date 04 the overpayment is made, until the earlier of 05 (A) the date it is refunded or is applied to an underpayment; or 06 (B) March 31 following the calendar year of production; 07 (2) except as provided under (1) of this subsection, interest with 08 respect to an overpayment is allowed only on any net overpayment of the payments 09 required under (a) of this section that remains after the later of March 31 following the 10 calendar year of production or the date that the statement required under 11 AS 43.55.030(a) is filed; 12 (3) interest is allowed under (2) of this subsection only from a date that 13 is 90 days after the later of March 31 following the calendar year of production or the 14 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 15 if the overpayment was refunded within the 90-day period; 16 (4) interest under (2) and (3) of this subsection is paid at the rate and in 17 the manner provided in AS 43.05.225(1). 18  * Sec. 13. AS 43.55.020(k) is amended to read: 19 (k) For oil and gas produced on and after January 1, 2014, and before 20 January 1, 2022, in making settlement with the royalty owner for oil and gas that is 21 taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on 22 taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in 23 value at the time the tax becomes due to the amount of the tax paid. If the total 24 deductions of installment payments of estimated tax for a calendar year exceed the 25 actual tax for that calendar year, the producer shall, before April 1 of the following 26 year, refund the excess to the royalty owner. Unless otherwise agreed between the 27 producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on 28 taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or 29 right to which constitutes a landowner's royalty interest, is considered to be the gross 30 value at the point of production of the taxable royalty oil and gas produced during the 31 calendar year multiplied by a figure that is a quotient, in which 01 (1) the numerator is the producer's total tax liability under 02 AS 43.55.011(e) [AS 43.55.011(e)(2)] for the calendar year of production; and 03 (2) the denominator is the total gross value at the point of production 04 of the oil and gas taxable under AS 43.55.011(e) produced by the producer from all 05 leases and properties in the state during the calendar year. 06  * Sec. 14. AS 43.55.020(l) is amended to read: 07 (l) For oil and gas produced on and after January 1, 2022, in making 08 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, 09 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or 10 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes 11 due to the amount of the tax paid. If the total deductions of installment payments of 12 estimated tax for a calendar year exceed the actual tax for that calendar year, the 13 producer shall, before April 1 of the following year, refund the excess to the royalty 14 owner. In making settlement with the royalty owner for gas that is taxable under 15 AS 43.55.014, the producer may deduct the amount of the gas paid as in-kind tax on 16 taxable royalty gas or may deduct the gross value at the point of production of the gas 17 paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the 18 producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on 19 taxable royalty oil for a calendar year, other than oil the ownership or right to which 20 constitutes a landowner's royalty interest, is considered to be the gross value at the 21 point of production of the taxable royalty oil produced during the calendar year 22 multiplied by a figure that is a quotient, in which 23 (1) the numerator is the producer's total tax liability under 24 AS 43.55.011(e)(4)(A) [AS 43.55.011(e)(3)(A)] for the calendar year of production; 25 and 26 (2) the denominator is the total gross value at the point of production 27 of the oil taxable under AS 43.55.011(e) produced by the producer from all leases and 28 properties in the state during the calendar year. 29  * Sec. 15. AS 43.55.023(b) is amended to read: 30 (b) [BEFORE JANUARY 1, 2014, A PRODUCER OR EXPLORER MAY 31 ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A 01 CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES 02 INCURRED ON AND AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1, 03 2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS 04 LOCATED NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR 05 EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 45 06 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS. FOR LEASE 07 EXPENDITURES INCURRED ON AND AFTER JANUARY 1, 2016, TO 08 EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED 09 NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR EXPLORER 10 MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 35 PERCENT OF 11 A CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES 12 INCURRED ON OR AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1, 13 2017, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS 14 LOCATED SOUTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR 15 EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 16 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS.] For lease expenditures 17 incurred [ON OR AFTER JANUARY 1, 2017,] to explore for, develop, or produce oil 18 or gas deposits located south of 68 degrees North latitude, a producer or explorer may 19 elect to take a tax credit in the amount of 15 percent of a carried-forward annual loss, 20 except that a credit for lease expenditures incurred to explore for, develop, or produce 21 oil or gas deposits located in the Cook Inlet sedimentary basin may only be taken if 22 the expenditure is incurred before January 1, 2018. A credit under this subsection may 23 be applied against a tax levied by AS 43.55.011(e). For purposes of this subsection, 24 (1) a carried-forward annual loss is the amount of a producer's or 25 explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a 26 previous calendar year that was not deductible in calculating production tax values for 27 that calendar year under AS 43.55.160; 28 (2) for lease expenditures incurred on or after January 1, 2017, any 29 reduction under AS 43.55.160(f) [OR (g)] is added back to the calculation of 30 production tax values for that calendar year under AS 43.55.160 for the determination 31 of a carried-forward annual loss.  01  * Sec. 16. AS 43.55.023(c) is amended to read: 02 (c) A credit or portion of a credit under this section may not be used to reduce 03 a person's tax liability under AS 43.55.011(e) for any calendar year below zero or the  04 amount calculated under AS 43.55.011(f), if applicable, and any unused credit or 05 portion of a credit not used under this subsection may be applied in a later calendar 06 year. 07  * Sec. 17. AS 43.55.024(i) is amended to read: 08 (i) A producer may apply against the producer's tax liability for the calendar 09 year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under 10 AS 43.55.011(e) that receives a reduction in the gross value at the point of production 11 under AS 43.55.160(f) [OR (g)] and that is produced during a calendar year after 12 December 31, 2013. A tax credit authorized by this subsection may not reduce a 13 producer's tax liability for a calendar year under AS 43.55.011(e) below zero or the  14 amount calculated under AS 43.55.011(f) or (q), as applicable. 15  * Sec. 18. AS 43.55.025(i) is amended to read: 16 (i) For a production tax credit under this section, 17 (1) a credit may not be applied to reduce a taxpayer's tax liability for a  18 calendar year under AS 43.55.011(e) below zero or the amount calculated under  19 AS 43.55.011(f), if applicable [FOR A CALENDAR YEAR]; and 20 (2) an amount of the production tax credit in excess of the amount that 21 may be applied for a calendar year under this subsection may be carried forward and 22 applied against the taxpayer's tax liability under AS 43.55.011(e) in one or more later 23 calendar years. 24  * Sec. 19. AS 43.55.030(a) is amended to read: 25 (a) A producer that produces oil or gas from a lease or property in the state 26 during a calendar year, whether or not any tax payment is due under AS 43.55.020(a) 27 for that oil or gas, shall file with the department on March 31 of the following year a 28 statement, under oath, in a form prescribed by the department, giving, with other 29 information required under a regulation adopted by the department, the following: 30 (1) a description of each lease or property from which oil or gas was 31 produced, by name, legal description, lease number, or accounting codes assigned by 01 the department; 02 (2) the names of the producer and, if different, the person paying the 03 tax, if any; 04 (3) the gross amount of oil and the gross amount of gas produced from 05 each lease or property, separately identifying the gross amount of gas produced from 06 each oil and gas lease to which an effective election under AS 43.55.014(a) applies, 07 the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of 08 the gross amount of oil and gas owned by the producer; 09 (4) the gross value at the point of production of the oil and of the gas 10 produced from each lease or property owned by the producer and the costs of 11 transportation of the oil and gas; 12 (5) the name of the first purchaser and the price received for the oil and 13 for the gas, unless relieved from this requirement in whole or in part by the 14 department; 15 (6) the producer's qualified capital expenditures, as defined in 16 AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other 17 payments or credits under AS 43.55.170; 18 (7) the production tax values of the oil and gas under AS 43.55.160(a) 19 or of the oil under AS 43.55.160(h), as applicable; 20 (8) any claims for tax credits to be applied; [AND] 21 (9) calculations showing the amounts, if any, that were or are due 22 under AS 43.55.020(a) and interest on any underpayment or overpayment; and  23 (10) for each expenditure that is the basis of a lease expenditure  24 carried forward under AS 43.55.165(a)(3) or a credit claimed under AS 43.55.023  25 or 43.55.025, a description of the expenditure and a description of the lease or  26 property for which the expenditure was incurred. 27  * Sec. 20. AS 43.55.030(e) is amended to read: 28 (e) An explorer or producer that incurs a lease expenditure under 29 AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar 30 year but does not produce oil or gas from a lease or property in the state during the 31 calendar year shall file with the department, on March 31 of the following year, a 01 statement, under oath, in a form prescribed by the department, giving, with other 02 information required under a regulation adopted by the department, the following: 03 (1) the explorer's or producer's qualified capital expenditures, as 04 defined in AS 43.55.023, other lease expenditures under AS 43.55.165, and 05 adjustments or other payments or credits under AS 43.55.170; [AND] 06 (2) if the explorer or producer receives a payment or credit under 07 AS 43.55.170, calculations showing whether the explorer or producer is liable for a 08 tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount; and  09 (3) for each expenditure that is the basis of a lease expenditure  10 carried forward under AS 43.55.165(a)(3) or a credit claimed under this chapter,  11 a description of the expenditure and a description of the lease or property for  12 which the expenditure was incurred. 13  * Sec. 21. AS 43.55.150 is amended by adding a new subsection to read: 14 (d) For purposes of calculating the tax under this chapter, the gross value at 15 the point of production may not be less than zero. 16  * Sec. 22. AS 43.55.160(a) is amended to read: 17 (a) For oil and gas produced before January 1, 2022, except as provided in (b) 18 and [,] (f) [, AND (g)] of this section, for the purposes of 19 (1) AS 43.55.011(e)(1) - (3) [AS 43.55.011(e)(1) AND (2)], the annual 20 production tax value of taxable oil, gas, or oil and gas produced during a calendar year 21 in a category for which a separate annual production tax value is required to be 22 calculated under this paragraph is the gross value at the point of production of that oil, 23 gas, or oil and gas taxable under AS 43.55.011(e), less the producer's lease 24 expenditures under AS 43.55.165 for the calendar year applicable to the oil, gas, or oil 25 and gas in that category produced by the producer during the calendar year, as 26 adjusted under AS 43.55.170; a separate annual production tax value shall be 27 calculated for 28 (A) oil and gas produced from leases or properties in the state 29 that include land north of 68 degrees North latitude, other than gas produced 30 before 2022 and used in the state; 31 (B) oil and gas produced from leases or properties in the state 01 outside the Cook Inlet sedimentary basin, no part of which is north of 68 02 degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a) 03 and (b); this subparagraph does not apply to 04 (i) gas produced before 2022 and used in the state; or 05 (ii) oil and gas subject to AS 43.55.011(p); 06 (C) oil produced before 2022 from each lease or property in the 07 Cook Inlet sedimentary basin; 08 (D) gas produced before 2022 from each lease or property in 09 the Cook Inlet sedimentary basin; 10 (E) gas produced before 2022 from each lease or property in 11 the state outside the Cook Inlet sedimentary basin and used in the state, other 12 than gas subject to AS 43.55.011(p); 13 (F) oil and gas subject to AS 43.55.011(p) produced from 14 leases or properties in the state; 15 (G) oil and gas produced from leases or properties in the state 16 no part of which is north of 68 degrees North latitude, other than oil or gas 17 described in (B), (C), (D), (E), or (F) of this paragraph; 18 (2) AS 43.55.011(g), for oil and gas produced before January 1, 2014, 19 or on or after January 1, 2018, the monthly production tax value of the taxable 20 (A) oil and gas produced during a month from leases or 21 properties in the state that include land north of 68 degrees North latitude is the 22 gross value at the point of production of the oil and gas taxable under 23 AS 43.55.011(e) and produced by the producer from those leases or properties, 24 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 25 calendar year applicable to the oil and gas produced by the producer from 26 those leases or properties, as adjusted under AS 43.55.170; this subparagraph 27 does not apply to gas subject to AS 43.55.011(o); 28 (B) oil and gas produced during a month from leases or 29 properties in the state outside the Cook Inlet sedimentary basin, no part of 30 which is north of 68 degrees North latitude, is the gross value at the point of 31 production of the oil and gas taxable under AS 43.55.011(e) and produced by 01 the producer from those leases or properties, less 1/12 of the producer's lease 02 expenditures under AS 43.55.165 for the calendar year applicable to the oil and 03 gas produced by the producer from those leases or properties, as adjusted under 04 AS 43.55.170; this subparagraph does not apply to gas subject to 05 AS 43.55.011(o); 06 (C) oil produced during a month from a lease or property in the 07 Cook Inlet sedimentary basin is the gross value at the point of production of 08 the oil taxable under AS 43.55.011(e) and produced by the producer from that 09 lease or property, less 1/12 of the producer's lease expenditures under 10 AS 43.55.165 for the calendar year applicable to the oil produced by the 11 producer from that lease or property, as adjusted under AS 43.55.170; 12 (D) gas produced during a month from a lease or property in 13 the Cook Inlet sedimentary basin is the gross value at the point of production 14 of the gas taxable under AS 43.55.011(e) and produced by the producer from 15 that lease or property, less 1/12 of the producer's lease expenditures under 16 AS 43.55.165 for the calendar year applicable to the gas produced by the 17 producer from that lease or property, as adjusted under AS 43.55.170; 18 (E) gas produced during a month from a lease or property 19 outside the Cook Inlet sedimentary basin and used in the state is the gross 20 value at the point of production of that gas taxable under AS 43.55.011(e) and 21 produced by the producer from that lease or property, less 1/12 of the 22 producer's lease expenditures under AS 43.55.165 for the calendar year 23 applicable to that gas produced by the producer from that lease or property, as 24 adjusted under AS 43.55.170.  25  * Sec. 23. AS 43.55.160(e) is amended to read: 26 (e) Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that 27 would otherwise be deductible by a producer in a calendar year but whose deduction 28 would cause an annual production tax value calculated under (a)(1) or (h)(1) [(h)] of 29 this section of taxable oil or gas produced during the calendar year to be less than zero 30 may be used to establish a carried-forward annual loss under AS 43.55.023(b) or  31 43.55.165(a)(3). However, the department shall provide by regulation a method to 01 ensure that, for a period for which a producer's tax liability is limited by 02 AS 43.55.011(j), (k), (o), or (p), any adjusted lease expenditures under AS 43.55.165 03 and 43.55.170 that would otherwise be deductible by a producer for that period but 04 whose deduction would cause a production tax value calculated under (a)(1)(C), (D), 05 (E), or (F), or (h)(1)(C) [(h)(3)] of this section to be less than zero are accounted for as 06 though the adjusted lease expenditures had first been used as deductions in calculating 07 the production tax values of oil or gas subject to any of the limitations under 08 AS 43.55.011(j), (k), (o), or (p) that have positive production tax values so as to 09 reduce the tax liability calculated without regard to the limitation to the maximum 10 amount provided for under the applicable provision of AS 43.55.011(j), (k), (o), or (p). 11 Only the amount of those adjusted lease expenditures remaining after the accounting 12 provided for under this subsection may be used to establish a carried-forward annual 13 loss under AS 43.55.023(b) or 43.55.165(a)(3). In this subsection, "producer" includes 14 "explorer." 15  * Sec. 24. AS 43.55.160(f) is amended to read: 16 (f) On and after January 1, 2014, in the calculation of an annual production tax 17 value of a producer under (a)(1)(A) or (h)(1)(A) [(h)(1)] of this section, the gross 18 value at the point of production of oil or gas produced from a lease or property north 19 of 68 degrees North latitude meeting one or more of the following criteria is reduced 20 by 20 percent: (1) the oil or gas is produced from a lease or property that does not 21 contain a lease that was within a unit on January 1, 2003; (2) the oil or gas is produced 22 from a participating area established after December 31, 2011, that is within a unit 23 formed under AS 38.05.180(p) before January 1, 2003, if the participating area does 24 not contain a reservoir that had previously been in a participating area established 25 before December 31, 2011; (3) the oil or gas is produced from acreage that was added 26 to an existing participating area by the Department of Natural Resources on and after 27 January 1, 2014, and the producer demonstrates to the department that the volume of 28 oil or gas produced is from acreage added to an existing participating area. This 29 subsection does not apply to gas produced before 2022 that is used in the state or to 30 gas produced on and after January 1, 2022. For oil and gas first produced from a lease 31 or property after December 31, 2016, a reduction allowed under this subsection 01 applies from the date of commencement of regular production of oil and gas from that 02 lease or property and expires after three years, consecutive or nonconsecutive, in 03 which the average annual price per barrel for Alaska North Slope crude oil for sale on 04 the United States West Coast is more than $70 or after seven years, whichever occurs 05 first. For oil and gas first produced from a lease or property before January 1, 2017, a 06 reduction allowed under this subsection expires on the earlier of January 1, 2023, or 07 January 1 following three years, consecutive or nonconsecutive, in which the average 08 annual price per barrel for Alaska North Slope crude oil for sale on the United States 09 West Coast is more than $70. The Alaska Oil and Gas Conservation Commission shall 10 determine the commencement of regular production of oil and gas for purposes of this 11 subsection. A reduction under this subsection may not reduce the gross value at the 12 point of production below zero. In this subsection, "participating area" means a 13 reservoir or portion of a reservoir producing or contributing to production as approved 14 by the Department of Natural Resources. 15  * Sec. 25. AS 43.55.160(h) is amended to read: 16 (h) For oil produced on and after January 1, 2022, except as provided in (b) 17 and [,] (f) [, AND (g)] of this section, for the purposes of 18 (1) AS 43.55.011(e)(4) [AS 43.55.011(e)(3)], the annual production 19 tax value of oil taxable under AS 43.55.011(e) produced by a producer during a 20 calendar year 21 (A) [(1)] from leases or properties in the state that include land 22 north of 68 degrees North latitude is the gross value at the point of production 23 of that oil, less the producer's lease expenditures under AS 43.55.165 for the 24 calendar year incurred to explore for, develop, or produce oil and gas deposits 25 located in the state north of 68 degrees North latitude or located in leases or 26 properties in the state that include land north of 68 degrees North latitude, as 27 adjusted under AS 43.55.170; 28 (B) [(2)] before or during the last calendar year under 29 AS 43.55.024(b) for which the producer could take a tax credit under 30 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 31 sedimentary basin, no part of which is north of 68 degrees North latitude, other 01 than leases or properties subject to AS 43.55.011(p), is the gross value at the 02 point of production of that oil, less the producer's lease expenditures under 03 AS 43.55.165 for the calendar year incurred to explore for, develop, or produce 04 oil and gas deposits located in the state outside the Cook Inlet sedimentary 05 basin and south of 68 degrees North latitude, other than oil and gas deposits 06 located in a lease or property that includes land north of 68 degrees North 07 latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from 08 which commercial production has not begun, as adjusted under AS 43.55.170; 09 (C) [(3)] from leases or properties subject to AS 43.55.011(p) 10 is the gross value at the point of production of that oil, less the producer's lease 11 expenditures under AS 43.55.165 for the calendar year incurred to explore for, 12 develop, or produce oil and gas deposits located in leases or properties subject 13 to AS 43.55.011(p) or, before January 1, 2027, located in leases or properties 14 in the state outside the Cook Inlet sedimentary basin, no part of which is north 15 of 68 degrees North latitude from which commercial production has not begun, 16 as adjusted under AS 43.55.170; 17 (D) [(4)] from leases or properties in the state no part of which 18 is north of 68 degrees North latitude, other than leases or properties subject to 19 (B) or (C) of this paragraph [(2) OR (3) OF THIS SUBSECTION], is the 20 gross value at the point of production of that oil less the producer's lease 21 expenditures under AS 43.55.165 for the calendar year incurred to explore for, 22 develop, or produce oil and gas deposits located in the state south of 68 23 degrees North latitude, other than oil and gas deposits located in a lease or 24 property in the state that includes land north of 68 degrees North latitude, and 25 excluding lease expenditures that are deductible under (B) or (C) of this  26 paragraph [(2) OR (3) OF THIS SUBSECTION] or would be deductible 27 under (B) or (C) of this paragraph [(2) OR (3) OF THIS SUBSECTION] if 28 not prohibited by (b) of this section, as adjusted under AS 43.55.170; a 29 separate annual production tax value shall be calculated for 30 (i) [(A)] oil produced from each lease or property in the 31 Cook Inlet sedimentary basin; 01 (ii) [(B)] oil produced from each lease or property 02 outside the Cook Inlet sedimentary basin, no part of which is north of 03 68 degrees North latitude, other than leases or properties subject to (C)  04 of this paragraph;  05 (2) AS 43.55.011(g)(3), the monthly production tax value of oil  06 taxable under AS 43.55.011(e) produced by a producer during a month  07 (A) from leases or properties in the state that include land  08 north of 68 degrees North latitude is the gross value at the point of  09 production of that oil, less 1/12 the producer's lease expenditures under  10 AS 43.55.165 for the calendar year incurred to explore for, develop, or  11 produce oil and gas deposits located in the state north of 68 degrees North  12 latitude or located in leases or properties in the state that include land  13 north of 68 degrees North latitude, as adjusted under AS 43.55.170;  14 (B) in a calendar year that is before or during the last  15 calendar year under AS 43.55.024(b) for which the producer could take a  16 tax credit under AS 43.55.024(a), from leases or properties in the state  17 outside the Cook Inlet sedimentary basin, no part of which is north of 68  18 degrees North latitude, other than leases or properties subject to  19 AS 43.55.011(p), is the gross value at the point of production of that oil,  20 less 1/12 the producer's lease expenditures under AS 43.55.165 for the  21 calendar year incurred to explore for, develop, or produce oil and gas  22 deposits located in the state outside the Cook Inlet sedimentary basin and  23 south of 68 degrees North latitude, other than oil and gas deposits located  24 in a lease or property that includes land north of 68 degrees North latitude  25 or that is subject to AS 43.55.011(p) or, before January 1, 2027, from  26 which commercial production has not begun, as adjusted under  27 AS 43.55.170;  28 (C) from leases or properties subject to AS 43.55.011(p) is  29 the gross value at the point of production of that oil, less 1/12 the  30 producer's lease expenditures under AS 43.55.165 for the calendar year  31 incurred to explore for, develop, or produce oil and gas deposits located in  01 leases or properties subject to AS 43.55.011(p) or, before January 1, 2027,  02 located in leases or properties in the state outside the Cook Inlet  03 sedimentary basin, no part of which is north of 68 degrees North latitude  04 from which commercial production has not begun, as adjusted under  05 AS 43.55.170;  06 (D) from leases or properties in the state no part of which is  07 north of 68 degrees North latitude, other than leases or properties subject  08 to (B) or (C) of this paragraph, is the gross value at the point of  09 production of that oil less 1/12 the producer's lease expenditures under  10 AS 43.55.165 for the calendar year incurred to explore for, develop, or  11 produce oil and gas deposits located in the state south of 68 degrees North  12 latitude, other than oil and gas deposits located in a lease or property in  13 the state that includes land north of 68 degrees North latitude, and  14 excluding lease expenditures that are deductible under (B) or (C) of this  15 paragraph or would be deductible under (B) or (C) of this paragraph if  16 not prohibited by (b) of this section, as adjusted under AS 43.55.170; a  17 separate monthly production tax value shall be calculated for  18 (i) oil produced from each lease or property in the  19 Cook Inlet sedimentary basin;  20 (ii) oil produced from each lease or property outside  21 the Cook Inlet sedimentary basin, no part of which is north of 68  22 degrees North latitude, other than leases or properties subject to  23 (C) of this paragraph [(3) OF THIS SUBSECTION]. 24  * Sec. 26. AS 43.55.165(a), as amended by sec. 29, ch. 4, 4SSLA 2016, is amended to read: 25 (a) For purposes of this chapter, a producer's lease expenditures for a calendar 26 year are 27 (1) costs, other than items listed in (e) of this section, that are 28 (A) incurred by the producer during the calendar year after 29 March 31, 2006, to explore for, develop, or produce oil or gas deposits located 30 within the producer's leases or properties in the state or, in the case of land in 31 which the producer does not own an operating right, operating interest, or 01 working interest, to explore for oil or gas deposits within other land in the 02 state; and 03 (B) allowed by the department by regulation, based on the 04 department's determination that the costs satisfy the following three 05 requirements: 06 (i) the costs must be incurred upstream of the point of 07 production of oil and gas; 08 (ii) the costs must be ordinary and necessary costs of 09 exploring for, developing, or producing, as applicable, oil or gas 10 deposits; and 11 (iii) the costs must be direct costs of exploring for, 12 developing, or producing, as applicable, oil or gas deposits; [AND] 13 (2) a reasonable allowance for that calendar year, as determined under 14 regulations adopted by the department, for overhead expenses that are directly related 15 to exploring for, developing, or producing, as applicable, the oil or gas deposits; and  16 (3) lease expenditures incurred in a previous year, subject to (m)  17 and (n) of this section, that  18 (A) met the requirements of AS 43.55.160(e) in the year that  19 the lease expenditures were incurred;  20 (B) have not been deducted in the determination of the  21 production tax value of oil and gas under AS 43.55.160(a) in a previous  22 calendar year;  23 (C) were not the basis of a credit under this title; and  24 (D) were incurred to explore for, develop, or produce an oil  25 or gas deposit located north of 68 degrees North latitude.  26  * Sec. 27. AS 43.55.165 is amended by adding new subsections to read: 27 (m) Beginning January 1 of the eighth calendar year after a lease expenditure 28 is carried forward under (a)(3) of this section, the lease expenditure shall decrease in 29 value each year by one-tenth of the amount carried forward in the first calendar year. 30 A lease expenditure carried forward under this section may not decrease in value for a 31 partial calendar year. 01 (n) A lease expenditure carried forward under (a)(3) of this section may not 02 reduce a taxpayer's gross value at the point of production by an amount that exceeds 03 the gross value at the point of production of the oil and gas produced from the lease or 04 property where the lease expenditure was incurred during the calendar year the lease 05 expenditure is applied. 06 * Sec. 28. AS 43.98.050 is amended to read: 07 Sec. 43.98.050. Duties. The duties of the board include the following: 08 (1) establish and maintain a salient collection of information related to 09 oil and gas exploration, development, and production in the state and related to tax 10 structures, rates, and credits in other regions with oil and gas resources; 11 (2) review historical, current, and potential levels of investment in the 12 state's oil and gas sector; 13 (3) identify factors that affect investment in oil and gas exploration, 14 development, and production in the state, including tax structure, rates, and credits; 15 royalty requirements; infrastructure; workforce availability; and regulatory 16 requirements; 17 (4) review the competitive position of the state to attract and maintain 18 investment in the oil and gas sector in the state as compared to the competitive 19 position of other regions with oil and gas resources; 20 (5) in order to facilitate the work of the board, establish procedures to 21 accept and keep confidential information that is beneficial to the work of the board, 22 including the creation of a secure data room and confidentiality agreements to be 23 signed by individuals having access to confidential information; 24 (6) make written findings and recommendations to the Alaska State 25 Legislature before 26 (A) January 31, 2015, or as soon thereafter as practicable, 27 regarding 28 (i) changes to the state's regulatory environment and 29 permitting structure that would be conducive to encouraging increased 30 investment while protecting the interests of the people of the state and 31 the environment; 01 (ii) the status of the oil and gas industry labor pool in 02 the state and the effectiveness of workforce development efforts by the 03 state; 04 (iii) the status of the oil-and-gas-related infrastructure 05 of the state, including a description of infrastructure deficiencies; and 06 (iv) the competitiveness of the state's fiscal oil and gas 07 tax regime when compared to other regions of the world; 08 (B) January 15, 2017, regarding 09 (i) the state's tax structure and rates on oil and gas 10 produced south of 68 degrees North latitude; 11 (ii) a tax structure that takes into account the unique 12 economic circumstances for each oil and gas producing area south of 13 68 degrees North latitude; 14 (iii) a reduction in the gross value at the point of 15 production for oil and gas produced south of 68 degrees North latitude 16 that is similar to the reduction in gross value at the point of production 17 in AS 43.55.160(f) and former AS 43.55.160(g) [(g)]; 18 (iv) other incentives for oil and gas production south of 19 68 degrees North latitude; 20 (C) January 31, 2021, or as soon thereafter as practicable, 21 regarding 22 (i) changes to the state's fiscal regime that would be 23 conducive to increased and ongoing long-term investment in and 24 development of the state's oil and gas resources; 25 (ii) alternative means for increasing the state's ability to 26 attract and maintain investment in and development of the state's oil 27 and gas resources; and 28 (iii) a review of the current effectiveness and future 29 value of any provisions of the state's oil and gas tax laws that are 30 expiring in the next five years. 31  * Sec. 29. AS 43.55.024(j), 43.55.029, and 43.55.160(g) are repealed. 01 * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 LEGISLATIVE WORKING GROUP. (a) A legislative working group is established 04 to analyze the Cook Inlet fiscal regime for oil and gas, review the state's tax structure and 05 rates on oil and gas produced south of 68 degrees North latitude, recommend changes to the 06 legislature for consideration during the Second Regular Session of the Thirtieth Alaska State 07 Legislature, and develop terms for a comprehensive fiscal regime, including 08 (1) a tax structure that accounts for the unique circumstances for each oil and 09 gas producing area south of 68 degrees North latitude; 10 (2) incentives other than direct monetary support from the state for the 11 exploration, development, and production of oil and gas south of 68 degrees North latitude; 12 (3) consideration of the competitiveness of the area south of 68 degrees North 13 latitude to attract new oil and gas development; 14 (4) consideration of the unique market considerations of the Cook Inlet 15 sedimentary basin and the need to support energy supply security for communities in 16 Southcentral Alaska; 17 (5) alternative means of state support for the exploration, development, and 18 production of oil and gas in the Cook Inlet sedimentary basin, including loan guarantees or 19 other financial support through the Alaska Industrial Development and Export Authority, or 20 other state corporation or entity; 21 (6) the applicability of the recommended tax structure to gas currently subject 22 to AS 43.55.011(o). 23 (b) The recommended changes under (a) of this section may not include refundable or 24 deductible tax credits or carried-forward lease expenditures. 25 (c) The working group consists of 26 (1) two co-chairs, one of whom is a member of the house of representatives 27 appointed by the speaker of the house of representatives, and one of whom is a member of the 28 senate appointed by the president of the senate; and 29 (2) members appointed by the co-chairs; members must be legislators and 30 must include members of the majority and minority caucuses. 31 (d) The co-chairs of the working group may form an advisory group to the working 01 group, composed of members who are not legislators and who have expertise and skills to 02 assist in the review and development of a new plan for the tax structure and rates on oil and 03 gas produced south of 68 degrees North latitude. The members of an advisory group may 04 include commissioners or employees of state departments, members of the oil and gas 05 industry or trade associations, and economists. 06 (e) The working group may be supported by legislative consultants under contract 07 through the Legislative Budget and Audit Committee. 08  * Sec. 31. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 APPLICABILITY. (a) The additional limitations on the use of tax credits in 11 AS 43.55.011(q), added by sec. 8 of this Act, AS 43.55.023(c), as amended by sec. 16 of this 12 Act, AS 43.55.024(i), as amended by sec. 17 of this Act, and AS 43.55.025(i), as amended by 13 sec. 18 of this Act, apply to credits applied to reduce a tax liability for a tax year starting on or 14 after the effective date of secs. 8 and 16 - 18 of this Act. 15 (b) AS 43.55.023(b), as amended by sec. 15 of this Act, applies to lease expenditures 16 incurred on or after the effective date of sec. 15 of this Act. 17 (c) The repeal of AS 43.55.029 by sec. 29 of this Act applies to a credit applied for on 18 or after the effective date of sec. 29 of this Act. 19  * Sec. 32. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 TRANSITION: CARRIED-FORWARD LEASE EXPENDITURES. 22 AS 43.55.165(a)(3), (m), and (n), added by secs. 26 and 27 of this Act, apply to a lease 23 expenditure incurred on or after the effective date of secs. 26 and 27 of this Act. 24  * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 TRANSITION: ASSIGNMENT OF TAX CREDIT CERTIFICATES. 27 Notwithstanding the repeal of AS 43.55.029 by sec. 29 of this Act, the Department of 28 Revenue may continue to apply and enforce AS 43.55.029 as that section read the day before 29 the effective date of sec. 29 of this Act for a credit applied for before the effective date of sec. 30 29 of this Act. 31  * Sec. 34. The uncodified law of the State of Alaska is amended by adding a new section to 01 read: 02 TRANSITION: PAYMENT OF TAX; FILING. (a) Notwithstanding the amendments 03 to AS 43.55.020 by secs. 10 - 14 of this Act, 04 (1) a person subject to tax under AS 43.55 that is required to make one or 05 more installment payments of estimated tax or other payments of tax under AS 43.55.020 for 06 production before the effective date of secs. 10 - 14 of this Act shall pay the tax under 07 AS 43.55.020, as that section read on the day before the effective date of secs. 10 - 14 of this 08 Act; 09 (2) an unpaid amount of an installment payment required under AS 43.55.020 10 for production before the effective date of secs. 10 - 14 of this Act that is not paid when due 11 bears interest under AS 43.55.020, as that section read on the day before the effective date of 12 secs. 10 - 14 of this Act; 13 (3) an overpayment of an installment payment required under AS 43.55.020 14 for production before the effective date of secs. 10 - 14 of this Act bears interest under 15 AS 43.55.020, as that section read on the day before the effective date of secs. 10 - 14 of this 16 Act. 17 (b) The Department of Revenue may continue to apply and enforce AS 43.55.020, as 18 that section read on the day before the effective date of secs. 10 - 14 of this Act, for a tax or 19 installment payment for production before the effective date of secs. 10 - 14 of this Act. 20 * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 TRANSITION: GROSS VALUE REDUCTION. Notwithstanding the repeal of 23 AS 43.55.160(g) by sec. 29 of this Act and the amendments to AS 43.55.020(a), 43.55.023(b), 24 43.55.024(i), and 43.55.160(a) and (h) by secs. 10, 15, 17, 22, and 25 of this Act, a taxpayer 25 who produces oil or gas before January 1, 2018, that qualifies for a reduction in gross value 26 under AS 43.55.160(g), as that subsection read on the day before the effective date of sec. 29 27 of this Act, may reduce the gross value at the point of production of and may qualify for a 28 credit under AS 43.55.024(i) for that oil or gas, in accordance with AS 43.55.160(g) and 29 43.55.024(i), as those subsections read on the day before the effective date of sec. 29 of this 30 Act. 31 * Sec. 36. The uncodified law of the State of Alaska is amended by adding a new section to 01 read: 02 TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any 03 contrary provision of AS 44.62.240, if the Department of Revenue expressly designates in a 04 regulation that the regulation applies retroactively, a regulation adopted by the Department of 05 Revenue to implement, interpret, make specific, or otherwise carry out this Act may apply 06 retroactively to the effective date of the law implemented by the regulation. 07  * Sec. 37. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 RETROACTIVITY. Section 3 of this Act is retroactive to January 1, 2017. 10  * Sec. 38. Sections 3, 30, 36, and 37 of this Act take effect immediately under 11 AS 01.10.070(c). 12  * Sec. 39. Section 26 of this Act takes effect on the effective date of sec. 29, ch. 4, 4SSLA 13 2016. 14  * Sec. 40. Except as provided in secs. 38 and 39 of this Act, this Act takes effect January 1, 15 2018.