CSSB 305(FIN)(title am): "An Act providing that the tax rate applicable to the production of oil as the average production tax value of oil, gas produced in the Cook Inlet sedimentary basin, and gas produced outside of the Cook Inlet sedimentary basin and used in the state increases above $30 shall be 0.4 percent multiplied by the number that represents the difference between that average monthly production tax value and $30, or the sum of 25 percent and the product of 0.1 percent multiplied by the number that represents the difference between that average monthly production tax value and $92.50, except that the total rate determined in the calculation may not exceed 50 percent; providing for an increase in the rate of tax on the production of gas as the average production tax value on a BTU equivalent barrel basis of gas produced outside of the Cook Inlet sedimentary basin and not used in the state increases above $30; relating to payments of the oil and gas production tax; relating to availability of a portion of the money received from the tax on oil and gas production for appropriation to the community revenue sharing fund; relating to the allocation of lease expenditures and adjustments to lease expenditures; and providing for an effective date."
00 CS FOR SENATE BILL NO. 305(FIN)(title am) 01 "An Act providing that the tax rate applicable to the production of oil as the average 02 production tax value of oil, gas produced in the Cook Inlet sedimentary basin, and gas 03 produced outside of the Cook Inlet sedimentary basin and used in the state increases 04 above $30 shall be 0.4 percent multiplied by the number that represents the difference 05 between that average monthly production tax value and $30, or the sum of 25 percent 06 and the product of 0.1 percent multiplied by the number that represents the difference 07 between that average monthly production tax value and $92.50, except that the total rate 08 determined in the calculation may not exceed 50 percent; providing for an increase in 09 the rate of tax on the production of gas as the average production tax value on a BTU 10 equivalent barrel basis of gas produced outside of the Cook Inlet sedimentary basin and 11 not used in the state increases above $30; relating to payments of the oil and gas 12 production tax; relating to availability of a portion of the money received from the tax
01 on oil and gas production for appropriation to the community revenue sharing fund; 02 relating to the allocation of lease expenditures and adjustments to lease expenditures; 03 and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 29.60.850(b) is amended to read: 06 (b) Each fiscal year, the legislature may appropriate to the community revenue 07 sharing fund an amount equal to 20 percent of the money received by the state during 08 the previous calendar year under AS 43.55.011(g) and (p). The amount may not 09 exceed 10 (1) $60,000,000; or 11 (2) the amount that, when added to the fund balance on June 30 of the 12 previous fiscal year, equals $180,000,000. 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 in the state, less any oil and 16 gas the ownership or right to which is exempt from taxation or constitutes a 17 landowner's royalty interest. Except as otherwise provided under (f), (j), (k), and (o) of 18 this section, the tax is equal to the sum of 19 (1) the annual production tax value of the taxable oil and gas as 20 calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 21 (2) the sum, over all months of the calendar year, of the tax amounts 22 determined under 23 (A) subsection (g) of this section; and 24 (B) subsection (p) of this section. 25 * Sec. 3. AS 43.55.011(g) is amended to read: 26 (g) For each month of the calendar year for which the producer's average 27 monthly production tax value under AS 43.55.160(a)(2)(A) - (E) of a 28 [AS 43.55.160(a)(2) PER] BTU equivalent barrel of [THE] taxable oil and gas is more 29 than $30, the amount of tax for purposes of (e)(2)(A) [(e)(2)] of this section is 30 determined by multiplying the monthly production tax value of the taxable oil [AND
01 GAS] produced during the month, gas produced during the month from a lease or 02 property in the Cook Inlet sedimentary basin, and gas produced during the 03 month from a lease or property outside the Cook Inlet sedimentary basin and 04 used in the state by the tax rate calculated as follows: 05 (1) if the producer's average monthly production tax value under 06 AS 43.55.160(a)(2)(A) - (E) of a [PER] BTU equivalent barrel of [THE] taxable oil 07 and gas for the month is not more than $92.50, the tax rate is 0.4 percent multiplied by 08 the number that represents the difference between the producer's [THAT] average 09 monthly production tax value under AS 43.55.160(a)(2)(A) - (E) of a [PER] BTU 10 equivalent barrel of taxable oil and gas and $30; or 11 (2) if the producer's average monthly production tax value under 12 AS 43.55.160(a)(2)(A) - (E) of a [PER] BTU equivalent barrel of [THE] taxable oil 13 and gas for the month is more than $92.50, the tax rate is the sum of 25 percent and 14 the product of 0.1 percent multiplied by the number that represents the difference 15 between the producer's average monthly production tax value under 16 AS 43.55.160(a)(2)(A) - (E) of a [PER] BTU equivalent barrel of taxable oil and gas 17 and $92.50, except that the sum determined under this paragraph may not exceed 50 18 percent. 19 * Sec. 4. AS 43.55.011 is amended by adding a new subsection to read: 20 (p) For each month of the calendar year for which the producer's average 21 monthly production tax value under AS 43.55.160(a)(2)(F) and (G) of a BTU 22 equivalent barrel of taxable gas is more than $30, the amount of tax on the production 23 of gas for purposes of (e)(2)(B) of this section is determined by multiplying the 24 monthly production tax value of the taxable gas produced during the month other than 25 gas produced from a lease or property in the Cook Inlet sedimentary basin or gas 26 produced outside the Cook Inlet sedimentary basin and used in the state by the tax rate 27 calculated as follows: 28 (1) if the producer's average monthly production tax value under 29 AS 43.55.160(a)(2)(F) and (G) of a BTU equivalent barrel of taxable gas for the 30 month is not more than $92.50, the tax rate is 0.4 percent multiplied by the number 31 that represents the difference between the producer's average monthly production tax
01 value under AS 43.55.160(a)(2)(F) and (G) of a BTU equivalent barrel of gas and $30; 02 or 03 (2) if the producer's average monthly production tax value under 04 AS 43.55.160(a)(2)(F) and (G) of a BTU equivalent barrel of taxable gas for the 05 month is more than $92.50, the tax rate is the sum of 25 percent and the product of 0.1 06 percent multiplied by the number that represents the difference between the producer's 07 average monthly production tax value under AS 43.55.160(a)(2)(F) and (G) of a BTU 08 equivalent barrel of gas and $92.50, except that the sum determined under this 09 paragraph may not exceed 50 percent. 10 * Sec. 5. AS 43.55.020(a) is amended to read: 11 (a) For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i) 12 and (p) shall pay the tax as follows: 13 (1) an installment payment of the estimated tax levied by 14 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 15 month of the calendar year on the last day of the following month; except as otherwise 16 provided under (2) of this subsection, the amount of the installment payment is the 17 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 18 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 19 of the installment payment may not be less than zero: 20 (A) for oil and gas produced from leases or properties in the 21 state outside the Cook Inlet sedimentary basin but not subject to 22 AS 43.55.011(o), other than leases or properties subject to AS 43.55.011(f), the 23 greater of 24 (i) zero; or 25 (ii) an amount equal to the sum of 25 percent and the 26 tax rate calculated for the month under AS 43.55.011(g) multiplied by 27 the remainder obtained by subtracting 1/12 of the producer's adjusted 28 lease expenditures for the calendar year of production applicable to 29 the oil produced by the producer from those leases and properties 30 under AS 43.55.165 and 43.55.170 that are deductible for the leases or 31 properties under AS 43.55.160, from the gross value at the point of
01 production of the oil [AND GAS] produced from the leases or 02 properties during the month for which the installment payment is 03 calculated added to the sum of 25 percent and the tax rate 04 calculated for the month under AS 43.55.011(p) multiplied by the 05 remainder obtained by subtracting 1/12 of the producer's adjusted 06 lease expenditures for the calendar year of production applicable 07 to the gas produced by the producer from those leases and 08 properties under AS 43.55.165 and 43.55.170 that are deductible 09 for the leases or properties under AS 43.55.160 from the gross 10 value at the point of production of the gas produced from the leases 11 or properties during the month for which the installment payment 12 is calculated; 13 (B) for oil and gas produced from leases or properties subject 14 to AS 43.55.011(f), the greatest of 15 (i) zero; 16 (ii) zero percent, one percent, two percent, three 17 percent, or four percent, as applicable, of the gross value at the point of 18 production of the oil and gas produced from all leases or properties 19 during the month for which the installment payment is calculated; or 20 (iii) an amount equal to the sum of 25 percent and the 21 tax rate calculated for the month under AS 43.55.011(g) multiplied by 22 the remainder obtained by subtracting 1/12 of the producer's adjusted 23 lease expenditures for the calendar year of production applicable to 24 the oil produced by the producer from those leases and properties 25 under AS 43.55.165 and 43.55.170 that are deductible for those leases 26 or properties under AS 43.55.160, from the gross value at the point of 27 production of the oil [AND GAS] produced from those leases or 28 properties during the month for which the installment payment is 29 calculated added to the sum of 25 percent and the tax rate 30 calculated for the month under AS 43.55.011(p) multiplied by the 31 remainder obtained by subtracting 1/12 of the producer's adjusted
01 lease expenditures for the calendar year of production applicable 02 to the gas produced by the producer from those leases and 03 properties under AS 43.55.165 and 43.55.170 that are deductible 04 for those leases or properties under AS 43.55.160 from the gross 05 value at the point of production of the gas produced from those 06 leases or properties during the month for which the installment 07 payment is calculated; 08 (C) for oil and gas produced from each lease or property 09 subject to AS 43.55.011(j), (k), or (o), the greater of 10 (i) zero; or 11 (ii) an amount equal to the sum of 25 percent and the 12 tax rate calculated for the month under AS 43.55.011(g) multiplied by 13 the remainder obtained by subtracting 1/12 of the producer's adjusted 14 lease expenditures for the calendar year of production applicable to 15 the oil produced by the producer from those leases and properties 16 under AS 43.55.165 and 43.55.170 that are deductible under 17 AS 43.55.160 for oil [OR GAS, RESPECTIVELY,] produced from the 18 lease or property, from the gross value at the point of production of the 19 oil [OR GAS, RESPECTIVELY,] produced from the lease or property 20 during the month for which the installment payment is calculated 21 added to the sum of 25 percent and the tax rate calculated for the 22 month under AS 43.55.011(g) multiplied by the remainder obtained 23 by subtracting 1/12 of the producer's adjusted lease expenditures 24 for the calendar year of production applicable to the gas produced 25 by the producer from the lease or property under AS 43.55.165 and 26 43.55.170 that are deductible under AS 43.55.160 for gas produced 27 from the lease or property, from the gross value at the point of 28 production of the gas produced from the lease or property during 29 the month for which the installment payment is calculated; 30 (2) an amount calculated under (1)(C) of this subsection for oil or gas 31 produced before 2022 from a lease or property subject to AS 43.55.011(j), (k), or (o)
01 may not exceed the product obtained by carrying out the calculation set out in 02 AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas or set out in 03 AS 43.55.011(k)(1) or (2), as applicable, for oil, but substituting in 04 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 05 gas produced during the month for the amount of taxable gas produced during the 06 calendar year and substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the 07 amount of taxable oil produced during the month for the amount of taxable oil 08 produced during the calendar year; 09 (3) an installment payment of the estimated tax levied by 10 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 11 on the last day of the following month; the amount of the installment payment is the 12 sum of 13 (A) the applicable tax rate for oil provided under 14 AS 43.55.011(i), multiplied by the gross value at the point of production of the 15 oil taxable under AS 43.55.011(i) and produced from the lease or property 16 during the month; and 17 (B) the applicable tax rate for gas provided under 18 AS 43.55.011(i), multiplied by the gross value at the point of production of the 19 gas taxable under AS 43.55.011(i) and produced from the lease or property 20 during the month; 21 (4) any amount of tax levied by AS 43.55.011(e) or (i), net of any 22 credits applied as allowed by law, that exceeds the total of the amounts due as 23 installment payments of estimated tax is due on March 31 of the year following the 24 calendar year of production. 25 * Sec. 6. AS 43.55.020(d) is amended to read: 26 (d) In making settlement with the royalty owner for oil and gas that is taxable 27 under AS 43.55.011, the producer may deduct the amount of the tax paid on taxable 28 royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at the 29 time the tax becomes due to the amount of the tax paid. If the total deductions of 30 installment payments of estimated tax for a calendar year exceed the actual tax for that 31 calendar year, the producer shall, before April 1 of the following year, refund the
01 excess to the royalty owner. Unless otherwise agreed between the producer and the 02 royalty owner, the amount of the tax paid under AS 43.55.011(e) - (g) and (p) on 03 taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or 04 right to which constitutes a landowner's royalty interest, is considered to be the gross 05 value at the point of production of the taxable royalty oil and gas produced during the 06 calendar year multiplied by a figure that is a quotient, in which 07 (1) the numerator is the producer's total tax liability under 08 AS 43.55.011(e) - (g) and (p) for the calendar year of production; and 09 (2) the denominator is the total gross value at the point of production 10 of the oil and gas taxable under AS 43.55.011(e) - (g) and (p) produced by the 11 producer from all leases and properties in the state during the calendar year. 12 * Sec. 7. AS 43.55.160(a) is amended to read: 13 (a) Except as provided in (b) of this section, for the purposes of 14 (1) AS 43.55.011(e), the annual production tax value of the taxable 15 (A) oil [AND GAS] produced during a calendar year from 16 leases or properties in the state that include land north of 68 degrees North 17 latitude is the gross value at the point of production of the oil [AND GAS] 18 taxable under AS 43.55.011(e) and produced by the producer from those leases 19 or properties, less the producer's lease expenditures under AS 43.55.165 for the 20 calendar year applicable to the oil [AND GAS] produced by the producer from 21 those leases or properties, as adjusted under AS 43.55.170; [THIS 22 SUBPARAGRAPH DOES NOT APPLY TO GAS SUBJECT TO 23 AS 43.55.011(o);] 24 (B) oil [AND GAS] produced during a calendar year from 25 leases or properties in the state outside the Cook Inlet sedimentary basin, no 26 part of which is north of 68 degrees North latitude, is the gross value at the 27 point of production of the oil [AND GAS] taxable under AS 43.55.011(e) and 28 produced by the producer from those leases or properties, less the producer's 29 lease expenditures under AS 43.55.165 for the calendar year applicable to the 30 oil [AND GAS] produced by the producer from those leases or properties, as 31 adjusted under AS 43.55.170; [THIS SUBPARAGRAPH DOES NOT APPLY
01 TO GAS SUBJECT TO AS 43.55.011(o);] 02 (C) oil produced during a calendar year from a lease or 03 property in the Cook Inlet sedimentary basin is the gross value at the point of 04 production of the oil taxable under AS 43.55.011(e) and produced by the 05 producer from that lease or property, less the producer's lease expenditures 06 under AS 43.55.165 for the calendar year applicable to the oil produced by the 07 producer from that lease or property, as adjusted under AS 43.55.170; 08 (D) gas produced during a calendar year from a lease or 09 property in the Cook Inlet sedimentary basin is the gross value at the point of 10 production of the gas taxable under AS 43.55.011(e) and produced by the 11 producer from that lease or property, less the producer's lease expenditures 12 under AS 43.55.165 for the calendar year applicable to the gas produced by the 13 producer from that lease or property, as adjusted under AS 43.55.170; 14 (E) gas produced during a calendar year from a lease or 15 property outside the Cook Inlet sedimentary basin and used in the state is the 16 gross value at the point of production of that gas taxable under 17 AS 43.55.011(e) and produced by the producer from that lease or property, less 18 the producer's lease expenditures under AS 43.55.165 for the calendar year 19 applicable to that gas produced by the producer from that lease or property, as 20 adjusted under AS 43.55.170; 21 (F) gas produced during a calendar year from leases or 22 properties in the state that include land north of 68 degrees North latitude 23 is the gross value at the point of production of the gas taxable under 24 AS 43.55.011(e) and produced by the producer from those leases or 25 properties, less the producer's lease expenditures under AS 43.55.165 for 26 the calendar year applicable to the gas produced by the producer from 27 those leases or properties, as adjusted under AS 43.55.170; this 28 subparagraph does not apply to gas used in the state; 29 (G) gas produced during a calendar year from leases or 30 properties in the state outside the Cook Inlet sedimentary basin, no part of 31 which is north of 68 degrees North latitude, is the gross value at the point
01 of production of the gas taxable under AS 43.55.011(e) and produced by 02 the producer from those leases or properties, less the producer's lease 03 expenditures under AS 43.55.165 for the calendar year applicable to the 04 gas produced by the producer from those leases or properties, as adjusted 05 under AS 43.55.170; this subparagraph does not apply to gas used in the 06 state; 07 (2) AS 43.55.011(g) and (p), the monthly production tax value of the 08 taxable 09 (A) oil [AND GAS] produced during a month from leases or 10 properties in the state that include land north of 68 degrees North latitude is the 11 gross value at the point of production of the oil [AND GAS] taxable under 12 AS 43.55.011(e) and produced by the producer from those leases or properties, 13 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 14 calendar year applicable to the oil [AND GAS] produced by the producer from 15 those leases or properties, as adjusted under AS 43.55.170; [THIS 16 SUBPARAGRAPH DOES NOT APPLY TO GAS SUBJECT TO 17 AS 43.55.011(o);] 18 (B) oil [AND GAS] produced during a month from leases or 19 properties in the state outside the Cook Inlet sedimentary basin, no part of 20 which is north of 68 degrees North latitude, is the gross value at the point of 21 production of the oil [AND GAS] taxable under AS 43.55.011(e) and produced 22 by the producer from those leases or properties, less 1/12 of the producer's 23 lease expenditures under AS 43.55.165 for the calendar year applicable to the 24 oil [AND GAS] produced by the producer from those leases or properties, as 25 adjusted under AS 43.55.170; [THIS SUBPARAGRAPH DOES NOT APPLY 26 TO GAS SUBJECT TO AS 43.55.011(o);] 27 (C) oil produced during a month from a lease or property in the 28 Cook Inlet sedimentary basin is the gross value at the point of production of 29 the oil taxable under AS 43.55.011(e) and produced by the producer from that 30 lease or property, less 1/12 of the producer's lease expenditures under 31 AS 43.55.165 for the calendar year applicable to the oil produced by the
01 producer from that lease or property, as adjusted under AS 43.55.170; 02 (D) gas produced during a month from a lease or property in 03 the Cook Inlet sedimentary basin is the gross value at the point of production 04 of the gas taxable under AS 43.55.011(e) and produced by the producer from 05 that lease or property, less 1/12 of the producer's lease expenditures under 06 AS 43.55.165 for the calendar year applicable to the gas produced by the 07 producer from that lease or property, as adjusted under AS 43.55.170; 08 (E) gas produced during a month from a lease or property 09 outside the Cook Inlet sedimentary basin and used in the state is the gross 10 value at the point of production of that gas taxable under AS 43.55.011(e) and 11 produced by the producer from that lease or property, less 1/12 of the 12 producer's lease expenditures under AS 43.55.165 for the calendar year 13 applicable to that gas produced by the producer from that lease or property, as 14 adjusted under AS 43.55.170; 15 (F) gas produced during a month from leases or properties 16 in the state that include land north of 68 degrees North latitude is the 17 gross value at the point of production of the gas taxable under 18 AS 43.55.011(e) and produced by the producer from those leases or 19 properties, less 1/12 of the producer's lease expenditures under 20 AS 43.55.165 for the calendar year applicable to the gas produced by the 21 producer from those leases or properties, as adjusted under AS 43.55.170; 22 this subparagraph does not apply to gas used in the state; 23 (G) gas produced during a month from leases or properties 24 in the state outside the Cook Inlet sedimentary basin, no part of which is 25 north of 68 degrees North latitude, is the gross value at the point of 26 production of the gas taxable under AS 43.55.011(e) and produced by the 27 producer from those leases or properties, less 1/12 of the producer's lease 28 expenditures under AS 43.55.165 for the calendar year applicable to the 29 gas produced by the producer from those leases or properties, as adjusted 30 under AS 43.55.170; this subparagraph does not apply to gas used in the 31 state.
01 * Sec. 8. AS 43.55.165(h) is amended to read: 02 (h) The department shall adopt regulations that provide for reasonable 03 methods of allocating costs between oil and gas, between gas subject to 04 AS 43.55.011(o) and other gas, and between leases or properties in those 05 circumstances where an allocation of costs is required to determine lease expenditures 06 that are costs of exploring for, developing, or producing oil deposits or costs of 07 exploring for, developing, or producing gas deposits, or that are costs of exploring for, 08 developing, or producing oil or gas deposits located within different leases or 09 properties. When determining a reasonable method of allocating lease 10 expenditures between the production of oil and the production of gas, the 11 department shall consider allocating lease expenditures in proportion to the BTU 12 equivalent barrels of oil produced and gas produced from each lease or property. 13 * Sec. 9. AS 43.55.170 is amended by adding a new subsection to read: 14 (d) The department shall adopt regulations that provide for reasonable 15 methods of allocating the adjustments to a producer's lease expenditures in (a) of this 16 section and the payments and credits described in (b) of this section between oil and 17 gas, between gas subject to AS 43.55.011(o) and other gas, and between leases or 18 properties in those circumstances where an allocation of costs is required to determine 19 lease expenditures that are costs of exploring for, developing, or producing oil 20 deposits, or costs of exploring for, developing, or producing gas deposits, or that are 21 costs of exploring for, developing, or producing oil or gas deposits located within 22 different leases or properties. When determining a reasonable method of allocating the 23 adjustments to a producer's lease expenditures between the production of oil and the 24 production of gas, the department shall consider allocating the adjustments in 25 proportion to the lease expenditures allocated to the production of oil and the 26 production of gas under regulations adopted by the department under 27 AS 43.55.165(h). 28 * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 TRANSITION: INSTALLMENT PAYMENTS OF TAX. A producer required to 31 make an installment payment of tax under AS 43.55.020(a)(1) after December 31, 2009, and
01 before the effective date of this Act, and that underpaid the amount due for the installment 02 payment because of the retroactive application of secs. 2 - 4 and 7 of this Act, shall submit the 03 amount of any underpayment on the date the first installment payment is due under 04 AS 43.55.020(a)(1) after the effective date of this Act. Interest on the amount of an 05 underpayment due because of the retroactive application of secs. 2 - 4 and 7 of this Act does 06 not accrue until the day after the date the first installment payment is due under 07 AS 43.55.020(a)(1) after the effective date of this Act. 08 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 RETROACTIVITY. Sections 2 - 4 and 7 of this Act are retroactive to January 1, 2010. 11 * Sec. 12. This Act takes effect immediately under AS 01.10.070(c).