HCS CSSB 377(STA) AM H(FLD H): "An Act relating to state agency fiscal procedures, including procedures related to the assessment and collection of certain taxes; and providing for an effective date."
00HOUSE CS FOR CS FOR SENATE BILL NO. 377(STA) am H(fld H) 01 "An Act relating to state agency fiscal procedures, including procedures related 02 to the assessment and collection of certain taxes; and providing for an effective 03 date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 43.05.260(a) is amended to read: 06 (a) Except as provided in (c) of this section and AS 43.20.200(b), the amount 07 of a tax imposed by this title must be assessed 08 (1) for tax periods ending before January 1, 1994, within three years 09 after the return was filed, whether or not a return was filed on or after the date 10 prescribed by law; however, at any time during the administrative consideration 11 of a taxpayer grievance or of a claim for credit or refund, based upon a tax 12 imposed by former AS 43.21 or by AS 43.55, the department may increase or 13 decrease the amount of tax due by issuing or amending an assessment; 14 (2) for tax periods beginning after December 31, 1993, within five
01 years after the return was filed, whether or not a return was filed on or after the 02 date prescribed by law; the department may increase the amount of tax due by 03 issuing or amending an assessment within the five-year period; after that five-year 04 period, the department may not increase an assessment or issue an additional 05 assessment under this subsection; the department may decrease an assessment at 06 any time. [IF THE TAX IS NOT ASSESSED BEFORE THE EXPIRATION OF THE 07 THREE-YEAR PERIOD, PROCEEDINGS MAY NOT BE INSTITUTED IN COURT 08 FOR THE COLLECTION OF THE TAX.] 09 * Sec. 2. AS 43.05.270(a) is amended to read: 10 (a) When the assessment of a tax imposed by this title has been made within 11 the period of limitation under AS 43.05.260, the tax may be collected by levy or by 12 a proceeding in court [, BUT ONLY] if the levy is made or the proceeding is begun: 13 (1) within six years after the latest of any of the following: 14 (A) the assessment of the tax; 15 (B) the final administrative determination of the grievance, 16 if the taxpayer files a grievance from an assessment; or 17 (C) the final judicial resolution of an appeal, if the taxpayer 18 appeals from a final adjudicative determination of a grievance; or 19 (2) before the expiration of a period for collection agreed upon in 20 writing by the department and the taxpayer before the expiration of the six-year period; 21 a period agreed upon may be extended by subsequent agreements in writing made 22 before the expiration of the period previously agreed upon [; THE PERIOD 23 PROVIDED BY THIS PARAGRAPH DURING WHICH A TAX MAY BE 24 COLLECTED BY LEVY MAY NOT BE EXTENDED OR CURTAILED BECAUSE 25 OF A JUDGMENT AGAINST THE TAXPAYER]. 26 * Sec. 3. AS 43.55 is amended by adding a new section to read: 27 Sec. 43.55.145. PREVAILING VALUE FOR OIL. (a) The department shall 28 adopt regulations to determine a methodology for calculating the prevailing value of 29 oil produced in each field or area of the state for each destination area to which the 30 oil is delivered. Before each October 30, the department shall annually review and 31 determine if any prospective adjustments are necessary to the methodology established
01 by regulation under this section. 02 (b) The regulations adopted by the department under (a) of this section shall 03 determine the prevailing value of oil using the 04 (1) current value or average of current values for oil of like kind, 05 character, and quality produced from each field or area in the state; 06 (2) current values or average of current values for two or more types 07 of domestic or foreign oil selected by the department that are not produced in the state; 08 or 09 (3) any combination of the methods set out in this subsection. 10 (c) The department shall assign percentage weights to the oils selected under 11 (b) of this section. The department shall adjust the amounts calculated under (b) of 12 this section to account for differences in oil types and destination areas. 13 (d) For purposes of this section, "current value" includes spot or other current 14 prices or market assessments publicly reported. 15 * Sec. 4. AS 43.55.900(7) is amended to read: 16 (7) "gross value at the point of production" means 17 (A) for oil, the value of the oil at the point where it is metered 18 or measured (by automatic custody transfer meter, tank gauge, or other method 19 approved by the commissioner) in a condition of pipeline quality on the 20 premises of the lease or property from which it is recovered; however, if the 21 oil is not of pipeline quality when it is removed from the premises of the lease 22 or property from which it is recovered, or if the oil recovered from a lease or 23 property is not metered or measured (by automatic custody transfer meter, tank 24 gauge, or other method approved by the commissioner) on the premises of the 25 lease or property from which it is recovered, then the gross value at the point 26 of production is the value of that oil at the off-premises location where the oil 27 is first metered or measured (by automatic custody transfer meter, tank gauge, 28 or other method approved by the commissioner) in a condition of pipeline 29 quality; 30 (B) for gas recovered from or in association with oil, the value 31 of the gas at the point where it is accurately metered or measured after
01 separation from the oil; for gas run through a gas processing plant, the gross 02 value at the point of production is the full consideration received by the 03 producer for the gas if sold in an arm's length transaction or, in the absence of 04 an arm's length transaction, is the sum of the value of the liquids extracted 05 from the gas at the plant and sold and the value of the residue gas sold, less 06 a reasonable allowance for processing the gas at the plant and for transporting 07 the gas to the plant from the premises upon which the oil production operation 08 is conducted; the reasonable allowance for processing and transporting the 09 gas may not exceed $2 per barrel of plant liquid sold, adjusted annually 10 by 25 percent of the change in the Consumer Price Index; and 11 (C) for gas not recovered from or in association with oil, the 12 value of the gas at the point where it is accurately metered or measured or the 13 value of the gas at the point of sale, if any, on the premises of the lease or 14 property from which the gas is recovered, whichever is the higher value; for 15 gas run through a gas processing plant, the gross value at the point of 16 production is the full consideration received by the producer for the gas if sold 17 in an arm's length transaction or, in the absence of an arm's length transaction, 18 is the sum of the value of the liquids extracted from the gas at the plant and 19 sold and the value of the residue gas sold, less a reasonable allowance for 20 processing the gas at the plant and for transporting the gas to the plant from 21 the point where it was accurately metered or measured; the reasonable 22 allowance for processing and transporting the gas may not exceed $2 per 23 barrel of plant liquid sold, adjusted annually by 25 percent of the change 24 in the Consumer Price Index; 25 * Sec. 5. AS 43.55.900(7), as amended by sec. 4 of this Act, is amended to read: 26 (7) "gross value at the point of production" means 27 (A) for oil, the value of the oil at the point where it is metered 28 or measured (by automatic custody transfer meter, tank gauge, or other method 29 approved by the commissioner) in a condition of pipeline quality on the 30 premises of the lease or property from which it is recovered; however, if the 31 oil is not of pipeline quality when it is removed from the premises of the lease
01 or property from which it is recovered, or if the oil recovered from a lease or 02 property is not metered or measured (by automatic custody transfer meter, tank 03 gauge, or other method approved by the commissioner) on the premises of the 04 lease or property from which it is recovered, then the gross value at the point 05 of production is the value of that oil at the off-premises location where the oil 06 is first metered or measured (by automatic custody transfer meter, tank gauge, 07 or other method approved by the commissioner) in a condition of pipeline 08 quality; 09 (B) for gas recovered from or in association with oil, the value 10 of the gas at the point where it is accurately metered or measured after 11 separation from the oil; for gas run through a gas processing plant, the gross 12 value at the point of production is the full consideration received by the 13 producer for the gas if sold in an arm's length transaction or, in the absence of 14 an arm's length transaction, is the sum of the value of the liquids extracted 15 from the gas at the plant and sold and the value of the residue gas sold, less 16 a reasonable allowance for processing the gas at the plant and for transporting 17 the gas to the plant from the premises upon which the oil production operation 18 is conducted; the reasonable allowance for processing and transporting the gas 19 may not exceed $2 per barrel of plant liquid sold, adjusted annually by 25 20 percent of the change in the Consumer Price Index; [AND] 21 (C) for gas not recovered from or in association with oil, the 22 value of the gas at the point where it is accurately metered or measured or the 23 value of the gas at the point of sale, if any, on the premises of the lease or 24 property from which the gas is recovered, whichever is the higher value; for 25 gas run through a gas processing plant, the gross value at the point of 26 production is the full consideration received by the producer for the gas if sold 27 in an arm's length transaction or, in the absence of an arm's length transaction, 28 is the sum of the value of the liquids extracted from the gas at the plant and 29 sold and the value of the residue gas sold, less a reasonable allowance for 30 processing the gas at the plant and for transporting the gas to the plant from 31 the point where it was accurately metered or measured; the reasonable
01 allowance for processing and transporting the gas may not exceed $2 per barrel 02 of plant liquid sold, adjusted annually by 25 percent of the change in the 03 Consumer Price Index; and 04 (D) for taxable gas produced and used as a fuel or feedstock 05 in the production of urea or ammonia, notwithstanding (B) and (C) of this 06 paragraph and AS 43.55.020(f), the gross value at the point of production 07 for each lease or property is the amount per Mcf under a royalty 08 settlement agreement to which the state is a party and that was in effect 09 on January 1, 1994, for royalty gas from that lease or property; if taxable 10 gas is produced and exchanged for other gas on a volumetric basis, and the 11 gas received in that exchange transaction is used as a fuel or feedstock in 12 the production of urea or ammonia, the gross value at the point of 13 production for each lease or property is the amount per Mcf under a 14 royalty settlement agreement to which the state is a party and which was 15 in effect on January 1, 1994, for royalty gas from the lease or property 16 from which the producer's taxable gas was produced; 17 * Sec. 6. AS 43.55.900 is amended by adding new paragraphs to read: 18 (17) "condensate" means all hydrocarbons, including scrubber liquids, 19 recovered in liquid form from a gaseous stream by mechanical separation without 20 resort to extraneous refrigeration, adiabatic expansion through a Joule-Thompson valve 21 following artificial compression, turbo-expansion, aerial cooling below the temperature 22 at which hydrates or ice would form in the gas stream, osmosis, adsorption, or 23 absorption; if a gas stream moves to a gas processing plant without having passed 24 through a prudently operated mechanical separation unit, that portion of the liquid 25 hydrocarbons extracted at the gas plant that could have been extracted through a 26 mechanical separation unit by a prudent operator will be treated as condensate; 27 (18) "Consumer Price Index" means the Consumer Price Index for all 28 urban consumers for the Anchorage Metropolitan Area compiled by the Bureau of 29 Labor Statistics, United States Department of Labor; 30 (19) "distillate" has the meaning given the term "condensate" in this 31 section;
01 (20) "gas processing plant" means a facility, other than a liquified 02 natural gas plant, in which liquid hydrocarbons are extracted and separated from a 03 stream of gas by one or more of the following means: refrigeration, adiabatic 04 expansion through a Joule-Thompson valve following artificial compression, turbo-expansion, osmosis, adsorption, 05 or absorption. 06 * Sec. 7. The provisions of AS 43.05.260(a)(1), as amended by sec. 1 of this Act, and of 07 AS 43.05.270(a), as amended by sec. 2 of this Act, are declaratory of existing law as 08 originally enacted in AS 43.05.260 and 43.05.270 by sec. 1, ch. 94, SLA 1976. 09 * Sec. 8. Notwithstanding the provisions of AS 01.10.100(a), the provisions of 10 AS 43.05.260(a)(1), as amended by sec. 1 of this Act, and AS 43.05.270(a), as amended by 11 sec. 2 of this Act, apply to a grievance pending under AS 43.05.240 and to an action or appeal 12 pending before a court on the effective date of secs. 1 and 2 of this Act. 13 * Sec. 9. Section 4 of this Act and sec. 6 of this Act, are retroactive to January 1, 1985. 14 * Sec. 10. Except as provided in sec. 11 of this Act, this Act takes effect immediately under 15 AS 01.10.070(c).