CSHB 111(FIN)(efd fld): "An Act relating to the oil and gas production tax, tax payments, and credits; relating to interest applicable to delinquent oil and gas production tax; relating to carried-forward lease expenditures based on losses and limiting those lease expenditures to an amount equal to the gross value at the point of production of oil and gas produced from the lease or property where the lease expenditure was incurred; relating to information concerning tax credits, lease expenditures, and oil and gas taxes; relating to the disclosure of that information to the public; relating to an adjustment in the gross value at the point of production; and relating to a legislative working group."
00 CS FOR HOUSE BILL NO. 111(FIN)(efd fld) 01 "An Act relating to the oil and gas production tax, tax payments, and credits; relating to 02 interest applicable to delinquent oil and gas production tax; relating to carried-forward 03 lease expenditures based on losses and limiting those lease expenditures to an amount 04 equal to the gross value at the point of production of oil and gas produced from the lease 05 or property where the lease expenditure was incurred; relating to information 06 concerning tax credits, lease expenditures, and oil and gas taxes; relating to the 07 disclosure of that information to the public; relating to an adjustment in the gross value 08 at the point of production; and relating to a legislative working group." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10 * Section 1. AS 31.05.030(n) is amended to read: 11 (n) Upon request of the commissioner of revenue, the commission shall 12 determine the commencement of regular production from a lease or property for
01 purposes of AS 43.55.160(f) [AND (g)]. 02 * Sec. 2. AS 40.25.100(a) is amended to read: 03 (a) Information in the possession of the Department of Revenue that discloses 04 the particulars of the business or affairs of a taxpayer or other person, including 05 information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement 06 under AS 38.05.020(b)(12), is not a matter of public record, except as provided in 07 AS 43.05.230(i) - (n) [AS 43.05.230(i) - (l)] or for purposes of investigation and law 08 enforcement. The information shall be kept confidential except when its production is 09 required in an official investigation, administrative adjudication under AS 43.05.405 - 10 43.05.499, or court proceeding. These restrictions do not prohibit the publication of 11 statistics presented in a manner that prevents the identification of particular reports 12 and items, prohibit the publication of tax lists showing the names of taxpayers who are 13 delinquent and relevant information that may assist in the collection of delinquent 14 taxes, or prohibit the publication of records, proceedings, and decisions under 15 AS 43.05.405 - 43.05.499. 16 * Sec. 3. AS 43.05.225 is amended to read: 17 Sec. 43.05.225. Interest. Unless otherwise provided, 18 (1) a delinquent tax 19 (A) under this title, before January 1, 2014, bears interest in 20 each calendar quarter at the rate of five percentage points above the annual rate 21 charged member banks for advances by the 12th Federal Reserve District as of 22 the first day of that calendar quarter, or at the annual rate of 11 percent, 23 whichever is greater, compounded quarterly as of the last day of that quarter; 24 (B) under this title, on and after January 1, 2014, except as 25 provided in (C) of this paragraph, bears interest in each calendar quarter at the 26 rate of three percentage points above the annual rate charged member banks 27 for advances by the 12th Federal Reserve District as of the first day of that 28 calendar quarter; 29 (C) under AS 43.55, on and after January 1, 2017, 30 [(i) FOR THE FIRST THREE YEARS AFTER A TAX 31 BECOMES DELINQUENT,] bears interest in each calendar quarter at
01 the rate of seven percentage points above the annual rate charged 02 member banks for advances by the 12th Federal Reserve District as of 03 the first day of that calendar quarter, compounded quarterly as of the 04 last day of that quarter; [AND 05 (ii) AFTER THE FIRST THREE YEARS AFTER A 06 TAX BECOMES DELINQUENT, DOES NOT BEAR INTEREST;] 07 (2) the interest rate is 12 percent a year for 08 (A) delinquent fees payable under AS 05.15.095(c); and 09 (B) unclaimed property that is not timely paid or delivered, as 10 allowed by AS 34.45.470(a). 11 * Sec. 4. AS 43.05.230(l) is amended to read: 12 (l) The [FOR TAX CREDIT CERTIFICATES PURCHASED BY THE 13 DEPARTMENT IN THE PRECEDING CALENDAR YEAR UNDER AS 43.55.028, 14 THE] department shall make the following information public by April 30 of each 15 year: 16 (1) for tax credit certificates issued or purchased by the 17 department in the preceding calendar year under AS 43.55.028: 18 (A) the name of each person to which a transferable tax 19 certificate was issued or from which the department purchased a transferable 20 tax credit certificate; and 21 (B) [(2)] the aggregate amount of the tax credit certificates 22 purchased from the person in the preceding calendar year; 23 (C) the aggregate amount of the tax credit certificates 24 issued to the person in the preceding calendar year; and 25 (2) unless otherwise prohibited by law, information submitted 26 during the previous calendar year under AS 43.55.030(a)(10) and (e)(3). 27 * Sec. 5. AS 43.05.230 is amended by adding new subsections to read: 28 (m) The department may disclose information otherwise publicly available 29 (1) on a return filed for a tax due under AS 43.55; or 30 (2) related to a credit received under AS 43.20.046, 43.20.047, 31 43.20.049, 43.20.052, or 43.20.053.
01 (n) The name of each person claiming a credit, the amount of credit received 02 for each oil refinery, and a description of the expenditures for which each credit is 03 claimed under AS 43.20.053 is public information. The department shall make the 04 following information public by April 30 of each year: 05 (1) the name of each person who claimed a tax credit under 06 AS 43.20.053 in the preceding calendar year; 07 (2) for each refinery for which a tax credit was claimed under 08 AS 43.20.053 in the preceding calendar year, 09 (A) the aggregate amount of tax credits claimed for that 10 refinery; 11 (B) a description of any potential benefits to the state or 12 residents of the state, including the estimated monetary value; 13 (3) a brief description of the qualified infrastructure expenditures for 14 which each tax credit claimed under AS 43.20.053 in the preceding calendar year was 15 claimed; and 16 (4) for each refinery for which an expenditure is the basis of a credit 17 under AS 43.20.053, the aggregate amount of unused tax credits or portions of tax 18 credits. 19 * Sec. 6. AS 43.55.011(e) is amended to read: 20 (e) There is levied on the producer of oil or gas a tax for all oil and gas 21 produced each calendar year from each lease or property in the state, less any oil and 22 gas the ownership or right to which is exempt from taxation or constitutes a 23 landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as 24 otherwise provided under (f), (j), (k), (o), and (p) of this section, for oil and gas 25 produced 26 (1) before January 1, 2014, the tax is equal to the sum of 27 (A) the annual production tax value of the taxable oil and gas 28 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 29 (B) the sum, over all months of the calendar year, of the tax 30 amounts determined under (g) of this section; 31 (2) on and after January 1, 2014, and before January 1, 2018 [2022],
01 the tax is equal to the annual production tax value of the taxable oil and gas as 02 calculated under AS 43.55.160(a)(1) multiplied by 35 percent; 03 (3) on and after January 1, 2018, and before January 1, 2022, the 04 tax is equal to the sum of 05 (A) the annual production tax value of the taxable oil and 06 gas as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 07 (B) the sum, over all the months of the calendar year, of the 08 amounts determined under (g) of this section; 09 (4) on and after January 1, 2022, the tax for 10 (A) oil is equal to the sum of 11 (i) the annual production tax value of the taxable oil as 12 calculated under AS 43.55.160(h)(1) [AS 43.55.160(h)] multiplied by 13 25 [35] percent; and 14 (ii) the sum, over all the months of the calendar 15 year, of the amounts determined under (g) of this section; 16 (B) gas is equal to 13 percent of the gross value at the point of 17 production of the taxable gas; if the gross value at the point of production of 18 gas produced from a lease or property is less than zero, that gross value at the 19 point of production is considered zero for purposes of this subparagraph. 20 * Sec. 7. AS 43.55.011(g) is amended to read: 21 (g) For purposes of (e) of this section, 22 (1) before January 1, 2014, for [FOR] each month of a calendar year 23 [BEFORE 2014] for which the producer's average monthly production tax value under 24 AS 43.55.160(a)(2) of a BTU equivalent barrel of the taxable oil and gas is more than 25 $30, the amount of tax for purposes of (e)(1)(B) of this section is determined by 26 multiplying the monthly production tax value of the taxable oil and gas produced 27 during the month by the tax rate calculated as follows: 28 (A) [(1)] if the producer's average monthly production tax 29 value of a BTU equivalent barrel of the taxable oil and gas for the month is not 30 more than $92.50, the tax rate is 0.4 percent multiplied by the number that 31 represents the difference between that average monthly production tax value of
01 a BTU equivalent barrel and $30; or 02 (B) [(2)] if the producer's average monthly production tax value 03 of a BTU equivalent barrel of the taxable oil and gas for the month is more 04 than $92.50, the tax rate is the sum of 25 percent and the product of 0.1 percent 05 multiplied by the number that represents the difference between the average 06 monthly production tax value of a BTU equivalent barrel and $92.50, except 07 that the sum determined under this subparagraph [PARAGRAPH] may not 08 exceed 50 percent; 09 (2) on or after January 1, 2018, and before January 1, 2022, for 10 each month of a calendar year for which the producer's production tax value 11 under AS 43.55.160(a)(2) of a BTU equivalent barrel of the taxable oil and gas is 12 more than $60, the difference between the monthly production tax value of a 13 BTU equivalent barrel and $60 multiplied by the volume of oil and gas produced 14 by the producer for the month multiplied by 15 percent; 15 (3) on or after January 1, 2022, for each month of a calendar year 16 for which the producer's production tax value under AS 43.55.160(h)(2) of a BTU 17 equivalent barrel of taxable oil is more than $60, the difference between the 18 monthly production tax value of a BTU equivalent barrel and $60 multiplied by 19 the volume of oil produced by the producer for the month multiplied by 15 20 percent. 21 * Sec. 8. AS 43.55.011 is amended by adding new subsections to read: 22 (q) Except as otherwise provided in this subsection, a credit under this chapter 23 may not be applied to reduce the tax determined under (f) of this section. A credit 24 under AS 43.55.024(c) may reduce the tax determined under (f) of this section, but not 25 below zero. A credit under AS 43.55.024(i) may reduce the tax determined under (f) 26 of this section, but not below 27 (1) for gas produced on and after January 1, 2018, and before 28 January 1, 2022, 29 (A) four percent of the adjusted gross value at the point of 30 production when the average price per barrel for Alaska North Slope crude oil 31 for sale on the United States West Coast during the calendar year for which the
01 tax is due is more than $25; 02 (B) three percent of the adjusted gross value at the point of 03 production when the average price per barrel for Alaska North Slope crude oil 04 for sale on the United States West Coast during the calendar year for which the 05 tax is due is more than $20 but not more than $25; 06 (C) two percent of the adjusted gross value at the point of 07 production when the average price per barrel for Alaska North Slope crude oil 08 for sale on the United States West Coast during the calendar year for which the 09 tax is due is more than $17.50 but not more than $20; 10 (D) one percent of the adjusted gross value at the point of 11 production when the average price per barrel for Alaska North Slope crude oil 12 for sale on the United States West Coast during the calendar year for which the 13 tax is due is more than $15 but not more than $17.50; or 14 (E) zero percent of the adjusted gross value at the point of 15 production when the average price per barrel for Alaska North Slope crude oil 16 for sale on the United States West Coast during the calendar year for which the 17 tax is due is $15 or less; 18 (2) for oil produced on and after January 1, 2018, 19 (A) four percent of the adjusted gross value at the point of 20 production when the average price per barrel for Alaska North Slope crude oil 21 for sale on the United States West Coast during the calendar year for which the 22 tax is due is more than $25; 23 (B) three percent of the adjusted gross value at the point of 24 production when the average price per barrel for Alaska North Slope crude oil 25 for sale on the United States West Coast during the calendar year for which the 26 tax is due is more than $20 but not more than $25; 27 (C) two percent of the adjusted gross value at the point of 28 production when the average price per barrel for Alaska North Slope crude oil 29 for sale on the United States West Coast during the calendar year for which the 30 tax is due is more than $17.50 but not more than $20; 31 (D) one percent of the adjusted gross value at the point of
01 production when the average price per barrel for Alaska North Slope crude oil 02 for sale on the United States West Coast during the calendar year for which the 03 tax is due is more than $15 but not more than $17.50; or 04 (E) zero percent of the adjusted gross value at the point of 05 production when the average price per barrel for Alaska North Slope crude oil 06 for sale on the United States West Coast during the calendar year for which the 07 tax is due is $15 or less. 08 (r) In (q) of this section, "adjusted gross value at the point of production" 09 means the gross value at the point of production less a reduction from the gross value 10 at the point of production under AS 43.55.160(f). 11 * Sec. 9. AS 43.55.014(b) is amended to read: 12 (b) A production tax levied by this section is equal to 13 percent of the gas 13 otherwise taxable under AS 43.55.011(e)(4) [AS 43.55.011(e)(3)] produced from each 14 oil and gas lease to which an effective election under (a) of this section applies, when 15 and as that gas is produced. The producer shall pay the tax in gas by delivering that 13 16 percent of the gas to the state at the point of production. 17 * Sec. 10. AS 43.55.020(a) is amended to read: 18 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 19 the tax as follows: 20 (1) for oil and gas produced before January 1, 2014, an installment 21 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 22 as allowed by law, is due for each month of the calendar year on the last day of the 23 following month; except as otherwise provided under (2) of this subsection, the 24 amount of the installment payment is the sum of the following amounts, less 1/12 of 25 the tax credits that are allowed by law to be applied against the tax levied by 26 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 27 not be less than zero: 28 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 29 produced from leases or properties in the state outside the Cook Inlet 30 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 31 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 for the oil and gas under AS 43.55.160 from the gross value 07 at the point of production of the oil and gas produced from the leases or 08 properties during the month for which the installment payment is 09 calculated; 10 (B) for oil and gas produced from leases or properties subject 11 to AS 43.55.011(f), the greatest of 12 (i) zero; 13 (ii) zero percent, one percent, two percent, three 14 percent, or four percent, as applicable, of the gross value at the point of 15 production of the oil and gas produced from the leases or properties 16 during the month for which the installment payment is calculated; or 17 (iii) the sum of 25 percent and the tax rate calculated for 18 the month under AS 43.55.011(g) multiplied by the remainder obtained 19 by subtracting 1/12 of the producer's adjusted lease expenditures for the 20 calendar year of production under AS 43.55.165 and 43.55.170 that are 21 deductible for the oil and gas under AS 43.55.160 from the gross value 22 at the point of production of the oil and gas produced from those leases 23 or properties during the month for which the installment payment is 24 calculated; 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 25 percent and the tax rate calculated for 29 the month under AS 43.55.011(g) multiplied by the remainder obtained 30 by subtracting 1/12 of the producer's adjusted lease expenditures for the 31 calendar year of production under AS 43.55.165 and 43.55.170 that are
01 deductible under AS 43.55.160 for the oil or gas, respectively, 02 produced from the lease or property from the gross value at the point of 03 production of the oil or gas, respectively, produced from the lease or 04 property during the month for which the installment payment is 05 calculated; 06 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 07 (i) 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, 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 (2) an amount calculated under (1)(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) for oil, but substituting in 22 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 23 gas produced during the month for the amount of taxable gas produced during the 24 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 25 during the month for the amount of taxable oil produced during the calendar year; 26 (3) an installment payment of the estimated tax levied by 27 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 28 on the last day of the following month; the amount of the installment payment is the 29 sum of 30 (A) the applicable tax rate for oil provided under 31 AS 43.55.011(i), multiplied by the gross value at the point of production of the
01 oil taxable under AS 43.55.011(i) and produced from the lease or property 02 during the month; and 03 (B) the applicable tax rate for gas provided under 04 AS 43.55.011(i), multiplied by the gross value at the point of production of the 05 gas taxable under AS 43.55.011(i) and produced from the lease or property 06 during the month; 07 (4) any amount of tax levied by AS 43.55.011, net of any credits 08 applied as allowed by law, that exceeds the total of the amounts due as installment 09 payments of estimated tax is due on March 31 of the year following the calendar year 10 of production; 11 (5) for oil and gas produced on and after January 1, 2014, and before 12 January 1, 2018 [JANUARY 1, 2022], an installment payment of the estimated tax 13 levied by AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for 14 each month of the calendar year on the last day of the following month; except as 15 otherwise provided under (7) [(6)] of this subsection, the amount of the installment 16 payment is the sum of the following amounts, less 1/12 of the tax credits that are 17 allowed by law to be applied against the tax levied by AS 43.55.011(e) for the 18 calendar year, but the amount of the installment payment may not be less than zero: 19 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 20 produced from leases or properties in the state outside the Cook Inlet 21 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 22 the greater of 23 (i) zero; or 24 (ii) 35 percent multiplied by the remainder obtained by 25 subtracting 1/12 of the producer's adjusted lease expenditures for the 26 calendar year of production under AS 43.55.165 and 43.55.170 that are 27 deductible for the oil and gas under AS 43.55.160 from the gross value 28 at the point of production of the oil and gas produced from the leases or 29 properties during the month for which the installment payment is 30 calculated; 31 (B) for oil and gas produced from leases or properties subject
01 to AS 43.55.011(f), the greatest of 02 (i) zero; 03 (ii) the percentage applicable under AS 43.55.011(f) 04 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 05 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 06 value at the point of production of the oil and gas produced from the 07 leases or properties during the month for which the installment 08 payment is calculated; or 09 (iii) 35 percent multiplied by the remainder obtained by 10 subtracting 1/12 of the producer's adjusted lease expenditures for the 11 calendar year of production under AS 43.55.165 and 43.55.170 that are 12 deductible for the oil and gas under AS 43.55.160 from the gross value 13 at the point of production of the oil and gas produced from those leases 14 or properties during the month for which the installment payment is 15 calculated, except that, for the purposes of this calculation, a reduction 16 from the gross value at the point of production may apply for oil and 17 gas subject to AS 43.55.160(f) [OR (g)]; 18 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 19 each lease or property, the greater of 20 (i) zero; or 21 (ii) 35 percent multiplied by the remainder obtained by 22 subtracting 1/12 of the producer's adjusted lease expenditures for the 23 calendar year of production under AS 43.55.165 and 43.55.170 that are 24 deductible under AS 43.55.160 for the oil or gas, respectively, 25 produced from the lease or property from the gross value at the point of 26 production of the oil or gas, respectively, produced from the lease or 27 property during the month for which the installment payment is 28 calculated; 29 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 30 (i) 35 percent multiplied by the remainder obtained by 31 subtracting 1/12 of the producer's adjusted lease expenditures for the
01 calendar year of production under AS 43.55.165 and 43.55.170 that are 02 deductible for the oil and gas under AS 43.55.160 from the gross value 03 at the point of production of the oil and gas produced from the leases or 04 properties during the month for which the installment payment is 05 calculated, but not less than zero; or 06 (ii) four percent of the gross value at the point of 07 production of the oil and gas produced from the leases or properties 08 during the month, but not less than zero; 09 (6) for oil and gas produced on and after January 1, 2018, and 10 before January 1, 2022, an installment payment of the estimated tax levied by 11 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 12 month of the calendar year on the last day of the following month; except as 13 otherwise provided under (7) of this subsection, the amount of the installment 14 payment is the sum of the following amounts, less 1/12 of the tax credits that are 15 allowed by law to be applied against the tax levied by AS 43.55.011(e) for the 16 calendar year, but the amount of the installment payment may not be less than 17 zero: 18 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 19 produced from leases or properties in the state outside the Cook Inlet 20 sedimentary basin, other than leases or properties subject to 21 AS 43.55.011(f), the greater of 22 (i) zero; or 23 (ii) the amount calculated for the month under 24 AS 43.55.011(g), as applicable, and 25 percent multiplied by the 25 remainder obtained by subtracting 1/12 of the producer's adjusted 26 lease expenditures for the calendar year of production under 27 AS 43.55.165 and 43.55.170 that are deductible for the oil and gas 28 under AS 43.55.160 from the gross value at the point of production 29 of the oil and gas produced from the leases or properties during the 30 month for which the installment payment is calculated; 31 (B) for oil and gas produced from leases or properties
01 subject to AS 43.55.011(f), the greatest of 02 (i) zero; 03 (ii) the percentage applicable under AS 43.55.011(f) 04 of the gross value at the point of production of the oil and gas 05 produced from the leases or properties during the month for which 06 the installment payment is calculated; or 07 (iii) the amount calculated for the month under 08 AS 43.55.011(g), as applicable, and 25 percent multiplied by the 09 remainder obtained by subtracting 1/12 of the producer's adjusted 10 lease expenditures for the calendar year of production under 11 AS 43.55.165 and 43.55.170 that are deductible for the oil and gas 12 under AS 43.55.160 from the gross value at the point of production 13 of the oil and gas produced from those leases or properties during 14 the month for which the installment payment is calculated, except 15 that, for the purposes of this calculation, a reduction from the gross 16 value at the point of production may apply for oil and gas subject 17 to AS 43.55.160(f); 18 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 19 each lease or property, the greater of 20 (i) zero; or 21 (ii) the amount calculated for the month under 22 AS 43.55.011(g), as applicable, and 25 percent multiplied by the 23 remainder obtained by subtracting 1/12 of the producer's adjusted 24 lease expenditures for the calendar year of production under 25 AS 43.55.165 and 43.55.170 that are deductible under AS 43.55.160 26 for the oil or gas, respectively, produced from the lease or property 27 from the gross value at the point of production of the oil or gas, 28 respectively, produced from the lease or property during the 29 month for which the installment payment is calculated; 30 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 31 (i) the amount calculated for the month under
01 AS 43.55.011(g), as applicable, and 25 percent multiplied by the 02 remainder obtained by subtracting 1/12 of the producer's adjusted 03 lease expenditures for the calendar year of production under 04 AS 43.55.165 and 43.55.170 that are deductible for the oil and gas 05 under AS 43.55.160 from the gross value at the point of production 06 of the oil and gas produced from the leases or properties during the 07 month for which the installment payment is calculated, but not less 08 than zero; or 09 (ii) four percent of the gross value at the point of 10 production of the oil and gas produced from the leases or 11 properties during the month, but not less than zero; 12 (7) [(6)] an amount calculated under (5)(C) or (6)(C) of this subsection 13 for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product 14 obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 15 43.55.011(o), as applicable, for gas or set out in AS 43.55.011(k) for oil, but 16 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 17 amount of taxable gas produced during the month for the amount of taxable gas 18 produced during the calendar year and substituting in AS 43.55.011(k) the amount of 19 taxable oil produced during the month for the amount of taxable oil produced during 20 the calendar year; 21 (8) [(7)] for oil and gas produced on or after January 1, 2022, an 22 installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax 23 credits applied as allowed by law, is due for each month of the calendar year on the 24 last day of the following month; except as otherwise provided under (11) [(10)] of this 25 subsection, the amount of the installment payment is the sum of the following 26 amounts, less 1/12 of the tax credits that are allowed by law to be applied against the 27 tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment 28 payment may not be less than zero: 29 (A) for oil produced from leases or properties subject to 30 AS 43.55.011(f), the greatest of 31 (i) zero;
01 (ii) the percentage applicable under AS 43.55.011(f) 02 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 03 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 04 value at the point of production of the oil produced from the leases or 05 properties during the month for which the installment payment is 06 calculated; or 07 (iii) the amount calculated for the month under 08 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 09 remainder 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 under 12 AS 43.55.160(h)(1)(A) [AS 43.55.160(h)(1)] from the gross value at 13 the point of production of the oil produced from those leases or 14 properties during the month for which the installment payment is 15 calculated, except that, for the purposes of this calculation, a reduction 16 from the gross value at the point of production may apply for oil 17 subject to AS 43.55.160(f) [OR 43.55.160(f) AND (g)]; 18 (B) for oil produced before or during the last calendar year 19 under AS 43.55.024(b) for which the producer could take a tax credit under 20 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 21 sedimentary basin, no part of which is north of 68 degrees North latitude, other 22 than leases or properties subject to AS 43.55.011(o) or (p), the greater of 23 (i) zero; or 24 (ii) the amount calculated for the month under 25 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 26 remainder obtained by subtracting 1/12 of the producer's adjusted lease 27 expenditures for the calendar year of production under AS 43.55.165 28 and 43.55.170 that are deductible for the oil under 29 AS 43.55.160(h)(1)(B) [AS 43.55.160(h)(2)] from the gross value at 30 the point of production of the oil produced from the leases or properties 31 during the month for which the installment payment is calculated;
01 (C) for oil and gas produced from leases or properties subject 02 to AS 43.55.011(p), except as otherwise provided under (9) [(8)] of this 03 subsection, the sum of 04 (i) the amount calculated for the month under 05 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 06 remainder obtained by subtracting 1/12 of the producer's adjusted lease 07 expenditures for the calendar year of production under AS 43.55.165 08 and 43.55.170 that are deductible for the oil under 09 AS 43.55.160(h)(1)(C) [AS 43.55.160(h)(3)] from the gross value at 10 the point of production of the oil produced from the leases or properties 11 during the month for which the installment payment is calculated, but 12 not less than zero; and 13 (ii) 13 percent of the gross value at the point of 14 production of the gas produced from the leases or properties during the 15 month, but not less than zero; 16 (D) for oil produced from leases or properties in the state, no 17 part of which is north of 68 degrees North latitude, other than leases or 18 properties subject to (B), (C), or (F) of this paragraph, the greater of 19 (i) zero; or 20 (ii) the amount calculated for the month under 21 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 22 remainder obtained by subtracting 1/12 of the producer's adjusted lease 23 expenditures for the calendar year of production under AS 43.55.165 24 and 43.55.170 that are deductible for the oil under 25 AS 43.55.160(h)(1)(D) [AS 43.55.160(h)(4)] from the gross value at 26 the point of production of the oil produced from the leases or properties 27 during the month for which the installment payment is calculated; 28 (E) for gas produced from each lease or property in the state 29 outside the Cook Inlet sedimentary basin, other than a lease or property subject 30 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of 31 production of the gas produced from the lease or property during the month for
01 which the installment payment is calculated, but not less than zero; 02 (F) for oil subject to AS 43.55.011(k), for each lease or 03 property, the greater of 04 (i) zero; or 05 (ii) the amount calculated for the month under 06 AS 43.55.011(g), as applicable, and 25 [35] percent multiplied by the 07 remainder obtained by subtracting 1/12 of the producer's adjusted lease 08 expenditures for the calendar year of production under AS 43.55.165 09 and 43.55.170 that are deductible under AS 43.55.160 for the oil 10 produced from the lease or property from the gross value at the point of 11 production of the oil produced from the lease or property during the 12 month for which the installment payment is calculated; 13 (G) for gas subject to AS 43.55.011(j) or (o), for each lease or 14 property, the greater of 15 (i) zero; or 16 (ii) 13 percent of the gross value at the point of 17 production of the gas produced from the lease or property during the 18 month for which the installment payment is calculated; 19 (9) [(8)] an amount calculated under (8)(C) [(7)(C)] of this subsection 20 may not exceed four percent of the gross value at the point of production of the oil and 21 gas produced from leases or properties subject to AS 43.55.011(p) during the month 22 for which the installment payment is calculated; 23 (10) [(9)] for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), 24 (6)(B)(ii), and (8)(A)(ii) [(7)(A)(ii)] of this subsection, the applicable percentage of 25 the gross value at the point of production is determined under AS 43.55.011(f)(1) or 26 (2) but substituting the phrase "month for which the installment payment is calculated" 27 in AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is due"; 28 (11) [(10)] an amount calculated under (8)(F) or (G) [(7)(F) OR (G)] 29 of this subsection for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed 30 the product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or 31 (2) or 43.55.011(o), as applicable, for gas, or set out in AS 43.55.011(k) for oil, but
01 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 02 amount of taxable gas produced during the month for the amount of taxable gas 03 produced during the calendar year and substituting in AS 43.55.011(k) the amount of 04 taxable oil produced during the month for the amount of taxable oil produced during 05 the calendar year. 06 * Sec. 11. AS 43.55.020(g) is amended to read: 07 (g) Notwithstanding any contrary provision of AS 43.05.225, 08 (1) before January 1, 2014, an unpaid amount of an installment 09 payment required under (a)(1) - (3) of this section that is not paid when due bears 10 interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal 11 Revenue Code), as amended, compounded daily, from the date the installment 12 payment is due until March 31 following the calendar year of production, and (B) as 13 provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued 14 under (A) of this paragraph that remains unpaid after that March 31 is treated as an 15 addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax 16 due under (a)(4) of this section that is not paid when due bears interest as provided for 17 a delinquent tax under AS 43.05.225; 18 (2) on and after January 1, 2014, an unpaid amount of an installment 19 payment required under (a)(3), (5), (6), [OR] (7), or (8) of this section that is not paid 20 when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C. 21 6621 (Internal Revenue Code), as amended, compounded daily, from the date the 22 installment payment is due until March 31 following the calendar year of production, 23 and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31; 24 interest accrued under (A) of this paragraph that remains unpaid after that March 31 is 25 treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid 26 amount of tax due under (a)(4) of this section that is not paid when due bears interest 27 as provided for a delinquent tax under AS 43.05.225. 28 * Sec. 12. AS 43.55.020(h) is amended to read: 29 (h) Notwithstanding any contrary provision of AS 43.05.280, 30 (1) an overpayment of an installment payment required under (a)(1), 31 (2), (3), (5), (6), [OR] (7), or (8) of this section bears interest at the rate provided for
01 an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended, 02 compounded daily, from the later of the date the installment payment is due or the date 03 the overpayment is made, until the earlier of 04 (A) the date it is refunded or is applied to an underpayment; or 05 (B) March 31 following the calendar year of production; 06 (2) except as provided under (1) of this subsection, interest with 07 respect to an overpayment is allowed only on any net overpayment of the payments 08 required under (a) of this section that remains after the later of March 31 following the 09 calendar year of production or the date that the statement required under 10 AS 43.55.030(a) is filed; 11 (3) interest is allowed under (2) of this subsection only from a date that 12 is 90 days after the later of March 31 following the calendar year of production or the 13 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 14 if the overpayment was refunded within the 90-day period; 15 (4) interest under (2) and (3) of this subsection is paid at the rate and in 16 the manner provided in AS 43.05.225(1). 17 * Sec. 13. AS 43.55.020(k) is amended to read: 18 (k) For oil and gas produced on and after January 1, 2014, and before 19 January 1, 2022, in making settlement with the royalty owner for oil and gas that is 20 taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on 21 taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in 22 value at the time the tax becomes due to the amount of the tax paid. If the total 23 deductions of installment payments of estimated tax for a calendar year exceed the 24 actual tax for that calendar year, the producer shall, before April 1 of the following 25 year, refund the excess to the royalty owner. Unless otherwise agreed between the 26 producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on 27 taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or 28 right to which constitutes a landowner's royalty interest, is considered to be the gross 29 value at the point of production of the taxable royalty oil and gas produced during the 30 calendar year multiplied by a figure that is a quotient, in which 31 (1) the numerator is the producer's total tax liability under
01 AS 43.55.011(e) [AS 43.55.011(e)(2)] for the calendar year of production; and 02 (2) the denominator is the total gross value at the point of production 03 of the oil and gas taxable under AS 43.55.011(e) produced by the producer from all 04 leases and properties in the state during the calendar year. 05 * Sec. 14. AS 43.55.020(l) is amended to read: 06 (l) For oil and gas produced on and after January 1, 2022, in making 07 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, 08 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or 09 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes 10 due to the amount of the tax paid. If the total deductions of installment payments of 11 estimated tax for a calendar year exceed the actual tax for that calendar year, the 12 producer shall, before April 1 of the following year, refund the excess to the royalty 13 owner. In making settlement with the royalty owner for gas that is taxable under 14 AS 43.55.014, the producer may deduct the amount of the gas paid as in-kind tax on 15 taxable royalty gas or may deduct the gross value at the point of production of the gas 16 paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the 17 producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on 18 taxable royalty oil for a calendar year, other than oil the ownership or right to which 19 constitutes a landowner's royalty interest, is considered to be the gross value at the 20 point of production of the taxable royalty oil produced during the calendar year 21 multiplied by a figure that is a quotient, in which 22 (1) the numerator is the producer's total tax liability under 23 AS 43.55.011(e)(4)(A) [AS 43.55.011(e)(3)(A)] for the calendar year of production; 24 and 25 (2) the denominator is the total gross value at the point of production 26 of the oil taxable under AS 43.55.011(e) produced by the producer from all leases and 27 properties in the state during the calendar year. 28 * Sec. 15. AS 43.55.023(b) is amended to read: 29 (b) [BEFORE JANUARY 1, 2014, A PRODUCER OR EXPLORER MAY 30 ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A 31 CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES
01 INCURRED ON AND AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1, 02 2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS 03 LOCATED NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR 04 EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 45 05 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS. FOR LEASE 06 EXPENDITURES INCURRED ON AND AFTER JANUARY 1, 2016, TO 07 EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED 08 NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR EXPLORER 09 MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 35 PERCENT OF 10 A CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES 11 INCURRED ON OR AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1, 12 2017, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS 13 LOCATED SOUTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR 14 EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 15 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS.] For lease expenditures 16 incurred [ON OR AFTER JANUARY 1, 2017,] to explore for, develop, or produce oil 17 or gas deposits located south of 68 degrees North latitude, a producer or explorer may 18 elect to take a tax credit in the amount of 15 percent of a carried-forward annual loss, 19 except that a credit for lease expenditures incurred to explore for, develop, or produce 20 oil or gas deposits located in the Cook Inlet sedimentary basin may only be taken if 21 the expenditure is incurred before January 1, 2018. A credit under this subsection may 22 be applied against a tax levied by AS 43.55.011(e). For purposes of this subsection, 23 (1) a carried-forward annual loss is the amount of a producer's or 24 explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a 25 previous calendar year that was not deductible in calculating production tax values for 26 that calendar year under AS 43.55.160; 27 (2) for lease expenditures incurred on or after January 1, 2017, any 28 reduction under AS 43.55.160(f) [OR (g)] is added back to the calculation of 29 production tax values for that calendar year under AS 43.55.160 for the determination 30 of a carried-forward annual loss. 31 * Sec. 16. AS 43.55.023(c) is amended to read:
01 (c) A credit or portion of a credit under this section may not be used to reduce 02 a person's tax liability under AS 43.55.011(e) for any calendar year below zero or the 03 amount calculated under AS 43.55.011(f), if applicable, and any unused credit or 04 portion of a credit not used under this subsection may be applied in a later calendar 05 year. 06 * Sec. 17. AS 43.55.024(i) is amended to read: 07 (i) A producer may apply against the producer's tax liability for the calendar 08 year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under 09 AS 43.55.011(e) that receives a reduction in the gross value at the point of production 10 under AS 43.55.160(f) [OR (g)] and that is produced during a calendar year after 11 December 31, 2013. A tax credit authorized by this subsection may not reduce a 12 producer's tax liability for a calendar year under AS 43.55.011(e) below zero or the 13 amount calculated under AS 43.55.011(f) or (q), as applicable. 14 * Sec. 18. AS 43.55.025(i) is amended to read: 15 (i) For a production tax credit under this section, 16 (1) a credit may not be applied to reduce a taxpayer's tax liability for a 17 calendar year under AS 43.55.011(e) below zero or the amount calculated under 18 AS 43.55.011(f), if applicable [FOR A CALENDAR YEAR]; and 19 (2) an amount of the production tax credit in excess of the amount that 20 may be applied for a calendar year under this subsection may be carried forward and 21 applied against the taxpayer's tax liability under AS 43.55.011(e) in one or more later 22 calendar years. 23 * Sec. 19. AS 43.55.030(a) is amended to read: 24 (a) A producer that produces oil or gas from a lease or property in the state 25 during a calendar year, whether or not any tax payment is due under AS 43.55.020(a) 26 for that oil or gas, shall file with the department on March 31 of the following year a 27 statement, under oath, in a form prescribed by the department, giving, with other 28 information required under a regulation adopted by the department, the following: 29 (1) a description of each lease or property from which oil or gas was 30 produced, by name, legal description, lease number, or accounting codes assigned by 31 the department;
01 (2) the names of the producer and, if different, the person paying the 02 tax, if any; 03 (3) the gross amount of oil and the gross amount of gas produced from 04 each lease or property, separately identifying the gross amount of gas produced from 05 each oil and gas lease to which an effective election under AS 43.55.014(a) applies, 06 the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of 07 the gross amount of oil and gas owned by the producer; 08 (4) the gross value at the point of production of the oil and of the gas 09 produced from each lease or property owned by the producer and the costs of 10 transportation of the oil and gas; 11 (5) the name of the first purchaser and the price received for the oil and 12 for the gas, unless relieved from this requirement in whole or in part by the 13 department; 14 (6) the producer's qualified capital expenditures, as defined in 15 AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other 16 payments or credits under AS 43.55.170; 17 (7) the production tax values of the oil and gas under AS 43.55.160(a) 18 or of the oil under AS 43.55.160(h), as applicable; 19 (8) any claims for tax credits to be applied; [AND] 20 (9) calculations showing the amounts, if any, that were or are due 21 under AS 43.55.020(a) and interest on any underpayment or overpayment; and 22 (10) for each expenditure that is the basis of a lease expenditure 23 carried forward under AS 43.55.165(a)(3) or a credit claimed under AS 43.55.023 24 or 43.55.025, a description of the expenditure and a description of the lease or 25 property for which the expenditure was incurred. 26 * Sec. 20. AS 43.55.030(e) is amended to read: 27 (e) An explorer or producer that incurs a lease expenditure under 28 AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar 29 year but does not produce oil or gas from a lease or property in the state during the 30 calendar year shall file with the department, on March 31 of the following year, a 31 statement, under oath, in a form prescribed by the department, giving, with other
01 information required under a regulation adopted by the department, the following: 02 (1) the explorer's or producer's qualified capital expenditures, as 03 defined in AS 43.55.023, other lease expenditures under AS 43.55.165, and 04 adjustments or other payments or credits under AS 43.55.170; [AND] 05 (2) if the explorer or producer receives a payment or credit under 06 AS 43.55.170, calculations showing whether the explorer or producer is liable for a 07 tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount; and 08 (3) for each expenditure that is the basis of a lease expenditure 09 carried forward under AS 43.55.165(a)(3) or a credit claimed under this chapter, 10 a description of the expenditure and a description of the lease or property for 11 which the expenditure was incurred. 12 * Sec. 21. AS 43.55.150 is amended by adding a new subsection to read: 13 (d) For purposes of calculating the tax under this chapter, the gross value at 14 the point of production may not be less than zero. 15 * Sec. 22. AS 43.55.160(a) is amended to read: 16 (a) For oil and gas produced before January 1, 2022, except as provided in (b) 17 and [,] (f) [, AND (g)] of this section, for the purposes of 18 (1) AS 43.55.011(e)(1) - (3) [AS 43.55.011(e)(1) AND (2)], the annual 19 production tax value of taxable oil, gas, or oil and gas produced during a calendar year 20 in a category for which a separate annual production tax value is required to be 21 calculated under this paragraph is the gross value at the point of production of that oil, 22 gas, or oil and gas taxable under AS 43.55.011(e), less the producer's lease 23 expenditures under AS 43.55.165 for the calendar year applicable to the oil, gas, or oil 24 and gas in that category produced by the producer during the calendar year, as 25 adjusted under AS 43.55.170; a separate annual production tax value shall be 26 calculated for 27 (A) oil and gas produced from leases or properties in the state 28 that include land north of 68 degrees North latitude, other than gas produced 29 before 2022 and used in the state; 30 (B) oil and gas produced from leases or properties in the state 31 outside the Cook Inlet sedimentary basin, no part of which is north of 68
01 degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a) 02 and (b); this subparagraph does not apply to 03 (i) gas produced before 2022 and used in the state; or 04 (ii) oil and gas subject to AS 43.55.011(p); 05 (C) oil produced before 2022 from each lease or property in the 06 Cook Inlet sedimentary basin; 07 (D) gas produced before 2022 from each lease or property in 08 the Cook Inlet sedimentary basin; 09 (E) gas produced before 2022 from each lease or property in 10 the state outside the Cook Inlet sedimentary basin and used in the state, other 11 than gas subject to AS 43.55.011(p); 12 (F) oil and gas subject to AS 43.55.011(p) produced from 13 leases or properties in the state; 14 (G) oil and gas produced from leases or properties in the state 15 no part of which is north of 68 degrees North latitude, other than oil or gas 16 described in (B), (C), (D), (E), or (F) of this paragraph; 17 (2) AS 43.55.011(g), for oil and gas produced before January 1, 2014, 18 or on or after January 1, 2018, the monthly production tax value of the taxable 19 (A) oil and gas produced during a month from leases or 20 properties in the state that include land north of 68 degrees North latitude is the 21 gross value at the point of production of the oil and gas taxable under 22 AS 43.55.011(e) and produced by the producer from those leases or properties, 23 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 24 calendar year applicable to the oil and gas produced by the producer from 25 those leases or properties, as adjusted under AS 43.55.170; this subparagraph 26 does not apply to gas subject to AS 43.55.011(o); 27 (B) oil and gas produced during a month from leases or 28 properties in the state outside the Cook Inlet sedimentary basin, no part of 29 which is north of 68 degrees North latitude, is the gross value at the point of 30 production of the oil and gas taxable under AS 43.55.011(e) and produced by 31 the producer from those leases or properties, less 1/12 of the producer's lease
01 expenditures under AS 43.55.165 for the calendar year applicable to the oil and 02 gas produced by the producer from those leases or properties, as adjusted under 03 AS 43.55.170; this subparagraph does not apply to gas subject to 04 AS 43.55.011(o); 05 (C) oil produced during a month from a lease or property in the 06 Cook Inlet sedimentary basin is the gross value at the point of production of 07 the oil taxable under AS 43.55.011(e) and produced by the producer from that 08 lease or property, less 1/12 of the producer's lease expenditures under 09 AS 43.55.165 for the calendar year applicable to the oil produced by the 10 producer from that lease or property, as adjusted under AS 43.55.170; 11 (D) gas produced during a month from a lease or property in 12 the Cook Inlet sedimentary basin is the gross value at the point of production 13 of the gas taxable under AS 43.55.011(e) and produced by the producer from 14 that lease or property, less 1/12 of the producer's lease expenditures under 15 AS 43.55.165 for the calendar year applicable to the gas produced by the 16 producer from that lease or property, as adjusted under AS 43.55.170; 17 (E) gas produced during a month from a lease or property 18 outside the Cook Inlet sedimentary basin and used in the state is the gross 19 value at the point of production of that gas taxable under AS 43.55.011(e) and 20 produced by the producer from that lease or property, less 1/12 of the 21 producer's lease expenditures under AS 43.55.165 for the calendar year 22 applicable to that gas produced by the producer from that lease or property, as 23 adjusted under AS 43.55.170. 24 * Sec. 23. AS 43.55.160(e) is amended to read: 25 (e) Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that 26 would otherwise be deductible by a producer in a calendar year but whose deduction 27 would cause an annual production tax value calculated under (a)(1) or (h)(1) [(h)] of 28 this section of taxable oil or gas produced during the calendar year to be less than zero 29 may be used to establish a carried-forward annual loss under AS 43.55.023(b) or 30 43.55.165(a)(3). However, the department shall provide by regulation a method to 31 ensure that, for a period for which a producer's tax liability is limited by
01 AS 43.55.011(j), (k), (o), or (p), any adjusted lease expenditures under AS 43.55.165 02 and 43.55.170 that would otherwise be deductible by a producer for that period but 03 whose deduction would cause a production tax value calculated under (a)(1)(C), (D), 04 (E), or (F), or (h)(1)(C) [(h)(3)] of this section to be less than zero are accounted for as 05 though the adjusted lease expenditures had first been used as deductions in calculating 06 the production tax values of oil or gas subject to any of the limitations under 07 AS 43.55.011(j), (k), (o), or (p) that have positive production tax values so as to 08 reduce the tax liability calculated without regard to the limitation to the maximum 09 amount provided for under the applicable provision of AS 43.55.011(j), (k), (o), or (p). 10 Only the amount of those adjusted lease expenditures remaining after the accounting 11 provided for under this subsection may be used to establish a carried-forward annual 12 loss under AS 43.55.023(b) or 43.55.165(a)(3). In this subsection, "producer" includes 13 "explorer." 14 * Sec. 24. AS 43.55.160(f) is amended to read: 15 (f) On and after January 1, 2014, in the calculation of an annual production tax 16 value of a producer under (a)(1)(A) or (h)(1)(A) [(h)(1)] of this section, the gross 17 value at the point of production of oil or gas produced from a lease or property north 18 of 68 degrees North latitude meeting one or more of the following criteria is reduced 19 by 20 percent: (1) the oil or gas is produced from a lease or property that does not 20 contain a lease that was within a unit on January 1, 2003; (2) the oil or gas is produced 21 from a participating area established after December 31, 2011, that is within a unit 22 formed under AS 38.05.180(p) before January 1, 2003, if the participating area does 23 not contain a reservoir that had previously been in a participating area established 24 before December 31, 2011; (3) the oil or gas is produced from acreage that was added 25 to an existing participating area by the Department of Natural Resources on and after 26 January 1, 2014, and the producer demonstrates to the department that the volume of 27 oil or gas produced is from acreage added to an existing participating area. This 28 subsection does not apply to gas produced before 2022 that is used in the state or to 29 gas produced on and after January 1, 2022. For oil and gas first produced from a lease 30 or property after December 31, 2016, a reduction allowed under this subsection 31 applies from the date of commencement of regular production of oil and gas from that
01 lease or property and expires after three years, consecutive or nonconsecutive, in 02 which the average annual price per barrel for Alaska North Slope crude oil for sale on 03 the United States West Coast is more than $70 or after seven years, whichever occurs 04 first. For oil and gas first produced from a lease or property before January 1, 2017, a 05 reduction allowed under this subsection expires on the earlier of January 1, 2023, or 06 January 1 following three years, consecutive or nonconsecutive, in which the average 07 annual price per barrel for Alaska North Slope crude oil for sale on the United States 08 West Coast is more than $70. The Alaska Oil and Gas Conservation Commission shall 09 determine the commencement of regular production of oil and gas for purposes of this 10 subsection. A reduction under this subsection may not reduce the gross value at the 11 point of production below zero. In this subsection, "participating area" means a 12 reservoir or portion of a reservoir producing or contributing to production as approved 13 by the Department of Natural Resources. 14 * Sec. 25. AS 43.55.160(h) is amended to read: 15 (h) For oil produced on and after January 1, 2022, except as provided in (b) 16 and [,] (f) [, AND (g)] of this section, for the purposes of 17 (1) AS 43.55.011(e)(4) [AS 43.55.011(e)(3)], the annual production 18 tax value of oil taxable under AS 43.55.011(e) produced by a producer during a 19 calendar year 20 (A) [(1)] from leases or properties in the state that include land 21 north of 68 degrees North latitude is the gross value at the point of production 22 of that oil, less the producer's lease expenditures under AS 43.55.165 for the 23 calendar year incurred to explore for, develop, or produce oil and gas deposits 24 located in the state north of 68 degrees North latitude or located in leases or 25 properties in the state that include land north of 68 degrees North latitude, as 26 adjusted under AS 43.55.170; 27 (B) [(2)] before or during the last calendar year under 28 AS 43.55.024(b) for which the producer could take a tax credit under 29 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 30 sedimentary basin, no part of which is north of 68 degrees North latitude, other 31 than leases or properties subject to AS 43.55.011(p), is the gross value at the
01 point of production of that oil, less the producer's lease expenditures under 02 AS 43.55.165 for the calendar year incurred to explore for, develop, or produce 03 oil and gas deposits located in the state outside the Cook Inlet sedimentary 04 basin and south of 68 degrees North latitude, other than oil and gas deposits 05 located in a lease or property that includes land north of 68 degrees North 06 latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from 07 which commercial production has not begun, as adjusted under AS 43.55.170; 08 (C) [(3)] from leases or properties subject to AS 43.55.011(p) 09 is the gross value at the point of production of that oil, less the producer's lease 10 expenditures under AS 43.55.165 for the calendar year incurred to explore for, 11 develop, or produce oil and gas deposits located in leases or properties subject 12 to AS 43.55.011(p) or, before January 1, 2027, located in leases or properties 13 in the state outside the Cook Inlet sedimentary basin, no part of which is north 14 of 68 degrees North latitude from which commercial production has not begun, 15 as adjusted under AS 43.55.170; 16 (D) [(4)] from leases or properties in the state no part of which 17 is north of 68 degrees North latitude, other than leases or properties subject to 18 (B) or (C) of this paragraph [(2) OR (3) OF THIS SUBSECTION], is the 19 gross value at the point of production of that oil less the producer's lease 20 expenditures under AS 43.55.165 for the calendar year incurred to explore for, 21 develop, or produce oil and gas deposits located in the state south of 68 22 degrees North latitude, other than oil and gas deposits located in a lease or 23 property in the state that includes land north of 68 degrees North latitude, and 24 excluding lease expenditures that are deductible under (B) or (C) of this 25 paragraph [(2) OR (3) OF THIS SUBSECTION] or would be deductible 26 under (B) or (C) of this paragraph [(2) OR (3) OF THIS SUBSECTION] if 27 not prohibited by (b) of this section, as adjusted under AS 43.55.170; a 28 separate annual production tax value shall be calculated for 29 (i) [(A)] oil produced from each lease or property in the 30 Cook Inlet sedimentary basin; 31 (ii) [(B)] oil produced from each lease or property
01 outside the Cook Inlet sedimentary basin, no part of which is north of 02 68 degrees North latitude, other than leases or properties subject to (C) 03 of this paragraph; 04 (2) AS 43.55.011(g)(3), the monthly production tax value of oil 05 taxable under AS 43.55.011(e) produced by a producer during a month 06 (A) from leases or properties in the state that include land 07 north of 68 degrees North latitude is the gross value at the point of 08 production of that oil, less 1/12 the producer's lease expenditures under 09 AS 43.55.165 for the calendar year incurred to explore for, develop, or 10 produce oil and gas deposits located in the state north of 68 degrees North 11 latitude or located in leases or properties in the state that include land 12 north of 68 degrees North latitude, as adjusted under AS 43.55.170; 13 (B) in a calendar year that is before or during the last 14 calendar year under AS 43.55.024(b) for which the producer could take a 15 tax credit under AS 43.55.024(a), from leases or properties in the state 16 outside the Cook Inlet sedimentary basin, no part of which is north of 68 17 degrees North latitude, other than leases or properties subject to 18 AS 43.55.011(p), is the gross value at the point of production of that oil, 19 less 1/12 the producer's lease expenditures under AS 43.55.165 for the 20 calendar year incurred to explore for, develop, or produce oil and gas 21 deposits located in the state outside the Cook Inlet sedimentary basin and 22 south of 68 degrees North latitude, other than oil and gas deposits located 23 in a lease or property that includes land north of 68 degrees North latitude 24 or that is subject to AS 43.55.011(p) or, before January 1, 2027, from 25 which commercial production has not begun, as adjusted under 26 AS 43.55.170; 27 (C) from leases or properties subject to AS 43.55.011(p) is 28 the gross value at the point of production of that oil, less 1/12 the 29 producer's lease expenditures under AS 43.55.165 for the calendar year 30 incurred to explore for, develop, or produce oil and gas deposits located in 31 leases or properties subject to AS 43.55.011(p) or, before January 1, 2027,
01 located in leases or properties in the state outside the Cook Inlet 02 sedimentary basin, no part of which is north of 68 degrees North latitude 03 from which commercial production has not begun, as adjusted under 04 AS 43.55.170; 05 (D) from leases or properties in the state no part of which is 06 north of 68 degrees North latitude, other than leases or properties subject 07 to (B) or (C) of this paragraph, is the gross value at the point of 08 production of that oil less 1/12 the producer's lease expenditures under 09 AS 43.55.165 for the calendar year incurred to explore for, develop, or 10 produce oil and gas deposits located in the state south of 68 degrees North 11 latitude, other than oil and gas deposits located in a lease or property in 12 the state that includes land north of 68 degrees North latitude, and 13 excluding lease expenditures that are deductible under (B) or (C) of this 14 paragraph or would be deductible under (B) or (C) of this paragraph if 15 not prohibited by (b) of this section, as adjusted under AS 43.55.170; a 16 separate monthly production tax value shall be calculated for 17 (i) oil produced from each lease or property in the 18 Cook Inlet sedimentary basin; 19 (ii) oil produced from each lease or property outside 20 the Cook Inlet sedimentary basin, no part of which is north of 68 21 degrees North latitude, other than leases or properties subject to 22 (C) of this paragraph [(3) OF THIS SUBSECTION]. 23 * Sec. 26. AS 43.55.165(a), as amended by sec. 29, ch. 4, 4SSLA 2016, is amended to read: 24 (a) For purposes of this chapter, a producer's lease expenditures for a calendar 25 year are 26 (1) costs, other than items listed in (e) of this section, that are 27 (A) incurred by the producer during the calendar year after 28 March 31, 2006, to explore for, develop, or produce oil or gas deposits located 29 within the producer's leases or properties in the state or, in the case of land in 30 which the producer does not own an operating right, operating interest, or 31 working interest, to explore for oil or gas deposits within other land in the
01 state; and 02 (B) allowed by the department by regulation, based on the 03 department's determination that the costs satisfy the following three 04 requirements: 05 (i) the costs must be incurred upstream of the point of 06 production of oil and gas; 07 (ii) the costs must be ordinary and necessary costs of 08 exploring for, developing, or producing, as applicable, oil or gas 09 deposits; and 10 (iii) the costs must be direct costs of exploring for, 11 developing, or producing, as applicable, oil or gas deposits; [AND] 12 (2) a reasonable allowance for that calendar year, as determined under 13 regulations adopted by the department, for overhead expenses that are directly related 14 to exploring for, developing, or producing, as applicable, the oil or gas deposits; and 15 (3) lease expenditures incurred in a previous year, subject to (m) 16 and (n) of this section, that 17 (A) met the requirements of AS 43.55.160(e) in the year that 18 the lease expenditures were incurred; 19 (B) have not been deducted in the determination of the 20 production tax value of oil and gas under AS 43.55.160(a) in a previous 21 calendar year; 22 (C) were not the basis of a credit under this title; and 23 (D) were incurred to explore for, develop, or produce an oil 24 or gas deposit located north of 68 degrees North latitude. 25 * Sec. 27. AS 43.55.165 is amended by adding new subsections to read: 26 (m) Beginning January 1 of the eighth calendar year after a lease expenditure 27 is carried forward under (a)(3) of this section, the lease expenditure shall decrease in 28 value each year by one-tenth of the amount carried forward in the first calendar year. 29 A lease expenditure carried forward under this section may not decrease in value for a 30 partial calendar year. 31 (n) A lease expenditure carried forward under (a)(3) of this section may not
01 reduce a taxpayer's gross value at the point of production by an amount that exceeds 02 the gross value at the point of production of the oil and gas produced from the lease or 03 property where the lease expenditure was incurred during the calendar year the lease 04 expenditure is applied. 05 * Sec. 28. AS 43.98.050 is amended to read: 06 Sec. 43.98.050. Duties. The duties of the board include the following: 07 (1) establish and maintain a salient collection of information related to 08 oil and gas exploration, development, and production in the state and related to tax 09 structures, rates, and credits in other regions with oil and gas resources; 10 (2) review historical, current, and potential levels of investment in the 11 state's oil and gas sector; 12 (3) identify factors that affect investment in oil and gas exploration, 13 development, and production in the state, including tax structure, rates, and credits; 14 royalty requirements; infrastructure; workforce availability; and regulatory 15 requirements; 16 (4) review the competitive position of the state to attract and maintain 17 investment in the oil and gas sector in the state as compared to the competitive 18 position of other regions with oil and gas resources; 19 (5) in order to facilitate the work of the board, establish procedures to 20 accept and keep confidential information that is beneficial to the work of the board, 21 including the creation of a secure data room and confidentiality agreements to be 22 signed by individuals having access to confidential information; 23 (6) make written findings and recommendations to the Alaska State 24 Legislature before 25 (A) January 31, 2015, or as soon thereafter as practicable, 26 regarding 27 (i) changes to the state's regulatory environment and 28 permitting structure that would be conducive to encouraging increased 29 investment while protecting the interests of the people of the state and 30 the environment; 31 (ii) the status of the oil and gas industry labor pool in
01 the state and the effectiveness of workforce development efforts by the 02 state; 03 (iii) the status of the oil-and-gas-related infrastructure 04 of the state, including a description of infrastructure deficiencies; and 05 (iv) the competitiveness of the state's fiscal oil and gas 06 tax regime when compared to other regions of the world; 07 (B) January 15, 2017, regarding 08 (i) the state's tax structure and rates on oil and gas 09 produced south of 68 degrees North latitude; 10 (ii) a tax structure that takes into account the unique 11 economic circumstances for each oil and gas producing area south of 12 68 degrees North latitude; 13 (iii) a reduction in the gross value at the point of 14 production for oil and gas produced south of 68 degrees North latitude 15 that is similar to the reduction in gross value at the point of production 16 in AS 43.55.160(f) and former AS 43.55.160(g) [(g)]; 17 (iv) other incentives for oil and gas production south of 18 68 degrees North latitude; 19 (C) January 31, 2021, or as soon thereafter as practicable, 20 regarding 21 (i) changes to the state's fiscal regime that would be 22 conducive to increased and ongoing long-term investment in and 23 development of the state's oil and gas resources; 24 (ii) alternative means for increasing the state's ability to 25 attract and maintain investment in and development of the state's oil 26 and gas resources; and 27 (iii) a review of the current effectiveness and future 28 value of any provisions of the state's oil and gas tax laws that are 29 expiring in the next five years. 30 * Sec. 29. AS 43.55.024(j), 43.55.029, and 43.55.160(g) are repealed. 31 * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to
01 read: 02 LEGISLATIVE WORKING GROUP. (a) A legislative working group is established 03 to analyze the Cook Inlet fiscal regime for oil and gas, review the state's tax structure and 04 rates on oil and gas produced south of 68 degrees North latitude, recommend changes to the 05 legislature for consideration during the Second Regular Session of the Thirtieth Alaska State 06 Legislature, and develop terms for a comprehensive fiscal regime, including 07 (1) a tax structure that accounts for the unique circumstances for each oil and 08 gas producing area south of 68 degrees North latitude; 09 (2) incentives other than direct monetary support from the state for the 10 exploration, development, and production of oil and gas south of 68 degrees North latitude; 11 (3) consideration of the competitiveness of the area south of 68 degrees North 12 latitude to attract new oil and gas development; 13 (4) consideration of the unique market considerations of the Cook Inlet 14 sedimentary basin and the need to support energy supply security for communities in 15 Southcentral Alaska; 16 (5) alternative means of state support for the exploration, development, and 17 production of oil and gas in the Cook Inlet sedimentary basin, including loan guarantees or 18 other financial support through the Alaska Industrial Development and Export Authority, or 19 other state corporation or entity; 20 (6) the applicability of the recommended tax structure to gas currently subject 21 to AS 43.55.011(o). 22 (b) The recommended changes under (a) of this section may not include refundable or 23 deductible tax credits or carried-forward lease expenditures. 24 (c) The working group consists of 25 (1) two co-chairs, one of whom is a member of the house of representatives 26 appointed by the speaker of the house of representatives, and one of whom is a member of the 27 senate appointed by the president of the senate; and 28 (2) members appointed by the co-chairs; members must be legislators and 29 must include members of the majority and minority caucuses. 30 (d) The co-chairs of the working group may form an advisory group to the working 31 group, composed of members who are not legislators and who have expertise and skills to
01 assist in the review and development of a new plan for the tax structure and rates on oil and 02 gas produced south of 68 degrees North latitude. The members of an advisory group may 03 include commissioners or employees of state departments, members of the oil and gas 04 industry or trade associations, and economists. 05 (e) The working group may be supported by legislative consultants under contract 06 through the Legislative Budget and Audit Committee. 07 * Sec. 31. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 APPLICABILITY. (a) The additional limitations on the use of tax credits in 10 AS 43.55.011(q), added by sec. 8 of this Act, AS 43.55.023(c), as amended by sec. 16 of this 11 Act, AS 43.55.024(i), as amended by sec. 17 of this Act, and AS 43.55.025(i), as amended by 12 sec. 18 of this Act, apply to credits applied to reduce a tax liability for a tax year starting on or 13 after the effective date of secs. 8 and 16 - 18 of this Act. 14 (b) AS 43.55.023(b), as amended by sec. 15 of this Act, applies to lease expenditures 15 incurred on or after the effective date of sec. 15 of this Act. 16 (c) The repeal of AS 43.55.029 by sec. 29 of this Act applies to a credit applied for on 17 or after the effective date of sec. 29 of this Act. 18 * Sec. 32. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 TRANSITION: CARRIED-FORWARD LEASE EXPENDITURES. 21 AS 43.55.165(a)(3), (m), and (n), added by secs. 26 and 27 of this Act, apply to a lease 22 expenditure incurred on or after the effective date of secs. 26 and 27 of this Act. 23 * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 TRANSITION: ASSIGNMENT OF TAX CREDIT CERTIFICATES. 26 Notwithstanding the repeal of AS 43.55.029 by sec. 29 of this Act, the Department of 27 Revenue may continue to apply and enforce AS 43.55.029 as that section read the day before 28 the effective date of sec. 29 of this Act for a credit applied for before the effective date of sec. 29 29 of this Act. 30 * Sec. 34. The uncodified law of the State of Alaska is amended by adding a new section to 31 read:
01 TRANSITION: PAYMENT OF TAX; FILING. (a) Notwithstanding the amendments 02 to AS 43.55.020 by secs. 10 - 14 of this Act, 03 (1) a person subject to tax under AS 43.55 that is required to make one or 04 more installment payments of estimated tax or other payments of tax under AS 43.55.020 for 05 production before the effective date of secs. 10 - 14 of this Act shall pay the tax under 06 AS 43.55.020, as that section read on the day before the effective date of secs. 10 - 14 of this 07 Act; 08 (2) an unpaid amount of an installment payment required under AS 43.55.020 09 for production before the effective date of secs. 10 - 14 of this Act that is not paid when due 10 bears interest under AS 43.55.020, as that section read on the day before the effective date of 11 secs. 10 - 14 of this Act; 12 (3) an overpayment of an installment payment required under AS 43.55.020 13 for production before the effective date of secs. 10 - 14 of this Act bears interest under 14 AS 43.55.020, as that section read on the day before the effective date of secs. 10 - 14 of this 15 Act. 16 (b) The Department of Revenue may continue to apply and enforce AS 43.55.020, as 17 that section read on the day before the effective date of secs. 10 - 14 of this Act, for a tax or 18 installment payment for production before the effective date of secs. 10 - 14 of this Act. 19 * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 TRANSITION: GROSS VALUE REDUCTION. Notwithstanding the repeal of 22 AS 43.55.160(g) by sec. 29 of this Act and the amendments to AS 43.55.020(a), 43.55.023(b), 23 43.55.024(i), and 43.55.160(a) and (h) by secs. 10, 15, 17, 22, and 25 of this Act, a taxpayer 24 who produces oil or gas before January 1, 2018, that qualifies for a reduction in gross value 25 under AS 43.55.160(g), as that subsection read on the day before the effective date of sec. 29 26 of this Act, may reduce the gross value at the point of production of and may qualify for a 27 credit under AS 43.55.024(i) for that oil or gas, in accordance with AS 43.55.160(g) and 28 43.55.024(i), as those subsections read on the day before the effective date of sec. 29 of this 29 Act. 30 * Sec. 36. The uncodified law of the State of Alaska is amended by adding a new section to 31 read:
01 TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any 02 contrary provision of AS 44.62.240, if the Department of Revenue expressly designates in a 03 regulation that the regulation applies retroactively, a regulation adopted by the Department of 04 Revenue to implement, interpret, make specific, or otherwise carry out this Act may apply 05 retroactively to the effective date of the law implemented by the regulation. 06 * Sec. 37. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 RETROACTIVITY. Section 3 of this Act is retroactive to January 1, 2017.