00 HOUSE BILL NO. 369 01 "An Act relating to the oil and gas production tax; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03  * Section 1. AS 43.55.011(e) is amended to read: 04 (e) There is levied on the producer of oil or gas a tax for all oil and gas 05 produced each calendar year from each lease or property in the state, less any oil and 06 gas the ownership or right to which is exempt from taxation or constitutes a 07 landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as 08 otherwise provided under (f), (j), (k), (o), [AND] (p), and (q) of this section, for oil 09 and gas produced 10 (1) before January 1, 2014, the tax is equal to the sum of 11 (A) the annual production tax value of the taxable oil and gas 12 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 13 (B) the sum, over all months of the calendar year, of the tax 14 amounts determined under (g) of this section; 15 (2) on and after January 1, 2014, and before January 1, 2022, the tax is 01 equal to the annual production tax value of the taxable oil and gas as calculated under 02 AS 43.55.160(a)(1) multiplied by 35 percent; 03 (3) on and after January 1, 2022, the tax for 04 (A) oil is equal to the annual production tax value of the 05 taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent; 06 (B) gas is equal to 13 percent of the gross value at the point of 07 production of the taxable gas; if the gross value at the point of production of 08 gas produced from a lease or property is less than zero, that gross value at the 09 point of production is considered zero for purposes of this subparagraph. 10  * Sec. 2. AS 43.55.011(f) is amended to read: 11 (f) The levy of tax under (e) of this section for 12 (1) oil and gas produced before January 1, 2022, from leases or 13 properties that include land north of 68 degrees North latitude, other than gas subject 14 to (o) of this section, may not be less than 15 (A) four percent of the gross value at the point of production 16 when the average price per barrel for Alaska North Slope crude oil for sale on 17 the United States West Coast during the calendar year for which the tax is due 18 is more than $25; 19 (B) three percent of the gross value at the point of production 20 when the average price per barrel for Alaska North Slope crude oil for sale on 21 the United States West Coast during the calendar year for which the tax is due 22 is over $20 but not over $25; 23 (C) two percent of the gross value at the point of production 24 when the average price per barrel for Alaska North Slope crude oil for sale on 25 the United States West Coast during the calendar year for which the tax is due 26 is over $17.50 but not over $20; 27 (D) one percent of the gross value at the point of production 28 when the average price per barrel for Alaska North Slope crude oil for sale on 29 the United States West Coast during the calendar year for which the tax is due 30 is over $15 but not over $17.50; or 31 (E) zero percent of the gross value at the point of production 01 when the average price per barrel for Alaska North Slope crude oil for sale on 02 the United States West Coast during the calendar year for which the tax is due 03 is $15 or less; [AND] 04 (2) oil produced on and after January 1, 2022, except as provided in  05 (3) of this subsection, from leases or properties that include land north of 68 degrees 06 North latitude, may not be less than 07 (A) four percent of the gross value at the point of production 08 when the average price per barrel for Alaska North Slope crude oil for sale on 09 the United States West Coast during the calendar year for which the tax is due 10 is more than $25; 11 (B) three percent of the gross value at the point of production 12 when the average price per barrel for Alaska North Slope crude oil for sale on 13 the United States West Coast during the calendar year for which the tax is due 14 is over $20 but not over $25; 15 (C) two percent of the gross value at the point of production 16 when the average price per barrel for Alaska North Slope crude oil for sale on 17 the United States West Coast during the calendar year for which the tax is due 18 is over $17.50 but not over $20; 19 (D) one percent of the gross value at the point of production 20 when the average price per barrel for Alaska North Slope crude oil for sale on 21 the United States West Coast during the calendar year for which the tax is due 22 is over $15 but not over $17.50; or 23 (E) zero percent of the gross value at the point of production 24 when the average price per barrel for Alaska North Slope crude oil for sale on 25 the United States West Coast during the calendar year for which the tax is due 26 is $15 or less; and  27 (3) oil produced on and after January 1, 2023, and before  28 January 1, 2025, from leases or properties that include land north of 68 degrees  29 North latitude, is six percent of the gross value at the point of production.  30  * Sec. 3. AS 43.55.011 is amended by adding a new subsection to read: 31 (q) Notwithstanding the relevant provisions of this section, the tax on oil 01 produced from leases or properties that include land north of 68 degrees North latitude 02 under (e)(3)(A) of this section is suspended for a period beginning January 1, 2023, 03 and ending January 1, 2025. For the period the tax under (e)(3)(A) of this section is 04 suspended for a producer, the minimum tax under (f)(3) of this section will instead 05 apply. For purposes of calculating an installment payment under AS 43.55.020 for the 06 time the tax under (e)(3)(A) of this section is suspended under this subsection, a 07 producer shall pay tax at the rate set out in (f)(3) of this section. For the purposes of 08 the tax credits under AS 43.55.024 and 43.55.025, a producer may calculate its tax 09 under (e)(3)(A) of this section, but tax is not due under (e)(3)(A) of this section. 10  * Sec. 4. AS 43.55.020(a) is amended to read: 11 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 12 the tax as follows: 13 (1) for oil and gas produced before January 1, 2014, an installment 14 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 15 as allowed by law, is due for each month of the calendar year on the last day of the 16 following month; except as otherwise provided under (2) of this subsection, the 17 amount of the installment payment is the sum of the following amounts, less 1/12 of 18 the tax credits that are allowed by law to be applied against the tax levied by 19 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 20 not be less than zero: 21 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 22 produced from leases or properties in the state outside the Cook Inlet 23 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 24 the greater of 25 (i) zero; or 26 (ii) the sum of 25 percent and the tax rate calculated for 27 the month under AS 43.55.011(g) multiplied by the remainder obtained 28 by subtracting 1/12 of the producer's adjusted lease expenditures for the 29 calendar year of production under AS 43.55.165 and 43.55.170 that are 30 deductible for the oil and gas under AS 43.55.160 from the gross value 31 at the point of production of the oil and gas produced from the leases or 01 properties during the month for which the installment payment is 02 calculated; 03 (B) for oil and gas produced from leases or properties subject 04 to AS 43.55.011(f), the greatest of 05 (i) zero; 06 (ii) zero percent, one percent, two percent, three 07 percent, or four percent, as applicable, 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 for which the installment payment is calculated; or 10 (iii) the sum of 25 percent and the tax rate calculated for 11 the month under AS 43.55.011(g) multiplied by the remainder obtained 12 by subtracting 1/12 of the producer's adjusted lease expenditures for the 13 calendar year of production under AS 43.55.165 and 43.55.170 that are 14 deductible for the oil and gas under AS 43.55.160 from the gross value 15 at the point of production of the oil and gas produced from those leases 16 or properties during the month for which the installment payment is 17 calculated; 18 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 19 each lease or property, the greater of 20 (i) zero; or 21 (ii) the sum of 25 percent and the tax rate calculated for 22 the month under AS 43.55.011(g) multiplied by the remainder obtained 23 by 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) the sum of 25 percent and the tax rate calculated for 01 the month under AS 43.55.011(g) multiplied by the remainder obtained 02 by subtracting 1/12 of the producer's adjusted lease expenditures for the 03 calendar year of production under AS 43.55.165 and 43.55.170 that are 04 deductible for the oil and gas under AS 43.55.160 from the gross value 05 at the point of production of the oil and gas produced from the leases or 06 properties during the month for which the installment payment is 07 calculated, but not less than zero; or 08 (ii) four percent of the gross value at the point of 09 production of the oil and gas produced from the leases or properties 10 during the month, but not less than zero; 11 (2) an amount calculated under (1)(C) of this subsection for oil or gas 12 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 13 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 14 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 15 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 16 gas produced during the month for the amount of taxable gas produced during the 17 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 18 during the month for the amount of taxable oil produced during the calendar year; 19 (3) an installment payment of the estimated tax levied by 20 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 21 on the last day of the following month; the amount of the installment payment is the 22 sum of 23 (A) the applicable tax rate for oil provided under 24 AS 43.55.011(i), multiplied by the gross value at the point of production of the 25 oil taxable under AS 43.55.011(i) and produced from the lease or property 26 during the month; and 27 (B) the applicable tax rate for gas provided under 28 AS 43.55.011(i), multiplied by the gross value at the point of production of the 29 gas taxable under AS 43.55.011(i) and produced from the lease or property 30 during the month; 31 (4) any amount of tax levied by AS 43.55.011, net of any credits 01 applied as allowed by law, that exceeds the total of the amounts due as installment 02 payments of estimated tax is due on March 31 of the year following the calendar year 03 of production; 04 (5) for oil and gas produced on and after January 1, 2014, and before 05 January 1, 2022, an installment payment of the estimated tax levied by 06 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 07 month of the calendar year on the last day of the following month; except as otherwise 08 provided under (6) of this subsection, the amount of the installment payment is the 09 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 10 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 11 of the installment payment may not be less than zero: 12 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 13 produced from leases or properties in the state outside the Cook Inlet 14 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 15 the greater of 16 (i) zero; or 17 (ii) 35 percent multiplied by the remainder obtained by 18 subtracting 1/12 of the producer's adjusted lease expenditures for the 19 calendar year of production under AS 43.55.165 and 43.55.170 that are 20 deductible for the oil and gas under AS 43.55.160 from the gross value 21 at the point of production of the oil and gas produced from the leases or 22 properties during the month for which the installment payment is 23 calculated; 24 (B) for oil and gas produced from leases or properties subject 25 to AS 43.55.011(f), the greatest of 26 (i) zero; 27 (ii) zero percent, one percent, two percent, three 28 percent, or four percent, as applicable, of the gross value at the point of 29 production of the oil and gas produced from the leases or properties 30 during the month for which the installment payment is calculated; or 31 (iii) 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 those leases 05 or properties during the month for which the installment payment is 06 calculated, except that, for the purposes of this calculation, a reduction 07 from the gross value at the point of production may apply for oil and 08 gas subject to AS 43.55.160(f) or (g); 09 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 10 each lease or property, the greater of 11 (i) zero; or 12 (ii) 35 percent multiplied by the remainder obtained by 13 subtracting 1/12 of the producer's adjusted lease expenditures for the 14 calendar year of production under AS 43.55.165 and 43.55.170 that are 15 deductible under AS 43.55.160 for the oil or gas, respectively, 16 produced from the lease or property from the gross value at the point of 17 production of the oil or gas, respectively, produced from the lease or 18 property during the month for which the installment payment is 19 calculated; 20 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 21 (i) 35 percent multiplied by the remainder obtained by 22 subtracting 1/12 of the producer's adjusted lease expenditures for the 23 calendar year of production under AS 43.55.165 and 43.55.170 that are 24 deductible for the oil and gas under AS 43.55.160 from the gross value 25 at the point of production of the oil and gas produced from the leases or 26 properties during the month for which the installment payment is 27 calculated, but not less than zero; or 28 (ii) four percent of the gross value at the point of 29 production of the oil and gas produced from the leases or properties 30 during the month, but not less than zero; 31 (6) an amount calculated under (5)(C) of this subsection for oil or gas 01 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 02 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 03 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 04 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 05 gas produced during the month for the amount of taxable gas produced during the 06 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 07 during the month for the amount of taxable oil produced during the calendar year; 08 (7) for oil and gas produced on or after January 1, 2022, an installment 09 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 10 as allowed by law, is due for each month of the calendar year on the last day of the 11 following month; except as otherwise provided under (10) of this subsection, the 12 amount of the installment payment is the sum of the following amounts, less 1/12 of 13 the tax credits that are allowed by law to be applied against the tax levied by 14 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 15 not be less than zero: 16 (A) for oil produced from leases or properties subject to 17 AS 43.55.011(f), the greatest of 18 (i) zero; 19 (ii) the [ZERO PERCENT, ONE PERCENT, TWO 20 PERCENT, THREE PERCENT, OR FOUR PERCENT, AS] 21 applicable percentage under AS 43.55.011(f) [,] of the gross value at 22 the point of production of the oil produced from the leases or properties 23 during the month for which the installment payment is calculated; or 24 (iii) 35 percent multiplied by the remainder obtained by 25 subtracting 1/12 of the producer's adjusted lease expenditures for the 26 calendar year of production under AS 43.55.165 and 43.55.170 that are 27 deductible for the oil under AS 43.55.160(h)(1) from the gross value at 28 the point of production of the oil produced from those leases or 29 properties during the month for which the installment payment is 30 calculated, except that, for the purposes of this calculation, a reduction 31 from the gross value at the point of production may apply for oil 01 subject to AS 43.55.160(f) or 43.55.160(f) and (g); 02 (B) for oil produced before or during the last calendar year 03 under AS 43.55.024(b) for which the producer could take a tax credit under 04 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 05 sedimentary basin, no part of which is north of 68 degrees North latitude, other 06 than leases or properties subject to AS 43.55.011(o) or (p), the greater of 07 (i) zero; or 08 (ii) 35 percent multiplied by the remainder obtained by 09 subtracting 1/12 of the producer's adjusted lease expenditures for the 10 calendar year of production under AS 43.55.165 and 43.55.170 that are 11 deductible for the oil under AS 43.55.160(h)(2) from the gross value at 12 the point of production of the oil produced from the leases or properties 13 during the month for which the installment payment is calculated; 14 (C) for oil and gas produced from leases or properties subject 15 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection, 16 the sum of 17 (i) 35 percent multiplied by the remainder obtained by 18 subtracting 1/12 of the producer's adjusted lease expenditures for the 19 calendar year of production under AS 43.55.165 and 43.55.170 that are 20 deductible for the oil under AS 43.55.160(h)(3) from the gross value at 21 the point of production of the oil produced from the leases or properties 22 during the month for which the installment payment is calculated, but 23 not less than zero; and 24 (ii) 13 percent of the gross value at the point of 25 production of the gas produced from the leases or properties during the 26 month, but not less than zero; 27 (D) for oil produced from leases or properties in the state, no 28 part of which is north of 68 degrees North latitude, other than leases or 29 properties subject to (B), (C), or (F) of this paragraph, the greater of 30 (i) zero; or 31 (ii) 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 under AS 43.55.160(h)(4) from the gross value at 04 the point of production of the oil produced from the leases or properties 05 during the month for which the installment payment is calculated; 06 (E) for gas produced from each lease or property in the state 07 outside the Cook Inlet sedimentary basin, other than a lease or property subject 08 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of 09 production of the gas produced from the lease or property during the month for 10 which the installment payment is calculated, but not less than zero; 11 (F) for oil subject to AS 43.55.011(k), for each lease or 12 property, the greater of 13 (i) zero; or 14 (ii) 35 percent multiplied by the remainder obtained by 15 subtracting 1/12 of the producer's adjusted lease expenditures for the 16 calendar year of production under AS 43.55.165 and 43.55.170 that are 17 deductible under AS 43.55.160 for the oil produced from the lease or 18 property from the gross value at the point of production of the oil 19 produced from the lease or property during the month for which the 20 installment payment is calculated; 21 (G) for gas subject to AS 43.55.011(j) or (o), for each lease or 22 property, the greater of 23 (i) zero; or 24 (ii) 13 percent of the gross value at the point of 25 production of the gas produced from the lease or property during the 26 month for which the installment payment is calculated; 27 (8) an amount calculated under (7)(C) of this subsection may not 28 exceed four percent of the gross value at the point of production of the oil and gas 29 produced from leases or properties subject to AS 43.55.011(p) during the month for 30 which the installment payment is calculated; 31 (9) for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and 01 (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point 02 of production is determined under AS 43.55.011(f) [AS 43.55.011(f)(1) OR (2)] but 03 substituting the phrase "month for which the installment payment is calculated" in 04 AS 43.55.011(f) [AS 43.55.011(f)(1) AND (2)] for the phrase "calendar year for 05 which the tax is due"; 06 (10) an amount calculated under (7)(F) or (G) of this subsection for oil 07 or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 08 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 09 applicable, for gas, or set out in AS 43.55.011(k) for oil, but substituting in 10 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 11 gas produced during the month for the amount of taxable gas produced during the 12 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 13 during the month for the amount of taxable oil produced during the calendar year. 14  * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 REGULATIONS. The Department of Revenue may adopt regulations under 17 AS 43.05.080 necessary to implement the changes made by this Act. The regulations take 18 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 19 law implemented by the regulation. 20  * Sec. 6. Section 5 of this Act takes effect immediately under AS 01.10.070(c). 21  * Sec. 7. Except as provided in sec. 6 of this Act, this Act takes effect January 1, 2023.