00 SENATE BILL NO. 114 01 "An Act establishing an income tax on certain entities producing or transporting oil or 02 gas in the state; relating to the oil and gas production tax; and providing for an effective 03 date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05  * Section 1. AS 43.20 is amended by adding a new section to read: 06 Sec. 43.20.019. Tax on income attributable to a qualified entity. (a) If an 07 entity has qualified taxable income over $4,000,000 in a tax year, the entity shall pay a 08 tax of 9.4 percent on the qualified taxable income over $4,000,000. 09 (b) The tax under this section does not apply to a corporation paying tax under 10 AS 43.20.011. 11 (c) The department may aggregate the qualified taxable income of two or 12 more entities for the purpose of determining the tax due under this section if the 13 department determines that, without the provisions of this section, the qualified 14 taxable income would reasonably be expected to be attributed to a single entity. 01 (d) In this section, 02 (1) "entity" means a 03 (A) sole proprietorship; 04 (B) partnership; or 05 (C) entity that has elected to file federal returns under 26 06 U.S.C. 1361 - 1379 (Internal Revenue Code); 07 (2) "qualified taxable income" means income from the production of 08 oil or gas from a lease or property in the state or from the transportation of oil or gas 09 by pipeline in the state before deductions for 10 (A) dividends and gifts; and 11 (B) wages, salaries, bonuses, or other similar payments to 12 owners, partners, members, or shareholders of the entity. 13  * Sec. 2. AS 43.55.011(e) is amended to read: 14 (e) There is levied on the producer of oil or gas a tax for all oil and gas 15 produced each calendar year from each lease, [OR] property, or unit in the state, as  16 applicable under (q) of this section, less any oil and gas the ownership or right to 17 which is exempt from taxation or constitutes a landowner's royalty interest or for 18 which a tax is levied by AS 43.55.014. Except as otherwise provided under (f), (j), (k), 19 (o), and (p) of this section, for oil and gas produced 20 (1) before January 1, 2014, the tax is equal to the sum of 21 (A) the annual production tax value of the taxable oil and gas 22 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 23 (B) the sum, over all months of the calendar year, of the tax 24 amounts determined under (g) of this section; 25 (2) on and after January 1, 2014, and before January 1, 2022, the tax is 26 equal to the annual production tax value of the taxable oil and gas as calculated under 27 AS 43.55.160(a)(1) multiplied by 35 percent; 28 (3) on and after January 1, 2022, the tax for 29 (A) oil is equal to the annual production tax value of the 30 taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent; 31 (B) gas is equal to 13 percent of the gross value at the point of 01 production of the taxable gas; if the gross value at the point of production of 02 gas produced from a lease or property is less than zero, that gross value at the 03 point of production is considered zero for purposes of this subparagraph. 04  * Sec. 3. AS 43.55.011(f) is amended to read: 05 (f) The levy of tax under (e) of this section for 06 (1) oil and gas produced before January 1, 2022, from leases or 07 properties that include land north of 68 degrees North latitude, other than gas subject 08 to (o) of this section, may not be less than 09 (A) four percent of the gross value at the point of production 10 when the average price per barrel for Alaska North Slope crude oil for sale on 11 the United States West Coast during the calendar year for which the tax is due 12 is more than $25; 13 (B) three percent of the gross value at the point of production 14 when the average price per barrel for Alaska North Slope crude oil for sale on 15 the United States West Coast during the calendar year for which the tax is due 16 is over $20 but not over $25; 17 (C) two percent of the gross value at the point of production 18 when the average price per barrel for Alaska North Slope crude oil for sale on 19 the United States West Coast during the calendar year for which the tax is due 20 is over $17.50 but not over $20; 21 (D) one percent of the gross value at the point of production 22 when the average price per barrel for Alaska North Slope crude oil for sale on 23 the United States West Coast during the calendar year for which the tax is due 24 is over $15 but not over $17.50; or 25 (E) zero percent of the gross value at the point of production 26 when the average price per barrel for Alaska North Slope crude oil for sale on 27 the United States West Coast during the calendar year for which the tax is due 28 is $15 or less; and 29 (2) oil produced from leases or properties on and after January 1, 30 2022, or from units on and after January 1, 2023, [FROM LEASES OR 31 PROPERTIES] that include land north of 68 degrees North latitude, may not be less 01 than 02 (A) four percent of the gross value at the point of production 03 when the average price per barrel for Alaska North Slope crude oil for sale on 04 the United States West Coast during the calendar year for which the tax is due 05 is more than $25; 06 (B) three percent of the gross value at the point of production 07 when the average price per barrel for Alaska North Slope crude oil for sale on 08 the United States West Coast during the calendar year for which the tax is due 09 is over $20 but not over $25; 10 (C) two percent of the gross value at the point of production 11 when the average price per barrel for Alaska North Slope crude oil for sale on 12 the United States West Coast during the calendar year for which the tax is due 13 is over $17.50 but not over $20; 14 (D) one percent of the gross value at the point of production 15 when the average price per barrel for Alaska North Slope crude oil for sale on 16 the United States West Coast during the calendar year for which the tax is due 17 is over $15 but not over $17.50; or 18 (E) zero percent of the gross value at the point of production 19 when the average price per barrel for Alaska North Slope crude oil for sale on 20 the United States West Coast during the calendar year for which the tax is due 21 is $15 or less. 22  * Sec. 4. AS 43.55.011(o) is amended to read: 23 (o) Notwithstanding other provisions of this section, for a calendar year, the 24 tax levied under (e) of this section for each 1,000 cubic feet of gas for gas produced 25 from a lease, [OR] property, or unit outside the Cook Inlet sedimentary basin and 26 used in the state, other than gas subject to (p) of this section, may not exceed the 27 amount of tax for each 1,000 cubic feet of gas that is determined under (j)(2) of this 28 section. 29  * Sec. 5. AS 43.55.011 is amended by adding a new subsection to read: 30 (q) On and after January 1, 2023, the tax under (e) of this section is levied by 31 unit if the unit includes land north of 68 degrees North latitude. 01  * Sec. 6. AS 43.55.020(a) is amended to read: 02 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 03 the tax as follows: 04 (1) for oil and gas produced before January 1, 2014, an installment 05 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 06 as allowed by law, is due for each month of the calendar year on the last day of the 07 following month; except as otherwise provided under (2) of this subsection, the 08 amount of the installment payment is the sum of the following amounts, less 1/12 of 09 the tax credits that are allowed by law to be applied against the tax levied by 10 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 11 not be less than zero: 12 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 13 produced from leases or properties in the state outside the Cook Inlet 14 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 15 the greater of 16 (i) zero; or 17 (ii) the sum of 25 percent and the tax rate calculated for 18 the month under AS 43.55.011(g) multiplied by the remainder obtained 19 by subtracting 1/12 of the producer's adjusted lease expenditures for the 20 calendar year of production under AS 43.55.165 and 43.55.170 that are 21 deductible for the oil and gas under AS 43.55.160 from the gross value 22 at the point of production of the oil and gas produced from the leases or 23 properties during the month for which the installment payment is 24 calculated; 25 (B) for oil and gas produced from leases or properties subject 26 to AS 43.55.011(f), the greatest of 27 (i) zero; 28 (ii) zero percent, one percent, two percent, three 29 percent, or four percent, as applicable, of the gross value at the point of 30 production of the oil and gas produced from the leases or properties 31 during the month for which the installment payment is calculated; or 01 (iii) the sum of 25 percent and the tax rate calculated for 02 the month under AS 43.55.011(g) multiplied by the remainder obtained 03 by subtracting 1/12 of the producer's adjusted lease expenditures for the 04 calendar year of production under AS 43.55.165 and 43.55.170 that are 05 deductible for the oil and gas under AS 43.55.160 from the gross value 06 at the point of production of the oil and gas produced from those leases 07 or properties during the month for which the installment payment is 08 calculated; 09 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 10 each lease or property, the greater of 11 (i) zero; or 12 (ii) the sum of 25 percent and the tax rate calculated for 13 the month under AS 43.55.011(g) multiplied by the remainder obtained 14 by 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 under AS 43.55.160 for the oil or gas, respectively, 17 produced from the lease or property from the gross value at the point of 18 production of the oil or gas, respectively, produced from the lease or 19 property during the month for which the installment payment is 20 calculated; 21 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 22 (i) the sum of 25 percent and the tax rate calculated for 23 the month under AS 43.55.011(g) multiplied by the remainder obtained 24 by 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 the leases or 28 properties during the month for which the installment payment is 29 calculated, but not less than zero; or 30 (ii) four percent 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, but not less than zero; 02 (2) an amount calculated under (1)(C) of this subsection for oil or gas 03 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 04 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 05 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 06 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 07 gas produced during the month for the amount of taxable gas produced during the 08 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 09 during the month for the amount of taxable oil produced during the calendar year; 10 (3) an installment payment of the estimated tax levied by 11 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 12 on the last day of the following month; the amount of the installment payment is the 13 sum of 14 (A) the applicable tax rate for oil provided under 15 AS 43.55.011(i), multiplied by the gross value at the point of production of the 16 oil taxable under AS 43.55.011(i) and produced from the lease or property 17 during the month; and 18 (B) the applicable tax rate for gas provided under 19 AS 43.55.011(i), multiplied by the gross value at the point of production of the 20 gas taxable under AS 43.55.011(i) and produced from the lease or property 21 during the month; 22 (4) any amount of tax levied by AS 43.55.011, net of any credits 23 applied as allowed by law, that exceeds the total of the amounts due as installment 24 payments of estimated tax is due on March 31 of the year following the calendar year 25 of production; 26 (5) for oil and gas produced on and after January 1, 2014, and before 27 January 1, 2022, an installment payment of the estimated tax levied by 28 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 29 month of the calendar year on the last day of the following month; except as otherwise 30 provided under (6) of this subsection, the amount of the installment payment is the 31 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 01 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 02 of the installment payment may not be less than zero: 03 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 04 produced from leases or properties in the state outside the Cook Inlet 05 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 06 the greater of 07 (i) zero; or 08 (ii) 35 percent multiplied by the remainder obtained by 09 subtracting 1/12 of the producer's adjusted lease expenditures for the 10 calendar year of production under AS 43.55.165 and 43.55.170 that are 11 deductible for the oil and gas under AS 43.55.160 from the gross value 12 at the point of production of the oil and gas produced from the leases or 13 properties during the month for which the installment payment is 14 calculated; 15 (B) for oil and gas produced from leases or properties subject 16 to AS 43.55.011(f), the greatest of 17 (i) zero; 18 (ii) zero percent, one percent, two percent, three 19 percent, or four percent, as applicable, of the gross value at the point of 20 production of the oil and gas produced from the leases or properties 21 during the month for which the installment payment is calculated; or 22 (iii) 35 percent multiplied by the remainder obtained by 23 subtracting 1/12 of the producer's adjusted lease expenditures for the 24 calendar year of production under AS 43.55.165 and 43.55.170 that are 25 deductible for the oil and gas under AS 43.55.160 from the gross value 26 at the point of production of the oil and gas produced from those leases 27 or properties during the month for which the installment payment is 28 calculated, except that, for the purposes of this calculation, a reduction 29 from the gross value at the point of production may apply for oil and 30 gas subject to AS 43.55.160(f) or (g); 31 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 01 each lease or property, the greater of 02 (i) zero; or 03 (ii) 35 percent multiplied by the remainder obtained by 04 subtracting 1/12 of the producer's adjusted lease expenditures for the 05 calendar year of production under AS 43.55.165 and 43.55.170 that are 06 deductible under AS 43.55.160 for the oil or gas, respectively, 07 produced from the lease or property from the gross value at the point of 08 production of the oil or gas, respectively, produced from the lease or 09 property during the month for which the installment payment is 10 calculated; 11 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 12 (i) 35 percent multiplied by the remainder obtained by 13 subtracting 1/12 of the producer's adjusted lease expenditures for the 14 calendar year of production under AS 43.55.165 and 43.55.170 that are 15 deductible for the oil and gas under AS 43.55.160 from the gross value 16 at the point of production of the oil and gas produced from the leases or 17 properties during the month for which the installment payment is 18 calculated, but not less than zero; or 19 (ii) four percent of the gross value at the point of 20 production of the oil and gas produced from the leases or properties 21 during the month, but not less than zero; 22 (6) an amount calculated under (5)(C) of this subsection for oil or gas 23 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 24 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 25 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 26 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 27 gas produced during the month for the amount of taxable gas produced during the 28 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 29 during the month for the amount of taxable oil produced during the calendar year; 30 (7) for oil and gas produced on or after January 1, 2022, and before  31 January 1, 2023, an installment payment of the estimated tax levied by 01 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 02 month of the calendar year on the last day of the following month; except as otherwise 03 provided under (10) of this subsection, the amount of the installment payment is the 04 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 05 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 06 of the installment payment may not be less than zero: 07 (A) for oil produced from leases or properties subject to 08 AS 43.55.011(f), the greatest of 09 (i) zero; 10 (ii) zero percent, one percent, two percent, three 11 percent, or four percent, as applicable, of the gross value at the point of 12 production of the oil produced from the leases or properties during the 13 month for which the installment payment is calculated; or 14 (iii) 35 percent multiplied by the remainder obtained by 15 subtracting 1/12 of the producer's adjusted lease expenditures for the 16 calendar year of production under AS 43.55.165 and 43.55.170 that are 17 deductible for the oil under AS 43.55.160(h)(1) from the gross value at 18 the point of production of the oil produced from those leases or 19 properties during the month for which the installment payment is 20 calculated, except that, for the purposes of this calculation, a reduction 21 from the gross value at the point of production may apply for oil 22 subject to AS 43.55.160(f) or 43.55.160(f) and (g); 23 (B) for oil produced before or during the last calendar year 24 under former AS 43.55.024(b) for which the producer could take a tax credit 25 under former AS 43.55.024(a), from leases or properties in the state outside 26 the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North 27 latitude, other than leases or properties subject to AS 43.55.011(o) or (p), the 28 greater of 29 (i) zero; or 30 (ii) 35 percent multiplied by the remainder obtained by 31 subtracting 1/12 of the producer's adjusted lease expenditures for the 01 calendar year of production under AS 43.55.165 and 43.55.170 that are 02 deductible for the oil under AS 43.55.160(h)(2) from the gross value at 03 the point of production of the oil produced from the leases or properties 04 during the month for which the installment payment is calculated; 05 (C) for oil and gas produced from leases or properties subject 06 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection, 07 the sum of 08 (i) 35 percent multiplied by the remainder obtained by 09 subtracting 1/12 of the producer's adjusted lease expenditures for the 10 calendar year of production under AS 43.55.165 and 43.55.170 that are 11 deductible for the oil under AS 43.55.160(h)(3) from the gross value at 12 the point of production of the oil produced from the leases or properties 13 during the month for which the installment payment is calculated, but 14 not less than zero; and 15 (ii) 13 percent of the gross value at the point of 16 production of the gas produced from the leases or properties during the 17 month, but not less than zero; 18 (D) for oil produced from leases or properties in the state, no 19 part of which is north of 68 degrees North latitude, other than leases or 20 properties subject to (B), (C), or (F) of this paragraph, the greater of 21 (i) zero; or 22 (ii) 35 percent multiplied by the remainder obtained by 23 subtracting 1/12 of the producer's adjusted lease expenditures for the 24 calendar year of production under AS 43.55.165 and 43.55.170 that are 25 deductible for the oil under AS 43.55.160(h)(4) from the gross value at 26 the point of production of the oil produced from the leases or properties 27 during the month for which the installment payment is calculated; 28 (E) for gas produced from each lease or property in the state 29 outside the Cook Inlet sedimentary basin, other than a lease or property subject 30 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of 31 production of the gas produced from the lease or property during the month for 01 which the installment payment is calculated, but not less than zero; 02 (F) for oil subject to AS 43.55.011(k), for each lease or 03 property, the greater of 04 (i) zero; or 05 (ii) 35 percent multiplied by the remainder obtained by 06 subtracting 1/12 of the producer's adjusted lease expenditures for the 07 calendar year of production under AS 43.55.165 and 43.55.170 that are 08 deductible under AS 43.55.160 for the oil produced from the lease or 09 property from the gross value at the point of production of the oil 10 produced from the lease or property during the month for which the 11 installment payment is calculated; 12 (G) for gas subject to AS 43.55.011(j) or (o), for each lease or 13 property, the greater of 14 (i) zero; or 15 (ii) 13 percent of the gross value at the point of 16 production of the gas produced from the lease or property during the 17 month for which the installment payment is calculated; 18 (8) an amount calculated under (7)(C) or (11)(B) of this subsection 19 may not exceed four percent of the gross value at the point of production of the oil and 20 gas produced from leases or properties subject to AS 43.55.011(p) during the month 21 for which the installment payment is calculated; 22 (9) for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), [AND] 23 (7)(A)(ii), and (11)(A)(ii) of this subsection, the applicable percentage of the gross 24 value at the point of production is determined under AS 43.55.011(f)(1) or (2) but 25 substituting the phrase "month for which the installment payment is calculated" in 26 AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is due"; 27 (10) an amount calculated under (7)(F) or (G) or (11)(E) or (F) of this 28 subsection for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the 29 product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 30 43.55.011(o), as applicable, for gas, or set out in AS 43.55.011(k) for oil, but 31 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 01 amount of taxable gas produced during the month for the amount of taxable gas 02 produced during the calendar year and substituting in AS 43.55.011(k) the amount of 03 taxable oil produced during the month for the amount of taxable oil produced during 04 the calendar year;  05 (11) for oil and gas produced on or after January 1, 2023, an  06 installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax  07 credits applied as allowed by law, is due for each month of the calendar year on  08 the last day of the following month; except as otherwise provided under (10) of  09 this subsection, the amount of the installment payment is the sum of the following  10 amounts, less 1/12 of the tax credits that are allowed by law to be applied against  11 the tax levied by AS 43.55.011(e) for the calendar year, but the amount of the  12 installment payment may not be less than zero:  13 (A) for units subject to AS 43.55.011(f), the greatest of  14 (i) zero;  15 (ii) the percent applicable under AS 43.55.011(f) of  16 the gross value at the point of production of the oil produced from  17 the unit during the month for which the installment payment is  18 calculated; or  19 (iii) for each unit operated by the producer, 35  20 percent multiplied by the remainder obtained by subtracting 1/12  21 of the producer's adjusted unit expenditures for the calendar year  22 of production under AS 43.55.165 and 43.55.170 that are  23 deductible for the oil under AS 43.55.160(h)(5) from the producer's  24 gross value at the point of production of the oil produced from that  25 unit during the month for which the installment payment is  26 calculated, except that, for the purposes of this calculation, a  27 reduction from the gross value at the point of production may  28 apply for oil subject to AS 43.55.160(f) or 43.55.160(f) and (g);  29 (B) for oil and gas produced from leases or properties  30 subject to AS 43.55.011(p), except as otherwise provided under (8) of this  31 subsection, the sum of  01 (i) 35 percent multiplied by the remainder obtained  02 by subtracting 1/12 of the producer's adjusted lease expenditures  03 for the calendar year of production under AS 43.55.165 and  04 43.55.170 that are deductible for the oil under AS 43.55.160(h)(3)  05 from the gross value at the point of production of the oil produced  06 from the leases or properties during the month for which the  07 installment payment is calculated, but not less than zero; and  08 (ii) 13 percent of the gross value at the point of  09 production of the gas produced from the leases or properties  10 during the month, but not less than zero;  11 (C) for oil produced from leases or properties in the state,  12 no part of which is north of 68 degrees North latitude, other than leases or  13 properties subject to (B) or (E) of this paragraph, the 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 under AS 43.55.160(h)(4)  19 from the gross value at the point of production of the oil produced  20 from the leases or properties during the month for which the  21 installment payment is calculated;  22 (D) for gas produced from each lease or property in the  23 state outside the Cook Inlet sedimentary basin, other than a lease or  24 property subject to AS 43.55.011(o) or (p), 13 percent of the gross value at  25 the point of production of the gas produced from the lease or property  26 during the month for which the installment payment is calculated, but not  27 less than zero;  28 (E) for oil subject to AS 43.55.011(k), for each lease or  29 property, the greater of  30 (i) zero; or  31 (ii) 35 percent multiplied by the remainder obtained  01 by subtracting 1/12 of the producer's adjusted lease expenditures  02 for the calendar year of production under AS 43.55.165 and  03 43.55.170 that are deductible under AS 43.55.160 for the oil  04 produced from the lease or property from the gross value at the  05 point of production of the oil produced from the lease or property  06 during the month for which the installment payment is calculated;  07 (F) for gas subject to AS 43.55.011(j) or (o), for each lease,  08 property, or unit, as applicable, the greater of  09 (i) zero; or  10 (ii) 13 percent of the gross value at the point of  11 production of the gas produced from the lease, property, or unit, as  12 applicable, during the month for which the installment payment is  13 calculated. 14  * Sec. 7. AS 43.55.020(e) is amended to read: 15 (e) Gas flared, released, or allowed to escape in excess of the amount 16 authorized by the Alaska Oil and Gas Conservation Commission is considered, for the 17 purpose of AS 43.55.011 - 43.55.180, as gas produced from a lease, [OR] property, or  18 unit, as applicable. Oil or gas used in the operation of a lease, [OR] property, or unit 19 in the state in drilling for or producing oil or gas, or for repressuring, except to the 20 extent determined by the Alaska Oil and Gas Conservation Commission to be waste, is 21 not considered, for the purpose of AS 43.55.011 - 43.55.180, as oil or gas produced 22 from a lease, [OR] property, or unit, as applicable. 23  * Sec. 8. AS 43.55.020(g) is amended to read: 24 (g) Notwithstanding any contrary provision of AS 43.05.225, 25 (1) before January 1, 2014, an unpaid amount of an installment 26 payment required under (a)(1) - (3) of this section that is not paid when due bears 27 interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal 28 Revenue Code), as amended, compounded daily, from the date the installment 29 payment is due until March 31 following the calendar year of production, and (B) as 30 provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued 31 under (A) of this paragraph that remains unpaid after that March 31 is treated as an 01 addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax 02 due under (a)(4) of this section that is not paid when due bears interest as provided for 03 a delinquent tax under AS 43.05.225; 04 (2) on and after January 1, 2014, an unpaid amount of an installment 05 payment required under (a)(3), (5), (6), [OR] (7), or (11) of this section that is not paid 06 when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C. 07 6621 (Internal Revenue Code), as amended, compounded daily, from the date the 08 installment payment is due until March 31 following the calendar year of production, 09 and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31; 10 interest accrued under (A) of this paragraph that remains unpaid after that March 31 is 11 treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid 12 amount of tax due under (a)(4) of this section that is not paid when due bears interest 13 as provided for a delinquent tax under AS 43.05.225. 14  * Sec. 9. AS 43.55.020(h) is amended to read: 15 (h) Notwithstanding any contrary provision of AS 43.05.280, 16 (1) an overpayment of an installment payment required under (a)(1), 17 (2), (3), (5), (6), [OR] (7), or (11) of this section bears interest at the rate provided for 18 an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended, 19 compounded daily, from the later of the date the installment payment is due or the date 20 the overpayment is made, until the earlier of 21 (A) the date it is refunded or is applied to an underpayment; or 22 (B) March 31 following the calendar year of production; 23 (2) except as provided under (1) of this subsection, interest with 24 respect to an overpayment is allowed only on any net overpayment of the payments 25 required under (a) of this section that remains after the later of March 31 following the 26 calendar year of production or the date that the statement required under 27 AS 43.55.030(a) is filed; 28 (3) interest is allowed under (2) of this subsection only from a date that 29 is 90 days after the later of March 31 following the calendar year of production or the 30 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 31 if the overpayment was refunded within the 90-day period; 01 (4) interest under (2) and (3) of this subsection is paid at the rate and in 02 the manner provided in AS 43.05.225(1). 03  * Sec. 10. AS 43.55.020(j) is amended to read: 04 (j) Cushion gas in a gas storage facility is not considered to be gas used in the 05 operation of a lease, [OR] property, or unit or gas used for repressuring as described 06 in (e) of this section. Gas withdrawn from a gas storage facility regulated under 07 AS 42.05 is considered to be non-native gas until all non-native gas injected into the 08 gas storage facility has been withdrawn from the gas storage facility. Non-native gas 09 withdrawn from a gas storage facility is not considered to be gas produced for the 10 purposes of AS 43.55.011 - 43.55.180. Gas withdrawn from a gas storage facility after 11 all non-native gas previously injected into the gas storage facility has been withdrawn 12 is gas considered to be produced from the lease, [OR] property, or unit for the 13 purposes of AS 43.55.011 - 43.55.180. In this subsection, "native gas" and "non-native 14 gas" have the meanings given in AS 31.05.032. 15  * Sec. 11. AS 43.55.020(l) is amended to read: 16 (l) For oil and gas produced on and after January 1, 2022, in making 17 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, 18 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or 19 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes 20 due to the amount of the tax paid. If the total deductions of installment payments of 21 estimated tax for a calendar year exceed the actual tax for that calendar year, the 22 producer shall, before April 1 of the following year, refund the excess to the royalty 23 owner. In making settlement with the royalty owner for gas that is taxable under 24 AS 43.55.014, the producer may deduct the amount of the gas paid as in-kind tax on 25 taxable royalty gas or may deduct the gross value at the point of production of the gas 26 paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the 27 producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on 28 taxable royalty oil for a calendar year, other than oil the ownership or right to which 29 constitutes a landowner's royalty interest, is considered to be the gross value at the 30 point of production of the taxable royalty oil produced during the calendar year 31 multiplied by a figure that is a quotient, in which 01 (1) the numerator is the producer's total tax liability under 02 AS 43.55.011(e)(3)(A) for the calendar year of production; and 03 (2) the denominator is the total gross value at the point of production 04 of the oil taxable under AS 43.55.011(e) produced by the producer from all leases, 05 [AND] properties, and units in the state during the calendar year. 06  * Sec. 12. AS 43.55.024(c) is amended to read: 07 (c) For a calendar year for which a producer's tax liability under 08 AS 43.55.011(e) exceeds zero before application of any credits under this chapter, 09 [OTHER THAN A CREDIT UNDER (a) OF THIS SECTION BUT AFTER 10 APPLICATION OF ANY CREDIT UNDER (a) OF THIS SECTION,] a producer that 11 is qualified under (e) of this section and whose average amount of oil and gas 12 produced a day and taxable under AS 43.55.011(e) is less than 100,000 BTU 13 equivalent barrels a day may apply a tax credit under this subsection against that 14 liability. A producer whose average amount of oil and gas produced a day and taxable 15 under AS 43.55.011(e) is 16 (1) not more than 50,000 BTU equivalent barrels may apply a tax 17 credit of not more than $12,000,000 for the calendar year; 18 (2) more than 50,000 and less than 100,000 BTU equivalent barrels 19 may apply a tax credit of not more than $12,000,000 multiplied by the following 20 fraction for the calendar year: 21 1 - [2 X (AP - 50,000)] ÷ 100,000 22 where AP = the average amount of oil and gas taxable under AS 43.55.011(e), 23 produced a day during the calendar year in BTU equivalent barrels. 24  * Sec. 13. AS 43.55.024(e) is amended to read: 25 (e) On written application by a producer that includes any information the 26 department may require, the department shall determine whether the producer 27 qualifies for a calendar year under [(a) AND] (c) of this section. To qualify under [(a) 28 AND] (c) of this section, a producer must demonstrate that its operation in the state or 29 its ownership of an interest in a lease or property in the state as a distinct producer 30 would not result in the division among multiple producer entities of any production tax 31 liability under AS 43.55.011(e) that reasonably would be expected to be attributed to a 01 single producer if the tax credit provisions of [(a) OR] (c) of this section did not exist. 02  * Sec. 14. AS 43.55.024(i) is amended to read: 03 (i) Subject to the restriction in (k) of this section, a [A] producer may apply 04 against the producer's tax liability for the calendar year under AS 43.55.011(e) a tax 05 credit of $5 for each barrel of oil taxable under AS 43.55.011(e) that receives a 06 reduction in the gross value at the point of production under AS 43.55.160(f) or (g) 07 and that is produced during a calendar year after December 31, 2013. A tax credit 08 authorized by this subsection may not reduce a producer's tax liability for a calendar 09 year under AS 43.55.011(e) below zero. 10  * Sec. 15. AS 43.55.024(j) is amended to read: 11 (j) Subject to the restriction in (k) of this section, a [A] producer may apply 12 against the producer's tax liability for the calendar year under AS 43.55.011(e) a tax 13 credit in the amount specified in this subsection for each barrel of oil taxable under 14 AS 43.55.011(e) that does not receive a reduction in the gross value at the point of 15 production under AS 43.55.160(f) or (g) and that is produced during a calendar year 16 after December 31, 2013, from units [LEASES OR PROPERTIES] north of 68 17 degrees North latitude. A tax credit under this subsection may not reduce a producer's 18 tax liability for a calendar year under AS 43.55.011(e) below the amount calculated 19 under AS 43.55.011(f). The amount of the tax credit for a barrel of taxable oil subject 20 to this subsection produced during a month of the calendar year is 21 (1) $5 [$8] for each barrel of taxable oil if the average gross value at 22 the point of production for the month is less than $80 a barrel; 23 (2) $4 [$7] for each barrel of taxable oil if the average gross value at 24 the point of production for the month is greater than or equal to $80 a barrel, but less 25 than $90 a barrel; 26 (3) $3 [$6] for each barrel of taxable oil if the average gross value at 27 the point of production for the month is greater than or equal to $90 a barrel, but less 28 than $100 a barrel; 29 (4) $2 [$5] for each barrel of taxable oil if the average gross value at 30 the point of production for the month is greater than or equal to $100 a barrel, but less 31 than $110 a barrel; 01 (5) $1 [$4] for each barrel of taxable oil if the average gross value at 02 the point of production for the month is greater than or equal to $110 a barrel [, BUT 03 LESS THAN $120 A BARREL; 04 (6) $3 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE 05 GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS 06 GREATER THAN OR EQUAL TO $120 A BARREL, BUT LESS THAN $130 A 07 BARREL; 08 (7) $2 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE 09 GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS 10 GREATER THAN OR EQUAL TO $130 A BARREL, BUT LESS THAN $140 A 11 BARREL; 12 (8) $1 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE 13 GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS 14 GREATER THAN OR EQUAL TO $140 A BARREL, BUT LESS THAN $150 A 15 BARREL; 16 (9) ZERO IF THE AVERAGE GROSS VALUE AT THE POINT OF 17 PRODUCTION FOR THE MONTH IS GREATER THAN OR EQUAL TO $150 A 18 BARREL]. 19  * Sec. 16. AS 43.55.024 is amended by adding a new subsection to read: 20 (k) In a calendar year, for each lease, property, or unit, a producer may not 21 apply against the producer's tax liability under AS 43.55.011(e) credits earned under 22 (i) or (j) of this section in an amount that exceeds the producer's qualified capital 23 expenditures for the lease, property, or unit. A producer may not carry forward an 24 unused credit under this subsection. In this subsection, "qualified capital expenditure" 25 has the meaning given in AS 43.55.023(o). 26  * Sec. 17. AS 43.55.030(e) is amended to read: 27 (e) An explorer or producer that incurs a unit or lease expenditure under 28 AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar 29 year but does not produce oil or gas from a lease, [OR] property, or unit in the state 30 during the calendar year shall file with the department, on March 31 of the following 31 year, a statement, under oath, in a form prescribed by the department, giving, with 01 other information required, the following: 02 (1) the explorer's or producer's qualified capital expenditures, as 03 defined in AS 43.55.023, other unit or lease expenditures under AS 43.55.165, and 04 adjustments or other payments or credits under AS 43.55.170; and 05 (2) if the explorer or producer receives a payment or credit under 06 AS 43.55.170, calculations showing whether the explorer or producer is liable for a 07 tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount. 08  * Sec. 18. AS 43.55.030(f) is amended to read: 09 (f) The department may require a producer, an explorer, or an operator of a 10 lease, [OR] property, or unit to file monthly reports, as applicable, of 11 (1) the amounts and gross value at the point of production of oil and 12 gas produced; 13 (2) transportation costs of the oil and gas; 14 (3) any unscheduled interruption of, or reduction in the rate of, oil or 15 gas production; 16 (4) unit or lease expenditures and adjustments under AS 43.55.165 17 and 43.55.170; 18 (5) joint interest billings; 19 (6) contracts for the sale or transportation of oil or gas; 20 (7) information and calculations used in determining monthly 21 installment payments of estimated tax under AS 43.55.020(a); and 22 (8) other records and information the department considers necessary 23 for the administration of this chapter. 24  * Sec. 19. AS 43.55.040 is amended to read: 25 Sec. 43.55.040. Powers of Department of Revenue. Except as provided in 26 AS 43.05.405 - 43.05.499, the department may  27 (1) require a person engaged in production and the agent or employee 28 of the person, and the purchaser of oil or gas, or the owner of a royalty interest in oil 29 or gas to furnish, whether by the filing of regular statements or reports or otherwise, 30 additional information that is considered by the department as necessary to compute 31 the amount of the tax; notwithstanding any contrary provision of law, the disclosure of 01 additional information under this paragraph to the producer obligated to pay the tax 02 does not violate AS 40.25.100(a) or AS 43.05.230(a); before disclosing information 03 under this paragraph that is otherwise required to be held confidential under 04 AS 40.25.100(a) or AS 43.05.230(a), the department shall 05 (A) provide the person that furnished the information a 06 reasonable opportunity to be heard regarding the proposed disclosure and the 07 conditions to be imposed under (B) of this paragraph; and 08 (B) impose appropriate conditions limiting 09 (i) access to the information to those legal counsel, 10 consultants, employees, officers, and agents of the producer who have a 11 need to know that information for the purpose of determining or 12 contesting the producer's tax obligation; and 13 (ii) the use of the information to use for that purpose; 14 (2) examine the books, records, and files of the person; 15 (3) conduct hearings and compel the attendance of witnesses and the 16 production of books, records, and papers of any person; 17 (4) make an investigation or hold an inquiry that is considered 18 necessary to a disclosure of the facts as to 19 (A) the amount of production from any oil or gas location, or of 20 a company or other producer of oil or gas; and 21 (B) the rendition of the oil and gas for taxing purposes; 22 (5) require a producer, an explorer, or an operator of a lease, [OR] 23 property, or unit to file reports and copies of records that the department considers 24 necessary to forecast state revenue under this chapter; in the case of reports and copies 25 of records relating to proposed, expected, or approved unit expenditures for a unit for 26 which one or more working interest owners other than the operator have authority to 27 approve unit expenditures, the required reports and copies of records are limited to 28 those reports or copies of records that constitute or disclose communications between 29 the operator and the working interest owners relating to unit budget matters; 30 (6) require a producer that has an average total production in the state 31 of more than 100,000 barrels a day for a calendar year to report the gross value at the 01 point of production of the producer's taxable oil and gas in the state for a calendar year 02 and the total amount of lease and unit expenditures in the state for that calendar year; 03 and 04 (7) assess against a person required under this section to file a report, 05 statement, or other document a penalty, as determined by the department under 06 standards adopted in regulation by the department, of not more than $1,000 for each 07 day the person fails to file the report, statement, or other document after notice by the 08 department; the penalty is in addition to any penalties under AS 43.05.220 and 09 43.05.290 and is assessed, collected, and paid in the same manner as a tax deficiency 10 under this title; the penalty shall bear interest at the rate specified under 11 AS 43.05.225(1). 12  * Sec. 20. AS 43.55.075(b) is amended to read: 13 (b) A decision of a regulatory agency, court, or other body with authority to 14 resolve disputes that results in a retroactive change to a lease or unit expenditure, to 15 an adjustment to a lease or unit expenditure, to costs of transportation, to sale price, to 16 prevailing value, or to consideration of quality differentials relating to the 17 commingling of oils has a corresponding effect, either an increase or decrease, as 18 applicable, on the production tax value of oil or gas or the amount or availability of a 19 tax credit as determined under this chapter. For purposes of this section, a change to a 20 lease or unit expenditure includes a change in the categorization of a lease or unit 21 expenditure as a qualified capital expenditure or as not a qualified capital expenditure. 22 The producer shall 23 (1) within 60 days after the change, notify the department in writing; 24 and 25 (2) within 120 days after the change, file amended returns covering all 26 periods affected by the change, unless the department agrees otherwise or a stay is in 27 place that affects the filing or payment, regardless of the pendency of appeals of the 28 decision. 29  * Sec. 21. AS 43.55.160(a) is amended to read: 30 (a) For oil and gas produced before January 1, 2022, except as provided in (b), 31 (f), and (g) of this section, for the purposes of 01 (1) AS 43.55.011(e)(1) and (2), the annual production tax value of 02 taxable oil, gas, or oil and gas produced during a calendar year in a category for which 03 a separate annual production tax value is required to be calculated under this 04 paragraph is the gross value at the point of production of that oil, gas, or oil and gas 05 taxable under AS 43.55.011(e), less the producer's lease expenditures under 06 AS 43.55.165 for the calendar year applicable to the oil, gas, or oil and gas in that 07 category produced by the producer during the calendar year, as adjusted under 08 AS 43.55.170; a separate annual production tax value shall be calculated for 09 (A) oil and gas produced from leases or properties in the state 10 that include land north of 68 degrees North latitude, other than gas produced 11 before 2022 and used in the state; 12 (B) oil and gas produced from leases or properties in the state 13 outside the Cook Inlet sedimentary basin, no part of which is north of 68 14 degrees North latitude and that qualifies for a tax credit under former 15 AS 43.55.024(a) and (b); this subparagraph does not apply to 16 (i) gas produced before 2022 and used in the state; or 17 (ii) oil and gas subject to AS 43.55.011(p); 18 (C) oil produced before 2022 from each lease or property in the 19 Cook Inlet sedimentary basin; 20 (D) gas produced before 2022 from each lease or property in 21 the Cook Inlet sedimentary basin; 22 (E) gas produced before 2022 from each lease or property in 23 the state outside the Cook Inlet sedimentary basin and used in the state, other 24 than gas subject to AS 43.55.011(p); 25 (F) oil and gas subject to AS 43.55.011(p) produced from 26 leases or properties in the state; 27 (G) oil and gas produced from leases or properties in the state 28 no part of which is north of 68 degrees North latitude, other than oil or gas 29 described in (B), (C), (D), (E), or (F) of this paragraph; 30 (2) AS 43.55.011(g), for oil and gas produced before January 1, 2014, 31 the monthly production tax value of the taxable 01 (A) oil and gas produced during a month from leases or 02 properties in the state that include land north of 68 degrees North latitude is the 03 gross value at the point of production of the oil and gas taxable under 04 AS 43.55.011(e) and produced by the producer from those leases or properties, 05 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 06 calendar year applicable to the oil and gas produced by the producer from 07 those leases or properties, as adjusted under AS 43.55.170; this subparagraph 08 does not apply to gas subject to AS 43.55.011(o); 09 (B) oil and gas produced during a month from leases or 10 properties in the state outside the Cook Inlet sedimentary basin, no part of 11 which is north of 68 degrees North latitude, is the gross value at the point of 12 production of the oil and gas taxable under AS 43.55.011(e) and produced by 13 the producer from those leases or properties, less 1/12 of the producer's lease 14 expenditures under AS 43.55.165 for the calendar year applicable to the oil and 15 gas produced by the producer from those leases or properties, as adjusted under 16 AS 43.55.170; this subparagraph does not apply to gas subject to 17 AS 43.55.011(o); 18 (C) oil produced during a month from a lease or property in the 19 Cook Inlet sedimentary basin is the gross value at the point of production of 20 the oil taxable under AS 43.55.011(e) and produced by the producer from that 21 lease or property, less 1/12 of the producer's lease expenditures under 22 AS 43.55.165 for the calendar year applicable to the oil produced by the 23 producer from that lease or property, as adjusted under AS 43.55.170; 24 (D) gas produced during a month from a lease or property in 25 the Cook Inlet sedimentary basin is the gross value at the point of production 26 of the gas taxable under AS 43.55.011(e) and produced by the producer from 27 that lease or property, less 1/12 of the producer's lease expenditures under 28 AS 43.55.165 for the calendar year applicable to the gas produced by the 29 producer from that lease or property, as adjusted under AS 43.55.170; 30 (E) gas produced during a month from a lease or property 31 outside the Cook Inlet sedimentary basin and used in the state is the gross 01 value at the point of production of that gas taxable under AS 43.55.011(e) and 02 produced by the producer from that lease or property, less 1/12 of the 03 producer's lease expenditures under AS 43.55.165 for the calendar year 04 applicable to that gas produced by the producer from that lease or property, as 05 adjusted under AS 43.55.170. 06  * Sec. 22. AS 43.55.160(e) is amended to read: 07 (e) Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 08 incurred to explore for, develop, or produce oil or gas from a lease or property outside 09 the Cook Inlet sedimentary basin that would otherwise be deductible by a producer in 10 a calendar year but whose deduction would cause an annual production tax value 11 calculated under (a)(1) or (h)(2) - (4) [(h)] of this section of taxable oil or gas 12 produced during the calendar year to be less than zero may be used to establish a 13 carried- forward annual loss under AS 43.55.165(a)(3). A reduction under (f) or (g) of 14 this section must be added back to the calculation of production tax values for that 15 calendar year before the determination of a carried-forward annual loss under this 16 subsection. However, the department shall provide by regulation a method to ensure 17 that, for a period for which a producer's tax liability is limited by AS 43.55.011(o) or 18 (p), any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that would 19 otherwise be deductible by a producer for that period but whose deduction would 20 cause a production tax value calculated under (a)(1)(E) or (F) or (h)(3) of this section 21 to be less than zero are accounted for as though the adjusted lease expenditures had 22 first been used as deductions in calculating the production tax values of oil or gas 23 subject to any of the limitations under AS 43.55.011(o) or (p) that have positive 24 production tax values so as to reduce the tax liability calculated without regard to the 25 limitation to the maximum amount provided for under the applicable provision of 26 AS 43.55.011(o) or (p). Only the amount of those adjusted lease expenditures 27 remaining after the accounting provided for under this subsection may be used to 28 establish a carried-forward annual loss under AS 43.55.165(a)(3). In this subsection, 29 "producer" includes "explorer." 30  * Sec. 23. AS 43.55.160(f) is amended to read: 31 (f) On and after January 1, 2014, in the calculation of an annual production tax 01 value of a producer under (a)(1)(A) or (h)(1) of this section, the gross value at the 02 point of production of oil or gas produced from a unit [LEASE OR PROPERTY] 03 north of 68 degrees North latitude meeting one or more of the following criteria is 04 reduced by 20 percent: (1) the oil or gas is produced from a unit [LEASE OR 05 PROPERTY] that did [DOES] not contain a lease [THAT WAS] within it [A UNIT] 06 on January 1, 2003; (2) the oil or gas is produced from a participating area established 07 after December 31, 2011, that is within a unit formed under AS 38.05.180(p) before 08 January 1, 2003, if the participating area does not contain a reservoir that had 09 previously been in a participating area established before December 31, 2011; (3) the 10 oil or gas is produced from acreage that was added to an existing participating area by 11 the Department of Natural Resources on and after January 1, 2014, and the producer 12 demonstrates to the department that the volume of oil or gas produced is from acreage 13 added to an existing participating area. This subsection does not apply to gas produced 14 before 2022 that is used in the state or to gas produced on and after January 1, 2022. 15 For oil and gas first produced from a lease, [OR] property, or unit after December 31, 16 2016, a reduction allowed under this subsection applies from the date of 17 commencement of regular production of oil and gas from that lease, [OR] property, or  18 unit and expires after three years, consecutive or nonconsecutive, in which the 19 average annual price per barrel for Alaska North Slope crude oil for sale on the United 20 States West Coast is more than $70 or after seven years, whichever occurs first. For oil 21 and gas first produced from a lease, [OR] property, or unit before January 1, 2017, a 22 reduction allowed under this subsection expires on the earlier of January 1, 2023, or 23 January 1 following three years, consecutive or nonconsecutive, in which the average 24 annual price per barrel for Alaska North Slope crude oil for sale on the United States 25 West Coast is more than $70. The Alaska Oil and Gas Conservation Commission shall 26 determine the commencement of regular production of oil and gas for purposes of this 27 subsection. A reduction under this subsection may not reduce the gross value at the 28 point of production below zero. In this subsection, "participating area" means a 29 reservoir or portion of a reservoir producing or contributing to production as approved 30 by the Department of Natural Resources. 31  * Sec. 24. AS 43.55.160(g) is amended to read: 01 (g) On and after January 1, 2014, in addition to the reduction under (f) of this 02 section, in the calculation of an annual production tax value of a producer under 03 (a)(1)(A) or (h)(1) of this section, the gross value at the point of production of oil or 04 gas produced from a unit [LEASE OR PROPERTY] north of 68 degrees North 05 latitude that did [DOES] not contain a lease [THAT WAS] within it [A UNIT] on 06 January 1, 2003, is reduced by 10 percent if the oil or gas is produced from the [A] 07 unit made up solely of leases that have a royalty share of more than 12.5 percent in 08 amount or value of the production removed or sold from the lease as determined under 09 AS 38.05.180(f). This subsection does not apply if the royalty obligation for one or 10 more of the leases in the unit has been reduced to 12.5 percent or less under 11 AS 38.05.180(j) for all or part of the calendar year for which the annual production tax 12 value is calculated. This subsection does not apply to gas produced before 2022 that is 13 used in the state or to gas produced on and after January 1, 2022. For oil and gas first 14 produced from a lease, [OR] property, or unit after December 31, 2016, a reduction 15 allowed under this subsection applies from the date of commencement of regular 16 production of oil and gas from that lease, [OR] property, or unit and expires after 17 three years, consecutive or nonconsecutive, in which the average annual price per 18 barrel for Alaska North Slope crude oil for sale on the United States West Coast is 19 more than $70 or after seven years, whichever occurs first. For oil and gas first 20 produced from a lease or property before January 1, 2017, a reduction allowed under 21 this subsection expires on the earlier of January 1, 2023, or January 1 following three 22 years, consecutive or nonconsecutive, in which the average annual price per barrel for 23 Alaska North Slope crude oil for sale on the United States West Coast is more than 24 $70. The Alaska Oil and Gas Conservation Commission shall determine the 25 commencement of regular production for purposes of this subsection. A reduction 26 under this subsection may not reduce the gross value at the point of production below 27 zero. 28  * Sec. 25. AS 43.55.160(h) is amended to read: 29 (h) Except [FOR OIL PRODUCED ON AND AFTER JANUARY 1, 2022, 30 EXCEPT] as provided in (b), (f), [AND] (g), and (i) of this section, for the purposes 31 of AS 43.55.011(e)(3), the annual production tax value of oil taxable under 01 AS 43.55.011(e) produced by a producer during a calendar year 02 (1) on and after January 1, 2022, and before January 1, 2023, from 03 leases or properties in the state that include land north of 68 degrees North latitude is 04 the gross value at the point of production of that oil, less the producer's lease 05 expenditures under AS 43.55.165 for the calendar year incurred to explore for, 06 develop, or produce oil and gas deposits located in the state north of 68 degrees North 07 latitude or located in leases or properties in the state that include land north of 68 08 degrees North latitude, as adjusted under AS 43.55.170; 09 (2) on and after January 1, 2022, and before or during the last 10 calendar year under former AS 43.55.024(b) for which the producer could take a tax 11 credit under former AS 43.55.024(a), from leases or properties in the state outside the 12 Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, 13 other than leases or properties subject to AS 43.55.011(p), is the gross value at the 14 point of production of that oil, less the producer's lease expenditures under 15 AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil and 16 gas deposits located in the state outside the Cook Inlet sedimentary basin and south of 17 68 degrees North latitude, other than oil and gas deposits located in a lease or property 18 that includes land north of 68 degrees North latitude or that is subject to 19 AS 43.55.011(p) or, before January 1, 2027, from which commercial production has 20 not begun, as adjusted under AS 43.55.170; 21 (3) on and after January 1, 2022, from leases or properties subject to 22 AS 43.55.011(p) is the gross value at the point of production of that oil, less the 23 producer's lease expenditures under AS 43.55.165 for the calendar year incurred to 24 explore for, develop, or produce oil and gas deposits located in leases or properties 25 subject to AS 43.55.011(p) or, before January 1, 2027, located in leases or properties 26 in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 27 degrees North latitude from which commercial production has not begun, as adjusted 28 under AS 43.55.170; 29 (4) on and after January 1, 2022, from leases or properties in the 30 state no part of which is north of 68 degrees North latitude, other than leases or 31 properties subject to (2) or (3) of this subsection, is the gross value at the point of 01 production of that oil less the producer's lease expenditures under AS 43.55.165 for 02 the calendar year incurred to explore for, develop, or produce oil and gas deposits 03 located in the state south of 68 degrees North latitude, other than oil and gas deposits 04 located in a lease or property in the state that includes land north of 68 degrees North 05 latitude, and excluding lease expenditures that are deductible under (2) or (3) of this 06 subsection or would be deductible under (2) or (3) of this subsection if not prohibited 07 by (b) of this section, as adjusted under AS 43.55.170; a separate annual production 08 tax value shall be calculated for 09 (A) oil produced from each lease or property in the Cook Inlet 10 sedimentary basin; 11 (B) oil produced from each lease or property outside the Cook 12 Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, 13 other than leases or properties subject to (3) of this subsection;  14 (5) on and after January 1, 2023, from units in the state that  15 include land north of 68 degrees North latitude is the producer's gross value at  16 the point of production of oil from each unit operated by the producer, less the  17 producer's unit expenditures under AS 43.55.165 for the calendar year incurred  18 to explore for, develop, or produce oil and gas deposits in that unit, as adjusted  19 under AS 43.55.170. 20  * Sec. 26. AS 43.55.160 is amended by adding a new subsection to read: 21 (i) An adjusted unit expenditure under AS 43.55.165 and 43.55.170 incurred 22 to explore for, develop, or produce oil or gas from a unit that includes land north of 68 23 degrees North latitude that would otherwise be deductible by a producer in a calendar 24 year but whose deduction would cause an annual production tax value calculated 25 under (h)(5) of this section of taxable oil or gas produced during the calendar year to 26 be less than zero may be used to establish a carried-forward annual loss under 27 AS 43.55.165(a)(3). A reduction under (f) or (g) of this section must be added back to 28 the calculation of production tax values for that calendar year when calculating the 29 carried-forward annual loss under this subsection. In this subsection, "producer" 30 includes an explorer. 31  * Sec. 27. AS 43.55.165(a) is amended to read: 01 (a) For purposes of this chapter, a producer's calendar year lease 02 expenditures, from a lease or property that does not include land north of 68  03 degrees North latitude, or unit expenditures, from a unit that includes land north  04 of 68 degrees North latitude, [FOR A CALENDAR YEAR] are 05 (1) costs, other than items listed in (e) of this section, that are 06 (A) incurred by the producer during the calendar year after 07 March 31, 2006, to explore for, develop, or produce oil or gas deposits located 08 within the producer's units, leases, or properties, as applicable, in the state or, 09 in the case of land in which the producer does not own an operating right, 10 operating interest, or working interest, to explore for oil or gas deposits within 11 other land in the state; and 12 (B) allowed by the department by regulation, based on the 13 department's determination that the costs satisfy the following three 14 requirements: 15 (i) the costs must be incurred upstream of the point of 16 production of oil and gas; 17 (ii) the costs must be ordinary and necessary costs of 18 exploring for, developing, or producing, as applicable, oil or gas 19 deposits; and 20 (iii) the costs must be direct costs of exploring for, 21 developing, or producing, as applicable, oil or gas deposits; 22 (2) a reasonable allowance for that calendar year, as determined under 23 regulations adopted by the department, for overhead expenses that are directly related 24 to exploring for, developing, or producing, as applicable, the oil or gas deposits; and 25 (3) lease or unit expenditures incurred in a previous calendar year, 26 subject to (l) - (r) of this section, that 27 (A) met the requirements of AS 43.55.160(e) or (i), as  28 applicable, in the year in which the lease or unit expenditures were incurred; 29 (B) have not been deducted in the determination of the 30 production tax value of oil and gas under AS 43.55.160(a) or (h) in a previous 31 calendar year; 01 (C) were not the basis of a credit under this title; and 02 (D) were incurred to explore for, develop, or produce an oil or 03 gas deposit located in the state outside the Cook Inlet sedimentary basin. 04  * Sec. 28. AS 43.55.165(b) is amended to read: 05 (b) For purposes of (a) of this section, 06 (1) direct costs include 07 (A) an expenditure, when incurred, to acquire an item if the 08 acquisition cost is otherwise a direct cost, notwithstanding that the expenditure 09 may be required to be capitalized rather than treated as an expense for financial 10 accounting or federal income tax purposes; 11 (B) payments of or in lieu of property taxes, sales and use 12 taxes, motor fuel taxes, and excise taxes; 13 (2) an activity does not need to be physically located on, near, or 14 within the premises of the lease, [OR] property, or unit within which an oil or gas 15 deposit being explored for, developed, or produced is located in order for the cost of 16 the activity to be a cost upstream of the point of production of the oil or gas; 17 (3) in determining whether costs are lease or unit expenditures, the 18 department may consider, among other factors, the 19 (A) typical industry practices and standards in the state that 20 determine the costs, other than items listed in (e) of this section, that an 21 operator is allowed to bill a producer that is not the operator, under unit 22 operating agreements or similar operating agreements that were in effect 23 before December 2, 2005, and were subject to negotiation with at least one 24 producer with substantial bargaining power, other than the operator; and 25 (B) standards adopted by the Department of Natural Resources 26 that determine the costs, other than items listed in (e) of this section, that a 27 lessee is allowed to deduct from revenue in calculating net profits under a lease 28 issued under AS 38.05.180(f)(3)(B), (D), or (E). 29  * Sec. 29. AS 43.55.165(e) is amended to read: 30 (e) For purposes of this section, lease and unit expenditures do not include 31 (1) depreciation, depletion, or amortization; 01 (2) oil or gas royalty payments, production payments, lease profit 02 shares, or other payments or distributions of a share of oil or gas production, profit, or 03 revenue, except that a producer's lease or unit expenditures applicable to oil and gas 04 produced from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the 05 share of net profit paid to the state under that lease; 06 (3) taxes based on or measured by net income; 07 (4) interest or other financing charges or costs of raising equity or debt 08 capital; 09 (5) acquisition costs for a lease, [OR] property, or unit, or exploration 10 license; 11 (6) costs arising from fraud, wilful misconduct, gross negligence, 12 violation of law, or failure to comply with an obligation under a lease, permit, or 13 license issued by the state or federal government; 14 (7) fines or penalties imposed by law; 15 (8) costs of arbitration, litigation, or other dispute resolution activities 16 that involve the state or concern the rights or obligations among owners of interests in, 17 or rights to production from, one or more leases or properties or a unit; 18 (9) costs incurred in organizing a partnership, joint venture, or other 19 business entity or arrangement; 20 (10) amounts paid to indemnify the state; the exclusion provided by 21 this paragraph does not apply to the costs of obtaining insurance or a surety bond from 22 a third-party insurer or surety; 23 (11) surcharges levied under AS 43.55.201 or 43.55.300; 24 (12) an expenditure otherwise deductible under (b) of this section that 25 is a result of an internal transfer, a transaction with an affiliate, or a transaction 26 between related parties, or is otherwise not an arm's length transaction, unless the 27 producer establishes to the satisfaction of the department that the amount of the 28 expenditure does not exceed the fair market value of the expenditure; 29 (13) an expenditure incurred to purchase an interest in any corporation, 30 partnership, limited liability company, business trust, or any other business entity, 31 whether or not the transaction is treated as an asset sale for federal income tax 01 purposes; 02 (14) a tax levied under AS 43.55.011 or 43.55.014; 03 (15) costs incurred for dismantlement, removal, surrender, or 04 abandonment of a facility, pipeline, well pad, platform, or other structure, or for the 05 restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in 06 conjunction with dismantlement, removal, surrender, or abandonment; a cost is not 07 excluded under this paragraph if the dismantlement, removal, surrender, or 08 abandonment for which the cost is incurred is undertaken for the purpose of replacing, 09 renovating, or improving the facility, pipeline, well pad, platform, or other structure; 10 (16) costs incurred for containment, control, cleanup, or removal in 11 connection with any unpermitted release of oil or a hazardous substance and any 12 liability for damages imposed on the producer or explorer for that unpermitted release; 13 this paragraph does not apply to the cost of developing and maintaining an oil 14 discharge prevention and contingency plan under AS 46.04.030; 15 (17) costs incurred to satisfy a work commitment under an exploration 16 license under AS 38.05.132; 17 (18) that portion of expenditures, that would otherwise be qualified 18 capital expenditures, as defined in AS 43.55.023, incurred during a calendar year that 19 are less than the product of $0.30 multiplied by the total taxable production from each 20 lease, [OR] property, or unit, as applicable, in BTU equivalent barrels, during that 21 calendar year, except that, when a portion of a calendar year is subject to this 22 provision, the expenditures and volumes shall be prorated within that calendar year; 23 (19) costs incurred for repair, replacement, or deferred maintenance of 24 a facility, a pipeline, a structure, or equipment, other than a well, that results in or is 25 undertaken in response to a failure, problem, or event that results in an unscheduled 26 interruption of, or reduction in the rate of, oil or gas production; or costs incurred for 27 repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or 28 equipment, other than a well, that is undertaken in response to, or is otherwise 29 associated with, an unpermitted release of a hazardous substance or of gas; however, 30 costs under this paragraph that would otherwise constitute lease or unit expenditures 31 under (a) and (b) of this section may be treated as lease or unit expenditures if the 01 department determines that the repair or replacement is solely necessitated by an act of 02 war, by an unanticipated grave natural disaster or other natural phenomenon of an 03 exceptional, inevitable, and irresistible character, the effects of which could not have 04 been prevented or avoided by the exercise of due care or foresight, or by an intentional 05 or negligent act or omission of a third party, other than a party or its agents in privity 06 of contract with, or employed by, the producer or an operator acting for the producer, 07 but only if the producer or operator, as applicable, exercised due care in operating and 08 maintaining the facility, pipeline, structure, or equipment, and took reasonable 09 precautions against the act or omission of the third party and against the consequences 10 of the act or omission; in this paragraph, 11 (A) "costs incurred for repair, replacement, or deferred 12 maintenance of a facility, a pipeline, a structure, or equipment" includes costs 13 to dismantle and remove the facility, pipeline, structure, or equipment that is 14 being replaced; 15 (B) "hazardous substance" has the meaning given in 16 AS 46.03.826; 17 (C) "replacement" includes renovation or improvement; 18 (20) costs incurred to construct, acquire, or operate a refinery or crude 19 oil topping plant, regardless of whether the products of the refinery or topping plant 20 are used in oil or gas exploration, development, or production operations; however, if 21 a producer owns a refinery or crude oil topping plant that is located on or near the 22 premises of the producer's lease, [OR] property, or unit, as applicable, in the state 23 and that processes the producer's oil produced from that lease, [OR] property, or unit 24 into a product that the producer uses in the operation of the lease, [OR] property, or  25 unit in drilling for or producing oil or gas, the producer's lease expenditures include 26 the amount calculated by subtracting from the fair market value of the product used 27 the prevailing value, as determined under AS 43.55.020(f), of the oil that is processed; 28 (21) costs of lobbying, public relations, public relations advertising, or 29 policy advocacy. 30  * Sec. 30. AS 43.55.165(g) is amended to read: 31 (g) The department shall specify or approve a reasonable allocation method 01 for determining the portion of a cost that is appropriately treated as a lease or unit 02 expenditure under this section if a cost that would otherwise constitute a lease or unit 03 expenditure under this section is incurred to explore for, develop, or produce 04 (1) both an oil or gas deposit located within land outside the state and 05 an oil or gas deposit located within a lease, [OR] property, or unit, as applicable, or 06 other land, in the state; or 07 (2) an oil or gas deposit located partly within land outside the state and 08 partly within a lease, [OR] property, or unit, as applicable, or other land, in the state. 09  * Sec. 31. AS 43.55.165(h) is amended to read: 10 (h) The department shall adopt regulations that provide for reasonable 11 methods of allocating costs between oil and gas, between gas subject to 12 AS 43.55.011(o) and other gas, and between leases, [OR] properties, or units in those 13 circumstances where an allocation of costs is required to determine lease or unit 14 expenditures that are costs of exploring for, developing, or producing oil deposits or 15 costs of exploring for, developing, or producing gas deposits, or that are costs of 16 exploring for, developing, or producing oil or gas deposits located within different 17 leases, [OR] properties, or units. 18  * Sec. 32. AS 43.55.165(l) is amended to read: 19 (l) In a calendar year, after application of a producer's lease or unit 20 expenditures, as applicable, that are incurred in that calendar year, the producer may 21 choose to apply all or a portion of a carried-forward annual loss or carry any unused 22 portion forward. The department may not require a producer to apply all or a portion 23 of a carried-forward annual loss in a calendar year. 24  * Sec. 33. AS 43.55.165(m) is amended to read: 25 (m) During a calendar year in which a taxpayer's liability under 26 AS 43.55.011(e) is determined under AS 43.55.011(f), the maximum amount of 27 carried-forward annual loss that a taxpayer may apply in that year is equal to the 28 amount, when combined with the lease or unit expenditures, as applicable, of the 29 current year and any credits under this chapter, necessary to reduce the amount 30 calculated under AS 43.55.011(e) to the equivalent amount of tax due under 31 AS 43.55.011(f) before the application of any credits under this chapter. An amount of 01 carried-forward annual loss not applied under this subsection may continue to be 02 carried forward. 03  * Sec. 34. AS 43.55.165(n) is amended to read: 04 (n) A carried-forward annual loss resulting from expenditures incurred in  05 (1) leases, properties, or units that do not include land north of 68  06 degrees North latitude or resulting from a lease or property that includes land  07 north of 68 degrees North latitude and that were incurred before January 1,  08 2023, may only be applied 09 (A) [(1)] to determine the production tax value of oil or gas for 10 a category for which a separate annual production tax value is required to be 11 calculated under AS 43.55.160(a) or (h) if the lease expenditure resulting in the 12 carried-forward annual loss was incurred in the same category; 13 (B) [(2)] beginning in the calendar year in which regular 14 production of oil or gas from the lease or property where the lease expenditure 15 resulting in the carried-forward annual loss was incurred commences; 16 (2) units that include land north of 68 degrees North latitude and  17 that were incurred on or after January 1, 2023, may only be applied 18 (A) to determine the production tax value of oil or gas for  19 the unit in which the carried-forward loss was incurred;  20 (B) beginning in the calendar year in which regular  21 production of oil or gas from the unit where the lease expenditure  22 resulting in the carried-forward annual loss was incurred commences. 23  * Sec. 35. AS 43.55.165(o) is amended to read: 24 (o) A carried-forward annual loss for a lease or unit expenditure incurred on a 25 lease, [OR] property, or unit that 26 (1) did not commence regular production of oil or gas before or during 27 the year the lease or unit expenditure was incurred decreases in value each year by 28 one-tenth of the value of the carried-forward annual loss in the preceding year, 29 beginning January 1 of the 11th calendar year after the lease or unit expenditure is 30 carried forward under (a)(3) of this section; a decrease in value under this paragraph 31 does not apply for a year in which the department determines that regular production 01 of oil or gas did not commence because of a natural disaster, an injunction or other 02 court order, or an administrative order; 03 (2) commenced regular production of oil or gas before or during the 04 year the lease or unit expenditure was incurred decreases in value each year by one- 05 tenth of the value of the carried-forward annual loss in the preceding year, beginning 06 January 1 of the eighth calendar year after the lease or unit expenditure is carried 07 forward under (a)(3) of this section. 08  * Sec. 36. AS 43.55.165(r) is amended to read: 09 (r) In adopting a regulation that defines the lease, [OR] property, or unit 10 where a lease or unit expenditure resulting in a carried-forward annual loss is incurred 11 for purposes of (n) and (o) of this section, the department shall include an exploration 12 lease or unit expenditure that is reasonably related to the lease, [OR] property, or  13 unit. 14  * Sec. 37. AS 43.55.170(a) is amended to read: 15 (a) A producer's lease or unit expenditures under AS 43.55.165 must be 16 adjusted by subtracting payments or credits, other than tax credits, received by the 17 producer or by an operator acting for the producer for 18 (1) the use by another person of a production facility in which the 19 producer has an ownership interest or the management by the producer of a production 20 facility under a management agreement providing for the producer to receive a 21 management fee; 22 (2) a reimbursement or similar payment that offsets the producer's 23 lease or unit expenditures, including an insurance recovery from a third-party insurer 24 and a payment from the state or federal government for reimbursement of the 25 producer's upstream costs, including costs for gathering, separating, cleaning, 26 dehydration, compressing, or other field handling associated with the production of oil 27 or gas upstream of the point of production; 28 (3) the sale or other transfer of 29 (A) an asset, including geological, geophysical, or well data or 30 interpretations, acquired by the producer as a result of a lease or unit 31 expenditure or an expenditure that would be a lease or unit expenditure if it 01 were incurred after March 31, 2006; for purposes of this subparagraph, 02 (i) if a producer removes from the state, for use outside 03 the state, an asset described in this subparagraph, the value of the asset 04 at the time it is removed is considered a payment received by the 05 producer for sale or transfer of the asset; 06 (ii) for a transaction that is an internal transfer or is 07 otherwise not an arm's length transaction, if the sale or transfer of the 08 asset is made for less than fair market value, the amount subtracted 09 must be the fair market value; and 10 (B) oil or gas 11 (i) that is not considered produced from a lease, [OR] 12 property, or unit, under AS 43.55.020(e); and 13 (ii) the cost of acquiring which is a lease or unit 14 expenditure incurred by the person that acquires the oil or gas. 15  * Sec. 38. AS 43.55.170(b) is amended to read: 16 (b) Except as otherwise provided under this subsection, if one or more 17 payments or credits subject to this section are received by a producer or by an operator 18 acting for the producer during a calendar year and if either the total amount of the 19 payments or credits exceeds the amount of the producer's applicable lease and unit 20 expenditures for that calendar year or the producer has no lease or unit expenditures 21 for that calendar year, the producer shall nevertheless subtract those payments or 22 credits from the lease and unit expenditures or from zero, respectively, and the 23 producer's applicable adjusted lease and unit expenditures for that calendar year are a 24 negative number and shall be applied to the pertinent calculation under 25 AS 43.55.160(a) or (h) as a negative number. 26  * Sec. 39. AS 43.55.180(a) is amended to read: 27 (a) The department shall study 28 (1) the effects of the provisions of this chapter on oil and gas 29 exploration, development, and production in the state, on investment expenditures for 30 oil and gas exploration, development, and production in the state, on the entry of new 31 producers into the oil and gas industry in the state, on state revenue, and on tax 01 administration and compliance, giving particular attention to the tax rates provided 02 under AS 43.55.011, the tax credits provided under AS 43.55.023 - 43.55.025, and the 03 deductions for and adjustments to lease and unit expenditures provided under 04 AS 43.55.160 - 43.55.170; and 05 (2) the effects of the tax rates under AS 43.55.011(i) on state revenue 06 and on oil and gas exploration, development, and production on private land, and the 07 fairness of those tax rates for private landowners. 08  * Sec. 40. AS 43.55.890 is amended to read: 09 Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary 10 provision of AS 40.25.100, and regardless of whether the information is considered 11 under AS 43.05.230(e) to constitute statistics classified to prevent the identification of 12 particular returns or reports, the department may publish the following information 13 under this chapter, if aggregated among three or more producers or explorers, showing 14 by month or calendar year and by lease or property, unit, or area of the state:  15 (1) the amount of oil or gas production; 16 (2) the amount of taxes levied under this chapter or paid under this 17 chapter; 18 (3) the effective tax rates under this chapter; 19 (4) the gross value of oil or gas at the point of production; 20 (5) the transportation costs for oil or gas; 21 (6) qualified capital expenditures, as defined in AS 43.55.023; 22 (7) exploration expenditures under AS 43.55.025; 23 (8) production tax values of oil or gas under AS 43.55.160; 24 (9) lease or unit expenditures under AS 43.55.165; 25 (10) adjustments to lease or unit expenditures under AS 43.55.170; 26 (11) tax credits applicable or potentially applicable against taxes levied 27 by this chapter. 28  * Sec. 41. AS 43.55.895(b) is amended to read: 29 (b) A municipal entity subject to taxation because of this section 30 (1) is eligible for tax credits proportionate to its production taxable 31 under AS 43.55.011(e); and 01 (2) shall allocate its lease and unit expenditures in proportion to its 02 production taxable under AS 43.55.011(e). 03  * Sec. 42. AS 43.55.024(a), 43.55.024(b), and 43.55.024(f) are repealed. 04  * Sec. 43. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 APPLICABILITY. (a) Section 1 of this Act applies to an entity with qualified taxable 07 income over $4,000,000 for a tax year beginning on or after January 1, 2023. 08 (b) AS 43.55.011(e), (f), and (o); 43.55.020(a), (e), (g), (h), (j), and (l); 43.55.024(c), 09 (e), (i), and (j); 43.55.030(e) and (f); 43.55.040; 43.55.075(b); 43.55.160(a), (e), (f), (g), and 10 (h); 43.55.165(a), (b), (e), (g), (h), (l), (m), (n), (o), and (r); 43.55.170(a) and (b); 11 43.55.180(a); 43.55.890; and 43.55.895(b), as amended by secs. 2 - 4, 6 - 15, 17 - 25, and 27 - 12 41 of this Act, and 43.55.011(q); 43.55.024(k); and 43.55.160(i), added by secs. 5, 16, and 26 13 of this Act, apply to oil and gas produced or determinations of production tax value, gross 14 value at the point of production, lease expenditures, credits, or carried-forward losses 15 resulting from oil and gas produced on or after January 1, 2023. 16  * Sec. 44. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 TRANSITION: PAYMENT OF TAX. (a) A person subject to tax before the effective 19 date of sec. 1 of this Act under AS 43.20.019, added by sec. 1 of this Act, shall pay the 20 balance of the tax due for a tax year ending before January 1, 2024, by January 1, 2024. Until 21 January 1, 2024, the Department of Revenue shall waive interest that would otherwise accrue 22 under AS 43.05.225 and civil and criminal penalties accruing under AS 43.05.220, 43.05.245, 23 and 43.05.290 that are a result of the retroactivity of this Act. 24 (b) Notwithstanding AS 43.55.020, a person subject to tax under AS 43.55.011(e), (f), 25 and (o); 43.55.020(a), (e), (g), (h), (j), and (l); 43.55.024(c), (e), (i), and (j); 43.55.030(e) and 26 (f); 43.55.040; 43.55.075(b); 43.55.160(a), (e), (f), (g), and (h); 43.55.165(a), (b), (e), (g), (h), 27 (l), (m), (n), (o), and (r); 43.55.170(a) and (b); 43.55.180(a); 43.55.890; and 43.55.895(b), as 28 amended by secs. 2 - 4, 6 - 15, 17 - 25, and 27 - 41 of this Act, and 43.55.011(q); 29 43.55.024(k); and 43.55.160(i), added by secs. 5, 16, and 26 of this Act, shall pay the balance 30 of the tax due before January 1, 2024, by January 1, 2024. Until January 1, 2024, the 31 Department of Revenue shall waive interest that would otherwise accrue under AS 43.05.225 01 and civil and criminal penalties accruing under AS 43.05.220, 43.05.245, and 43.05.290 that 02 are a result of the retroactivity of this Act. 03  * Sec. 45. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 RETROACTIVITY OF REGULATIONS. Notwithstanding a contrary provision of 06 AS 44.62.240, if the Department of Revenue expressly designates in the regulation that the 07 regulation applies retroactively to a specific date, a regulation adopted by the department to 08 implement, interpret, make specific, or otherwise carry out sec. 1 of this Act applies 09 retroactively to that date. 10  * Sec. 46. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 RETROACTIVITY. This Act is retroactive to January 1, 2023. 13  * Sec. 47. This Act takes effect immediately under AS 01.10.070(c).