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.