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SB 129: "An Act relating to the oil and gas production tax; relating to credits against the oil and gas production tax; relating to payments of the oil and gas production tax; relating to lease expenditures and adjustments to lease expenditures; making public certain information related to the oil and gas production tax; relating to the Department of Revenue; and providing for an effective date."

00                             SENATE BILL NO. 129                                                                         
01 "An Act relating to the oil and gas production tax; relating to credits against the oil and                             
02 gas production tax; relating to payments of the oil and gas production tax; relating to                                 
03 lease expenditures and adjustments to lease expenditures; making public certain                                         
04 information related to the oil and gas production tax; relating to the Department of                                    
05 Revenue; and providing for an effective date."                                                                          
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. AS 40.25.100(a) is amended to read:                                                                   
08            (a)  Information in the possession of the Department of Revenue that discloses                               
09       the particulars of the business or affairs of a taxpayer or other person, including                               
10 information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement                                    
11 under AS 38.05.020(b)(12), is not a matter of public record, except as provided in                                      
12 AS 43.05.230(i) - (m) [AS 43.05.230(i) - (l)] or for purposes of investigation and law                              
13 enforcement. The information shall be kept confidential except when its production is                                   
01 required in an official investigation, administrative adjudication under AS 43.05.405 -                                 
02 43.05.499, or court proceeding. These restrictions do not prohibit the publication of                                   
03 statistics presented in a manner that prevents the identification of particular reports                                 
04 and items, prohibit the publication of tax lists showing the names of taxpayers who are                                 
05 delinquent and relevant information that may assist in the collection of delinquent                                     
06 taxes, or prohibit the publication of records, proceedings, and decisions under                                         
07       AS 43.05.405 - 43.05.499.                                                                                         
08    * Sec. 2. AS 43.05.230 is amended by adding a new subsection to read:                                              
09 (m)  The information provided by a producer to the department on a return for                                           
10 the payment of oil production taxes assessed under AS 43.55.011(q) is public                                            
11       information.                                                                                                      
12    * Sec. 3. AS 43.55.011(e) is amended to read:                                                                      
13 (e)  There is levied on the producer of oil or gas a tax for all oil and gas                                            
14 produced each calendar year from each lease or property in the state, less any oil and                                  
15 gas the ownership or right to which is exempt from taxation or constitutes a                                            
16 landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as                                    
17 otherwise provided under (f), (j), (k), (o), [AND] (p), (q), and (s) of this section, for                           
18       oil and gas produced                                                                                              
19                 (1)  before January 1, 2014, the tax is equal to the sum of                                             
20 (A)  the annual production tax value of the taxable oil and gas                                                         
21            as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and                                         
22 (B)  the sum, over all months of the calendar year, of the tax                                                          
23            amounts determined under (g) of this section;                                                                
24 (2)  on and after January 1, 2014, and before January 1, 2022, the tax is                                               
25 equal to the annual production tax value of the taxable oil and gas as calculated under                                 
26       AS 43.55.160(a)(1) multiplied by 35 percent;                                                                      
27                 (3)  on and after January 1, 2022, the tax for                                                          
28 (A)  oil is equal to the annual production tax value of the                                                             
29            taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent;                                    
30 (B)  gas is equal to 13 percent of the gross value at the point of                                                      
31 production of the taxable gas; if the gross value at the point of production of                                         
01            gas produced from a lease or property is less than zero, that gross value at the                             
02            point of production is considered zero for purposes of this subparagraph.                                    
03    * Sec. 4. AS 43.55.011(f) is amended to read:                                                                      
04            (f)  The levy of tax under (e) of this section for                                                           
05                 (1)  oil and gas produced before January 1, 2022, from leases or                                        
06       properties that include land north of 68 degrees North latitude, other than gas subject                           
07       to (o) of this section and oil subject to (q) of this section, may not be less than                           
08                      (A)  four 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 more than $25;                                                                                            
12 (B)  three 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 over $20 but not over $25;                                                                                
16 (C)  two percent of the gross value at the point of production                                                          
17 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
18 the United States West Coast during the calendar year for which the tax is due                                          
19            is over $17.50 but not over $20;                                                                             
20 (D)  one percent of the gross value at the point of production                                                          
21 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
22 the United States West Coast during the calendar year for which the tax is due                                          
23            is over $15 but not over $17.50; or                                                                          
24 (E)  zero percent of the gross value at the point of production                                                         
25 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
26 the United States West Coast during the calendar year for which the tax is due                                          
27            is $15 or less; and                                                                                          
28 (2)  oil produced on and after January 1, 2022, from leases or properties                                               
29 that include land north of 68 degrees North latitude, other than oil subject to (q) of                              
30       this section, may not be less than                                                                            
31 (A)  four 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 more than $25;                                                                                            
04 (B)  three 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 $20 but not over $25;                                                                                
08 (C)  two 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 $17.50 but not over $20;                                                                             
12 (D)  one 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 over $15 but not over $17.50; or                                                                          
16 (E)  zero percent of the gross value at the point of production                                                         
17 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
18 the United States West Coast during the calendar year for which the tax is due                                          
19            is $15 or less.                                                                                              
20    * Sec. 5. AS 43.55.011 is amended by adding new subsections to read:                                               
21 (q)  There is levied on the producer of oil or gas a tax for all oil produced from                                      
22 each major oil field each month of the calendar year, less any oil and gas the                                          
23 ownership or right to which is exempt from taxation or constitutes a landowner's                                        
24 royalty interest.  For oil produced from a major oil field on and after January 1, 2021,                                
25       the tax is equal to the sum of                                                                                    
26 (1)  the annual production tax value of the taxable oil from the major                                                  
27 oil field as calculated under AS 43.55.160(h)(5) or (i)(8), as applicable, multiplied by                                
28       35 percent; and                                                                                                   
29 (2)  the sum, over all months of the calendar year, of the tax amounts                                                  
30       determined under (r) of this section.                                                                             
31 (r)  For each month of a calendar year for which the average monthly                                                    
01       production tax value under AS 43.55.160(j) of a barrel of taxable oil produced from                               
02       each major oil field is more than $50, the amount of additional tax for purposes of                               
03       (q)(2) of this section is determined by multiplying                                                               
04                 (1)  the monthly production tax value of the taxable oil produced by the                                
05       producer from the major oil field during the month, less $50; and                                                 
06                 (2)  the tax rate of 15 percent.                                                                        
07            (s)  For each month of the calendar year, the levy of tax under (q) of this                                  
08       section for oil produced from each major oil field may not be less than                                           
09                 (1)  10 percent of the gross value at the point of production from the                                  
10 major oil field when the average price per barrel for Alaska North Slope crude oil for                                  
11 sale on the United States West Coast during the month for which the tax is due is less                                  
12       than $50;                                                                                                         
13 (2)  11 percent of the gross value at the point of production from the                                                  
14 major oil field when the average price per barrel for Alaska North Slope crude oil for                                  
15 sale on the United States West Coast during the month for which the tax is due is $50                                   
16       or more but less than $55;                                                                                        
17 (3)  12 percent of the gross value at the point of production from the                                                  
18 major oil field when the average price per barrel for Alaska North Slope crude oil for                                  
19 sale on the United States West Coast during the month for which the tax is due is $55                                   
20       or more but less than $60;                                                                                        
21 (4)  13 percent of the gross value at the point of production from the                                                  
22 major oil field when the average price per barrel for Alaska North Slope crude oil for                                  
23 sale on the United States West Coast during the month for which the tax is due is $60                                   
24       or more but less than $65;                                                                                        
25 (5)  14 percent of the gross value at the point of production from the                                                  
26 major oil field when the average price per barrel for Alaska North Slope crude oil for                                  
27 sale on the United States West Coast during the month for which the tax is due is $65                                   
28       or more but less than $70; or                                                                                     
29 (6)  15 percent of the gross value at the point of production from the                                                  
30 major oil field when the average price per barrel for Alaska North Slope crude oil for                                  
31 sale on the United States West Coast during the month for which the tax is due is $70                                   
01       or more.                                                                                                          
02            (t)  A tax credit provided under this chapter may not be applied to reduce an                                
03       amount due under (s) of this section.                                                                             
04    * Sec. 6. AS 43.55.019(a) is amended to read:                                                                      
05            (a)  A producer of oil or gas is allowed a credit against the tax levied by                                  
06 AS 43.55.011 [AS 43.55.011(e)] for contributions of cash or equipment accepted for                                  
07 (1)  direct instruction, research, and educational support purposes,                                                    
08 including library and museum acquisitions, and contributions to endowment, by an                                        
09 Alaska university foundation or by a nonprofit, public or private, Alaska two-year or                                   
10       four-year college accredited by a national or regional accreditation association;                                 
11 (2)  secondary school level vocational education courses, programs, and                                                 
12       facilities by a school district in the state;                                                                     
13 (3)  vocational education courses, programs, equipment, and facilities                                                  
14 by a state-operated vocational technical education and training school, a nonprofit                                     
15 regional training center recognized by the Department of Labor and Workforce                                            
16 Development, and an apprenticeship program in the state that is registered with the                                     
17 United States Department of Labor under 29 U.S.C. 50 - 50b (National Apprenticeship                                     
18       Act);                                                                                                             
19 (4)  a facility by a nonprofit, public or private, Alaska two-year or four-                                             
20       year college accredited by a national or regional accreditation association;                                      
21 (5)  Alaska Native cultural or heritage programs and educational                                                        
22 support, including mentoring and tutoring, provided by a nonprofit agency for public                                    
23       school staff and for students who are in grades kindergarten through 12 in the state;                             
24 (6)  education, research, rehabilitation, and facilities by an institution                                              
25 that is located in the state and that qualifies as a coastal ecosystem learning center                                  
26       under the Coastal America Partnership established by the federal government; and                                  
27                 (7)  the Alaska higher education investment fund under AS 37.14.750.                                    
28    * Sec. 7. AS 43.55.019(e) is amended to read:                                                                      
29 (e)  The credit under this section may not reduce a person's tax liability under                                        
30 AS 43.55.011 [AS 43.55.011(e)] to below zero for any tax year. An unused credit or                                  
31 portion of a credit not used under this section for a tax year may not be sold, traded,                                 
01       transferred, or applied in a subsequent tax year.                                                                 
02    * Sec. 8. AS 43.55.020(a) is amended to read:                                                                      
03            (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                             
04       the tax as follows:                                                                                               
05 (1)  for oil and gas produced before January 1, 2014, an installment                                                    
06 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                                  
07 as allowed by law, is due for each month of the calendar year on the last day of the                                    
08 following month; except as otherwise provided under (2) of this subsection, the                                         
09 amount of the installment payment is the sum of the following amounts, less 1/12 of                                     
10 the tax credits that are allowed by law to be applied against the tax levied by                                         
11 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                                    
12       not be less than zero:                                                                                            
13 (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                                              
14 produced from leases or properties in the state outside the Cook Inlet                                                  
15 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                                          
16            the greater of                                                                                               
17                           (i)  zero; or                                                                                 
18 (ii)  the sum of 25 percent and the tax rate calculated for                                                             
19 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
20 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
21 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
22 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
23 at the point of production of the oil and gas produced from the leases or                                               
24 properties during the month for which the installment payment is                                                        
25                 calculated;                                                                                             
26 (B)  for oil and gas produced from leases or properties subject                                                         
27            to AS 43.55.011(f), the greatest of                                                                          
28                           (i)  zero;                                                                                    
29 (ii)  zero percent, one percent, two percent, three                                                                     
30 percent, or four percent, as applicable, of the gross value at the point of                                             
31 production of the oil and gas produced from the leases or properties                                                    
01                 during the month for which the installment payment is calculated; or                                    
02 (iii)  the sum of 25 percent and the tax rate calculated for                                                            
03 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
04 by 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 for the oil and gas under AS 43.55.160 from the gross value                                                  
07 at the point of production of the oil and gas produced from those leases                                                
08 or properties during the month for which the installment payment is                                                     
09                 calculated;                                                                                             
10 (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                                        
11            each lease or property, the greater of                                                                       
12                           (i)  zero; or                                                                                 
13 (ii)  the sum of 25 percent and the tax rate calculated for                                                             
14 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
15 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
16 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
17 deductible under AS 43.55.160 for the oil or gas, respectively,                                                         
18 produced from the lease or property from the gross value at the point of                                                
19 production of the oil or gas, respectively, produced from the lease or                                                  
20 property during the month for which the installment payment is                                                          
21                 calculated;                                                                                             
22                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
23 (i)  the sum of 25 percent and the tax rate calculated for                                                              
24 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
25 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
26 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
27 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
28 at the point of production of the oil and gas produced from the leases or                                               
29 properties during the month for which the installment payment is                                                        
30                 calculated, but not less than zero; or                                                                  
31 (ii)  four percent of the gross value at the point of                                                                   
01 production of the oil and gas produced from the leases or properties                                                    
02                 during the month, but not less than zero;                                                               
03 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                                
04 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                          
05 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
06 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                          
07 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
08 gas produced during the month for the amount of taxable gas produced during the                                         
09 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
10       during the month for the amount of taxable oil produced during the calendar year;                                 
11 (3)  an installment payment of the estimated tax levied by                                                              
12 AS 43.55.011(i) for each lease or property is due for each month of the calendar year                                   
13 on the last day of the following month; the amount of the installment payment is the                                    
14       sum of                                                                                                            
15 (A)  the applicable tax rate for oil provided under                                                                     
16 AS 43.55.011(i), multiplied by the gross value at the point of production of the                                        
17 oil taxable under AS 43.55.011(i) and produced from the lease or property                                               
18            during the month; and                                                                                        
19 (B)  the applicable tax rate for gas provided under                                                                     
20 AS 43.55.011(i), multiplied by the gross value at the point of production of the                                        
21 gas taxable under AS 43.55.011(i) and produced from the lease or property                                               
22            during the month;                                                                                            
23 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                                       
24 applied as allowed by law, that exceeds the total of the amounts due as installment                                     
25 payments of estimated tax is due on March 31 of the year following the calendar year                                    
26       of production;                                                                                                    
27 (5)  for oil and gas produced on and after January 1, 2014, and before                                                  
28 January 1, 2021 [JANUARY 1, 2022], an installment payment of the estimated tax                                      
29 levied by AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for                                 
30 each month of the calendar year on the last day of the following month; except as                                       
31 otherwise provided under (6) of this subsection, the amount of the installment payment                                  
01       is the sum of the following amounts, less 1/12 of the tax credits that are allowed by                             
02       law to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but                            
03       the amount of the installment payment may not be less than zero:                                                  
04 (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                                              
05 produced from leases or properties in the state outside the Cook Inlet                                                  
06 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                                          
07            the greater of                                                                                               
08                           (i)  zero; or                                                                                 
09                           (ii)  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 and gas under AS 43.55.160 from the gross value                                                  
13 at the point of production of the oil and gas produced from the leases or                                               
14 properties during the month for which the installment payment is                                                        
15                 calculated;                                                                                             
16 (B)  for oil and gas produced from leases or properties subject                                                         
17            to AS 43.55.011(f), the greatest of                                                                          
18                           (i)  zero;                                                                                    
19 (ii)  zero percent, one percent, two percent, three                                                                     
20 percent, or four percent, as applicable, of the gross value at the point of                                             
21 production of the oil and gas produced from the leases or properties                                                    
22                 during the month for which the installment payment is calculated; or                                    
23 (iii)  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 and gas under AS 43.55.160 from the gross value                                                  
27 at the point of production of the oil and gas produced from those leases                                                
28 or properties during the month for which the installment payment is                                                     
29 calculated, except that, for the purposes of this calculation, a reduction                                              
30 from the gross value at the point of production may apply for oil and                                                   
31                 gas subject to AS 43.55.160(f) or (g);                                                                  
01 (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                                        
02            each lease or property, the greater of                                                                       
03                           (i)  zero; or                                                                                 
04 (ii)  35 percent multiplied by the remainder obtained by                                                                
05 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
06 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
07 deductible under AS 43.55.160 for the oil or gas, respectively,                                                         
08 produced from the lease or property from the gross value at the point of                                                
09 production of the oil or gas, respectively, produced from the lease or                                                  
10 property during the month for which the installment payment is                                                          
11                 calculated;                                                                                             
12                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
13 (i)  35 percent multiplied by the remainder obtained by                                                                 
14 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
15 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
16 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
17 at the point of production of the oil and gas produced from the leases or                                               
18 properties during the month for which the installment payment is                                                        
19                 calculated, but not less than zero; or                                                                  
20 (ii)  four percent of the gross value at the point of                                                                   
21 production of the oil and gas produced from the leases or properties                                                    
22                 during the month, but not less than zero;                                                               
23 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                                
24 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                          
25 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
26 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                          
27 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
28 gas produced during the month for the amount of taxable gas produced during the                                         
29 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
30       during the month for the amount of taxable oil produced during the calendar year;                                 
31 (7)  for oil and gas produced on and after January 1, 2021, and                                                     
01 before January 1, 2022, an installment payment of the estimated tax levied by                                       
02 AS 43.55.011, net of any tax credits applied as allowed by law, is due for each                                     
03 month of the calendar year on the last day of the following month; except as                                        
04 otherwise provided under (8) of this subsection, the amount of the installment                                      
05 payment is the sum of the following amounts, less 1/12 of the tax credits that are                                  
06 allowed by law to be applied against the tax levied by AS 43.55.011 for the                                         
07 calendar year, but the amount of the installment payment may not be less than                                       
08       zero:                                                                                                         
09 (A)  for oil and gas subject to AS 43.55.011(e) and not                                                             
10 subject to AS 43.55.011(o) or (p) produced from leases or properties in the                                         
11 state outside the Cook Inlet sedimentary basin and outside a major oil                                              
12 field, other than leases or properties subject to AS 43.55.011(f) or (s), the                                       
13            greater of                                                                                               
14                           (i)  zero; or                                                                             
15 (ii)  35 percent multiplied by the remainder obtained                                                               
16 by subtracting 1/12 of the producer's adjusted lease expenditures                                                   
17 for the calendar year of production under AS 43.55.165 and                                                          
18 43.55.170 that are deductible for the oil and gas under                                                             
19 AS 43.55.160 from the gross value at the point of production of the                                                 
20 oil and gas produced from the leases or properties during the                                                       
21                 month for which the installment payment is calculated;                                              
22 (B)  for oil and gas produced from leases or properties                                                             
23            subject to AS 43.55.011(f), the greatest of                                                              
24                           (i)  zero;                                                                                
25 (ii)  the applicable percentage under AS 43.55.011(f)                                                               
26 of the gross value at the point of production of the oil and gas                                                    
27 produced from the leases or properties during the month for which                                                   
28                 the installment payment is calculated; or                                                           
29 (iii)  35 percent multiplied by the remainder obtained                                                              
30 by subtracting 1/12 of the producer's adjusted lease expenditures                                                   
31 for the calendar year of production under AS 43.55.165 and                                                          
01 43.55.170 that are deductible for the oil and gas under                                                             
02 AS 43.55.160 from the gross value at the point of production of the                                                 
03 oil and gas produced from those leases or properties during the                                                     
04 month for which the installment payment is calculated, except that,                                                 
05 for the purposes of this calculation, a reduction from the gross                                                    
06 value at the point of production may apply for oil and gas subject                                                  
07                 to AS 43.55.160(f) or (g);                                                                          
08 (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                                    
09            each lease or property, the greater of                                                                   
10                           (i)  zero; or                                                                             
11 (ii)  35 percent multiplied by the remainder obtained                                                               
12 by subtracting 1/12 of the producer's adjusted lease expenditures                                                   
13 for the calendar year of production under AS 43.55.165 and                                                          
14 43.55.170 that are deductible under AS 43.55.160 for the oil or gas,                                                
15 respectively, produced from the lease or property from the gross                                                    
16 value at the point of production of the oil or gas, respectively,                                                   
17 produced from the lease or property during the month for which                                                      
18                 the installment payment is calculated;                                                              
19                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                 
20 (i)  35 percent multiplied by the remainder obtained                                                                
21 by subtracting 1/12 of the producer's adjusted lease expenditures                                                   
22 for the calendar year of production under AS 43.55.165 and                                                          
23 43.55.170 that are deductible for the oil and gas under                                                             
24 AS 43.55.160 from the gross value at the point of production of the                                                 
25 oil and gas produced from the leases or properties during the                                                       
26 month for which the installment payment is calculated, but not less                                                 
27                 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                                                           
30                 properties during the month, but not less than zero;                                                
31 (E)  for oil produced from each major oil field subject to                                                          
01            AS 43.55.011(q), the greatest of                                                                         
02                           (i)  zero;                                                                                
03 (ii)  the applicable percentage under AS 43.55.011(s)                                                               
04 of the gross value at the point of production of the oil produced                                                   
05 from the major oil field during the month for which the installment                                                 
06 payment is calculated; a tax credit may not be applied against the                                                  
07                 tax levied by AS 43.55.011(s);                                                                      
08                           (iii)  if the average monthly production tax value of a                                   
09                 barrel of oil produced from the major oil field is $50 or less, 35                                  
10 percent of the average monthly production tax value of a barrel of                                                  
11 oil produced from the major oil field; for purposes of this sub-                                                    
12 subparagraph, the average monthly production tax value of a                                                         
13 barrel of oil produced from the major oil field is calculated under                                                 
14                 AS 43.55.160(j); or                                                                                 
15 (iv)  if the average monthly production tax value of a                                                              
16 barrel of oil produced from the major oil field is more than $50, the                                               
17 sum of 35 percent of the average monthly production tax value of a                                                  
18 barrel of oil produced from the major oil field plus the difference                                                 
19 between the average monthly production tax value of a barrel of oil                                                 
20 produced from the major oil field and $50, multiplied by 15                                                         
21 percent; for the purposes of this sub-subparagraph, the average                                                     
22 monthly production tax value of a barrel of oil produced from the                                                   
23                 major oil field is calculated under AS 43.55.160(j);                                                
24 (8)  an amount calculated under (7)(C) of this subsection for oil or                                                
25 gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                  
26 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                               
27 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                      
28 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of                                       
29 taxable gas produced during the month for the amount of taxable gas produced                                        
30 during the calendar year and substituting in AS 43.55.011(k) the amount of                                          
31 taxable oil produced during the month for the amount of taxable oil produced                                        
01       during the calendar year;                                                                                     
02 (9) [(7)]  for oil and gas produced on or after January 1, 2022, an                                                 
03 installment payment of the estimated tax levied by AS 43.55.011 [AS 43.55.011(e)],                                  
04 net of any tax credits applied as allowed by law, is due for each month of the calendar                                 
05 year on the last day of the following month; except as otherwise provided under (12)                                
06 [(10)] of this subsection, the amount of the installment payment is the sum of the                                      
07 following amounts, less 1/12 of the tax credits that are allowed by law to be applied                                   
08 against the tax levied by AS 43.55.011 [AS 43.55.011(e)] for the calendar year, but the                             
09       amount of the installment payment may not be less than zero:                                                      
10 (A)  for oil produced from leases or properties subject to                                                              
11            AS 43.55.011(f), the greatest of                                                                             
12                           (i)  zero;                                                                                    
13 (ii)  the applicable percentage under AS 43.55.011(f)                                                               
14 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE                                                                          
15 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross                                                                  
16 value at the point of production of the oil produced from the leases or                                                 
17 properties during the month for which the installment payment is                                                        
18                 calculated; or                                                                                          
19 (iii)  35 percent multiplied by the remainder obtained by                                                               
20 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
21 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
22 deductible for the oil under AS 43.55.160(h)(1) from the gross value at                                                 
23 the point of production of the oil produced from those leases or                                                        
24 properties during the month for which the installment payment is                                                        
25 calculated, except that, for the purposes of this calculation, a reduction                                              
26 from the gross value at the point of production may apply for oil                                                       
27                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
28 (B)  for oil produced before or during the last calendar year                                                           
29 under AS 43.55.024(b) for which the producer could take a tax credit under                                              
30 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                                          
31 sedimentary basin, no part of which is north of 68 degrees North latitude, other                                        
01            than leases or properties subject to AS 43.55.011(o) or (p), 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 for the oil under AS 43.55.160(h)(2) from the gross value at                                                 
07 the point of production of the oil produced from the leases or properties                                               
08                 during the month for which the installment payment is calculated;                                       
09                      (C)  for oil and gas produced from leases or properties subject                                    
10 to AS 43.55.011(p), except as otherwise provided under (10) [(8)] of this                                           
11            subsection, the sum 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 under AS 43.55.160(h)(3) from the gross value at                                                 
16 the point of production of the oil produced from the leases or properties                                               
17 during the month for which the installment payment is calculated, but                                                   
18                 not less than zero; and                                                                                 
19 (ii)  13 percent of the gross value at the point of                                                                     
20 production of the gas produced from the leases or properties during the                                                 
21                 month, but not less than zero;                                                                          
22 (D)  for oil produced from leases or properties in the state, no                                                        
23 part of which is north of 68 degrees North latitude, other than leases or                                               
24            properties subject to (B), (C), or (F) of this paragraph, the greater of                                     
25                           (i)  zero; or                                                                                 
26 (ii)  35 percent multiplied by the remainder obtained by                                                                
27 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
28 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
29 deductible for the oil under AS 43.55.160(h)(4) from the gross value at                                                 
30 the point of production of the oil produced from the leases or properties                                               
31                 during the month for which the installment payment is calculated;                                       
01 (E)  for gas produced from each lease or property in the state                                                          
02 outside the Cook Inlet sedimentary basin, other than a lease or property subject                                        
03 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of                                                
04 production of the gas produced from the lease or property during the month for                                          
05            which the installment payment is calculated, but not less than zero;                                         
06                      (F)  for oil subject to AS 43.55.011(k), for each lease or                                         
07            property, the greater of                                                                                     
08                           (i)  zero; or                                                                                 
09                           (ii)  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 under AS 43.55.160 for the oil produced from the lease or                                                    
13 property from the gross value at the point of production of the oil                                                     
14 produced from the lease or property during the month for which the                                                      
15                 installment payment is calculated;                                                                      
16 (G)  for gas subject to AS 43.55.011(j) or (o), for each lease or                                                       
17            property, the greater of                                                                                     
18                           (i)  zero; or                                                                                 
19 (ii)  13 percent of the gross value at the point of                                                                     
20 production of the gas produced from the lease or property during the                                                    
21                 month for which the installment payment is calculated;                                                  
22 (H)  for oil produced from each major oil field subject to                                                          
23            AS 43.55.011(q), the greatest of                                                                         
24                           (i)  zero;                                                                                
25 (ii)  the applicable percentage under AS 43.55.011(s)                                                               
26 of the gross value at the point of production of the oil produced                                                   
27 from the major oil field during the month for which the installment                                                 
28 payment is calculated; a tax credit may not be applied against the                                                  
29                 tax levied by AS 43.55.011(s);                                                                      
30 (iii)  if the average monthly production tax value of a                                                             
31 barrel of oil produced from the major oil field is $50 or less, 35                                                  
01 percent of the average monthly production tax value of a barrel of                                                  
02 oil produced from the major oil field; for the purposes of this sub-                                                
03 subparagraph, the average monthly production tax value of a                                                         
04 barrel of oil produced from the major oil field is calculated under                                                 
05                 AS 43.55.160(j); or                                                                                 
06 (iv)  if the average monthly production tax value of a                                                              
07 barrel of oil produced from the major oil field is more than $50, the                                               
08 sum of 35 percent of the average monthly production tax value of a                                                  
09 barrel of oil produced from the major oil field plus the difference                                                 
10 between the average monthly production tax value of a barrel of oil                                                 
11 produced from the major oil field and $50, multiplied by 15                                                         
12 percent; for the purposes of this sub-subparagraph, the average                                                     
13 monthly production tax value of a barrel of oil produced from the                                                   
14                 major oil field is calculated under AS 43.55.160(j);                                                
15 (10) [(8)]  an amount calculated under (9)(C) [(7)(C)] of this subsection                                       
16 may not exceed four percent of the gross value at the point of production of the oil and                                
17 gas produced from leases or properties subject to AS 43.55.011(p) during the month                                      
18       for which the installment payment is calculated;                                                                  
19 (11) [(9)]  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii),                                           
20 (7)(B)(ii), and (9)(A)(ii) [(7)(A)(ii)] of this subsection, the applicable percentage of                        
21 the gross value at the point of production is determined under AS 43.55.011(f)(1) or                                    
22 (2) but substituting the phrase "month for which the installment payment is calculated"                                 
23       in AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is due";                            
24 (12) [(10)]  an amount calculated under (9)(F) [(7)(F)] or (G) of this                                          
25 subsection for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the                                    
26 product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or                                
27 43.55.011(o), as applicable, for gas, or set out in AS 43.55.011(k) for oil, but                                        
28 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                                     
29 amount of taxable gas produced during the month for the amount of taxable gas                                           
30 produced during the calendar year and substituting in AS 43.55.011(k) the amount of                                     
31 taxable oil produced during the month for the amount of taxable oil produced during                                     
01       the calendar year.                                                                                                
02    * Sec. 9. AS 43.55.020(g) is amended to read:                                                                      
03            (g)  Notwithstanding any contrary provision of AS 43.05.225,                                                 
04 (1)  before January 1, 2014, an unpaid amount of an installment                                                         
05 payment required under (a)(1) - (3) of this section that is not paid when due bears                                     
06 interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal                                    
07 Revenue Code), as amended, compounded daily, from the date the installment                                              
08 payment is due until March 31 following the calendar year of production, and (B) as                                     
09 provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued                                  
10 under (A) of this paragraph that remains unpaid after that March 31 is treated as an                                    
11 addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax                                
12 due under (a)(4) of this section that is not paid when due bears interest as provided for                               
13       a delinquent tax under AS 43.05.225;                                                                              
14 (2)  on and after January 1, 2014, an unpaid amount of an installment                                                   
15 payment required under (a)(3), (5), (6), [OR] (7), (8), or (9) of this section that is not                          
16 paid when due bears interest (A) at the rate provided for an underpayment under 26                                      
17 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date                                        
18 the installment payment is due until March 31 following the calendar year of                                            
19 production, and (B) as provided for a delinquent tax under AS 43.05.225 after that                                      
20 March 31; interest accrued under (A) of this paragraph that remains unpaid after that                                   
21 March 31 is treated as an addition to tax that bears interest under (B) of this paragraph;                              
22 an unpaid amount of tax due under (a)(4) of this section that is not paid when due                                      
23       bears interest as provided for a delinquent tax under AS 43.05.225.                                               
24    * Sec. 10. AS 43.55.020(h) is amended to read:                                                                     
25            (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                 
26 (1)  an overpayment of an installment payment required under (a)(1),                                                    
27 (2), (3), (5), (6), [OR] (7), (8), or (9) of this section bears interest at the rate provided                       
28 for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended,                                            
29 compounded daily, from the later of the date the installment payment is due or the date                                 
30       the overpayment is made, until the earlier of                                                                     
31                      (A)  the date it is refunded or is applied to an underpayment; or                                  
01                      (B)  March 31 following the calendar year of production;                                           
02 (2)  except as provided under (1) of this subsection, interest with                                                     
03 respect to an overpayment is allowed only on any net overpayment of the payments                                        
04 required under (a) of this section that remains after the later of March 31 following the                               
05 calendar year of production or the date that the statement required under                                               
06       AS 43.55.030(a) is filed;                                                                                         
07 (3)  interest is allowed under (2) of this subsection only from a date that                                             
08 is 90 days after the later of March 31 following the calendar year of production or the                                 
09 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed                                
10       if the overpayment was refunded within the 90-day period;                                                         
11 (4)  interest under (2) and (3) of this subsection is paid at the rate and in                                           
12       the manner provided in AS 43.05.225(1).                                                                           
13    * Sec. 11. AS 43.55.020(k) is amended to read:                                                                     
14            (k)  For oil and gas produced on and after                                                                   
15 (1)  January 1, 2014, and before January 1, 2021 [2022], in making                                              
16 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011,                                   
17 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or                                   
18 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes                                   
19 due to the amount of the tax paid; if  [. IF] the total deductions of installment                                   
20 payments of estimated tax for a calendar year exceed the actual tax for that calendar                                   
21 year, the producer shall, before April 1 of the following year, refund the excess to the                                
22 royalty owner; unless [. UNLESS] otherwise agreed between the producer and the                                      
23 royalty owner, the amount of the tax paid under AS 43.55.011(e) on taxable royalty oil                                  
24 and gas for a calendar year, other than oil and gas the ownership or right to which                                     
25 constitutes a landowner's royalty interest, is considered to be the gross value at the                                  
26 point of production of the taxable royalty oil and gas produced during the calendar                                     
27       year multiplied by a figure that is a quotient, in which                                                          
28 (A) [(1)]  the numerator is the producer's total tax liability under                                                
29            AS 43.55.011(e)(2) for the calendar year of production; and                                                  
30 (B) [(2)]  the denominator is the total gross value at the point of                                                 
31 production of the oil and gas taxable under AS 43.55.011(e) produced by the                                             
01            producer from all leases and properties in the state during the calendar year;                           
02 (2)  January 1, 2021, and before January 1, 2022, in making                                                         
03 settlement with the royalty owner for oil and gas that is taxable under                                             
04 AS 43.55.011, the producer may deduct the amount of the tax paid on taxable                                         
05 royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at                                
06 the time the tax becomes due to the amount of the tax paid; if the total deductions                                 
07 of installment payments of estimated tax for a calendar year exceed the actual tax                                  
08 for that calendar year, the producer shall, before April 1 of the following year,                                   
09 refund the excess to the royalty owner; unless otherwise agreed between the                                         
10 producer and the royalty owner, the amount of the tax paid under AS 43.55.011                                       
11 on taxable royalty oil and gas for a calendar year, other than oil and gas the                                      
12 ownership or right to which constitutes a landowner's royalty interest, is                                          
13 considered to be the gross value at the point of production of the taxable royalty                                  
14 oil and gas produced during the calendar year multiplied by a figure that is a                                      
15       quotient, in which                                                                                            
16 (A)  the numerator is the producer's total tax liability under                                                      
17            AS 43.55.011(e)(2) and (q) for the calendar year of production; and                                      
18 (B)  the denominator is the total gross value at the point of                                                       
19 production of the oil and gas taxable under AS 43.55.011(e) and (q)                                                 
20 produced by the producer from all leases and properties in the state                                                
21            during the calendar year.                                                                                
22    * Sec. 12. AS 43.55.020(l) is amended to read:                                                                     
23 (l)  For oil and gas produced on and after January 1, 2022, in making                                                   
24 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011,                                   
25 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or                                   
26 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes                                   
27 due to the amount of the tax paid. If the total deductions of installment payments of                                   
28 estimated tax for a calendar year exceed the actual tax for that calendar year, the                                     
29 producer shall, before April 1 of the following year, refund the excess to the royalty                                  
30 owner. In making settlement with the royalty owner for gas that is taxable under                                        
31 AS 43.55.014, the producer may deduct the amount of the gas paid as in-kind tax on                                      
01 taxable royalty gas or may deduct the gross value at the point of production of the gas                                 
02 paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the                                         
03 producer and the royalty owner, the amount of the tax paid under AS 43.55.011                                       
04 [AS 43.55.011(e)] on taxable royalty oil for a calendar year, other than oil the                                        
05 ownership or right to which constitutes a landowner's royalty interest, is considered to                                
06 be the gross value at the point of production of the taxable royalty oil produced during                                
07       the calendar year multiplied by a figure that is a quotient, in which                                             
08 (1)  the numerator is the producer's total tax liability under                                                          
09       AS 43.55.011(e)(3)(A) and (q) for the calendar year of production; and                                        
10 (2)  the denominator is the total gross value at the point of production                                                
11 of the oil taxable under AS 43.55.011(e) and (q) produced by the producer from all                                  
12       leases and properties in the state during the calendar year.                                                      
13    * Sec. 13. AS 43.55.023(a) is amended to read:                                                                     
14 (a)  A producer or explorer may take a tax credit for a qualified capital                                               
15       expenditure as follows:                                                                                           
16 (1)  notwithstanding that a qualified capital expenditure may be a                                                      
17 deductible lease expenditure for purposes of calculating the production tax value of oil                                
18 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                      
19 former AS 43.20.043 or AS 43.55.025, a producer or explorer that incurs a qualified                                     
20 capital expenditure may also elect to apply a tax credit against a tax levied by                                        
21       AS 43.55.011 [AS 43.55.011(e)] in the amount of 10 percent of that expenditure;                               
22 (2)  a producer or explorer may take a credit for a qualified capital                                                   
23 expenditure incurred in connection with geological or geophysical exploration or in                                     
24       connection with an exploration well only if the producer or explorer                                              
25 (A)  agrees, in writing, to the applicable provisions of                                                                
26            AS 43.55.025(f)(2); and                                                                                      
27 (B)  submits to the Department of Natural Resources all data                                                            
28            that would be required to be submitted under AS 43.55.025(f)(2);                                             
29 (3)  a credit for a qualified capital expenditure incurred to explore for,                                              
30       develop, or produce oil or gas deposits located                                                                   
31 (A)  north of 68 degrees North latitude may be taken only if the                                                        
01            expenditure is incurred before January 1, 2014;                                                              
02                      (B)  in the Cook Inlet sedimentary basin may be taken only if                                      
03            the expenditure is incurred before January 1, 2018.                                                          
04    * Sec. 14. AS 43.55.023(c) is amended to read:                                                                     
05            (c)  A credit or portion of a credit under this section                                                      
06                 (1)  may not be                                                                                         
07                      (A)  used to reduce a person's tax liability under AS 43.55.011                            
08            [AS 43.55.011(e)] for any calendar year below zero; or                                                   
09                      (B)  applied against the tax imposed under AS 43.55.011(s);                                    
10 (2)  may, if not used under this subsection, be applied in a later                                                      
11       calendar year;                                                                                                    
12 (3)  may, regardless of when the credit was earned, be used to satisfy a                                                
13       tax, interest, penalty, fee, or other charge that                                                                 
14 (A)  is related to the tax due under this chapter for a prior year,                                                     
15 except for a surcharge under AS 43.55.201 - 43.55.299 or 43.55.300 or the tax                                           
16            levied by AS 43.55.011(i) or 43.55.014; and                                                                  
17 (B)  has not, for the purpose of art. IX, sec. 17(a), Constitution                                                      
18 of the State of Alaska, been subject to an administrative proceeding or                                                 
19            litigation.                                                                                                  
20    * Sec. 15. AS 43.55.024(c) is amended to read:                                                                     
21 (c)  For a calendar year for which a producer's tax liability under AS 43.55.011                                    
22 [AS 43.55.011(e)] exceeds zero before application of any credits under this chapter,                                    
23 other than a credit under (a) of this section but after application of any credit under (a)                             
24 of this section, a producer that is qualified under (e) of this section and whose average                               
25 amount of oil and gas produced a day and taxable under AS 43.55.011                                                 
26 [AS 43.55.011(e)] is less than 100,000 BTU equivalent barrels a day may apply a tax                                     
27 credit under this subsection against that liability. A producer whose average amount of                                 
28       oil and gas produced a day and taxable under AS 43.55.011 [AS 43.55.011(e)] is                                
29 (1)  not more than 50,000 BTU equivalent barrels may apply a tax                                                        
30       credit of not more than $12,000,000 for the calendar year;                                                        
31 (2)  more than 50,000 and less than 100,000 BTU equivalent barrels                                                      
01       may apply a tax credit of not more than $12,000,000 multiplied by the following                                   
02       fraction for the calendar year:                                                                                   
03                         1 - [2 X (AP - 50,000)] ? 100,000                                                               
04       where AP = the average amount of oil and gas taxable under AS 43.55.011                                       
05       [AS 43.55.011(e)], produced a day during the calendar year in BTU equivalent barrels.                             
06    * Sec. 16. AS 43.55.024(e) is amended to read:                                                                     
07 (e)  On written application by a producer that includes any information the                                             
08 department may require, the department shall determine whether the producer                                             
09 qualifies for a calendar year under (a) and (c) of this section. To qualify under (a) and                               
10 (c) of this section, a producer must demonstrate that its operation in the state or its                                 
11 ownership of an interest in a lease or property in the state as a distinct producer would                               
12 not result in the division among multiple producer entities of any production tax                                       
13 liability under AS 43.55.011 [AS 43.55.011(e)] that reasonably would be expected to                                 
14 be attributed to a single producer if the tax credit provisions of (a) or (c) of this section                           
15       did not exist.                                                                                                    
16    * Sec. 17. AS 43.55.024(g) is amended to read:                                                                     
17            (g)  A tax credit authorized by (c) of this section may not be applied                                       
18 (1)  to reduce a producer's tax liability for any calendar year under                                               
19       AS 43.55.011 [AS 43.55.011(e)] below zero; or                                                             
20                 (2)  against the tax imposed under AS 43.55.011(s).                                                 
21    * Sec. 18. AS 43.55.024(i) is amended to read:                                                                     
22 (i)  A producer may apply against the producer's tax liability for the calendar                                         
23 year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under                                      
24 AS 43.55.011(e) that receives a reduction in the gross value at the point of production                                 
25 under AS 43.55.160(f) or (g) and that is produced during a calendar year after                                          
26       December 31, 2013. A tax credit authorized by this subsection                                                     
27 (1)  may not reduce a producer's tax liability for a calendar year under                                            
28       AS 43.55.011(e) below zero; and                                                                               
29                 (2)  does not apply to oil produced from a major oil field.                                         
30    * Sec. 19. AS 43.55.024(j) is amended to read:                                                                     
31 (j)  A producer may apply against the producer's tax liability for the calendar                                         
01 year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for                                  
02 each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in                                   
03 the gross value at the point of production under AS 43.55.160(f) or (g) and that is                                     
04 produced during a calendar year after December 31, 2013, from leases or properties                                      
05 north of 68 degrees North latitude. A tax credit under this subsection may not reduce a                                 
06 producer's tax liability for a calendar year under AS 43.55.011(e) below the amount                                     
07 calculated under AS 43.55.011(f) and does not apply to oil produced from a major                                    
08 oil field. The amount of the tax credit for a barrel of taxable oil subject to this                                 
09       subsection produced during a month of the calendar year is                                                        
10 (1)  $8 for each barrel of taxable oil if the average gross value at the                                                
11       point of production for the month is less than $80 a barrel;                                                      
12 (2)  $7 for each barrel of taxable oil if the average gross value at the                                                
13 point of production for the month is greater than or equal to $80 a barrel, but less than                               
14       $90 a barrel;                                                                                                     
15 (3)  $6 for each barrel of taxable oil if the average gross value at the                                                
16 point of production for the month is greater than or equal to $90 a barrel, but less than                               
17       $100 a barrel;                                                                                                    
18 (4)  $5 for each barrel of taxable oil if the average gross value at the                                                
19 point of production for the month is greater than or equal to $100 a barrel, but less                                   
20       than $110 a barrel;                                                                                               
21 (5)  $4 for each barrel of taxable oil if the average gross value at the                                                
22 point of production for the month is greater than or equal to $110 a barrel, but less                                   
23       than $120 a barrel;                                                                                               
24 (6)  $3 for each barrel of taxable oil if the average gross value at the                                                
25 point of production for the month is greater than or equal to $120 a barrel, but less                                   
26       than $130 a barrel;                                                                                               
27 (7)  $2 for each barrel of taxable oil if the average gross value at the                                                
28 point of production for the month is greater than or equal to $130 a barrel, but less                                   
29       than $140 a barrel;                                                                                               
30 (8)  $1 for each barrel of taxable oil if the average gross value at the                                                
31 point of production for the month is greater than or equal to $140 a barrel, but less                                   
01       than $150 a barrel;                                                                                               
02                 (9)  zero if the average gross value at the point of production for the                                 
03       month is greater than or equal to $150 a barrel.                                                                  
04    * Sec. 20. AS 43.55.025(a) is amended to read:                                                                     
05 (a)  Subject to the terms and conditions of this section, a credit against the tax                                      
06 levied by AS 43.55.011 [AS 43.55.011(e)] or, if the credit is for exploration                                       
07 expenditures incurred for work performed on or after July 1, 2016, against the tax                                      
08 levied by AS 43.20 is allowed for exploration expenditures that qualify under (b) of                                    
09       this section in an amount equal to one of the following:                                                          
10 (1)  30 percent of the total exploration expenditures that qualify only                                                 
11       under (b) and (c) of this section;                                                                                
12 (2)  30 percent of the total exploration expenditures that qualify only                                                 
13       under (b) and (d) of this section;                                                                                
14 (3)  40 percent of the total exploration expenditures that qualify under                                                
15       (b), (c), and (d) of this section;                                                                                
16 (4)  40 percent of the total exploration expenditures that qualify only                                                 
17       under (b) and (e) of this section;                                                                                
18 (5)  80, 90, or 100 percent, or a lesser amount described in (l) of this                                                
19 section, of the total exploration expenditures described in (b)(2) and (3) of this section                              
20 and not excluded by (b)(4) and (5) of this section that qualify only under (l) of this                                  
21       section;                                                                                                          
22 (6)  the lesser of $25,000,000 or 80 percent of the total exploration                                                   
23 drilling expenditures described in (m) of this section and that qualify under (b) and                                   
24       (c)(1), (c)(2)(A), and (c)(2)(C) of this section; or                                                              
25 (7)  the lesser of $7,500,000 or 75 percent of the total seismic                                                        
26 exploration expenditures described in (n) of this section and that qualify under (b) of                                 
27       this section.                                                                                                     
28    * Sec. 21. AS 43.55.025(f) is amended to read:                                                                     
29            (f)  For a production tax credit under this section,                                                         
30 (1)  an explorer shall, in a form prescribed by the department and,                                                     
31 except for a credit under (k) of this section, within six months of the completion of the                               
01 exploration activity, claim the credit and submit information sufficient to demonstrate                                 
02 to the department's satisfaction that the claimed exploration expenditures qualify under                                
03 this section; in addition, the explorer shall submit information necessary for the                                      
04 commissioner of natural resources to evaluate the validity of the explorer's compliance                                 
05       with the requirements of this section;                                                                            
06                 (2)  an explorer shall agree, in writing,                                                               
07 (A)  to notify the Department of Natural Resources, within 30                                                           
08 days after completion of seismic or geophysical data processing, completion of                                          
09 well drilling, or filing of a claim for credit, whichever is the latest, for which                                      
10 exploration costs are claimed, of the date of completion and submit a report to                                         
11 that department describing the processing sequence and providing a list of data                                         
12            sets available;                                                                                              
13 (B)  to provide to the Department of Natural Resources, within                                                          
14 30 days after the date of a request, unless a longer period is provided by the                                          
15 Department of Natural Resources, specific data sets, ancillary data, and reports                                        
16            identified in (A) of this paragraph; in this subparagraph,                                                   
17 (i)  a seismic or geophysical data set includes the data                                                                
18 for an entire seismic survey, irrespective of whether the survey area                                                   
19 covers nonstate land in addition to state land or land in a unit in                                                     
20                 addition to land outside a unit;                                                                        
21 (ii)  well data include all analyses conducted on physical                                                              
22 material, and well logs collected from the well, results, and copies of                                                 
23 data collected and data analyses for the well, including well logs;                                                     
24 sample analyses; testing geophysical and velocity data including                                                        
25 seismic profiles and check shot surveys; testing data and analyses; age                                                 
26                 data; geochemical analyses; and tangible material;                                                      
27 (C)  that, notwithstanding any provision of AS 38, information                                                          
28 provided under this paragraph will be held confidential by the Department of                                            
29            Natural Resources,                                                                                           
30 (i)  in the case of well data, until the expiration of the                                                              
31 24-month period of confidentiality described in AS 31.05.035(c), at                                                     
01 which time the Department of Natural Resources will release the                                                         
02 information after 30 days' public notice unless, in the discretion of the                                               
03 commissioner of natural resources, it is necessary to protect                                                           
04 information relating to the valuation of unleased acreage in the same                                                   
05 vicinity, or unless the well is on private land and the owner, including                                                
06 the lessor but not the lessee, of the oil and gas resources has not given                                               
07                 permission to release the well data;                                                                    
08 (ii)  in the case of seismic or other geophysical data,                                                                 
09 other than seismic data acquired by seismic exploration subject to (k) of                                               
10 this section, for 10 years following the completion date, at which time                                                 
11 the Department of Natural Resources will release the information after                                                  
12 30 days' public notice, except as to seismic or other geophysical data                                                  
13 acquired from private land, unless the owner, including a lessor but not                                                
14 a lessee, of the oil and gas resources in the private land gives                                                        
15 permission to release the seismic or other geophysical data associated                                                  
16                 with the private land;                                                                                  
17 (iii)  in the case of seismic data obtained by seismic                                                                  
18 exploration subject to (k) of this section, only until the expiration of 30                                             
19 days' public notice issued on or after the date the production tax credit                                               
20                 certificate is issued under (5) of this subsection;                                                     
21 (3)  if more than one explorer holds an interest in a well or seismic                                                   
22 exploration, each explorer may claim an amount of credit that is proportional to the                                    
23       explorer's cost incurred;                                                                                         
24 (4)  the department may exercise the full extent of its powers as though                                                
25 the explorer were a taxpayer under this title, in order to verify that the claimed                                      
26       expenditures are qualified exploration expenditures under this section; and                                       
27 (5)  if the department is satisfied that the explorer's claimed                                                         
28 expenditures are qualified under this section and that all data required to be submitted                                
29 under this section have been submitted, the department shall issue to the explorer a                                    
30 production tax credit certificate for the amount of credit to be allowed against                                        
31 production taxes levied by AS 43.55.011 [AS 43.55.011(e)] and, if the credit is for                                 
01       exploration expenditures incurred for work performed on or after July 1, 2016, against                            
02       taxes levied by AS 43.20; notwithstanding any contrary provision of AS 38,                                        
03       AS 40.25.100, or AS 43.05.230, the following information is not confidential:                                     
04                      (A)  the explorer's name;                                                                          
05                      (B)  the date of the application;                                                                  
06                      (C)  the location of the well or seismic exploration;                                              
07                      (D)  the date of the department's issuance of the certificate; and                                 
08                      (E)  the date on which the information required to be submitted                                    
09            under this section will be released.                                                                         
10    * Sec. 22. AS 43.55.025(h) is amended to read:                                                                     
11 (h)  A producer that purchases a production tax credit certificate may apply the                                        
12 credits against its production tax levied by AS 43.55.011 [AS 43.55.011(e)].                                        
13 Regardless of the price the producer paid for the certificate, the producer may receive                                 
14 a credit against its production tax liability for the full amount of the credit, but for not                            
15 more than the amount for which the certificate is issued. A production tax credit or a                                  
16 portion of a production tax credit or a production tax credit certificate or a portion of a                             
17       production tax credit certificate allowed under this section                                                      
18                 (1)  may not be applied                                                                                 
19                      (A)  more than once;                                                                           
20                      (B)  against the tax imposed under AS 43.55.011(s);                                            
21                 (2)  may be applied in a later calendar year;                                                           
22 (3)  may, regardless of when the credit was earned, be applied to satisfy                                               
23       a tax, interest, penalty, fee, or other charge that                                                               
24 (A)  is related to the tax due under this chapter for a prior year,                                                     
25 except for a surcharge under AS 43.55.201 - 43.55.299 or 43.55.300 or the tax                                           
26            levied by AS 43.55.011(i) or 43.55.014; and                                                                  
27 (B)  has not, for the purpose of art. IX, sec. 17(a), Constitution                                                      
28 of the State of Alaska, been subject to an administrative proceeding or                                                 
29            litigation.                                                                                                  
30    * Sec. 23. AS 43.55.025(i) is amended to read:                                                                     
31            (i)  For a production tax credit under this section,                                                         
01 (1)  a credit may not be applied to reduce a taxpayer's tax liability under                                             
02       AS 43.55.011 [AS 43.55.011(e)] below zero for a calendar year;                                                
03 (2)  if the production tax credit is for exploration expenditures incurred                                              
04 for work performed on or after July 1, 2016, the explorer may apply the credit to                                       
05 reduce the explorer's tax liability under AS 43.20, except that the credit may not be                                   
06 applied to reduce the explorer's tax liability under AS 43.20 below zero for a tax year;                                
07       and                                                                                                               
08 (3)  an amount of the production tax credit in excess of the amount that                                                
09 may be applied for a calendar or tax year under this subsection may be carried forward                                  
10 and applied against the taxpayer's tax liability under AS 43.55.011 [AS 43.55.011(e)]                               
11       in one or more later calendar years or under AS 43.20 in one or more later tax years.                             
12    * Sec. 24. AS 43.55.028(e) is amended to read:                                                                     
13 (e)  The department, on the written application of a person to whom a                                                   
14 transferable tax credit certificate has been issued under AS 43.55.023(d) or former                                     
15 AS 43.55.023(m) for an expenditure incurred before July 1, 2017, or to whom a                                           
16 production tax credit certificate has been issued under AS 43.55.025(f) for an                                          
17 expenditure incurred before July 1, 2017, may use either available money in the oil                                     
18 and gas tax credit fund or, subject to appropriation by the legislature, money disbursed                                
19 to the commissioner, or both, to purchase, in whole or in part, the certificate. The                                    
20 department may not purchase with money from the oil and gas tax credit fund a total                                     
21 of more than $70,000,000 in tax credit certificates from a person in a calendar year.                                   
22 The total amount of purchases made by the department with money from the oil and                                        
23 gas tax credit fund from a person in a year may not exceed the assumed payment                                          
24 amount for each year, as calculated under (l) of this section without the discount                                      
25 provided in (m) of this section. Before purchasing a certificate or part of a certificate,                              
26       the department shall find that                                                                                    
27 (1)  the calendar year of the purchase is not earlier than the first                                                    
28 calendar year for which the credit shown on the certificate would otherwise be allowed                                  
29       to be applied against a tax;                                                                                      
30 (2)  the application is not the result of the division of a single entity into                                          
31 multiple entities that would reasonably be expected to apply as a single entity if the                                  
01       $70,000,000 limitation in this subsection did not exist;                                                          
02                 (3)  the applicant's total tax liability under AS 43.55.011                                         
03       [AS 43.55.011(e)], after application of all available tax credits, for the calendar year in                       
04       which the application is made is zero;                                                                            
05 (4)  the applicant's average daily production of oil and gas taxable                                                    
06 under AS 43.55.011 [AS 43.55.011(e)] during the calendar year preceding the                                         
07 calendar year in which the application is made was not more than 50,000 BTU                                             
08       equivalent barrels; and                                                                                           
09                 (5)  the purchase is consistent with this section and regulations adopted                               
10       under this section.                                                                                               
11    * Sec. 25. AS 43.55.030(a) is amended to read:                                                                     
12 (a)  A producer that produces oil or gas from a lease or property in the state                                          
13 during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                                     
14 for that oil or gas, shall file with the department on March 31 of the following year a                                 
15 statement, under oath, in a form prescribed by the department, giving, with other                                       
16       information required, the following:                                                                              
17 (1)  a description of each lease or property and each major oil field                                               
18 from which oil or gas was produced, by name, legal description, lease number, or                                        
19       accounting codes assigned by the department;                                                                      
20 (2)  the names of the producer and, if different, the person paying the                                                 
21       tax, if any;                                                                                                      
22 (3)  the gross amount of oil and the gross amount of gas produced from                                                  
23 each lease or property and each major oil field, separately identifying the gross                                   
24 amount of gas produced from each oil and gas lease to which an effective election                                       
25 under AS 43.55.014(a) applies, the amount of gas delivered to the state under                                           
26 AS 43.55.014(b), and the percentage of the gross amount of oil and gas owned by the                                     
27       producer;                                                                                                         
28 (4)  the gross value at the point of production of the oil and of the gas                                               
29 produced from each lease or property and each major oil field owned by the producer                                 
30       and the costs of transportation of the oil and gas;                                                               
31 (5)  the name of the first purchaser and the price received for the oil and                                             
01       for the gas, unless relieved from this requirement in whole or in part by the                                     
02       department;                                                                                                       
03                 (6)  the producer's qualified capital expenditures, as defined in                                       
04       AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other                               
05       payments or credits under AS 43.55.170;                                                                           
06                 (7)  the production tax values of the oil and gas, separately, under                                
07       AS 43.55.160(a) or (i) or of the oil under AS 43.55.160(h) or (j), as applicable;                         
08                 (8)  any claims for tax credits to be applied; and                                                      
09                 (9)  calculations showing the amounts, if any, that were or are due                                     
10       under AS 43.55.020(a) and interest on any underpayment or overpayment.                                            
11    * Sec. 26. AS 43.55.075(b) is amended to read:                                                                     
12 (b)  A decision of a regulatory agency, court, or other body with authority to                                          
13 resolve disputes that results in a retroactive change to a lease expenditure, to an                                     
14 adjustment to a lease expenditure, to the allocation of a lease expenditure between                                 
15 oil and gas, to costs of transportation, to sale price, to prevailing value, or to                                  
16 consideration of quality differentials relating to the commingling of oils that has a                               
17 corresponding effect, either an increase or decrease, as applicable, on the production                                  
18 tax value of oil or gas or the amount or availability of a tax credit as determined under                               
19 this chapter. For purposes of this section, a change to a lease expenditure includes a                                  
20 change in the categorization of a lease expenditure as a qualified capital expenditure or                               
21       as not a qualified capital expenditure. The producer shall                                                        
22 (1)  within 60 days after the change, notify the department in writing;                                                 
23       and                                                                                                               
24 (2)  within 120 days after the change, file amended returns covering all                                                
25 periods affected by the change, unless the department agrees otherwise or a stay is in                                  
26 place that affects the filing or payment, regardless of the pendency of appeals of the                                  
27       decision.                                                                                                         
28    * Sec. 27. AS 43.55.150 is amended by adding new subsections to read:                                              
29 (d)  The department shall adopt regulations consistent with this section for                                            
30       determining the gross value at the point of production of                                                         
31                 (1)  oil;                                                                                               
01                 (2)  gas; and                                                                                           
02                 (3)  oil produced from a major oil field.                                                               
03            (e)  The department shall adopt regulations consistent with this chapter for                                 
04       determining the monthly gross value at the point of production for oil produced from                              
05       each major oil field.                                                                                             
06    * Sec. 28. AS 43.55.160(a) is amended to read:                                                                     
07            (a)  For oil and gas produced before January 1, 2021 [JANUARY 1, 2022],                                  
08       except as provided in (b), (f), and (g) of this section, for the purposes of                                      
09                 (1)  AS 43.55.011(e)(1) and (2), the annual production tax value of                                     
10 taxable oil, gas, or oil and gas produced during a calendar year in a category for which                                
11 a separate annual production tax value is required to be calculated under this                                          
12 paragraph is the gross value at the point of production of that oil, gas, or oil and gas                                
13 taxable under AS 43.55.011(e), less the producer's lease expenditures under                                             
14 AS 43.55.165 for the calendar year applicable to the oil, gas, or oil and gas in that                                   
15 category produced by the producer during the calendar year, as adjusted under                                           
16       AS 43.55.170; a separate annual production tax value shall be calculated for                                      
17 (A)  oil and gas produced from leases or properties in the state                                                        
18 that include land north of 68 degrees North latitude, other than gas produced                                           
19            before 2021 [2022] and used in the state;                                                                
20 (B)  oil and gas produced from leases or properties in the state                                                        
21 outside the Cook Inlet sedimentary basin, no part of which is north of 68                                               
22 degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a)                                        
23            and (b); this subparagraph does not apply to                                                                 
24 (i)  gas produced before 2021 [2022] and used in the                                                                
25                 state; or                                                                                               
26                           (ii)  oil and gas subject to AS 43.55.011(p);                                                 
27 (C)  oil produced before 2021 [2022] from each lease or                                                             
28            property in the Cook Inlet sedimentary basin;                                                                
29 (D)  gas produced before 2021 [2022] from each lease or                                                             
30            property in the Cook Inlet sedimentary basin;                                                                
31 (E)  gas produced before 2021 [2022] from each lease or                                                             
01            property in the state outside the Cook Inlet sedimentary basin and used in the                               
02            state, other than gas subject to AS 43.55.011(p);                                                            
03                      (F)  oil and gas subject to AS 43.55.011(p) produced from                                          
04            leases or properties in the state;                                                                           
05                      (G)  oil and gas produced from leases or properties in the state                                   
06            no part of which is north of 68 degrees North latitude, other than oil or gas                                
07            described in (B), (C), (D), (E), or (F) of this paragraph;                                                   
08                 (2)  AS 43.55.011(g), for oil and gas produced before January 1, 2014,                                  
09       the monthly production tax value of the taxable                                                                   
10 (A)  oil and gas produced during a month from leases or                                                                 
11 properties in the state that include land north of 68 degrees North latitude is the                                     
12 gross value at the point of production of the oil and gas taxable under                                                 
13 AS 43.55.011(e) and produced by the producer from those leases or properties,                                           
14 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the                                               
15 calendar year applicable to the oil and gas produced by the producer from                                               
16 those leases or properties, as adjusted under AS 43.55.170; this subparagraph                                           
17            does not apply to gas subject to AS 43.55.011(o);                                                            
18 (B)  oil and gas produced during a month from leases or                                                                 
19 properties in the state outside the Cook Inlet sedimentary basin, no part of                                            
20 which is north of 68 degrees North latitude, is the gross value at the point of                                         
21 production of the oil and gas taxable under AS 43.55.011(e) and produced by                                             
22 the producer from those leases or properties, less 1/12 of the producer's lease                                         
23 expenditures under AS 43.55.165 for the calendar year applicable to the oil and                                         
24 gas produced by the producer from those leases or properties, as adjusted under                                         
25 AS 43.55.170; this subparagraph does not apply to gas subject to                                                        
26            AS 43.55.011(o);                                                                                             
27 (C)  oil produced during a month from a lease or property in the                                                        
28 Cook Inlet sedimentary basin is the gross value at the point of production of                                           
29 the oil taxable under AS 43.55.011(e) and produced by the producer from that                                            
30 lease or property, less 1/12 of the producer's lease expenditures under                                                 
31 AS 43.55.165 for the calendar year applicable to the oil produced by the                                                
01            producer from that lease or property, as adjusted under AS 43.55.170;                                        
02 (D)  gas produced during a month from a lease or property in                                                            
03 the Cook Inlet sedimentary basin is the gross value at the point of production                                          
04 of the gas taxable under AS 43.55.011(e) and produced by the producer from                                              
05 that lease or property, less 1/12 of the producer's lease expenditures under                                            
06 AS 43.55.165 for the calendar year applicable to the gas produced by the                                                
07            producer from that lease or property, as adjusted under AS 43.55.170;                                        
08 (E)  gas produced during a month from a lease or property                                                               
09 outside the Cook Inlet sedimentary basin and used in the state is the gross                                             
10 value at the point of production of that gas taxable under AS 43.55.011(e) and                                          
11 produced by the producer from that lease or property, less 1/12 of the                                                  
12 producer's lease expenditures under AS 43.55.165 for the calendar year                                                  
13 applicable to that gas produced by the producer from that lease or property, as                                         
14            adjusted under AS 43.55.170.                                                                                 
15    * Sec. 29. AS 43.55.160(c) is amended to read:                                                                     
16 (c)  Notwithstanding any contrary provision of AS 43.55.150, for purposes of                                            
17 calculating a monthly production tax value under (a)(2) or (j) of this section, the gross                           
18 value at the point of production of the oil, gas, or oil and gas, as applicable, is                             
19 calculated under regulations adopted by the department that provide for using an                                        
20 appropriate monthly share of the producer's costs of transportation for the calendar                                    
21       year.                                                                                                             
22    * Sec. 30. AS 43.55.160(d) is amended to read:                                                                     
23 (d)  Irrespective of whether a producer produces taxable oil or gas during a                                            
24 calendar year or month, the producer is considered to have generated a positive                                         
25 production tax value if a calculation described in (a), (h), (i), or (j) of this section                            
26 yields a positive number because the producer's adjusted lease expenditures for a                                       
27 calendar year under AS 43.55.165 and 43.55.170 are less than zero as a result of the                                    
28 producer's receiving a payment or credit under AS 43.55.170. An explorer that has                                       
29 obtained a transferable tax credit certificate under AS 43.55.023(d) for the amount of a                                
30 tax credit under former AS 43.55.023(b) is considered a producer, subject to the tax                                    
31 levied by AS 43.55.011(e), to the extent that the explorer generates a positive                                         
01 production tax value as the result of the explorer's receiving a payment or credit under                                
02       AS 43.55.170.                                                                                                     
03    * Sec. 31. AS 43.55.160(e) is amended to read:                                                                     
04 (e)  Any adjusted lease expenditures under AS 43.55.165 and 43.55.170                                                   
05 incurred to explore for, develop, or produce oil or gas from a lease, [OR] property, or                         
06 major oil field outside the Cook Inlet sedimentary basin that would otherwise be                                    
07 deductible by a producer in a calendar year but whose deduction would cause an                                          
08 annual production tax value calculated under (a)(1), [OR] (h), or (i) of this section of                        
09 taxable oil or gas produced during the calendar year to be less than zero may be used                                   
10 to establish a carried-forward [CARRIED- FORWARD] annual loss under                                                 
11 AS 43.55.165(a)(3). A reduction under (f) or (g) of this section must be added back to                                  
12 the calculation of production tax values for that calendar year before the determination                                
13 of a carried-forward annual loss under this subsection. However, the department shall                                   
14 provide by regulation a method to ensure that, for a period for which a producer's tax                                  
15 liability is limited by AS 43.55.011(o) or (p), any adjusted lease expenditures under                                   
16 AS 43.55.165 and 43.55.170 that would otherwise be deductible by a producer for that                                    
17 period but whose deduction would cause a production tax value calculated under                                          
18 (a)(1)(E) or (F), [OR] (h)(3), or (i)(5) or (6) of this section to be less than zero are                        
19 accounted for as though the adjusted lease expenditures had first been used as                                          
20 deductions in calculating the production tax values of oil or gas subject to any of the                                 
21 limitations under AS 43.55.011(o) or (p) that have positive production tax values so as                                 
22 to reduce the tax liability calculated without regard to the limitation to the maximum                                  
23 amount provided for under the applicable provision of AS 43.55.011(o) or (p). Only                                      
24 the amount of those adjusted lease expenditures remaining after the accounting                                          
25 provided for under this subsection may be used to establish a carried-forward annual                                    
26       loss under AS 43.55.165(a)(3). In this subsection, "producer" includes "explorer."                                
27    * Sec. 32. AS 43.55.160(f) is amended to read:                                                                     
28 (f)  On and after January 1, 2014, in the calculation of an annual production tax                                       
29 value of a producer under (a)(1)(A), [OR] (h)(1), (i)(1) or (8), or (j) of this section,                        
30 the gross value at the point of production of oil or gas produced from a lease, [OR]                                
31 property, or major oil field north of 68 degrees North latitude meeting one or more of                              
01 the following criteria is reduced by 20 percent: (1) the oil or gas is produced from a                                  
02 lease, [OR] property, or major oil field that does not contain a lease that was within a                        
03 unit on January 1, 2003; (2) the oil or gas is produced from a participating area                                       
04 established after December 31, 2011, that is within a unit formed under                                                 
05 AS 38.05.180(p) before January 1, 2003, if the participating area does not contain a                                    
06 reservoir that had previously been in a participating area established before                                           
07 December 31, 2011; (3) the oil or gas is produced from acreage that was added to an                                     
08 existing participating area by the Department of Natural Resources on and after                                         
09 January 1, 2014, and the producer demonstrates to the department that the volume of                                     
10 oil or gas produced is from acreage added to an existing participating area. This                                       
11 subsection does not apply to gas produced before 2022 that is used in the state or to                                   
12 gas produced on and after January 1, 2022. For oil and gas first produced from a lease                                  
13 or property after December 31, 2016, a reduction allowed under this subsection                                          
14 applies from the date of commencement of regular production of oil and gas from that                                    
15 lease or property and expires after three years, consecutive or nonconsecutive, in                                      
16 which the average annual price per barrel for Alaska North Slope crude oil for sale on                                  
17 the United States West Coast is more than $70 or after seven years, whichever occurs                                    
18 first. For oil and gas first produced from a lease or property before January 1, 2017, a                                
19 reduction allowed under this subsection expires on the earlier of January 1, 2023, or                                   
20 January 1 following three years, consecutive or nonconsecutive, in which the average                                    
21 annual price per barrel for Alaska North Slope crude oil for sale on the United States                                  
22 West Coast is more than $70. The Alaska Oil and Gas Conservation Commission shall                                       
23 determine the commencement of regular production of oil and gas for purposes of this                                    
24 subsection. A reduction under this subsection may not reduce the gross value at the                                     
25 point of production below zero. In this subsection, "participating area" means a                                        
26 reservoir or portion of a reservoir producing or contributing to production as approved                                 
27       by the Department of Natural Resources.                                                                           
28    * Sec. 33. AS 43.55.160(g) is amended to read:                                                                     
29 (g)  On and after January 1, 2014, in addition to the reduction under (f) of this                                       
30 section, in the calculation of an annual production tax value of a producer under                                       
31 (a)(1)(A), [OR] (h)(1), (i)(1) or (8), or (j) of this section, the gross value at the point                     
01 of production of oil or gas produced from a lease, [OR] property, or major oil field                            
02 north of 68 degrees North latitude that does not contain a lease that was within a unit                                 
03 on January 1, 2003, is reduced by 10 percent if the oil or gas is produced from a unit                                  
04 made up solely of leases that have a royalty share of more than 12.5 percent in amount                                  
05 or value of the production removed or sold from the lease as determined under                                           
06 AS 38.05.180(f). This subsection does not apply if the royalty obligation for one or                                    
07 more of the leases in the unit has been reduced to 12.5 percent or less under                                           
08 AS 38.05.180(j) for all or part of the calendar year for which the annual production tax                                
09 value is calculated. This subsection does not apply to gas produced before 2022 that is                                 
10 used in the state or to gas produced on and after January 1, 2022. For oil and gas first                                
11 produced from a lease or property after December 31, 2016, a reduction allowed under                                    
12 this subsection applies from the date of commencement of regular production of oil                                      
13 and gas from that lease or property and expires after three years, consecutive or                                       
14 nonconsecutive, in which the average annual price per barrel for Alaska North Slope                                     
15 crude oil for sale on the United States West Coast is more than $70 or after seven                                      
16 years, whichever occurs first. For oil and gas first produced from a lease or property                                  
17 before January 1, 2017, a reduction allowed under this subsection expires on the                                        
18 earlier of January 1, 2023, or January 1 following three years, consecutive or                                          
19 nonconsecutive, in which the average annual price per barrel for Alaska North Slope                                     
20 crude oil for sale on the United States West Coast is more than $70. The Alaska Oil                                     
21 and Gas Conservation Commission shall determine the commencement of regular                                             
22 production for purposes of this subsection. A reduction under this subsection may not                                   
23       reduce the gross value at the point of production below zero.                                                     
24    * Sec. 34. AS 43.55.160(h) is amended to read:                                                                     
25 (h)  For oil produced on and after January 1, 2022, except as provided in (b),                                          
26 (f), and (g) of this section, for the purposes of AS 43.55.011 [AS 43.55.011(e)(3)], the                            
27 annual production tax value of oil taxable under AS 43.55.011 [AS 43.55.011(e)]                                     
28       produced by a producer during a calendar year                                                                     
29 (1)  from leases or properties in the state that include land north of 68                                               
30 degrees North latitude, other than major oil fields, is the gross value at the point of                             
31 production of that oil, less the producer's lease expenditures under AS 43.55.165 for                                   
01 the calendar year incurred to explore for, develop, or produce oil and gas deposits                                     
02 located in the state north of 68 degrees North latitude or located in leases or properties                              
03 in the state that include land north of 68 degrees North latitude, as adjusted under                                    
04       AS 43.55.170;                                                                                                     
05 (2)  before or during the last calendar year under AS 43.55.024(b) for                                                  
06 which the producer could take a tax credit under AS 43.55.024(a), from leases or                                        
07 properties in the state outside the Cook Inlet sedimentary basin, no part of which is                                   
08 north of 68 degrees North latitude, other than leases or properties subject to                                          
09 AS 43.55.011(p), is the gross value at the point of production of that oil, less the                                    
10 producer's lease expenditures under AS 43.55.165 for the calendar year incurred to                                      
11 explore for, develop, or produce oil and gas deposits located in the state outside the                                  
12 Cook Inlet sedimentary basin and south of 68 degrees North latitude, other than oil                                     
13 and gas deposits located in a lease or property that includes land north of 68 degrees                                  
14 North latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from                                   
15       which commercial production has not begun, as adjusted under AS 43.55.170;                                        
16 (3)  from leases or properties subject to AS 43.55.011(p) is the gross                                                  
17 value at the point of production of that oil, less the producer's lease expenditures under                              
18 AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil and                                 
19 gas deposits located in leases or properties subject to AS 43.55.011(p) or, before                                      
20 January 1, 2027, located in leases or properties in the state outside the Cook Inlet                                    
21 sedimentary basin, no part of which is north of 68 degrees North latitude from which                                    
22       commercial production has not begun, as adjusted under AS 43.55.170;                                              
23 (4)  from leases or properties in the state no part of which is north of 68                                             
24 degrees North latitude, other than leases or properties subject to (2) or (3) of this                                   
25 subsection, is the gross value at the point of production of that oil less the producer's                               
26 lease expenditures under AS 43.55.165 for the calendar year incurred to explore for,                                    
27 develop, or produce oil and gas deposits located in the state south of 68 degrees North                                 
28 latitude, other than oil and gas deposits located in a lease or property in the state that                              
29 includes land north of 68 degrees North latitude, and excluding lease expenditures that                                 
30 are deductible under (2) or (3) of this subsection or would be deductible under (2) or                                  
31 (3) of this subsection if not prohibited by (b) of this section, as adjusted under                                      
01       AS 43.55.170; a separate annual production tax value shall be calculated for                                      
02                      (A)  oil produced from each lease or property in the Cook Inlet                                    
03            sedimentary basin;                                                                                           
04                      (B)  oil produced from each lease or property outside the Cook                                     
05            Inlet sedimentary basin, no part of which is north of 68 degrees North latitude,                             
06            other than leases or properties subject to (3) of this subsection;                                       
07 (5)  for each major oil field in the state is the gross value at the                                                
08 point of production of that oil, less the lease expenditures allocated to the major                                 
09 oil field under AS 43.55.165 for the calendar year incurred to explore for,                                         
10 develop, or produce oil and gas deposits located in the major oil field, as adjusted                                
11       under AS 43.55.170.                                                                                           
12    * Sec. 35. AS 43.55.160 is amended by adding new subsections to read:                                              
13 (i)  For oil and gas produced on and after January 1, 2021, and before                                                  
14 January 1, 2022, except as provided in (b), (f), and (g) of this section, for the purposes                              
15 of AS 43.55.011, the annual production tax value of taxable oil or gas produced during                                  
16 a calendar year in a category for which a separate annual production tax value is                                       
17 required to be calculated under this subsection is the gross value at the point of                                      
18 production of that oil or gas taxable under AS 43.55.011, less the producer's lease                                     
19 expenditures under AS 43.55.165 for the calendar year applicable to the oil or gas in                                   
20 that category produced by the producer during the calendar year, as adjusted under                                      
21       AS 43.55.170. A separate annual production tax value shall be calculated for                                      
22 (1)  oil and gas produced from leases or properties in the state that                                                   
23       include land north of 68 degrees North latitude, other than                                                       
24                      (A)  oil produced from a major oil field; and                                                      
25                      (B)  gas produced before 2022 and used in the state;                                               
26 (2)  oil and gas produced from leases or properties in the state outside                                                
27 the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North                                         
28 latitude and that qualifies for a tax credit under AS 43.55.024(a) and (b); this                                        
29       paragraph does not apply to                                                                                       
30 (A)  gas produced on and after January 1, 2021, and before                                                              
31            2022 and used in the state; or                                                                               
01                      (B)  oil and gas subject to AS 43.55.011(p);                                                       
02                 (3)  oil produced on and after January 1, 2021, and before 2022 from                                    
03       each lease or property in the Cook Inlet sedimentary basin;                                                       
04                 (4)  gas produced on and after January 1, 2021, and before 2022 from                                    
05       each lease or property in the Cook Inlet sedimentary basin;                                                       
06                 (5)  gas produced on and after January 1, 2021, and before 2022 from                                    
07       each lease or property in the state outside the Cook Inlet sedimentary basin and used in                          
08       the state, other than gas subject to AS 43.55.011(p);                                                             
09                 (6)  oil and gas subject to AS 43.55.011(p) produced from leases or                                     
10       properties in the state;                                                                                          
11 (7)  oil and gas produced from leases or properties in the state no part                                                
12 of which is north of 68 degrees North latitude, other than oil or gas described in (2),                                 
13       (3), (4), (5), or (6) of this subsection;                                                                         
14                 (8)  oil produced from a major oil field.                                                               
15 (j)  Except as provided in (b), (f), and (g) of this section, for the purposes of                                       
16 AS 43.55.011(q) and AS 43.55.020(a)(7)(E), the monthly production tax value of the                                      
17 taxable oil produced during a month from a major oil field is the gross value at the                                    
18 point of production of the oil produced by the producer from the major oil field and                                    
19 taxable under AS 43.55.011, less 1/12 of the producer's lease expenditures under                                        
20 AS 43.55.165 for the calendar year applicable to the oil produced by the producer                                       
21 from that major oil field, as adjusted under AS 43.55.170. For the purposes of the                                      
22 calculation under this subsection, a reduction in the gross value at the point of                                       
23       production may apply for oil subject to AS 43.55.160(f) and (g).                                                  
24    * Sec. 36. AS 43.55.165(a) is amended to read:                                                                     
25 (a)  For purposes of this chapter, a producer's lease expenditures for a calendar                                       
26       year are                                                                                                          
27                 (1)  costs, other than items listed in (e) of this section, that are                                    
28 (A)  incurred by the producer during the calendar year after                                                            
29 March 31, 2006, to explore for, develop, or produce oil or gas deposits located                                         
30 within the producer's leases or properties in the state, a major oil field in the                                   
31 state, or, in the case of land in which the producer does not own an operating                                      
01            right, operating interest, or working interest, to explore for oil or gas deposits                           
02            within other land in the state; and                                                                          
03                      (B)  allowed by the department by regulation, based on the                                         
04            department's determination that the costs satisfy the following three                                        
05            requirements:                                                                                                
06                           (i)  the costs must be incurred upstream of the point of                                      
07                 production of oil and gas;                                                                              
08                           (ii)  the costs must be ordinary and necessary costs of                                       
09                 exploring for, developing, or producing, as applicable, oil or gas                                      
10                 deposits; and                                                                                           
11 (iii)  the costs must be direct costs of exploring for,                                                                 
12                 developing, or producing, as applicable, oil or gas deposits;                                           
13 (2)  a reasonable allowance for that calendar year, as determined under                                                 
14 regulations adopted by the department, for overhead expenses that are directly related                                  
15       to exploring for, developing, or producing, as applicable, the oil or gas deposits; and                           
16 (3)  lease expenditures incurred in a previous calendar year, subject to                                                
17       (l) - (r) of this section, that                                                                                   
18 (A)  met the requirements of AS 43.55.160(e) in the year in                                                             
19            which the lease expenditures were incurred;                                                                  
20 (B)  have not been deducted in the determination of the                                                                 
21 production tax value of oil and gas under AS 43.55.160(a), [OR] (h), (i), or (j)                                
22            in a previous calendar year;                                                                                 
23                      (C)  were not the basis of a credit under this title; and                                          
24 (D)  were incurred to explore for, develop, or produce an oil or                                                        
25            gas deposit located in the state outside the Cook Inlet sedimentary basin.                                   
26    * Sec. 37. AS 43.55.165(h) is amended to read:                                                                     
27 (h)  The department shall adopt regulations that provide for reasonable                                                 
28 methods of allocating costs between oil and gas, between gas subject to                                                 
29 AS 43.55.011(o) and other gas, [AND] between leases or properties, between leases                                   
30 or properties and major oil fields, and between major oil fields in those                                           
31 circumstances where an allocation of costs is required to determine lease expenditures                                  
01 that are costs of exploring for, developing, or producing oil deposits or costs of                                      
02 exploring for, developing, or producing gas deposits, or that are costs of exploring for,                               
03 developing, or producing oil or gas deposits located within a different lease, property,                        
04 or major oil field. A producer shall report to the department lease expenditures                                    
05 separately for oil subject to taxation under either AS 43.55.011(q) or (s) [LEASES                                  
06       OR PROPERTIES].                                                                                                   
07    * Sec. 38. AS 43.55.165(m) is amended to read:                                                                     
08 (m)  During a calendar year in which a taxpayer's liability under                                                       
09 AS 43.55.011(e) is determined under AS 43.55.011(f), the maximum amount of                                              
10 carried-forward annual loss that a taxpayer may apply in that year is equal to the                                      
11 amount, when combined with the lease expenditures of the current year and any                                           
12 credits under this chapter, necessary to reduce the amount calculated under                                             
13 AS 43.55.011(e) to the equivalent amount of tax due under AS 43.55.011(f) before the                                    
14 application of any credits under this chapter. During a calendar year in which a                                    
15 taxpayer's liability under AS 43.55.011(q) is determined under AS 43.55.011(s),                                     
16 the maximum amount of carried-forward annual loss that a taxpayer may apply                                         
17 in that year is equal to the amount, when combined with the lease expenditures of                                   
18 the current year and any credits under this chapter, necessary to reduce the                                        
19 amount calculated under AS 43.55.011(q) to the equivalent amount of tax due                                         
20 under AS 43.55.011(s) before the application of any credits under this chapter.                                     
21 An amount of carried-forward annual loss not applied under this subsection may                                          
22       continue to be carried forward.                                                                                   
23    * Sec. 39. AS 43.55.165(n) is amended to read:                                                                     
24            (n)  A carried-forward annual loss may only be applied                                                       
25 (1)  to determine the production tax value of oil or gas for a category                                                 
26 for which a separate annual production tax value is required to be calculated under                                     
27       AS 43.55.160(a), [OR] (h), (i), or (j) if the lease expenditure resulting in the carried-                 
28       forward annual loss was incurred in the same category;                                                            
29 (2)  beginning in the calendar year in which regular production of oil or                                               
30 gas from the lease or property where the lease expenditure resulting in the carried-                                
31       forward [CARRIED- FORWARD] annual loss was incurred commences.                                                
01    * Sec. 40. AS 43.55.165(o) is amended to read:                                                                     
02 (o)  A carried-forward annual loss for a lease expenditure incurred on a lease,                                     
03       [OR] property, or major oil field that                                                                        
04 (1)  did not commence regular production of oil or gas before or during                                                 
05 the year the lease expenditure was incurred decreases in value each year by one-tenth                                   
06 of the value of the carried-forward annual loss in the preceding year, beginning                                        
07 January 1 of the 11th calendar year after the lease expenditure is carried forward under                                
08 (a)(3) of this section; a decrease in value under this paragraph does not apply for a                                   
09 year in which the department determines that regular production of oil or gas did not                                   
10 commence because of a natural disaster, an injunction or other court order, or an                                       
11       administrative order;                                                                                             
12 (2)  commenced regular production of oil or gas before or during the                                                    
13 year the lease expenditure was incurred decreases in value each year by one-tenth of                                    
14 the value of the carried-forward annual loss in the preceding year, beginning January 1                                 
15 of the eighth calendar year after the lease expenditure is carried forward under (a)(3)                                 
16       of this section.                                                                                                  
17    * Sec. 41. AS 43.55.165(r) is amended to read:                                                                     
18 (r)  In adopting a regulation that defines the lease, [OR] property, or major oil                               
19 field where a lease expenditure resulting in a carried-forward annual loss is incurred                              
20 for purposes of (n) and (o) of this section, the department shall include an exploration                                
21 lease expenditure that is reasonably related to the lease, [OR] property, or major oil                          
22       field.                                                                                                        
23    * Sec. 42. AS 43.55.170 is amended by adding a new subsection to read:                                             
24 (d)  The department shall adopt regulations that provide for reasonable                                                 
25 methods of allocating adjustments to lease expenditures for oil produced from a major                                   
26 oil field subject to taxation under AS 43.55.011(q). A producer shall report to the                                     
27 department adjustments to lease expenditures separately for oil subject to taxation                                     
28       under AS 43.55.011(q).                                                                                            
29    * Sec. 43. AS 43.55.895(b) is amended to read:                                                                     
30            (b)  A municipal entity subject to taxation because of this section                                          
31 (1)  is eligible for tax credits proportionate to its production taxable                                                
01       under AS 43.55.011 [AS 43.55.011(e)]; and                                                                     
02                 (2)  shall allocate its lease expenditures in proportion to its production                              
03       taxable under AS 43.55.011 [AS 43.55.011(e)].                                                                 
04    * Sec. 44. AS 43.55.900 is amended by adding a new paragraph to read:                                              
05                 (27)  "major oil field" means a field all or part of which is north of 68                               
06       degrees North latitude that                                                                                       
07                      (A)  produced an average of more than 40,000 barrels of oil a                                      
08            day in the previous calendar year; and                                                                       
09                      (B)  has produced more than 400,000,000 barrels of oil in                                          
10            cumulative production.                                                                                       
11    * Sec. 45. This Act takes effect January 1, 2021.