SB 306: "An Act relating to the tax on oil and gas production; 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; and providing for an effective date."
00 SENATE BILL NO. 306 01 "An Act relating to the tax on oil and gas production; relating to availability of a portion 02 of the money received from the tax on oil and gas production for appropriation to the 03 community revenue sharing fund; 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
01 produced each calendar year from each lease or property in the state, less any oil and 02 gas the ownership or right to which is exempt from taxation or constitutes a 03 landowner's royalty interest. Except as otherwise provided under (f), (j), (k), and (o) of 04 this section, the tax is equal to the sum of 05 (1) the annual production tax value of the taxable oil and gas as 06 calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 07 (2) the sum, over all months of the calendar year, of the tax amounts 08 determined under (g) of this section on the production of oil and determined under 09 (p) of this section on the production of gas. 10 * Sec. 3. AS 43.55.011(g) is amended to read: 11 (g) For each month of the calendar year for which the producer's average 12 monthly production tax value under AS 43.55.160(a)(2) of a [PER BTU 13 EQUIVALENT] barrel of [THE] taxable oil [AND GAS] is more than $30, the 14 amount of tax on the production of oil for purposes of (e)(2) of this section is 15 determined by multiplying the monthly production tax value of the taxable oil [AND 16 GAS] produced during the month by the tax rate calculated as follows: 17 (1) if the producer's average monthly production tax value of a [PER 18 BTU EQUIVALENT] barrel of [THE] taxable oil [AND GAS] for the month is not 19 more than $92.50, the tax rate is 0.4 percent multiplied by the number that represents 20 the difference between the producer's [THAT] average monthly production tax value 21 of a [PER BTU EQUIVALENT] barrel of oil and $30; or 22 (2) if the producer's average monthly production tax value of a [PER 23 BTU EQUIVALENT] barrel of [THE] taxable oil [AND GAS] for the month is more 24 than $92.50, the tax rate is the sum of 25 percent and the product of 0.1 percent 25 multiplied by the number that represents the difference between the producer's 26 average monthly production tax value of a [PER BTU EQUIVALENT] barrel of oil 27 and $92.50, except that the sum determined under this paragraph may not exceed 50 28 percent. 29 * Sec. 4. AS 43.55.011 is amended by adding a new subsection to read: 30 (p) For each month of the calendar year for which the producer's average 31 monthly production tax value under AS 43.55.160(a)(3) of a BTU equivalent barrel of
01 taxable gas is more than $30, the amount of tax on the production of gas for purposes 02 of (e)(2) of this section is determined by multiplying the monthly production tax value 03 of the taxable gas produced during the month by the tax rate calculated as follows: 04 (1) if the producer's average monthly production tax value of a BTU 05 equivalent barrel of taxable gas for the month is not more than $92.50, the tax rate is 06 0.4 percent multiplied by the number that represents the difference between the 07 producer's average monthly production tax value of a BTU equivalent barrel of gas 08 and $30; or 09 (2) if the producer's average monthly production tax value of a BTU 10 equivalent barrel of taxable gas for the month is more than $92.50, the tax rate is the 11 sum of 25 percent and the product of 0.1 percent multiplied by the number that 12 represents the difference between the producer's average monthly production tax value 13 of a BTU equivalent barrel of gas and $92.50, except that the sum determined under 14 this paragraph may not exceed 50 percent. 15 * Sec. 5. AS 43.55.020(a) is amended to read: 16 (a) For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i) 17 and (p) shall pay the tax as follows: 18 (1) an installment payment of the estimated tax levied by 19 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 20 month of the calendar year on the last day of the following month; except as otherwise 21 provided under (2) of this subsection, the amount of the installment payment is the 22 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 23 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 24 of the installment payment may not be less than zero: 25 (A) for oil and gas produced from leases or properties in the 26 state outside the Cook Inlet sedimentary basin but not subject to 27 AS 43.55.011(o), other than leases or properties subject to AS 43.55.011(f), 28 [THE GREATER OF] 29 (i) [ZERO; OR 30 (ii)] the sum of 25 percent and the tax rate calculated 31 for the month under AS 43.55.011(g) multiplied by the remainder
01 obtained by subtracting 1/12 of the producer's adjusted lease 02 expenditures for the calendar year of production applicable to the oil 03 produced by the producer from those leases and properties under 04 AS 43.55.165 and 43.55.170 that are deductible for the leases or 05 properties under AS 43.55.160 from the gross value at the point of 06 production of the oil [AND GAS] produced from the leases or 07 properties during the month for which the installment payment is 08 calculated; and 09 (ii) the sum of 25 percent and the tax rate calculated 10 for the month under AS 43.55.011(p) multiplied by the remainder 11 obtained by subtracting 1/12 of the producer's adjusted lease 12 expenditures for the calendar year of production applicable to the 13 gas produced by the producer from those leases and properties 14 under AS 43.55.165 and 43.55.170 that are deductible for the leases 15 or properties under AS 43.55.160 from the gross value at the point 16 of production of the gas produced from the leases or properties 17 during the month for which the installment payment is calculated; 18 (B) for oil and gas produced from leases or properties subject 19 to AS 43.55.011(f), the greater [GREATEST] of 20 (i) [ZERO; 21 (ii)] zero percent, one percent, two percent, three 22 percent, or four percent, as applicable, of the gross value at the point of 23 production of the oil and gas produced from all leases or properties 24 during the month for which the installment payment is calculated; or 25 (ii) [(iii)] the sum of 25 percent and the tax rate 26 calculated for the month under AS 43.55.011(g) multiplied by the 27 remainder obtained by subtracting 1/12 of the producer's adjusted lease 28 expenditures for the calendar year of production applicable to the oil 29 produced by the producer from those leases and properties under 30 AS 43.55.165 and 43.55.170 that are deductible for those 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 those leases or 02 properties during the month for which the installment payment is 03 calculated and the sum of 25 percent and the tax rate for the month 04 under AS 43.55.011(p) multiplied by the remainder obtained by 05 subtracting 1/12 of the producer's adjusted lease expenditures for 06 the calendar year of production applicable to the gas produced by 07 the producer from those leases and properties under AS 43.55.165 08 and 43.55.170 that are deductible for those leases or properties 09 under AS 43.55.160 from the gross value at the point of production 10 of the gas produced from those leases or properties during the 11 month for which the installment payment is calculated; 12 (C) for oil and gas produced from each lease or property 13 subject to AS 43.55.011(j), (k), or (o), [THE GREATER OF] 14 (i) [ZERO; OR 15 (ii)] the sum of 25 percent and the tax rate calculated 16 for the month under AS 43.55.011(g) multiplied by the remainder 17 obtained by subtracting 1/12 of the producer's adjusted lease 18 expenditures for the calendar year of production applicable to the oil 19 produced by the producer from those leases and properties under 20 AS 43.55.165 and 43.55.170 that are deductible under AS 43.55.160 21 for oil [OR GAS, RESPECTIVELY,] produced from the lease or 22 property from the gross value at the point of production of the oil [OR 23 GAS, RESPECTIVELY,] produced from the lease or property during 24 the month for which the installment payment is calculated; and 25 (ii) the sum of 25 percent and the tax rate for the 26 month under AS 43.55.011(p) multiplied by the remainder 27 obtained by subtracting 1/12 of the producer's adjusted lease 28 expenditures for the calendar year of production applicable to the 29 gas produced by the producer from those leases and properties 30 under AS 43.55.165 and 43.55.170 that are deductible for those 31 leases or properties under AS 43.55.160 from the gross value at the
01 point of production of the gas produced from those leases or 02 properties during the month for which the installment payment is 03 calculated; 04 (2) an amount calculated under (1)(C) of this subsection for oil or gas 05 produced from a lease or property subject to AS 43.55.011(j), (k), or (o) may not 06 exceed the product obtained by carrying out the calculation set out in 07 AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas or set out in 08 AS 43.55.011(k)(1) or (2), as applicable, for oil, but substituting in 09 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 10 gas produced during the month for the amount of taxable gas produced during the 11 calendar year and substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the 12 amount of taxable oil produced during the month for the amount of taxable oil 13 produced during the calendar year; 14 (3) an installment payment of the estimated tax levied by 15 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 16 on the last day of the following month; the amount of the installment payment is the 17 sum of 18 (A) the applicable tax rate for oil provided under 19 AS 43.55.011(i), multiplied by the gross value at the point of production of the 20 oil taxable under AS 43.55.011(i) and produced from the lease or property 21 during the month; and 22 (B) the applicable tax rate for gas provided under 23 AS 43.55.011(i), multiplied by the gross value at the point of production of the 24 gas taxable under AS 43.55.011(i) and produced from the lease or property 25 during the month; 26 (4) any amount of tax levied by AS 43.55.011(e) or (i), net of any 27 credits applied as allowed by law, that exceeds the total of the amounts due as 28 installment payments of estimated tax is due on March 31 of the year following the 29 calendar year of production. 30 * Sec. 6. AS 43.55.020(d) is amended to read: 31 (d) In making settlement with the royalty owner for oil and gas that is taxable
01 under AS 43.55.011, the producer may deduct the amount of the tax paid on taxable 02 royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at the 03 time the tax becomes due to the amount of the tax paid. If the total deductions of 04 installment payments of estimated tax for a calendar year exceed the actual tax for that 05 calendar year, the producer shall, before April 1 of the following year, refund the 06 excess to the royalty owner. Unless otherwise agreed between the producer and the 07 royalty owner, the amount of the tax paid under AS 43.55.011(e) - (g) and (p) on 08 taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or 09 right to which constitutes a landowner's royalty interest, is considered to be the gross 10 value at the point of production of the taxable royalty oil and gas produced during the 11 calendar year multiplied by a figure that is a quotient, in which 12 (1) the numerator is the producer's total tax liability under 13 AS 43.55.011(e) - (g) and (p) for the calendar year of production; and 14 (2) the denominator is the total gross value at the point of production 15 of the oil and gas taxable under AS 43.55.011(e) - (g) and (p) produced by the 16 producer from all leases and properties in the state during the calendar year. 17 * Sec. 7. AS 43.55.160(a) is amended to read: 18 (a) Except as provided in (b) of this section, for the purposes of 19 (1) AS 43.55.011(e), the annual production tax value of the taxable 20 (A) oil [AND GAS] produced during a calendar year from 21 leases or properties in the state that include land north of 68 degrees North 22 latitude is the gross value at the point of production of the oil [AND GAS] 23 taxable under AS 43.55.011(e) and produced by the producer from those leases 24 or properties, less the producer's lease expenditures under AS 43.55.165 for the 25 calendar year applicable to the oil [AND GAS] produced by the producer from 26 those leases or properties, as adjusted under AS 43.55.170; 27 (B) gas produced during a calendar year from leases or 28 properties in the state that include land north of 68 degrees North latitude 29 is the gross value at the point of production of the gas taxable under 30 AS 43.55.011(e) and produced by the producer from those leases or 31 properties, less the producer's lease expenditures under AS 43.55.165 for
01 the calendar year applicable to the gas produced by the producer from 02 those leases or properties, as adjusted under AS 43.55.170; this 03 subparagraph does not apply to gas subject to AS 43.55.011(o); 04 (C) [(B)] oil [AND GAS] produced during a calendar year 05 from leases or properties in the state outside the Cook Inlet sedimentary basin, 06 no part of which is north of 68 degrees North latitude, is the gross value at the 07 point of production of the oil [AND GAS] taxable under AS 43.55.011(e) and 08 produced by the producer from those leases or properties, less the producer's 09 lease expenditures under AS 43.55.165 for the calendar year applicable to the 10 oil [AND GAS] produced by the producer from those leases or properties, as 11 adjusted under AS 43.55.170; 12 (D) gas produced during a calendar year from leases or 13 properties in the state outside the Cook Inlet sedimentary basin, no part of 14 which is north of 68 degrees North latitude, is the gross value at the point 15 of production of the gas taxable under AS 43.55.011(e) and produced by 16 the producer from those leases or properties, less the producer's lease 17 expenditures under AS 43.55.165 for the calendar year applicable to the 18 gas produced by the producer from those leases or properties, as adjusted 19 under AS 43.55.170; this subparagraph does not apply to gas subject to 20 AS 43.55.011(o); 21 (E) [(C)] oil produced during a calendar year from a lease or 22 property in the Cook Inlet sedimentary basin is the gross value at the point of 23 production of the oil taxable under AS 43.55.011(e) and produced by the 24 producer from that lease or property, less the producer's lease expenditures 25 under AS 43.55.165 for the calendar year applicable to the oil produced by the 26 producer from that lease or property, as adjusted under AS 43.55.170; 27 (F) [(D)] gas produced during a calendar year from a lease or 28 property in the Cook Inlet sedimentary basin is the gross value at the point of 29 production of the gas taxable under AS 43.55.011(e) and produced by the 30 producer from that lease or property, less the producer's lease expenditures 31 under AS 43.55.165 for the calendar year applicable to the gas produced by the
01 producer from that lease or property, as adjusted under AS 43.55.170; 02 (G) [(E)] gas produced during a calendar year from a lease or 03 property outside the Cook Inlet sedimentary basin and used in the state is the 04 gross value at the point of production of that gas taxable under 05 AS 43.55.011(e) and produced by the producer from that lease or property, less 06 the producer's lease expenditures under AS 43.55.165 for the calendar year 07 applicable to that gas produced by the producer from that lease or property, as 08 adjusted under AS 43.55.170; 09 (2) AS 43.55.011(g), the monthly production tax value of the taxable 10 oil produced during a month from 11 (A) [OIL AND GAS PRODUCED DURING A MONTH 12 FROM] leases or properties in the state that include land north of 68 degrees 13 North latitude is the gross value at the point of production of the oil [AND 14 GAS] taxable under AS 43.55.011(e) and produced by the producer from those 15 leases or properties, less 1/12 of the producer's lease expenditures under 16 AS 43.55.165 for the calendar year applicable to the oil [AND GAS] produced 17 by the producer from those leases or properties, as adjusted under 18 AS 43.55.170; [THIS SUBPARAGRAPH DOES NOT APPLY TO GAS 19 SUBJECT TO AS 43.55.011(o);] 20 (B) [OIL AND GAS PRODUCED DURING A MONTH 21 FROM] leases or properties in the state outside the Cook Inlet sedimentary 22 basin, no part of which is north of 68 degrees North latitude, is the gross value 23 at the point of production of the oil [AND GAS] taxable under 24 AS 43.55.011(e) and produced by the producer from those leases or properties, 25 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 26 calendar year applicable to the oil [AND 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 SUBJECT TO 29 AS 43.55.011(o);] 30 (C) [OIL PRODUCED DURING A MONTH FROM] a lease 31 or property in the Cook Inlet sedimentary basin is the gross value at the point
01 of production of the oil taxable under AS 43.55.011(e) and produced by the 02 producer from that lease or property, less 1/12 of the producer's lease 03 expenditures under AS 43.55.165 for the calendar year applicable to the oil 04 produced by the producer from that lease or property, as adjusted under 05 AS 43.55.170; 06 (3) AS 43.55.011(p), the monthly production tax value of the 07 taxable gas produced during a month from 08 (A) leases or properties in the state that include land north 09 of 68 degrees North latitude is the gross value at the point of production of 10 the gas taxable under AS 43.55.011(e) and produced by the producer from 11 those leases or properties, less 1/12 of the producer's lease expenditures 12 under AS 43.55.165 for the calendar year applicable to the gas produced 13 by the producer from those leases or properties, as adjusted under 14 AS 43.55.170; this subparagraph does not apply to gas subject to 15 AS 43.55.011(o); 16 (B) leases or properties in the state outside the Cook Inlet 17 sedimentary basin, no part of which is north of 68 degrees North latitude, 18 is the gross value at the point of production of the gas taxable under 19 AS 43.55.011(e) and produced by the producer from those leases or 20 properties, less 1/12 of the producer's lease expenditures under 21 AS 43.55.165 for the calendar year applicable to the gas produced by the 22 producer from those leases or properties, as adjusted under AS 43.55.170; 23 this subparagraph does not apply to gas subject to AS 43.55.011(o); 24 (C) [(D) GAS PRODUCED DURING A MONTH FROM] a 25 lease or property in the Cook Inlet sedimentary basin is the gross value at the 26 point of production of the gas taxable under AS 43.55.011(e) and produced by 27 the producer from that lease or property, less 1/12 of the producer's lease 28 expenditures under AS 43.55.165 for the calendar year applicable to the gas 29 produced by the producer from that lease or property, as adjusted under 30 AS 43.55.170; 31 (D) [(E) GAS PRODUCED DURING A MONTH FROM] a
01 lease or property outside the Cook Inlet sedimentary basin and used in the state 02 is the gross value at the point of production of that gas taxable under 03 AS 43.55.011(e) and produced by the producer from that lease or property, less 04 1/12 of the producer's lease expenditures under AS 43.55.165 for the calendar 05 year applicable to that gas produced by the producer from that lease or 06 property, as adjusted under AS 43.55.170. 07 * Sec. 8. AS 43.55.160(c) is amended to read: 08 (c) Notwithstanding any contrary provision of AS 43.55.150, for purposes of 09 calculating a monthly production tax value under (a)(2) and (3) of this section, the 10 gross value at the point of production of the oil and gas is calculated under regulations 11 adopted by the department that provide for using an appropriate monthly share of the 12 producer's costs of transportation for the calendar year. 13 * Sec. 9. AS 43.55.160(e) is amended to read: 14 (e) Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that 15 would otherwise be deductible by a producer in a calendar year but whose deduction 16 would cause an annual production tax value calculated under (a)(1) of this section of 17 taxable oil or gas produced during the calendar year to be less than zero may be used 18 to establish a carried-forward annual loss under AS 43.55.023(b). However, the 19 department shall provide by regulation a method to ensure that, for a period for which 20 a producer's tax liability is limited by AS 43.55.011(j), (k), or (o), any adjusted lease 21 expenditures under AS 43.55.165 and 43.55.170 that would otherwise be deductible 22 by a producer for that period but whose deduction would cause a production tax value 23 calculated under (a)(1)(E), (F), or (G) [(a)(1)(C), (D), OR (E)] of this section to be 24 less than zero are accounted for as though the adjusted lease expenditures had first 25 been used as deductions in calculating the production tax values of oil or gas subject to 26 any of the limitations under AS 43.55.011(j), (k), or (o) that have positive production 27 tax values so as to reduce the tax liability calculated without regard to the limitation to 28 the maximum amount provided for under the applicable provision of AS 43.55.011(j), 29 (k), or (o). Only the amount of those adjusted lease expenditures remaining after the 30 accounting provided for under this subsection may be used to establish a carried- 31 forward annual loss under AS 43.55.023(b). In this subsection, "producer" includes
01 "explorer." 02 * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 APPLICABILITY. Sections 1 - 9 of this Act are applicable on and after the first day 05 of the calendar month immediately following the effective date of this Act. 06 * Sec. 11. This Act takes effect immediately under AS 01.10.070(c).