SB 188: "An Act bearing the short title of the 'Protect the Permanent Fund Dividend Act'; relating to appropriations from the earnings reserve account; and relating to the oil and gas production tax."
00 SENATE BILL NO. 188 01 "An Act bearing the short title of the 'Protect the Permanent Fund Dividend Act'; 02 relating to appropriations from the earnings reserve account; and relating to the oil and 03 gas production tax." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 SHORT TITLE. This Act may be known as the Protect the Permanent Fund Dividend 08 Act. 09 * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 LEGISLATIVE FINDINGS AND INTENT. The permanent fund dividend has 12 become critically important to Alaskans. If funds are appropriated out of the earnings reserve 13 account for the purpose of funding state government, that action will diminish future 14 permanent fund dividends. It is the intent of the legislature to ensure that funds withdrawn
01 from the earnings reserve account for budgetary reasons be replenished when oil prices 02 increase and oil companies are reaping windfall profits. This repayment is best accomplished 03 with a progressivity surcharge on oil production in times of high oil prices, for the long-term 04 benefit of all Alaskans. 05 * Sec. 3. AS 37.13.145 is amended by adding a new subsection to read: 06 (e) The legislature may appropriate money available from the taxes collected 07 under AS 43.55.011(q) to the earnings reserve account in an amount equal to the total 08 amount appropriated from the earnings reserve account in a fiscal year for a purpose 09 other than as provided in (b) or (c) of this section. 10 * Sec. 4. AS 43.55.011(e) is amended to read: 11 (e) There is levied on the producer of oil or gas a tax for all oil and gas 12 produced each calendar year from each lease or property in the state, less any oil and 13 gas the ownership or right to which is exempt from taxation or constitutes a 14 landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as 15 otherwise provided under (f), (j), (k), (o), and (p) of this section, for oil and gas 16 produced 17 (1) before January 1, 2014, the tax is equal to the sum of 18 (A) the annual production tax value of the taxable oil and gas 19 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 20 (B) the sum, over all months of the calendar year, of the tax 21 amounts determined under (g) of this section; 22 (2) on and after January 1, 2014, and before January 1, 2022, the tax is 23 equal to the sum of 24 (A) the annual production tax value of the taxable oil and gas 25 as calculated under AS 43.55.160(a)(1) multiplied by 35 percent; and 26 (B) the sum, over all months of the calendar year, of the tax 27 amounts determined under (q) of this section; 28 (3) on and after January 1, 2022, the tax for 29 (A) oil is equal to the sum of 30 (i) the annual production tax value of the taxable oil as 31 calculated under AS 43.55.160(h) multiplied by 35 percent; and
01 (ii) the sum, over all the months of the calendar 02 year, of the tax amounts determined under (q) of this section; 03 (B) gas is equal to 13 percent of the gross value at the point of 04 production of the taxable gas; if the gross value at the point of production of 05 gas produced from a lease or property is less than zero, that gross value at the 06 point of production is considered zero for purposes of this subparagraph. 07 * Sec. 5. AS 43.55.011 is amended by adding a new subsection to read: 08 (q) Following June 30, 2016, for each month of the calendar year for which 09 the producer's average monthly production tax value under AS 43.55.160 of a barrel of 10 taxable oil is more than $20, the department shall impose a tax on oil, in addition to 11 the tax under AS 43.55.011(e), at the rate of 0.3 percent multiplied by the number that 12 represents the difference between the average monthly production tax value of a barrel 13 of oil and $20. The tax under this subsection applies 14 (1) in the calendar year beginning after a fiscal year during which 15 money was appropriated from the earnings reserve account as provided in 16 AS 37.13.145(e); and 17 (2) to oil produced from a lease or property within a unit or 18 nonunitized reservoir that has cumulatively produced 400,000,000 barrels of oil by the 19 close of the most recent calendar year and from which the average daily production of 20 oil from the unit or nonunitized reservoir during the most recent calendar year exceeds 21 20,000 barrels. 22 * Sec. 6. AS 43.55.020(a) is amended to read: 23 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 24 the tax as follows: 25 (1) for oil and gas produced before January 1, 2014, an installment 26 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 27 as allowed by law, is due for each month of the calendar year on the last day of the 28 following month; except as otherwise provided under (2) of this subsection, the 29 amount of the installment payment is the sum of the following amounts, less 1/12 of 30 the tax credits that are allowed by law to be applied against the tax levied by 31 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may
01 not be less than zero: 02 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 03 produced from leases or properties in the state outside the Cook Inlet 04 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 05 the greater of 06 (i) zero; or 07 (ii) the sum of 25 percent and the tax rate calculated for 08 the month under AS 43.55.011(g) multiplied by the remainder obtained 09 by subtracting 1/12 of the producer's adjusted lease expenditures for the 10 calendar year of production under AS 43.55.165 and 43.55.170 that are 11 deductible for the oil and gas under AS 43.55.160 from the gross value 12 at the point of production of the oil and gas produced from the leases or 13 properties during the month for which the installment payment is 14 calculated; 15 (B) for oil and gas produced from leases or properties subject 16 to AS 43.55.011(f), the greatest of 17 (i) zero; 18 (ii) zero percent, one percent, two percent, three 19 percent, or four percent, as applicable, of the gross value at the point of 20 production of the oil and gas produced from the leases or properties 21 during the month for which the installment payment is calculated; or 22 (iii) the sum of 25 percent and the tax rate calculated for 23 the month under AS 43.55.011(g) multiplied by the remainder obtained 24 by subtracting 1/12 of the producer's adjusted lease expenditures for the 25 calendar year of production under AS 43.55.165 and 43.55.170 that are 26 deductible for the oil and gas under AS 43.55.160 from the gross value 27 at the point of production of the oil and gas produced from those leases 28 or properties during the month for which the installment payment is 29 calculated; 30 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 31 each lease or property, the greater of
01 (i) zero; or 02 (ii) the sum of 25 percent and the tax rate calculated for 03 the month under AS 43.55.011(g) multiplied by the remainder obtained 04 by subtracting 1/12 of the producer's adjusted lease expenditures for the 05 calendar year of production under AS 43.55.165 and 43.55.170 that are 06 deductible under AS 43.55.160 for the oil or gas, respectively, 07 produced from the lease or property from the gross value at the point of 08 production of the oil or gas, respectively, produced from the lease or 09 property during the month for which the installment payment is 10 calculated; 11 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 12 (i) the sum of 25 percent and the tax rate calculated for 13 the month under AS 43.55.011(g) multiplied by the remainder obtained 14 by subtracting 1/12 of the producer's adjusted lease expenditures for the 15 calendar year of production under AS 43.55.165 and 43.55.170 that are 16 deductible for the oil and gas under AS 43.55.160 from the gross value 17 at the point of production of the oil and gas produced from the leases or 18 properties during the month for which the installment payment is 19 calculated, but not less than zero; or 20 (ii) four percent of the gross value at the point of 21 production of the oil and gas produced from the leases or properties 22 during the month, but not less than zero; 23 (2) an amount calculated under (1)(C) of this subsection for oil or gas 24 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 25 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 26 applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but 27 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 28 amount of taxable gas produced during the month for the amount of taxable gas 29 produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or 30 (2)(A), as applicable, the amount of taxable oil produced during the month for the 31 amount of taxable oil produced during the calendar year;
01 (3) an installment payment of the estimated tax levied by 02 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 03 on the last day of the following month; the amount of the installment payment is the 04 sum of 05 (A) the applicable tax rate for oil provided under 06 AS 43.55.011(i), multiplied by the gross value at the point of production of the 07 oil taxable under AS 43.55.011(i) and produced from the lease or property 08 during the month; and 09 (B) the applicable tax rate for gas provided under 10 AS 43.55.011(i), multiplied by the gross value at the point of production of the 11 gas taxable under AS 43.55.011(i) and produced from the lease or property 12 during the month; 13 (4) any amount of tax levied by AS 43.55.011, net of any credits 14 applied as allowed by law, that exceeds the total of the amounts due as installment 15 payments of estimated tax is due on March 31 of the year following the calendar year 16 of production; 17 (5) for oil and gas produced on and after January 1, 2014, and before 18 January 1, 2022, 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 (6) 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 not subject to AS 43.55.011(o) or (p) 26 produced from leases or properties in the state outside the Cook Inlet 27 sedimentary basin, 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 35 percent and the tax rate calculated 31 for the month under AS 43.55.011(q) multiplied by the remainder
01 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 the oil and gas under 04 AS 43.55.160 from the gross value at the point of production of the oil 05 and gas produced from the leases or properties during the month for 06 which the installment payment is calculated; 07 (B) for oil and gas produced from leases or properties subject 08 to AS 43.55.011(f), the greatest of 09 (i) zero; 10 (ii) zero percent, one percent, two percent, three 11 percent, or four percent, as applicable, of the gross value at the point of 12 production of the oil and gas produced from the leases or properties 13 during the month for which the installment payment is calculated; or 14 (iii) the sum of 35 percent and the tax rate calculated 15 for the month under AS 43.55.011(q) multiplied by the remainder 16 obtained by subtracting 1/12 of the producer's adjusted lease 17 expenditures for the calendar year of production under AS 43.55.165 18 and 43.55.170 that are deductible for the oil and gas under 19 AS 43.55.160 from the gross value at the point of production of the oil 20 and gas produced from those leases or properties during the month for 21 which the installment payment is calculated, except that, for the 22 purposes of this calculation, a reduction from the gross value at the 23 point of production may apply for oil and gas subject to 24 AS 43.55.160(f) or (g); 25 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 26 each lease or property, the greater of 27 (i) zero; or 28 (ii) the sum of 35 percent and the tax rate calculated 29 for the month under AS 43.55.011(q) multiplied by the remainder 30 obtained by subtracting 1/12 of the producer's adjusted lease 31 expenditures for the calendar year of production under AS 43.55.165
01 and 43.55.170 that are deductible under AS 43.55.160 for the oil or gas, 02 respectively, produced from the lease or property from the gross value 03 at the point of production of the oil or gas, respectively, produced from 04 the lease or property during the month for which the installment 05 payment is calculated; 06 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 07 (i) the sum of 35 percent and the tax rate calculated 08 for the month under AS 43.55.011(q) multiplied by the remainder 09 obtained by subtracting 1/12 of the producer's adjusted lease 10 expenditures for the calendar year of production under AS 43.55.165 11 and 43.55.170 that are deductible for the oil and gas under 12 AS 43.55.160 from the gross value at the point of production of the oil 13 and gas produced from the leases or properties during the month for 14 which the installment payment is calculated, but not less than zero; or 15 (ii) four percent of the gross value at the point of 16 production of the oil and gas produced from the leases or properties 17 during the month, but not less than zero; 18 (6) an amount calculated under (5)(C) of this subsection for oil or gas 19 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 20 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 21 applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but 22 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 23 amount of taxable gas produced during the month for the amount of taxable gas 24 produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or 25 (2)(A), as applicable, the amount of taxable oil produced during the month for the 26 amount of taxable oil produced during the calendar year; 27 (7) for oil and gas produced on or after January 1, 2022, an installment 28 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 29 as allowed by law, is due for each month of the calendar year on the last day of the 30 following month; the amount of the installment payment is the sum of the following 31 amounts, less 1/12 of the tax credits that are allowed by law to be applied against the
01 tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment 02 payment may not be less than zero: 03 (A) for oil produced from leases or properties that include land 04 north of 68 degrees North latitude, the greatest of 05 (i) zero; 06 (ii) zero percent, one percent, two percent, three 07 percent, or four percent, as applicable, of the gross value at the point of 08 production of the oil produced from the leases or properties during the 09 month for which the installment payment is calculated; or 10 (iii) the sum of 35 percent and the tax rate calculated 11 for the month under AS 43.55.011(q) multiplied by the remainder 12 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 for the oil under AS 43.55.160(h)(1) 15 from the gross value at the point of production of the oil produced from 16 those leases or properties during the month for which the installment 17 payment is calculated, except that, for the purposes of this calculation, 18 a reduction from the gross value at the point of production may apply 19 for oil subject to AS 43.55.160(f) or 43.55.160(f) and (g); 20 (B) for oil produced before or during the last calendar year 21 under AS 43.55.024(b) for which the producer could take a tax credit under 22 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 23 sedimentary basin, no part of which is north of 68 degrees North latitude, other 24 than leases or properties subject to AS 43.55.011(p), the greater of 25 (i) zero; or 26 (ii) the sum of 35 percent and the tax rate calculated 27 for the month under AS 43.55.011(q) multiplied by the remainder 28 obtained by subtracting 1/12 of the producer's adjusted lease 29 expenditures for the calendar year of production under AS 43.55.165 30 and 43.55.170 that are deductible for the oil under AS 43.55.160(h)(2) 31 from the gross value at the point of production of the oil produced from
01 the leases or properties during the month for which the installment 02 payment is calculated; 03 (C) for oil and gas produced from leases or properties subject 04 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection, 05 the sum of 06 (i) the sum of 35 percent and the tax rate calculated 07 for the month under AS 43.55.011(q) multiplied by the remainder 08 obtained by subtracting 1/12 of the producer's adjusted lease 09 expenditures for the calendar year of production under AS 43.55.165 10 and 43.55.170 that are deductible for the oil under AS 43.55.160(h)(3) 11 from the gross value at the point of production of the oil produced from 12 the leases or properties during the month for which the installment 13 payment is calculated, but not less than zero; and 14 (ii) 13 percent of the gross value at the point of 15 production of the gas produced from the leases or properties during the 16 month, but not less than zero; 17 (D) for oil produced from leases or properties in the state, no 18 part of which is north of 68 degrees North latitude, other than leases or 19 properties subject to (B) or (C) of this paragraph, the greater of 20 (i) zero; or 21 (ii) the sum of 35 percent and the tax rate calculated 22 for the month under AS 43.55.011(q) multiplied by the remainder 23 obtained by subtracting 1/12 of the producer's adjusted lease 24 expenditures for the calendar year of production under AS 43.55.165 25 and 43.55.170 that are deductible for the oil under AS 43.55.160(h)(4) 26 from the gross value at the point of production of the oil produced from 27 the leases or properties during the month for which the installment 28 payment is calculated; 29 (E) for gas produced from each lease or property in the state, 30 other than a lease or property subject to AS 43.55.011(p), 13 percent of the 31 gross value at the point of production of the gas produced from the lease or
01 property during the month for which the installment payment is calculated, but 02 not less than zero; 03 (8) an amount calculated under (7)(C) of this subsection may not 04 exceed four percent of the gross value at the point of production of the oil and gas 05 produced from leases or properties subject to AS 43.55.011(p) during the month for 06 which the installment payment is calculated; 07 (9) for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and 08 (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point 09 of production is determined under AS 43.55.011(f)(1) or (2) but substituting the 10 phrase "month for which the installment payment is calculated" in AS 43.55.011(f)(1) 11 and (2) for the phrase "calendar year for which the tax is due."