SB 239: "An Act establishing minimum rates of tax under the oil and gas properties production (severance) tax for certain oil produced from North Slope reservoirs; and providing for an effective date."
00 SENATE BILL NO. 239 01 "An Act establishing minimum rates of tax under the oil and gas properties production 02 (severance) tax for certain oil produced from North Slope reservoirs; and providing for 03 an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 43.55.013 is amended by adding a new subsection to read: 06 (l) The provisions of this subsection apply to oil produced from a portion of a 07 reservoir located north of 68 degrees North latitude. During each month in which the 08 average West Coast prevailing value for that oil determined under AS 43.55.020(f) on 09 which tax is due under this chapter is equal to or exceeds $35 per barrel, the provisions 10 of this section may not apply to reduce the tax rate to less than 10 percent of the gross 11 value of that oil at the point of production, except that, if the provisions of this section 12 without consideration of the effects of the application of this subsection would result 13 in a tax rate of at least 10 percent but not more than 15 percent of the gross value of 14 the oil at the point of production, the provisions of this section may not apply to
01 reduce the tax rate to less than 15 percent of the gross value of the oil at the point of 02 production. For purposes of application and administration of this subsection, 03 (1) the provisions of this subsection do not apply to 04 (A) heavy oil; for purposes of this subparagraph, "heavy oil" 05 means oil equal to or less than 20 degrees API gravity; and 06 (B) oil if the taxpayer, by clear and convincing evidence, 07 demonstrates to the commissioner that payment of tax under this chapter 08 without application of the economic limit factor authorized by this section 09 would make the production of the oil uneconomic; 10 (2) on the first July 1 that follows the effective date of this subsection, 11 and annually on each July 1 thereafter, the commissioner shall 12 (A) revise the dollar price set out in this subsection to reflect 13 inflation during the intervening period as defined by regulation adopted by the 14 department; the dollar price revision shall have effect on the computation of 15 the tax due under this chapter retroactively to the index date for the revision as 16 described in this subparagraph; and 17 (B) promptly report the application of the revision described in 18 (A) of this paragraph to all taxpayers subject to the tax levied and collected 19 under this chapter. 20 * Sec. 2. This Act takes effect on the first day of the calendar month following this Act's 21 becoming law under AS 01.10.070(f)(4).