### HB 321: "An Act relating to the tax rate on oil and gas production; and providing for an effective date."

00 HOUSE BILL NO. 321 01 "An Act relating to the tax rate on oil and gas production; and providing for an effective 02 date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04

* Section 1.AS 43.55.011(e) is amended to read: 05 (e) There is levied on the producer of oil or gas a tax for all oil and gas 06 produced each calendar year from each lease or property in the state, less any oil and 07 gas the ownership or right to which is exempt from taxation or constitutes a 08 landowner's royalty interest. Except as otherwise provided under (f), (j), (k), and (o) of 09 this section, the tax is equal to the sum of 10 (1) the annual production tax value of the taxable oil and gas as 11 calculated under AS 43.55.160(a)(1) multiplied by[25] percent; and 12 (2) the sum, over all months of the calendar year, of the tax amounts 13 determined under (g) of this section. 1420* Sec. 2.AS 43.55.020(a) is amended to read:01 (a) For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i) 02 shall pay the tax as follows: 03 (1) an installment payment of the estimated tax levied by 04 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 05 month of the calendar year on the last day of the following month; except as otherwise 06 provided under (2) of this subsection, the amount of the installment payment is the 07 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 08 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 09 of the installment payment may not be less than zero: 10 (A) for oil and gas produced from leases or properties in the 11 state outside the Cook Inlet sedimentary basin but not subject to 12 AS 43.55.011(o), other than leases or properties subject to AS 43.55.011(f), the 13 greater of 14 (i) zero; or 15 (ii) the sum of

[25] percent and the tax rate 16 calculated for the month under AS 43.55.011(g) multiplied by the 17 remainder obtained by subtracting 1/12 of the producer's adjusted lease 18 expenditures for the calendar year of production under AS 43.55.165 19 and 43.55.170 that are deductible for the leases or properties under 20 AS 43.55.160 from the gross value at the point of production of the oil 21 and gas produced from the leases or properties during the month for 22 which the installment payment is calculated; 23 (B) for oil and gas produced from leases or properties subject 24 to AS 43.55.011(f), the greatest of 25 (i) zero; 26 (ii) zero percent, one percent, two percent, three 27 percent, or four percent, as applicable, of the gross value at the point of 28 production of the oil and gas produced from all leases or properties 29 during the month for which the installment payment is calculated; or 30 (iii) the sum of20[25] percent and the tax rate 31 calculated for the month under AS 43.55.011(g) multiplied by the2001 remainder obtained by subtracting 1/12 of the producer's adjusted lease 02 expenditures for the calendar year of production under AS 43.55.165 03 and 43.55.170 that are deductible for those leases or properties under 04 AS 43.55.160 from the gross value at the point of production of the oil 05 and gas produced from those leases or properties during the month for 06 which the installment payment is calculated; 07 (C) for oil and gas produced from each lease or property 08 subject to AS 43.55.011(j), (k), or (o), the greater of 09 (i) zero; or 10 (ii) the sum of

[25] percent and the tax rate 11 calculated for the month under AS 43.55.011(g) multiplied by the 12 remainder obtained by subtracting 1/12 of the producer's adjusted lease 13 expenditures for the calendar year of production under AS 43.55.165 14 and 43.55.170 that are deductible under AS 43.55.160 for oil or gas, 15 respectively, produced from the lease or property from the gross value 16 at the point of production of the oil or gas, respectively, produced from 17 the lease or property during the month for which the installment 18 payment is calculated; 19 (2) an amount calculated under (1)(C) of this subsection for oil or gas 20 produced from a lease or property subject to AS 43.55.011(j), (k), or (o) may not 21 exceed the product obtained by carrying out the calculation set out in 22 AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas or set out in 23 AS 43.55.011(k)(1) or (2), as applicable, for oil, but substituting in 24 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 25 gas produced during the month for the amount of taxable gas produced during the 26 calendar year and substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the 27 amount of taxable oil produced during the month for the amount of taxable oil 28 produced during the calendar year; 29 (3) an installment payment of the estimated tax levied by 30 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 31 on the last day of the following month; the amount of the installment payment is the2001 sum of 02 (A) the applicable tax rate for oil provided under 03 AS 43.55.011(i), multiplied by the gross value at the point of production of the 04 oil taxable under AS 43.55.011(i) and produced from the lease or property 05 during the month; and 06 (B) the applicable tax rate for gas provided under 07 AS 43.55.011(i), multiplied by the gross value at the point of production of the 08 gas taxable under AS 43.55.011(i) and produced from the lease or property 09 during the month; 10 (4) any amount of tax levied by AS 43.55.011(e) or (i), net of any 11 credits applied as allowed by law, that exceeds the total of the amounts due as 12 installment payments of estimated tax is due on March 31 of the year following the 13 calendar year of production. 14

* Sec. 3.The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 RETROACTIVITY. Sections 1 and 2 of this Act are retroactive to January 1, 2010. 17* Sec. 4.This Act takes effect immediately under AS 01.10.070(c).