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CSSB 192(RES): "An Act relating to the oil and gas production tax; relating to the minimum tax on oil and gas production; providing that the tax rate applicable to the production of oil as the average production tax value of oil, gas produced in the Cook Inlet sedimentary basin, and gas produced outside of the Cook Inlet sedimentary basin and used in the state increases above $30 shall be 0.35 percent multiplied by the number that represents the difference between that average monthly production tax value and $30, or the sum of 25 percent and the product of 0.1 percent multiplied by the number that represents the difference between that average monthly production tax value and $101.43, except that the total rate determined in the calculation may not exceed 35 percent; providing for an increase in the rate of tax on the production of gas as the average production tax value on a BTU equivalent barrel basis of gas produced outside of the Cook Inlet sedimentary basin and not used in the state increases above $30; relating to payments of the oil and gas production tax; relating to the lease expenditures that may be deducted when determining production tax value; relating to the allocation of lease expenditures and adjustments to lease expenditures; relating to the availability of funds from the oil and gas production tax for appropriation to the community revenue sharing fund; providing for a reduction in production tax value for certain oil; relating to the duties of the Alaska Oil and Gas Conservation Commission; relating to a petroleum information management system; relating to the duties of the Department of Natural Resources, the Department of Revenue, and the Department of Labor and Workforce Development that relate to providing the Alaska Oil and Gas Conservation Commission with certain information relating to oil and gas; and providing for an effective date."

00                       CS FOR SENATE BILL NO. 192(RES)                                                                   
01 "An Act relating to the oil and gas production tax; relating to the minimum tax on oil                                  
02 and gas production; providing that the tax rate applicable to the production of oil as the                              
03 average production tax value of oil, gas produced in the Cook Inlet sedimentary basin,                                  
04 and gas produced outside of the Cook Inlet sedimentary basin and used in the state                                      
05 increases above $30 shall be 0.35 percent multiplied by the number that represents the                                  
06 difference between that average monthly production tax value and $30, or the sum of 25                                  
07 percent and the product of 0.1 percent multiplied by the number that represents the                                     
08 difference between that average monthly production tax value and $101.43, except that                                   
09 the total rate determined in the calculation may not exceed 35 percent; providing for an                                
10 increase in the rate of tax on the production of gas as the average production tax value                                
11 on a BTU equivalent barrel basis of gas produced outside of the Cook Inlet sedimentary                                  
12 basin and not used in the state increases above $30; relating to payments of the oil and                                
01 gas production tax; relating to the lease expenditures that may be deducted when                                        
02 determining production tax value; relating to the allocation of lease expenditures and                                  
03 adjustments to lease expenditures; relating to the availability of funds from the oil and                               
04 gas production tax for appropriation to the community revenue sharing fund; providing                                   
05 for a reduction in production tax value for certain oil; relating to the duties of the                                  
06 Alaska Oil and Gas Conservation Commission; relating to a petroleum information                                         
07 management system; relating to the duties of the Department of Natural Resources, the                                   
08 Department of Revenue, and the Department of Labor and Workforce Development                                            
09 that relate to providing the Alaska Oil and Gas Conservation Commission with certain                                    
10 information relating to oil and gas; and providing for an effective date."                                              
11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
12    * Section 1. AS 29.60.850(b) is amended to read:                                                                   
13            (b)  Each fiscal year, the legislature may appropriate to the community revenue                              
14       sharing fund an amount equal to the lesser of 20 percent of the money received by the                         
15       state during the previous calendar year under both AS 43.55.011(g) and (p), or the                        
16       difference between the amount of money received by the state during the                                       
17       previous calendar for oil and gas production subject to AS 43.55.011(f) and 25                                
18       percent of the production tax value determined under AS 43.55.160 for oil and                                 
19       gas production subject to AS 43.55.011(f) produced during the previous calendar                               
20       year, except the difference may not be less than zero. The amount appropriated                            
21       may not exceed                                                                                                    
22                 (1)  $60,000,000; or                                                                                    
23                 (2)  the amount that, when added to the fund balance on June 30 of the                                  
24       previous fiscal year, equals $180,000,000.                                                                        
25    * Sec. 2. AS 31.05.030 is amended by adding a new subsection to read:                                              
26            (n)  The commission shall develop and maintain the petroleum information                                     
27       management system required under AS 31.05.031.                                                                    
01    * Sec. 3. AS 31.05 is amended by adding a new section to read:                                                     
02            Sec. 31.05.031. Petroleum information management system. (a) The                                           
03       commission shall develop and maintain an electronic petroleum information                                         
04       management system to collect, secure, distribute, store, retrieve, and archive                                    
05       information related to oil and gas exploration, development, and production in the                                
06       state. The purposes of the petroleum information management system are to improve                                 
07       the administration of the oil and gas production tax and to facilitate exploration,                               
08       development, and production of oil and gas resources. The petroleum information                                   
09       management system shall be accessible by the public.                                                              
10            (b)  To the extent the information is available and is not confidential, the                                 
11       petroleum information management system must include the following information:                                   
12                 (1)  unit and joint operating agreements;                                                               
13                 (2)  state oil and gas exploration licenses and oil and gas leases;                                     
14                 (3)  for exploration activities,                                                                        
15                      (A)  exploration work programs and budgets;                                                        
16                      (B)  seismic data;                                                                                 
17                      (C)  drilling reports;                                                                             
18                      (D)  logs;                                                                                         
19                      (E)  well tests;                                                                                   
20                      (F)  geological models and maps;                                                                   
21                 (4)  for development activities,                                                                        
22                      (A)  development plans with operating and capital expenditure                                      
23            projections;                                                                                                 
24                      (B)  construction progress reports;                                                                
25                      (C)  drilling reports;                                                                             
26                      (D)  reservoir characterization;                                                                   
27                 (5)  for production activities,                                                                         
28                      (A)  production work programs and budgets;                                                         
29                      (B)  oil and gas sales, revenue, and pricing;                                                      
30                      (C)  transportation agreements;                                                                    
31                      (D)  production data;                                                                              
01                      (E)  injection data;                                                                               
02                      (F)  operating and capital expenditures;                                                           
03                      (G)  facility maps and studies;                                                                    
04                 (6)  for abandonment of oil and gas wells, leases, and production and                                   
05       transportation facilities,                                                                                        
06                      (A)  abandonment plans and budgets;                                                                
07                      (B)  progress reports;                                                                             
08                 (7)  for oil and gas related employment information,                                                    
09                      (A)  the number of resident and nonresident hires for each year;                                   
10                      (B)  training opportunities; and                                                                   
11                 (8)  other information the commission determines necessary and                                          
12       relevant to the oil and gas production tax and to the exploration, development, and                               
13       production of oil and gas resources.                                                                              
14            (c)  The Department of Natural Resources, the Department of Revenue, and the                                 
15       Department of Labor and Workforce Development, in consultation with the                                           
16       commission, shall provide information described in (b) of this section that is not                                
17       confidential and within each department's control to the commission for inclusion in                              
18       the petroleum information management system. The information provided by a                                        
19       department under this subsection shall be in a form suitable for the commission to                                
20       include in the petroleum information management system.                                                           
21    * Sec. 4. AS 31.05.093(c) is amended to read:                                                                      
22            (c)  The commission shall determine the regulatory cost charges levied under                                 
23       this section so that the total amount to be collected approximately equals the                                    
24       appropriations made for the operating costs of the commission under this chapter for                              
25       the fiscal year. For the purpose of determining the regulatory costs charges under                            
26       this subsection, the operating costs for the petroleum information management                                 
27       system (AS 31.05.031) may not be included in the operating costs of the                                       
28       commission.                                                                                                   
29    * Sec. 5. AS 43.55.011(e) is amended to read:                                                                      
30            (e)  There is levied on the producer of oil or gas a tax for all oil and gas                                 
31       produced each calendar year from each lease or property in the state, less any oil and                            
01       gas the ownership or right to which is exempt from taxation or constitutes a                                      
02       landowner's royalty interest. Except as otherwise provided under (f), (j), (k), and (o) of                        
03       this section, the tax is equal to the sum of                                                                      
04                 (1)  the annual production tax value of the taxable oil and gas as                                      
05       calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and                                                 
06                 (2)  the sum, over all months of the calendar year, of the tax amounts                                  
07       determined under                                                                                                  
08                      (A)  subsection (g) of this section; and                                                   
09                      (B)  subsection (p) of this section.                                                           
10    * Sec. 6. AS 43.55.011(f) is repealed and reenacted to read:                                                       
11            (f)  Except for oil and gas subject to (i) of this section and gas subject to (o) of                         
12       this section, the provisions of this subsection apply to oil and gas produced from each                           
13       lease or property within a unit or nonunitized reservoir that has cumulatively produced                           
14       1,000,000,000 BTU equivalent barrels of oil or gas by the close of the most recent                                
15       calendar year and from which the average daily oil and gas production from the unit or                            
16       nonunitized reservoir during the most recent calendar year exceeded 100,000 BTU                                   
17       equivalent barrels. Notwithstanding any contrary provision of law, a producer may not                             
18       apply tax credits to reduce its total tax liability under (e) and (g) of this section for oil                     
19       and gas produced from all leases or properties within the unit or nonunitized reservoir                           
20       below 10 percent of the total gross value at the point of production of that oil and gas.                         
21       If the amount of tax calculated by multiplying the tax rates in (e) and (g) of this                               
22       section by the total production tax value of the oil and gas taxable under (e) and (g) of                         
23       this section produced from all of the producer's leases or properties within the unit or                          
24       nonunitized reservoir is less than 10 percent of the total gross value at the point of                            
25       production of that oil and gas, the tax levied by (e) and (g) of this section for that oil                        
26       and gas is equal to 10 percent of the total gross value at the point of production of that                        
27       oil and gas.                                                                                                      
28    * Sec. 7. AS 43.55.011(g) is amended to read:                                                                      
29            (g)  For each month of the calendar year for which the producer's average                                    
30       monthly production tax value under AS 43.55.160(a)(2)(A) - (E) of a                                           
31       [AS 43.55.160(a)(2) PER] BTU equivalent barrel of [THE] taxable oil and gas is more                               
01       than $30, the amount of tax for purposes of (e)(2)(A) [(e)(2)] of this section is                             
02       determined by multiplying the monthly production tax value of the taxable oil [AND                                
03       GAS] produced during the month, gas produced during the month from a lease or                                 
04       property in the Cook Inlet sedimentary basin, and gas produced during the                                     
05       month from a lease or property outside the Cook Inlet sedimentary basin and                                   
06       used in the state by the tax rate calculated as follows:                                                      
07                 (1)  if the producer's average monthly production tax value under                                   
08       AS 43.55.160(a)(2)(A) - (E) of a [PER] BTU equivalent barrel of [THE] taxable oil                             
09       and gas for the month is not more than $101.43 [$92.50], the tax rate is 0.35 [0.4]                       
10       percent multiplied by the number that represents the difference between the                                   
11       producer's [THAT] average monthly production tax value under                                              
12       AS 43.55.160(a)(2)(A) - (E) of a [PER] BTU equivalent barrel of taxable oil and gas                       
13       and $30; [OR]                                                                                                     
14                 (2)  if the producer's average monthly production tax value under                                   
15       AS 43.55.160(a)(2)(A) - (E) of a [PER] BTU equivalent barrel of [THE] taxable oil                             
16       and gas for the month is more than $101.43 [$92.50], the tax rate is the sum of 25                            
17       percent and the product of 0.1 percent multiplied by the number that represents the                               
18       difference between the producer's average monthly production tax value under                              
19       AS 43.55.160(a)(2)(A) - (E) of a [PER] BTU equivalent barrel of taxable oil and gas                       
20       and $101.43 [$92.50], except that the sum determined under this paragraph may not                             
21       exceed 35 [50] percent;                                                                                   
22                 (3)  for purposes of this subsection, the average monthly                                           
23       production tax value under AS 43.55.160(a)(2)(A) - (E) of a BTU equivalent                                    
24       barrel of taxable oil and gas is calculated by                                                                
25                      (A)  adding all of the monthly production tax values                                           
26            determined under AS 43.55.160(a)(2)(A) - (E); and                                                        
27                      (B)  dividing the sum calculated under (A) of this paragraph                                   
28            by the total amount, in BTU equivalent barrels, of                                                       
29                           (i)  taxable oil produced by the producer during the                                      
30                 month;                                                                                              
31                           (ii)  taxable gas produced by the producer during the                                     
01                 month from a lease or property in the Cook Inlet sedimentary                                        
02                 basin; and                                                                                          
03                           (iii)  taxable gas produced by the producer during                                        
04                 the month from a lease or property outside the Cook Inlet                                           
05                 sedimentary basin and used in the state.                                                            
06    * Sec. 8. AS 43.55.011 is amended by adding a new subsection to read:                                              
07            (p)  For each month of the calendar year for which the producer's average                                    
08       monthly production tax value under AS 43.55.160(a)(2)(F) and (G) of a BTU                                         
09       equivalent barrel of taxable gas is more than $30, the amount of tax on the production                            
10       of gas for purposes of (e)(2)(B) of this section is determined by multiplying the                                 
11       monthly production tax value of the taxable gas produced during the month other than                              
12       gas produced from a lease or property in the Cook Inlet sedimentary basin or gas                                  
13       produced outside the Cook Inlet sedimentary basin and used in the state by the tax rate                           
14       calculated as follows:                                                                                            
15                 (1)  if the producer's average monthly production tax value under                                       
16       AS 43.55.160(a)(2)(F) and (G) of a BTU equivalent barrel of taxable gas for the                                   
17       month is not more than $101.43, the tax rate is 0.35 percent multiplied by the number                             
18       that represents the difference between the producer's average monthly production tax                              
19       value under AS 43.55.160(a)(2)(F) and (G) of a BTU equivalent barrel of gas and $30;                              
20                 (2)  if the producer's average monthly production tax value under                                       
21       AS 43.55.160(a)(2)(F) and (G) of a BTU equivalent barrel of taxable gas for the                                   
22       month is more than $101.43, the tax rate is the sum of 25 percent and the product of                              
23       0.1 percent multiplied by the number that represents the difference between the                                   
24       producer's average monthly production tax value under AS 43.55.160(a)(2)(F) and (G)                               
25       of a BTU equivalent barrel of gas and $101.43, except that the sum determined under                               
26       this paragraph may not exceed 35 percent;                                                                         
27                 (3)  for purposes of this subsection, the average monthly production tax                                
28       value under AS 43.55.160(a)(2)(F) and (G) of a BTU equivalent barrel of taxable gas                               
29       is calculated by                                                                                                  
30                      (A)  adding the monthly production tax value determined under                                      
31            AS 43.55.160(a)(2)(F) to the monthly production tax value determined under                                   
01            AS 43.55.160(a)(2)(G); and                                                                                   
02                      (B)  dividing the sum calculated under (A) of this paragraph by                                    
03            the total amount, in BTU equivalent barrels, of the taxable gas produced by the                              
04            producer during the month, other than gas produced from a lease or property in                               
05            the Cook Inlet sedimentary basin or gas produced outside the Cook Inlet                                      
06            sedimentary basin and used in the state.                                                                     
07    * Sec. 9. AS 43.55.020(a) is repealed and reenacted to read:                                                       
08            (a)  For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i)                              
09       and (p) shall pay the tax as follows:                                                                             
10                 (1)  an installment payment of the estimated tax levied by                                              
11       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
12       month of the calendar year on the last day of the following month; except as otherwise                            
13       provided under (2) of this subsection, the amount of the installment payment is the                               
14       sum of the following amounts in (A) - (C) of this paragraph, less 1/12 of the tax                                 
15       credits that are allowed by law to be applied against the tax levied by AS 43.55.011(e)                           
16       for the calendar year, but the amount of the installment payment may not be less than                             
17       zero:                                                                                                             
18                      (A)  the monthly production tax value for the month calculated                                     
19            under AS 43.55.160(a)(2)(B) multiplied by the sum of 25 percent and the tax                                  
20            rate calculated for the month under AS 43.55.011(g), added to the monthly                                    
21            production tax value for the month calculated under AS 43.55.160(a)(2)(G)                                    
22            multiplied by the sum of 25 percent and the tax rate calculated for the month                                
23            under AS 43.55.011(p);                                                                                       
24                      (B)  the greater of                                                                                
25                           (i)  10 percent, under AS 43.55.011(f), of the gross value                                    
26                 at the point of production of the oil and gas produced during the month                                 
27                 from all leases or properties in the state that include land north of 68                                
28                 degrees North latitude, other than oil and gas subject to                                               
29                 AS 43.55.011(i) and gas subject to AS 43.55.011(o); or                                                  
30                           (ii)  the monthly production tax value for the month                                          
31                 calculated under AS 43.55.160(a)(2)(A) multiplied by the sum of 25                                      
01                 percent and the tax rate calculated for the month under                                                 
02                 AS 43.55.011(g), added to the monthly production tax value for the                                      
03                 month calculated under AS 43.55.160(a)(2)(F) multiplied by the sum of                                   
04                 25 percent and the tax rate calculated for the month under                                              
05                 AS 43.55.011(p); and                                                                                    
06                      (C)  for each lease or property, for gas subject to                                                
07            AS 43.55.011(j), oil subject to AS 43.55.011(k), and gas subject to                                          
08            AS 43.55.011(o), the monthly production tax value for the month calculated                                   
09            under AS 43.55.160(a)(2)(C), (D), or (E), as applicable, multiplied by the sum                               
10            of 25 percent and the tax rate calculated for the month under AS 43.55.011(g);                               
11                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
12       produced from a particular lease or property 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)(1) or (2), as applicable for oil, but                           
15       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
16       amount of taxable gas produced during the month for the amount of taxable gas                                     
17       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
18       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
19       amount of taxable oil produced during the calendar year;                                                          
20                 (3)  an installment payment of the estimated tax levied by                                              
21       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
22       on the last day of the following month; the amount of the installment payment is the                              
23       sum of                                                                                                            
24                      (A)  the applicable tax rate for oil provided under                                                
25            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
26            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
27            during the month; and                                                                                        
28                      (B)  the applicable tax rate for gas provided under                                                
29            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
30            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
31            during the month;                                                                                            
01                 (4)  any amount of tax levied by AS 43.55.011(e) or (i), net of any                                     
02       credits applied as allowed by law, that exceeds the total of the amounts due as                                   
03       installment payments of estimated tax is due on March 31 of the year following the                                
04       calendar year of production.                                                                                      
05    * Sec. 10. AS 43.55.020(d) is amended to read:                                                                     
06            (d)  In making settlement with the royalty owner for oil and gas that is taxable                             
07       under AS 43.55.011, the producer may deduct the amount of the tax paid on taxable                                 
08       royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at the                          
09       time the tax becomes due to the amount of the tax paid. If the total deductions of                                
10       installment payments of estimated tax for a calendar year exceed the actual tax for that                          
11       calendar year, the producer shall, before April 1 of the following year, refund the                               
12       excess to the royalty owner. Unless otherwise agreed between the producer and the                                 
13       royalty owner, the amount of the tax paid under AS 43.55.011(e) - (g) and (p) on                              
14       taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or                          
15       right to which constitutes a landowner's royalty interest, is considered to be the gross                          
16       value at the point of production of the taxable royalty oil and gas produced during the                           
17       calendar year multiplied by a figure that is a quotient, in which                                                 
18                 (1)  the numerator is the producer's total tax liability under                                          
19       AS 43.55.011(e) - (g) and (p) for the calendar year of production; and                                        
20                 (2)  the denominator is the total gross value at the point of production                                
21       of the oil and gas taxable under AS 43.55.011(e) - (g) and (p) produced by the                                
22       producer from all leases and properties in the state during the calendar year.                                    
23    * Sec. 11. AS 43.55.160(a) is amended to read:                                                                     
24            (a)  Except as provided in (b) of this section and subject to an adjustment                              
25       under AS 43.55.162, for the purposes of                                                                       
26                 (1)  AS 43.55.011(e), the annual production tax value of the taxable                                    
27                      (A)  oil [AND GAS] produced during a calendar year from                                            
28            leases or properties in the state that include land north of 68 degrees North                                
29            latitude is the gross value at the point of production of the oil [AND GAS]                                  
30            taxable under AS 43.55.011(e) and produced by the producer from those leases                                 
31            or properties, less the producer's lease expenditures under AS 43.55.165 for the                             
01            calendar year applicable to the oil [AND GAS] produced by the producer from                                  
02            those leases or properties, and the portion allocated under (g) of this section                          
03            of the producer's lease expenditures under AS 43.55.165 for the calendar                                 
04            year incurred to explore land that is not a lease or property, or to explore                             
05            or develop a lease or property before commencement of commercial                                         
06            production of oil or gas from the lease or property, if that land or any part                            
07            of the lease or property is located north of 68 degrees North latitude, as                               
08            adjusted under AS 43.55.170; [THIS SUBPARAGRAPH DOES NOT APPLY                                               
09            TO GAS SUBJECT TO AS 43.55.011(o);]                                                                          
10                      (B)  oil [AND GAS] produced during a calendar year from                                            
11            leases or properties in the state outside the Cook Inlet sedimentary basin, no                               
12            part of which is north of 68 degrees North latitude, is the gross value at the                               
13            point of production of the oil [AND GAS] taxable under AS 43.55.011(e) and                                   
14            produced by the producer from those leases or properties, less the producer's                                
15            lease expenditures under AS 43.55.165 for the calendar year applicable to the                                
16            oil [AND GAS] produced by the producer from those leases or properties, and                              
17            the portion allocated under (g) of this section of the producer's lease                                  
18            expenditures under AS 43.55.165 for the calendar year incurred to explore                                
19            land that is not a lease or property, or to explore or develop a lease or                                
20            property before commencement of commercial production of oil or gas                                      
21            from the lease or property, if that land or lease or property is located                                 
22            outside the Cook Inlet sedimentary basin, and the land and all parts of the                              
23            lease or property are not north of 68 degrees North latitude, as adjusted                                
24            under AS 43.55.170; [THIS SUBPARAGRAPH DOES NOT APPLY TO                                                     
25            GAS SUBJECT TO AS 43.55.011(o);]                                                                             
26                      (C)  oil produced during a calendar year from a lease or                                           
27            property in the Cook Inlet sedimentary basin is the gross value at the point of                              
28            production of the oil taxable under AS 43.55.011(e) and produced by the                                      
29            producer from that lease or property, less the producer's lease expenditures                                 
30            under AS 43.55.165 for the calendar year applicable to the oil produced by the                               
31            producer from that lease or property, and the portion allocated under (g) of                             
01            this section of the producer's lease expenditures under AS 43.55.165 for                                 
02            the calendar year incurred to explore land that is not a lease or property,                              
03            or to explore or develop a lease or property before commencement of                                      
04            commercial production of oil or gas from the lease or property, if that                                  
05            land or lease or property is located in the Cook Inlet sedimentary basin, as                             
06            adjusted under AS 43.55.170;                                                                                 
07                      (D)  gas produced during a calendar year from a lease or                                           
08            property in the Cook Inlet sedimentary basin is the gross value at the point of                              
09            production of the gas taxable under AS 43.55.011(e) and produced by the                                      
10            producer from that lease or property, less the producer's lease expenditures                                 
11            under AS 43.55.165 for the calendar year applicable to the gas produced by the                               
12            producer from that lease or property, and the portion allocated under (g) of                             
13            this section of the producer's lease expenditures under AS 43.55.165 for                                 
14            the calendar year incurred to explore land that is not a lease or property,                              
15            or to explore or develop a lease or property before commencement of                                      
16            commercial production of oil or gas from the lease or property, if that                                  
17            land or lease or property is located in the Cook Inlet sedimentary basin, as                             
18            adjusted under AS 43.55.170;                                                                                 
19                      (E)  gas produced during a calendar year from a lease or                                           
20            property in the state outside the Cook Inlet sedimentary basin and used in the                           
21            state is the gross value at the point of production of that gas taxable under                                
22            AS 43.55.011(e) and produced by the producer from that lease or property, less                               
23            the producer's lease expenditures under AS 43.55.165 for the calendar year                                   
24            applicable to that gas produced by the producer from that lease or property,                                 
25            and the portion allocated under (g) of this section of the producer's lease                              
26            expenditures under AS 43.55.165 for the calendar year incurred to explore                                
27            land that is not a lease or property, or to explore or develop a lease or                                
28            property before commencement of commercial production of oil or gas                                      
29            from the lease or property, if that land or lease or property is located                                 
30            outside the Cook Inlet sedimentary basin, as adjusted under AS 43.55.170;                                
31                      (F)  gas produced during a calendar year from leases or                                        
01            properties in the state that include land north of 68 degrees North latitude                             
02            is the gross value at the point of production of the gas taxable under                                   
03            AS 43.55.011(e) and produced by the producer from those leases or                                        
04            properties, less the producer's lease expenditures under AS 43.55.165 for                                
05            the calendar year applicable to the gas produced by the producer from                                    
06            those leases or properties, and the portion allocated under (g) of this                                  
07            section of the producer's lease expenditures under AS 43.55.165 for the                                  
08            calendar year incurred to explore land that is not a lease or property, or                               
09            to explore or develop a lease or property before commencement of                                         
10            commercial production of oil or gas from the lease or property, if that                                  
11            land or any part of the lease or property is located north of 68 degrees                                 
12            North latitude, as adjusted under AS 43.55.170; this subparagraph does                                   
13            not apply to gas subject to AS 43.55.011(o);                                                             
14                      (G)  gas produced during a calendar year from leases or                                        
15            properties in the state outside the Cook Inlet sedimentary basin, no part of                             
16            which is north of 68 degrees North latitude, is the gross value at the point                             
17            of production of the gas taxable under AS 43.55.011(e) and produced by                                   
18            the producer from those leases or properties, less the producer's lease                                  
19            expenditures under AS 43.55.165 for the calendar year applicable to the                                  
20            gas produced by the producer from those leases or properties, and the                                    
21            portion allocated under (g) of this section of the producer's lease                                      
22            expenditures under AS 43.55.165 for the calendar year incurred to explore                                
23            land that is not a lease or property, or to explore or develop a lease or                                
24            property before commencement of commercial production of oil or gas                                      
25            from the lease or property, if that land or lease or property is located                                 
26            outside the Cook Inlet sedimentary basin, and the land and all parts of the                              
27            lease or property are not north of 68 degrees North latitude, as adjusted                                
28            under AS 43.55.170; this subparagraph does not apply to gas subject to                                   
29            AS 43.55.011(o);                                                                                         
30                 (2)  AS 43.55.011(g) and (p), the monthly production tax value of the                               
31       taxable                                                                                                           
01                      (A)  oil [AND GAS] produced during a month from leases or                                          
02            properties in the state that include land north of 68 degrees North latitude is the                          
03            gross value at the point of production of the oil [AND GAS] taxable under                                    
04            AS 43.55.011(e) and produced by the producer from those leases or properties,                                
05            less 1/12 of the producer's lease expenditures under AS 43.55.165 for the                                    
06            calendar year applicable to the oil [AND GAS] produced by the producer from                                  
07            those leases or properties, and 1/12 of the portion allocated under (g) of this                          
08            section of the producer's lease expenditures under AS 43.55.165 for the                                  
09            calendar year incurred to explore land that is not a lease or property, or                               
10            to explore or develop a lease or property before commencement of                                         
11            commercial production of oil or gas from the lease or property, if that                                  
12            land or any part of the lease or property is located north of 68 degrees                                 
13            North latitude, as adjusted under AS 43.55.170; [THIS SUBPARAGRAPH                                       
14            DOES NOT APPLY TO GAS SUBJECT TO AS 43.55.011(o);]                                                           
15                      (B)  oil [AND GAS] produced during a month from leases or                                          
16            properties in the state outside the Cook Inlet sedimentary basin, no part of                                 
17            which is north of 68 degrees North latitude, is the gross value at the point of                              
18            production of the oil [AND GAS] taxable under AS 43.55.011(e) and produced                                   
19            by the producer from those leases or properties, less 1/12 of the producer's                                 
20            lease expenditures under AS 43.55.165 for the calendar year applicable to the                                
21            oil [AND GAS] produced by the producer from those leases or properties, and                              
22            1/12 of the portion allocated under (g) of this section of the producer's                                
23            lease expenditures under AS 43.55.165 for the calendar year incurred to                                  
24            explore land that is not a lease or property, or to explore or develop a                                 
25            lease or property before commencement of commercial production of oil                                    
26            or gas from the lease or property, if that land or lease or property is                                  
27            located outside the Cook Inlet sedimentary basin, and the land and all                                   
28            parts of the lease or property are not north of 68 degrees North latitude, as                            
29            adjusted under AS 43.55.170; [THIS SUBPARAGRAPH DOES NOT APPLY                                               
30            TO GAS SUBJECT TO AS 43.55.011(o);]                                                                          
31                      (C)  oil produced during a month from a lease or property in the                                   
01            Cook Inlet sedimentary basin is the gross value at the point of production of                                
02            the oil taxable under AS 43.55.011(e) and produced by the producer from that                                 
03            lease or property, less 1/12 of the producer's lease expenditures under                                      
04            AS 43.55.165 for the calendar year applicable to the oil produced by the                                     
05            producer from that lease or property, and 1/12 of the portion allocated under                            
06            (g) of this section of the producer's lease expenditures under AS 43.55.165                              
07            for the calendar year incurred to explore land that is not a lease or                                    
08            property, or to explore or develop a lease or property before                                            
09            commencement of commercial production of oil or gas from the lease or                                    
10            property, if that land or lease or property is located in the Cook Inlet                                 
11            sedimentary basin, 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, and 1/12 of the portion allocated under                            
18            (g) of this section of the producer's lease expenditures under AS 43.55.165                              
19            for the calendar year incurred to explore land that is not a lease or                                    
20            property, or to explore or develop a lease or property before                                            
21            commencement of commercial production of oil or gas from the lease or                                    
22            property, if that land or lease or property is located in the Cook Inlet                                 
23            sedimentary basin, as adjusted under AS 43.55.170;                                                       
24                      (E)  gas produced during a month from a lease or property in                                   
25            the state outside the Cook Inlet sedimentary basin and used in the state is the                          
26            gross value at the point of production of that gas taxable under                                             
27            AS 43.55.011(e) and produced by the producer from that lease or property, less                               
28            1/12 of the producer's lease expenditures under AS 43.55.165 for the calendar                                
29            year applicable to that gas produced by the producer from that lease or                                      
30            property, and 1/12 of the portion allocated under (g) of this section of the                             
31            producer's lease expenditures under AS 43.55.165 for the calendar year                                   
01            incurred to explore land that is not a lease or property, or to explore or                               
02            develop a lease or property before commencement of commercial                                            
03            production of oil or gas from the lease or property, if that land or lease or                            
04            property is located outside of the Cook Inlet sedimentary basin, as adjusted                             
05            under AS 43.55.170;                                                                                      
06                      (F)  gas produced during a month from leases or properties                                     
07            in the state that include land north of 68 degrees North latitude is the                                 
08            gross value at the point of production of the gas taxable under                                          
09            AS 43.55.011(e) and produced by the producer from those leases or                                        
10            properties, less 1/12 of the producer's lease expenditures under                                         
11            AS 43.55.165 for the calendar year applicable to the gas produced by the                                 
12            producer from those leases or properties, and 1/12 of the portion allocated                              
13            under (g) of this section of the producer's lease expenditures under                                     
14            AS 43.55.165 for the calendar year incurred to explore land that is not a                                
15            lease or property, or to explore or develop a lease or property before                                   
16            commencement of commercial production of oil or gas from the lease or                                    
17            property, if that land or any part of the lease or property is located north                             
18            of 68 degrees North latitude, as adjusted under AS 43.55.170; this                                       
19            subparagraph does not apply to gas subject to AS 43.55.011(o);                                           
20                      (G)  gas produced during a month from leases or properties                                     
21            in the state outside the Cook Inlet sedimentary basin, no part of which is                               
22            north of 68 degrees North latitude, is the gross value at the point of                                   
23            production of the gas taxable under AS 43.55.011(e) and produced by the                                  
24            producer from those leases or properties, less 1/12 of the producer's lease                              
25            expenditures under AS 43.55.165 for the calendar year applicable to the                                  
26            gas produced by the producer from those leases or properties, and 1/12 of                                
27            the portion allocated under (g) of this section of the producer's lease                                  
28            expenditures under AS 43.55.165 for the calendar year incurred to explore                                
29            land that is not a lease or property, or to explore or develop a lease or                                
30            property before commencement of commercial production of oil or gas                                      
31            from the lease or property, if that land or lease or property is located                                 
01            outside the Cook Inlet sedimentary basin, and the land and all parts of the                              
02            lease or property are not north of 68 degrees North latitude, as adjusted                                
03            under AS 43.55.170; this subparagraph does not apply to gas subject to                                   
04            AS 43.55.011(o).                                                                                         
05    * Sec. 12. AS 43.55.160 is amended by adding new subsections to read:                                              
06            (f)  For purposes of (a) of this section, a lease expenditure is applicable to oil                           
07       or gas produced from a lease or property, or to oil or gas produced from leases or                                
08       properties in an area of the state, if the lease expenditure is                                                   
09                 (1)  a cost to explore, develop, or produce oil or gas from that lease or                               
10       property, or to explore, develop, or produce oil or gas from one of those leases or                               
11       properties in that area of the state, respectively; and                                                           
12                 (2)  incurred on or after the commencement of commercial production                                     
13       of oil or gas from the lease or property.                                                                         
14            (g)  For purposes of (a) of this section, a lease expenditure incurred during a                              
15       calendar year to explore land that is not a lease or property, or to explore or develop a                         
16       lease or property before commencement of commercial production of oil or gas from                                 
17       the lease or property, shall be allocated as provided in a regulation adopted by the                              
18       department under AS 43.55.165(h) to and among oil, gas subject to AS 43.55.011(o),                                
19       and gas not subject to AS 43.55.011(o) produced by the producer during that calendar                              
20       year from leases or properties in the same area of the state as the land being explored                           
21       or the lease or property being explored or developed, respectively.                                               
22            (h)  For purposes of (f) and (g) of this section, an area of the state is one of the                         
23       following:                                                                                                        
24                 (1)  land north of 68 degrees North latitude;                                                           
25                 (2)  land outside the Cook Inlet sedimentary basin not including any                                    
26       land north of 68 degrees North latitude; or                                                                       
27                 (3)  the Cook Inlet sedimentary basin.                                                                  
28    * Sec. 13. AS 43.55 is amended by adding a new section to read:                                                    
29            Sec. 43.55.162. Adjustment to production tax value for increasing oil                                      
30       production. (a) The production tax value of oil delivered to and transported by the                             
31       Trans Alaska Pipeline System, as calculated under AS 43.55.160(a)(1)(A) and (B) and                               
01       AS 43.55.160(a)(2)(A) and (B), may be reduced by an amount determined by the                                      
02       department under this section.                                                                                    
03            (b)  A producer shall report to the department the total adjusted amount of                                  
04       annual oil production and adjusted amount of the average daily statewide oil                                      
05       production delivered by the producer for transport to the Trans Alaska Pipeline                                   
06       System for both the calendar year immediately preceding the year for which the tax is                             
07       being determined and the year for which the tax is being determined. The report shall                             
08       be filed at the time the statement required under AS 43.55.030(a) is filed.                                       
09            (c)  When calculating the                                                                                    
10                 (1)  adjusted amount of the average daily statewide production under                                    
11       (b) of this section, the producer shall exclude from the calculation the days on which                            
12       the rate of production is significantly reduced and the volume of production on those                             
13       days for which the rate of production is significantly reduced; for the purposes of this                          
14       paragraph, the rate of production is significantly reduced when the production of oil                             
15       delivered by the producer to the Trans Alaska Pipeline System for the day is less than                            
16       one-half of the average daily production for the year calculated by dividing the total                            
17       oil production that is produced by the producer and delivered to the Trans Alaska                                 
18       Pipeline System for the year by the number of days in the year;                                                   
19                 (2)  adjusted amount of total annual oil production that is delivered by                                
20       the producer to the Trans Alaska Pipeline System, the producer shall multiply the                                 
21       adjusted amount of average daily production determined under (1) of this subsection                               
22       by the number of days in the applicable calendar year; and                                                        
23                 (3)  adjusted amount of total annual oil production that is delivered by                                
24       the producer to the Trans Alaska Pipeline System for the year for which the tax is                                
25       being determined under (2) of this subsection, the producer may not include the                                   
26       amount of production resulting from the purchase, merger, or other acquisition of                                 
27       another producer and any production attributable to the producer from a unit in which                             
28       the producer did not participate in the calendar year immediately preceding the year                              
29       for which the tax is being determined; however, the increased production that may not                             
30       be included by a producer under this paragraph may be included in the adjusted                                    
31       amount of total annual oil production for the year when determining the amount by                                 
01       which production increases in the next succeeding year.                                                           
02            (d)  After receiving a report by the producer under (b) of this section, the                                 
03       department may reduce the production tax value determined under                                                   
04                 (1)  AS 43.55.160(a)(1)(A) and (B) by $10 for each barrel of oil                                        
05       delivered by the producer to the Trans Alaska Pipeline system during the year for                                 
06       which the tax is being determined that exceeds the adjusted total annual production for                           
07       the calendar year immediately preceding the year for which the tax is being                                       
08       determined; and                                                                                                   
09                 (2)  AS 43.55.160(a)(2)(A) and (B) by $10 for each barrel of oil                                        
10       delivered to the Trans Alaska Pipeline System for each month in the year for which                                
11       the tax is being determined that exceeds 1/12 of the number of barrels by which the                               
12       adjusted total annual production for the year for which the tax is being determined                               
13       exceeds the adjusted total annual production for the calendar year immediately                                    
14       preceding the year for which the tax is being determined.                                                         
15            (e)  The department shall notify the producer of the amount of tax reduction                                 
16       allowed as a result of a reduction in production tax value determined by the                                      
17       department under (d) of this section. At the request of the producer, the department                              
18       may refund any amount due to the producer as a result of the reduction in production                              
19       tax value or credit the amount of the tax reduction against the liability of the taxpayer                         
20       for a tax due under this title.                                                                                   
21            (f)  A tax reduction that results from a reduction in the production tax value                               
22       under this section may not be considered when a producer is required to calculate and                             
23       pay any amount due under AS 43.55.020(a). However, at the request of the producer, a                              
24       credit allowed under (e) of this section may be applied against a payment due under                               
25       AS 43.55.020(a) for a period after the department determines the amount of reduction                              
26       in the production tax value.                                                                                      
27            (g)  When determining the average monthly production tax value in                                            
28       AS 43.55.011(g), the average monthly production tax value shall be determined before                              
29       applying any adjustment under (d) of this section.                                                                
30            (h)  The department may adopt regulations specifying the information that                                    
31       must be included in the report filed by a producer under (b) of this section and other                            
01       regulations necessary for the administration of this section.                                                     
02    * Sec. 14. AS 43.55.165(h) is amended to read:                                                                     
03            (h)  The department shall adopt regulations that provide for reasonable                                      
04       methods of allocating costs between oil and gas, between gas subject to                                           
05       AS 43.55.011(o) and other gas, and between leases or properties in those                                          
06       circumstances where an allocation of costs is required to determine lease expenditures                            
07       that are costs of exploring for, developing, or producing oil deposits or costs of                                
08       exploring for, developing, or producing gas deposits, or that are costs of exploring for,                         
09       developing, or producing oil or gas deposits located within different leases or                                   
10       properties. When adopting a regulation for determining a reasonable method of                                 
11       allocating lease expenditures between the production of oil and the production of                             
12       gas, the department shall, to the extent possible, provide for the allocation of                              
13       lease expenditures in proportion to the gross value at the point of production for                            
14       oil produced and gas produced.                                                                                
15    * Sec. 15. AS 43.55.170 is amended by adding a new subsection to read:                                             
16            (d)  The department shall adopt regulations that provide for reasonable                                      
17       methods of allocating the adjustments to a producer's lease expenditures in (a) of this                           
18       section and the payments and credits described in (b) of this section between oil and                             
19       gas, between gas subject to AS 43.55.011(o) and other gas, and between leases or                                  
20       properties in those circumstances where an allocation of costs is required to determine                           
21       lease expenditures that are costs of exploring for, developing, or producing oil                                  
22       deposits, or costs of exploring for, developing, or producing gas deposits, or that are                           
23       costs of exploring for, developing, or producing oil or gas deposits located within                               
24       different leases or properties. When determining a reasonable method of allocating the                            
25       adjustments to a producer's lease expenditures between the production of oil and the                              
26       production of gas, the department shall consider allocating the adjustments in                                    
27       proportion to the lease expenditures allocated to the production of oil and the                                   
28       production of gas under regulations adopted by the department under                                               
29       AS 43.55.165(h).                                                                                                
30    * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to                         
31 read:                                                                                                                   
01       IMPLEMENTATION OF THE PETROLEUM INFORMATION MANAGEMENT                                                            
02 SYSTEM; RECOMMENDATION FOR STATUTORY CHANGES. The Alaska Oil and Gas                                                    
03 Conservation Commission shall develop and implement a work plan for the development of                                  
04 the petroleum information management system required by AS 31.05.031, enacted by sec. 3                                 
05 of this Act, so that the system is operational before January 1, 2014.                                                  
06    * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section to                         
07 read:                                                                                                                   
08       APPLICABILITY. The reduction in production tax value under AS 43.55.162,                                          
09 enacted by sec. 13 of this Act, applies to qualifying oil produced after December 31, 2012. In                          
10 this section, "qualifying oil" means oil delivered to the Trans Alaska Pipeline System the                              
11 production tax value of which is calculated under AS 43.55.160(a)(1)(A) and (B) and                                     
12 43.55.160(a)(2)(A) and (B).                                                                                             
13    * Sec. 18. This Act takes effect January 1, 2013.