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HB 288: "An Act relating to the minimum tax imposed on oil and gas produced from leases or properties that include land north of 68 degrees North latitude; and providing for an effective date."

00                             HOUSE BILL NO. 288                                                                          
01 "An Act relating to the minimum tax imposed on oil and gas produced from leases or                                      
02 properties that include land north of 68 degrees North latitude; and providing for an                                   
03 effective date."                                                                                                        
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 43.55.011(f) is amended to read:                                                                   
06            (f)  The levy of tax under (e) of this section for                                                           
07                 (1)  oil and gas produced before January 1, 2019 [JANUARY 1,                                        
08       2022], from leases or properties that include land north of 68 degrees North latitude,                            
09       other than gas subject to (o) of this section, may not be less than                                               
10 (A)  four percent of the gross value at the point of production                                                         
11 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
12 the United States West Coast during the calendar year for which the tax is due                                          
13            is more than $25;                                                                                            
14                      (B)  three percent of the gross value at the point of production                                   
01 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
02 the United States West Coast during the calendar year for which the tax is due                                          
03            is over $20 but not over $25;                                                                                
04 (C)  two percent of the gross value at the point of production                                                          
05 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
06 the United States West Coast during the calendar year for which the tax is due                                          
07            is over $17.50 but not over $20;                                                                             
08 (D)  one percent of the gross value at the point of production                                                          
09 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
10 the United States West Coast during the calendar year for which the tax is due                                          
11            is over $15 but not over $17.50; or                                                                          
12 (E)  zero percent of the gross value at the point of production                                                         
13 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
14 the United States West Coast during the calendar year for which the tax is due                                          
15            is $15 or less; [AND]                                                                                        
16 (2)  oil and gas produced on and after January 1, 2019, and before                                                  
17 January 1, 2022, from leases or properties that include land north of 68 degrees                                    
18       North latitude, other than gas subject to (o) of this section, may not be less than                           
19 (A) seven percent of the gross value at the point of                                                                
20 production when the average price per barrel for Alaska North Slope                                                 
21 crude oil for sale on the United States West Coast during the calendar                                              
22            year for which the tax is due is more than $25;                                                          
23 (B) three percent of the gross value at the point of                                                                
24 production when the average price per barrel for Alaska North Slope                                                 
25 crude oil for sale on the United States West Coast during the calendar                                              
26            year for which the tax is due is over $20 but not over $25;                                              
27 (C) two percent of the gross value at the point of production                                                       
28 when the average price per barrel for Alaska North Slope crude oil for                                              
29 sale on the United States West Coast during the calendar year for which                                             
30            the tax is due is over $17.50 but not over $20;                                                          
31 (D) one percent of the gross value at the point of production                                                       
01            when the average price per barrel for Alaska North Slope crude oil for                                   
02            sale on the United States West Coast during the calendar year for which                                  
03            the tax is due is over $15 but not over $17.50; or                                                       
04 (E) zero percent of the gross value at the point of production                                                      
05 when the average price per barrel for Alaska North Slope crude oil for                                              
06 sale on the United States West Coast during the calendar year for which                                             
07            the tax is due is $15 or less; and                                                                       
08                 (3)  oil produced on and after January 1, 2022, from leases or properties                           
09       that include land north of 68 degrees North latitude, may not be less than                                        
10 (A)  seven [FOUR] percent of the gross value at the point of                                                        
11 production when the average price per barrel for Alaska North Slope crude oil                                           
12 for sale on the United States West Coast during the calendar year for which the                                         
13            tax is due is more than $25;                                                                                 
14 (B)  three percent of the gross value at the point of production                                                        
15 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
16 the United States West Coast during the calendar year for which the tax is due                                          
17            is over $20 but not over $25;                                                                                
18 (C)  two percent of the gross value at the point of production                                                          
19 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
20 the United States West Coast during the calendar year for which the tax is due                                          
21            is over $17.50 but not over $20;                                                                             
22 (D)  one percent of the gross value at the point of production                                                          
23 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
24 the United States West Coast during the calendar year for which the tax is due                                          
25            is over $15 but not over $17.50; or                                                                          
26 (E)  zero percent of the gross value at the point of production                                                         
27 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
28 the United States West Coast during the calendar year for which the tax is due                                          
29            is $15 or less.                                                                                              
30    * Sec. 2. AS 43.55.020(a) is amended to read:                                                                      
31 (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                                        
01       the tax as follows:                                                                                               
02 (1)  for oil and gas produced before January 1, 2014, an installment                                                    
03 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                                  
04 as allowed by law, is due for each month of the calendar year on the last day of the                                    
05 following month; except as otherwise provided under (2) of this subsection, the                                         
06 amount of the installment payment is the sum of the following amounts, less 1/12 of                                     
07 the tax credits that are allowed by law to be applied against the tax levied by                                         
08 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                                    
09       not be less than zero:                                                                                            
10 (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                                              
11 produced from leases or properties in the state outside the Cook Inlet                                                  
12 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                                          
13            the greater of                                                                                               
14                           (i)  zero; or                                                                                 
15 (ii)  the sum of 25 percent and the tax rate calculated for                                                             
16 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
17 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
18 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
19 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
20 at the point of production of the oil and gas produced from the leases or                                               
21 properties during the month for which the installment payment is                                                        
22                 calculated;                                                                                             
23 (B)  for oil and gas produced from leases or properties subject                                                         
24            to AS 43.55.011(f), the greatest of                                                                          
25                           (i)  zero;                                                                                    
26 (ii)  zero percent, one percent, two percent, three                                                                     
27 percent, or four percent, as applicable, of the gross value at the point of                                             
28 production of the oil and gas produced from the leases or properties                                                    
29                 during the month for which the installment payment is calculated; or                                    
30 (iii)  the sum of 25 percent and the tax rate calculated for                                                            
31 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
01 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
02 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
03 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
04 at the point of production of the oil and gas produced from those leases                                                
05 or properties during the month for which the installment payment is                                                     
06                 calculated;                                                                                             
07                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
08            each lease or property, the greater of                                                                       
09                           (i)  zero; or                                                                                 
10 (ii)  the sum of 25 percent and the tax rate calculated for                                                             
11 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
12 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
13 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
14 deductible under AS 43.55.160 for the oil or gas, respectively,                                                         
15 produced from the lease or property from the gross value at the point of                                                
16 production of the oil or gas, respectively, produced from the lease or                                                  
17 property during the month for which the installment payment is                                                          
18                 calculated;                                                                                             
19                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
20 (i)  the sum of 25 percent and the tax rate calculated for                                                              
21 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
22 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
23 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
24 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
25 at the point of production of the oil and gas produced from the leases or                                               
26 properties during the month for which the installment payment is                                                        
27                 calculated, but not less than zero; or                                                                  
28 (ii)  four percent of the gross value at the point of                                                                   
29 production of the oil and gas produced from the leases or properties                                                    
30                 during the month, but not less than zero;                                                               
31 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                                
01 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                          
02 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
03 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                          
04 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
05 gas produced during the month for the amount of taxable gas produced during the                                         
06 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
07       during the month for the amount of taxable oil produced during the calendar year;                                 
08 (3)  an installment payment of the estimated tax levied by                                                              
09 AS 43.55.011(i) for each lease or property is due for each month of the calendar year                                   
10 on the last day of the following month; the amount of the installment payment is the                                    
11       sum of                                                                                                            
12 (A)  the applicable tax rate for oil provided under                                                                     
13 AS 43.55.011(i), multiplied by the gross value at the point of production of the                                        
14 oil taxable under AS 43.55.011(i) and produced from the lease or property                                               
15            during the month; and                                                                                        
16 (B)  the applicable tax rate for gas provided under                                                                     
17 AS 43.55.011(i), multiplied by the gross value at the point of production of the                                        
18 gas taxable under AS 43.55.011(i) and produced from the lease or property                                               
19            during the month;                                                                                            
20 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                                       
21 applied as allowed by law, that exceeds the total of the amounts due as installment                                     
22 payments of estimated tax is due on March 31 of the year following the calendar year                                    
23       of production;                                                                                                    
24 (5)  for oil and gas produced on and after January 1, 2014, and before                                                  
25 January 1, 2022, an installment payment of the estimated tax levied by                                                  
26 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                      
27 month of the calendar year on the last day of the following month; except as otherwise                                  
28 provided under (6) of this subsection, the amount of the installment payment is the                                     
29 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be                                
30 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                                 
31       of the installment payment may not be less than zero:                                                             
01 (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                                              
02 produced from leases or properties in the state outside the Cook Inlet                                                  
03 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                                          
04            the greater of                                                                                               
05                           (i)  zero; or                                                                                 
06 (ii)  35 percent multiplied by the remainder obtained by                                                                
07 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
08 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
09 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
10 at the point of production of the oil and gas produced from the leases or                                               
11 properties during the month for which the installment payment is                                                        
12                 calculated;                                                                                             
13 (B)  for oil and gas produced from leases or properties subject                                                         
14            to AS 43.55.011(f), the greatest of                                                                          
15                           (i)  zero;                                                                                    
16 (ii)  the percentage applicable under AS 43.55.011(f)                                                               
17 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE                                                                          
18 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross                                                                  
19 value at the point of production of the oil and gas produced from the                                                   
20 leases or properties during the month for which the installment                                                         
21                 payment is calculated; or                                                                               
22 (iii)  35 percent multiplied by the remainder obtained by                                                               
23 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
24 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
25 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
26 at the point of production of the oil and gas produced from those leases                                                
27 or properties during the month for which the installment payment is                                                     
28 calculated, except that, for the purposes of this calculation, a reduction                                              
29 from the gross value at the point of production may apply for oil and                                                   
30                 gas subject to AS 43.55.160(f) or (g);                                                                  
31 (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                                        
01            each lease or property, the greater of                                                                       
02                           (i)  zero; or                                                                                 
03 (ii)  35 percent multiplied by the remainder obtained by                                                                
04 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
05 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
06 deductible under AS 43.55.160 for the oil or gas, respectively,                                                         
07 produced from the lease or property from the gross value at the point of                                                
08 production of the oil or gas, respectively, produced from the lease or                                                  
09 property during the month for which the installment payment is                                                          
10                 calculated;                                                                                             
11                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
12 (i)  35 percent multiplied by the remainder obtained by                                                                 
13 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
14 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
15 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
16 at the point of production of the oil and gas produced from the leases or                                               
17 properties during the month for which the installment payment is                                                        
18                 calculated, but not less than zero; or                                                                  
19 (ii)  four percent of the gross value at the point of                                                                   
20 production of the oil and gas produced from the leases or properties                                                    
21                 during the month, but not less than zero;                                                               
22 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                                
23 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                          
24 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
25 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                          
26 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
27 gas produced during the month for the amount of taxable gas produced during the                                         
28 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
29       during the month for the amount of taxable oil produced during the calendar year;                                 
30 (7)  for oil and gas produced on or after January 1, 2022, an installment                                               
31 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                                  
01 as allowed by law, is due for each month of the calendar year on the last day of the                                    
02 following month; except as otherwise provided under (10) of this subsection, the                                        
03 amount of the installment payment is the sum of the following amounts, less 1/12 of                                     
04 the tax credits that are allowed by law to be applied against the tax levied by                                         
05 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                                    
06       not be less than zero:                                                                                            
07                      (A)  for oil produced from leases or properties subject to                                         
08            AS 43.55.011(f), the greatest of                                                                             
09                           (i)  zero;                                                                                    
10 (ii)  the percentage applicable under AS 43.55.011(f)                                                               
11 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE                                                                          
12 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross                                                                  
13 value at the point of production of the oil produced from the leases or                                                 
14 properties during the month for which the installment payment is                                                        
15                 calculated; or                                                                                          
16 (iii)  35 percent multiplied by the remainder obtained by                                                               
17 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
18 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
19 deductible for the oil under AS 43.55.160(h)(1) from the gross value at                                                 
20 the point of production of the oil produced from those leases or                                                        
21 properties during the month for which the installment payment is                                                        
22 calculated, except that, for the purposes of this calculation, a reduction                                              
23 from the gross value at the point of production may apply for oil                                                       
24                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
25 (B)  for oil produced before or during the last calendar year                                                           
26 under AS 43.55.024(b) for which the producer could take a tax credit under                                              
27 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                                          
28 sedimentary basin, no part of which is north of 68 degrees North latitude, other                                        
29            than leases or properties subject to AS 43.55.011(o) or (p), the greater of                                  
30                           (i)  zero; or                                                                                 
31 (ii)  35 percent multiplied by the remainder obtained by                                                                
01 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
02 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
03 deductible for the oil under AS 43.55.160(h)(2) from the gross value at                                                 
04 the point of production of the oil produced from the leases or properties                                               
05                 during the month for which the installment payment is calculated;                                       
06 (C)  for oil and gas produced from leases or properties subject                                                         
07 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection,                                          
08            the sum of                                                                                                   
09 (i)  35 percent multiplied by the remainder obtained by                                                                 
10 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
11 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
12 deductible for the oil under AS 43.55.160(h)(3) from the gross value at                                                 
13 the point of production of the oil produced from the leases or properties                                               
14 during the month for which the installment payment is calculated, but                                                   
15                 not less than zero; and                                                                                 
16 (ii)  13 percent of the gross value at the point of                                                                     
17 production of the gas produced from the leases or properties during the                                                 
18                 month, but not less than zero;                                                                          
19 (D)  for oil produced from leases or properties in the state, no                                                        
20 part of which is north of 68 degrees North latitude, other than leases or                                               
21            properties subject to (B), (C), or (F) of this paragraph, the greater of                                     
22                           (i)  zero; or                                                                                 
23 (ii)  35 percent multiplied by the remainder obtained by                                                                
24 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
25 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
26 deductible for the oil under AS 43.55.160(h)(4) from the gross value at                                                 
27 the point of production of the oil produced from the leases or properties                                               
28                 during the month for which the installment payment is calculated;                                       
29 (E)  for gas produced from each lease or property in the state                                                          
30 outside the Cook Inlet sedimentary basin, other than a lease or property subject                                        
31 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of                                                
01            production of the gas produced from the lease or property during the month for                               
02            which the installment payment is calculated, but not less than zero;                                         
03                      (F)  for oil subject to AS 43.55.011(k), for each lease or                                         
04            property, the greater of                                                                                     
05                           (i)  zero; or                                                                                 
06 (ii)  35 percent multiplied by the remainder obtained by                                                                
07 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
08 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
09 deductible under AS 43.55.160 for the oil produced from the lease or                                                    
10 property from the gross value at the point of production of the oil                                                     
11 produced from the lease or property during the month for which the                                                      
12                 installment payment is calculated;                                                                      
13 (G)  for gas subject to AS 43.55.011(j) or (o), for each lease or                                                       
14            property, the greater of                                                                                     
15                           (i)  zero; or                                                                                 
16 (ii)  13 percent of the gross value at the point of                                                                     
17 production of the gas produced from the lease or property during the                                                    
18                 month for which the installment payment is calculated;                                                  
19 (8)  an amount calculated under (7)(C) of this subsection may not                                                       
20 exceed four percent of the gross value at the point of production of the oil and gas                                    
21 produced from leases or properties subject to AS 43.55.011(p) during the month for                                      
22       which the installment payment is calculated;                                                                      
23 (9)  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and                                                  
24 (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point                                
25 of production is determined under AS 43.55.011(f) [AS 43.55.011(f)(1) OR (2)] but                                   
26 substituting the phrase "month for which the installment payment is calculated" in                                      
27 AS 43.55.011(f) [AS 43.55.011(f)(1) AND (2)] for the phrase "calendar year for                                      
28       which the tax is due";                                                                                            
29 (10)  an amount calculated under (7)(F) or (G) of this subsection for oil                                               
30 or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                   
31 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
01 applicable, for gas, or set out in AS 43.55.011(k) for oil, but substituting in                                         
02 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
03 gas produced during the month for the amount of taxable gas produced during the                                         
04 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
05       during the month for the amount of taxable oil produced during the calendar year.                                 
06 (10)  an amount calculated under (7)(F) or (G) of this subsection for oil                                               
07 or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                   
08 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
09 applicable, for gas, or set out in AS 43.55.011(k) for oil, but substituting in                                         
10 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
11 gas produced during the month for the amount of taxable gas produced during the                                         
12 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
13       during the month for the amount of taxable oil produced during the calendar year.                                 
14    * Sec. 3. This Act takes effect January 1, 2019.