HB 133: "An Act relating to the oil and gas production tax, tax payments, and tax credits; relating to adjustments to the gross value at the point of production; and providing for an effective date."
00 HOUSE BILL NO. 133 01 "An Act relating to the oil and gas production tax, tax payments, and tax credits; 02 relating to adjustments to the gross value at the point of production; and providing for 03 an effective date." 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 Fair Share for Alaska's Oil Act. 08 * Sec. 2. AS 31.05.030(n) is amended to read: 09 (n) Upon request of the commissioner of revenue, the commission shall 10 determine the commencement of regular production from a lease or property for 11 purposes of AS 43.55.160(f) [AND (g)]. 12 * Sec. 3. AS 43.55.011(e) is amended to read: 13 (e) There is levied on the producer of oil or gas a tax for all oil and gas 14 produced each calendar year from each lease or property in the state, less any oil and
01 gas the ownership or right to which is exempt from taxation or constitutes a 02 landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as 03 otherwise provided under (f), (j), [(k),] (o), and (p) of this section, for oil and gas 04 produced 05 (1) before January 1, 2014, the tax is equal to the sum of 06 (A) the annual production tax value of the taxable oil and gas 07 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 08 (B) the sum, over all months of the calendar year, of the tax 09 amounts determined under (g) of this section; 10 (2) on and after January 1, 2014, and before January 1, 2018 [2022], 11 the tax is equal to the annual production tax value of the taxable oil and gas as 12 calculated under AS 43.55.160(a)(1) multiplied by 35 percent; 13 (3) on and after January 1, 2018, and before January 1, 2022, the 14 tax for 15 (A) oil produced from leases or properties outside the Cook 16 Inlet sedimentary basin that do not include land north of 68 degrees North 17 latitude is equal to the annual production tax value of the oil as calculated 18 under AS 43.55.160(a)(1) multiplied by 35 percent; 19 (B) oil produced from leases or properties in the Cook Inlet 20 sedimentary basin is equal to the sum of 21 (i) the annual production tax value of the taxable oil 22 as calculated under AS 43.55.160(a)(1) multiplied by 22.5 percent; 23 and 24 (ii) the sum, over all the months of the calendar 25 year, of the amounts determined under (g) of this section; 26 (C) oil produced from leases or properties that include land 27 north of 68 degrees North latitude is equal to the sum of 28 (i) the annual production tax value of the taxable oil 29 as calculated under AS 43.55.160(a)(1) multiplied by 35 percent; 30 and 31 (ii) the sum, over all the months of the calendar
01 year, of the amounts determined under (g) of this section; 02 (D) gas is equal to the annual production tax value of the 03 taxable gas as calculated under AS 43.55.160(a)(1) multiplied by 35 04 percent; 05 (4) on and after January 1, 2022, the tax for 06 (A) oil produced from leases or properties outside the Cook 07 Inlet sedimentary basin that do not include land north of 68 degrees North 08 latitude is equal to the annual production tax value of the taxable oil as 09 calculated under AS 43.55.160(h)(1) [AS 43.55.160(h)] multiplied by 35 10 percent; 11 (B) oil produced from leases or properties in the Cook Inlet 12 sedimentary basin is equal to the sum of 13 (i) the annual production tax value of the taxable oil 14 as calculated under AS 43.55.160(h)(1) multiplied by 22.5 percent; 15 and 16 (ii) the sum, over all the months of the calendar 17 year, of the amounts determined under (g) of this section; 18 (C) oil produced from leases or properties that include land 19 north of 68 degrees North latitude is equal to the sum of 20 (i) the annual production tax value of the taxable oil 21 as calculated under AS 43.55.160(h)(1) multiplied by 35 percent; 22 and 23 (ii) the sum, over all the months of the calendar 24 year, of the amounts determined under (g) of this section; 25 (D) [(B)] gas is equal to 13 percent of the gross value at the 26 point of production of the taxable gas; if the gross value at the point of 27 production of gas produced from a lease or property is less than zero, that gross 28 value at the point of production is considered zero for purposes of this 29 subparagraph. 30 * Sec. 4. AS 43.55.011(f) is amended to read: 31 (f) The levy of tax under (e) of this section for
01 (1) oil and gas produced before January 1, 2018 [JANUARY 1, 02 2022], from leases or properties that include land north of 68 degrees North latitude, 03 other than gas subject to (o) of this section, may not be less than 04 (A) four percent of the gross value at the point of production 05 when the average price per barrel for Alaska North Slope crude oil for sale on 06 the United States West Coast during the calendar year for which the tax is due 07 is more than $25; 08 (B) three percent of the gross value at the point of production 09 when the average price per barrel for Alaska North Slope crude oil for sale on 10 the United States West Coast during the calendar year for which the tax is due 11 is over $20 but not over $25; 12 (C) two percent of the gross value at the point of production 13 when the average price per barrel for Alaska North Slope crude oil for sale on 14 the United States West Coast during the calendar year for which the tax is due 15 is over $17.50 but not over $20; 16 (D) one percent of the gross value at the point of production 17 when the average price per barrel for Alaska North Slope crude oil for sale on 18 the United States West Coast during the calendar year for which the tax is due 19 is over $15 but not over $17.50; or 20 (E) zero percent of the gross value at the point of production 21 when the average price per barrel for Alaska North Slope crude oil for sale on 22 the United States West Coast during the calendar year for which the tax is due 23 is $15 or less; [AND] 24 (2) gas [OIL] produced on and after January 1, 2018, and before 25 January 1, 2022, from leases or properties that include land north of 68 degrees North 26 latitude, other than gas subject to (o) of this section, may not be less than 27 (A) four percent of the gross value at the point of production 28 when the average price per barrel for Alaska North Slope crude oil for sale on 29 the United States West Coast during the calendar year for which the tax is due 30 is more than $25; 31 (B) three percent of the gross value at the point of production
01 when the average price per barrel for Alaska North Slope crude oil for sale on 02 the United States West Coast during the calendar year for which the tax is due 03 is over $20 but not over $25; 04 (C) two percent of the gross value at the point of production 05 when the average price per barrel for Alaska North Slope crude oil for sale on 06 the United States West Coast during the calendar year for which the tax is due 07 is over $17.50 but not over $20; 08 (D) one percent of the gross value at the point of production 09 when the average price per barrel for Alaska North Slope crude oil for sale on 10 the United States West Coast during the calendar year for which the tax is due 11 is over $15 but not over $17.50; or 12 (E) zero percent of the gross value at the point of production 13 when the average price per barrel for Alaska North Slope crude oil for sale on 14 the United States West Coast during the calendar year for which the tax is due 15 is $15 or less; 16 (3) oil produced on and after January 1, 2018, from leases or 17 properties that include land north of 68 degrees North latitude, other than oil 18 subject to (4) of this subsection, may not be less than the greater of 19 (A) the applicable percentage of gross value, as follows: 20 (i) 10 percent of the gross value at the point of 21 production when the average price per barrel for Alaska North 22 Slope crude oil for sale on the United States West Coast during the 23 calendar year for which the tax is due is $90 or more; 24 (ii) nine percent of the gross value at the point of 25 production when the average price per barrel for Alaska North 26 Slope crude oil for sale on the United States West Coast during the 27 calendar year for which the tax is due is $82 or more but less than 28 $90; 29 (iii) eight percent of the gross value at the point of 30 production when the average price per barrel for Alaska North 31 Slope crude oil for sale on the United States West Coast during the
01 calendar year for which the tax is due is $74 or more but less than 02 $82; 03 (iv) seven percent of the gross value at the point of 04 production when the average price per barrel for Alaska North 05 Slope crude oil for sale on the United States West Coast during the 06 calendar year for which the tax is due is $66 or more but less than 07 $74; 08 (v) six percent of the gross value at the point of 09 production when the average price per barrel for Alaska North 10 Slope crude oil for sale on the United States West Coast during the 11 calendar year for which the tax is due is $58 or more but less than 12 $66; 13 (vi) five percent of the gross value at the point of 14 production when the average price per barrel for Alaska North 15 Slope crude oil for sale on the United States West Coast during the 16 calendar year for which the tax is due is $50 or more but less than 17 $58; 18 (vii) four percent of the gross value at the point of 19 production when the average price per barrel for Alaska North 20 Slope crude oil for sale on the United States West Coast during the 21 calendar year for which the tax is due is $25 or more but less than 22 $50; 23 (viii) three percent of the gross value at the point of 24 production when the average price per barrel for Alaska North 25 Slope crude oil for sale on the United States West Coast during the 26 calendar year for which the tax is due is less than $25; or 27 (B) 22.5 percent of the annual production tax value of the 28 taxable oil, as calculated under AS 43.55.160(a); and 29 (4) heavy oil produced on and after January 1, 2018, from leases 30 or properties that include land north of 68 degrees North latitude, may not be 31 less than the greater of
01 (A) the applicable percentage of gross value, as follows: 02 (i) seven percent of the gross value at the point of 03 production when the average price per barrel for Alaska North 04 Slope crude oil for sale on the United States West Coast during the 05 calendar year for which the tax is due is $90 or more; 06 (ii) six and one-half percent of the gross value at the 07 point of production when the average price per barrel for Alaska 08 North Slope crude oil for sale on the United States West Coast 09 during the calendar year for which the tax is due is $82 or more 10 but less than $90; 11 (iii) six percent of the gross value at the point of 12 production when the average price per barrel for Alaska North 13 Slope crude oil for sale on the United States West Coast during the 14 calendar year for which the tax is due is $74 or more but less than 15 $82; 16 (iv) five and one-half percent of the gross value at 17 the point of production when the average price per barrel for 18 Alaska North Slope crude oil for sale on the United States West 19 Coast during the calendar year for which the tax is due is $66 or 20 more but less than $74; 21 (v) five percent of the gross value at the point of 22 production when the average price per barrel for Alaska North 23 Slope crude oil for sale on the United States West Coast during the 24 calendar year for which the tax is due is $58 or more but less than 25 $66; 26 (vi) four and one-half percent of the gross value at 27 the point of production when the average price per barrel for 28 Alaska North Slope crude oil for sale on the United States West 29 Coast during the calendar year for which the tax is due is $50 or 30 more but less than $58; 31 (vii) four percent of the gross value at the point of
01 production when the average price per barrel for Alaska North 02 Slope crude oil for sale on the United States West Coast during the 03 calendar year for which the tax is due is less than $50; or 04 (B) 22.5 percent of the annual production tax value of the 05 taxable oil, as calculated under AS 43.55.160(a). 06 * Sec. 5. AS 43.55.011(g) is amended to read: 07 (g) For purposes of (e) of this section, the tax amount is determined as 08 follows: 09 (1) before January 1, 2014, for [FOR] each month of a calendar year 10 [BEFORE 2014] for which the producer's average monthly production tax value under 11 AS 43.55.160(a)(2) of a BTU equivalent barrel of the taxable oil and gas is more than 12 $30, the amount of tax for purposes of (e)(1)(B) of this section is determined by 13 multiplying the monthly production tax value of the taxable oil and gas produced 14 during the month by the tax rate calculated as follows: 15 (A) [(1)] if the producer's average monthly production tax 16 value of a BTU equivalent barrel of the taxable oil and gas for the month is not 17 more than $92.50, the tax rate is 0.4 percent multiplied by the number that 18 represents the difference between that average monthly production tax value of 19 a BTU equivalent barrel and $30; or 20 (B) [(2)] if the producer's average monthly production tax value 21 of a BTU equivalent barrel of the taxable oil and gas for the month is more 22 than $92.50, the tax rate is the sum of 25 percent and the product of 0.1 percent 23 multiplied by the number that represents the difference between the average 24 monthly production tax value of a BTU equivalent barrel and $92.50, except 25 that the sum determined under this subparagraph [PARAGRAPH] may not 26 exceed 50 percent; 27 (2) on or after January 1, 2018, and before January 1, 2022, for 28 each month of a calendar year for which the producer's production tax value 29 under AS 43.55.160(a)(3) of a BTU equivalent barrel of the taxable oil is 30 (A) more than $70, the difference between the monthly 31 production tax value of a BTU equivalent barrel and $70 multiplied by the
01 volume of oil produced by the producer for the month multiplied by 25 02 percent; 03 (B) more than $60 but not more than $70, the difference 04 between the monthly production tax value of a BTU equivalent barrel and 05 $60 multiplied by the volume of oil produced by the producer for the 06 month multiplied by 20 percent; 07 (C) more than $50 but not more than $60, the difference 08 between the monthly production tax value of a BTU equivalent barrel and 09 $50 multiplied by the volume of oil produced by the producer for the 10 month multiplied by 15 percent; 11 (D) more than $40 but not more than $50, the difference 12 between the monthly production tax value of a BTU equivalent barrel and 13 $40 multiplied by the volume of oil produced by the producer for the 14 month multiplied by 10 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 the taxable oil is 18 (A) more than $70, the difference between the monthly 19 production tax value of a BTU equivalent barrel and $70 multiplied by the 20 volume of oil produced by the producer for the month multiplied by 25 21 percent; 22 (B) more than $60 but not more than $70, the difference 23 between the monthly production tax value of a BTU equivalent barrel and 24 $60 multiplied by the volume of oil produced by the producer for the 25 month multiplied by 20 percent; 26 (C) more than $50 but not more than $60, the difference 27 between the monthly production tax value of a BTU equivalent barrel and 28 $50 multiplied by the volume of oil produced by the producer for the 29 month multiplied by 15 percent; 30 (D) more than $40 but not more than $50, the difference 31 between the monthly production tax value of a BTU equivalent barrel and
01 $40 multiplied by the volume of oil produced by the producer for the 02 month multiplied by 10 percent. 03 * Sec. 6. AS 43.55.011 is amended by adding new subsections to read: 04 (q) The department shall 05 (1) adjust dollar amounts under (f)(3) and (4) of this section biennially 06 for inflation from calendar year 2017 using the Consumer Price Index for all urban 07 consumers for Anchorage compiled by the Bureau of Labor Statistics, United States 08 Department of Labor, rounded to the nearest $.25 increment; and 09 (2) publish the adjusted amounts on the department's Internet website. 10 (r) The amount of tax determined under (f) of this section may not be reduced 11 by the application of a credit authorized under this chapter. 12 * Sec. 7. AS 43.55.014(b) is amended to read: 13 (b) A production tax levied by this section is equal to 13 percent of the gas 14 otherwise taxable under AS 43.55.011(e)(4) [AS 43.55.011(e)(3)] produced from each 15 oil and gas lease to which an effective election under (a) of this section applies, when 16 and as that gas is produced. The producer shall pay the tax in gas by delivering that 13 17 percent of the gas to the state at the point of production. 18 * Sec. 8. AS 43.55.020(a) is amended to read: 19 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 20 the tax as follows: 21 (1) [FOR OIL AND GAS PRODUCED BEFORE JANUARY 1, 2014, 22 AN INSTALLMENT PAYMENT OF THE ESTIMATED TAX LEVIED BY 23 AS 43.55.011(e), NET OF ANY TAX CREDITS APPLIED AS ALLOWED BY 24 LAW, IS DUE FOR EACH MONTH OF THE CALENDAR YEAR ON THE LAST 25 DAY OF THE FOLLOWING MONTH; EXCEPT AS OTHERWISE PROVIDED 26 UNDER (2) OF THIS SUBSECTION, THE AMOUNT OF THE INSTALLMENT 27 PAYMENT IS THE SUM OF THE FOLLOWING AMOUNTS, LESS 1/12 OF THE 28 TAX CREDITS THAT ARE ALLOWED BY LAW TO BE APPLIED AGAINST 29 THE TAX LEVIED BY AS 43.55.011(e) FOR THE CALENDAR YEAR, BUT THE 30 AMOUNT OF THE INSTALLMENT PAYMENT MAY NOT BE LESS THAN 31 ZERO:
01 (A) FOR OIL AND GAS NOT SUBJECT TO AS 43.55.011(o) 02 OR (p) PRODUCED FROM LEASES OR PROPERTIES IN THE STATE 03 OUTSIDE THE COOK INLET SEDIMENTARY BASIN, OTHER THAN 04 LEASES OR PROPERTIES SUBJECT TO AS 43.55.011(f), THE GREATER 05 OF 06 (i) ZERO; OR 07 (ii) THE SUM OF 25 PERCENT AND THE TAX 08 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g) 09 MULTIPLIED BY THE REMAINDER OBTAINED BY 10 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE 11 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION 12 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE 13 FOR THE OIL AND GAS UNDER AS 43.55.160 FROM THE 14 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL 15 AND GAS PRODUCED FROM THE LEASES OR PROPERTIES 16 DURING THE MONTH FOR WHICH THE INSTALLMENT 17 PAYMENT IS CALCULATED; 18 (B) FOR OIL AND GAS PRODUCED FROM LEASES OR 19 PROPERTIES SUBJECT TO AS 43.55.011(f), THE GREATEST OF 20 (i) ZERO; 21 (ii) ZERO PERCENT, ONE PERCENT, TWO 22 PERCENT, THREE PERCENT, OR FOUR PERCENT, AS 23 APPLICABLE, OF THE GROSS VALUE AT THE POINT OF 24 PRODUCTION OF THE OIL AND GAS PRODUCED FROM THE 25 LEASES OR PROPERTIES DURING THE MONTH FOR WHICH 26 THE INSTALLMENT PAYMENT IS CALCULATED; OR 27 (iii) THE SUM OF 25 PERCENT AND THE TAX 28 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g) 29 MULTIPLIED BY THE REMAINDER OBTAINED BY 30 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE 31 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION
01 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE 02 FOR THE OIL AND GAS UNDER AS 43.55.160 FROM THE 03 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL 04 AND GAS PRODUCED FROM THOSE LEASES OR PROPERTIES 05 DURING THE MONTH FOR WHICH THE INSTALLMENT 06 PAYMENT IS CALCULATED; 07 (C) FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k), 08 OR (o), FOR EACH LEASE OR PROPERTY, THE GREATER OF 09 (i) ZERO; OR 10 (ii) THE SUM OF 25 PERCENT AND THE TAX 11 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g) 12 MULTIPLIED BY THE REMAINDER OBTAINED BY 13 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE 14 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION 15 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE 16 UNDER AS 43.55.160 FOR THE OIL OR GAS, RESPECTIVELY, 17 PRODUCED FROM THE LEASE OR PROPERTY FROM THE 18 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL 19 OR GAS, RESPECTIVELY, PRODUCED FROM THE LEASE OR 20 PROPERTY DURING THE MONTH FOR WHICH THE 21 INSTALLMENT PAYMENT IS CALCULATED; 22 (D) FOR OIL AND GAS SUBJECT TO AS 43.55.011(p), 23 THE LESSER OF 24 (i) THE SUM OF 25 PERCENT AND THE TAX 25 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g) 26 MULTIPLIED BY THE REMAINDER OBTAINED BY 27 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE 28 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION 29 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE 30 FOR THE OIL AND GAS UNDER AS 43.55.160 FROM THE 31 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL
01 AND GAS PRODUCED FROM THE LEASES OR PROPERTIES 02 DURING THE MONTH FOR WHICH THE INSTALLMENT 03 PAYMENT IS CALCULATED, BUT NOT LESS THAN ZERO; OR 04 (ii) FOUR PERCENT OF THE GROSS VALUE AT 05 THE POINT OF PRODUCTION OF THE OIL AND GAS 06 PRODUCED FROM THE LEASES OR PROPERTIES DURING THE 07 MONTH, BUT NOT LESS THAN ZERO; 08 (2) AN AMOUNT CALCULATED UNDER (1)(C) OF THIS 09 SUBSECTION FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k), OR (o) MAY 10 NOT EXCEED THE PRODUCT OBTAINED BY CARRYING OUT THE 11 CALCULATION SET OUT IN AS 43.55.011(j)(1) OR (2) OR 43.55.011(o), AS 12 APPLICABLE, FOR GAS OR SET OUT IN AS 43.55.011(k) FOR OIL, BUT 13 SUBSTITUTING IN AS 43.55.011(j)(1)(A) OR (2)(A) OR 43.55.011(o), AS 14 APPLICABLE, THE AMOUNT OF TAXABLE GAS PRODUCED DURING THE 15 MONTH FOR THE AMOUNT OF TAXABLE GAS PRODUCED DURING THE 16 CALENDAR YEAR AND SUBSTITUTING IN AS 43.55.011(k) THE AMOUNT 17 OF TAXABLE OIL PRODUCED DURING THE MONTH FOR THE AMOUNT OF 18 TAXABLE OIL PRODUCED DURING THE CALENDAR YEAR; 19 (3)] an installment payment of the estimated tax levied by 20 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 21 on the last day of the following month; the amount of the installment payment is the 22 sum of 23 (A) the applicable tax rate for oil provided under 24 AS 43.55.011(i), multiplied by the gross value at the point of production of the 25 oil taxable under AS 43.55.011(i) and produced from the lease or property 26 during the month; and 27 (B) the applicable tax rate for gas provided under 28 AS 43.55.011(i), multiplied by the gross value at the point of production of the 29 gas taxable under AS 43.55.011(i) and produced from the lease or property 30 during the month; 31 (2) [(4)] any amount of tax levied by AS 43.55.011, net of any credits
01 applied as allowed by law, that exceeds the total of the amounts due as installment 02 payments of estimated tax is due on March 31 of the year following the calendar year 03 of production; 04 (3) [(5)] for oil and gas produced on and after January 1, 2018 05 [JANUARY 1, 2014], and before January 1, 2022, an installment payment of the 06 estimated tax levied by AS 43.55.011(e), net of any tax credits applied as allowed by 07 law, is due for each month of the calendar year on the last day of the following month; 08 except as otherwise provided under (4) [(6)] of this subsection, the amount of the 09 installment payment is the sum of the following amounts, less 1/12 of the tax credits 10 that are allowed by law to be applied against the tax levied by AS 43.55.011(e) for the 11 calendar year, but the amount of the installment payment may not be less than zero: 12 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 13 produced from leases or properties in the state outside the Cook Inlet 14 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 15 the greater of 16 (i) zero; or 17 (ii) 35 percent multiplied by the remainder obtained by 18 subtracting 1/12 of the producer's adjusted lease expenditures for the 19 calendar year of production under AS 43.55.165 and 43.55.170 that are 20 deductible for the oil and gas under AS 43.55.160 from the gross value 21 at the point of production of the oil and gas produced from the leases or 22 properties during the month for which the installment payment is 23 calculated; 24 (B) for oil and gas produced from leases or properties subject 25 to AS 43.55.011(f), the greatest of 26 (i) zero; 27 (ii) the percentages applicable under AS 43.55.011(f) 28 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 29 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 30 value at the point of production or the production tax value, as 31 applicable, of the oil and gas produced from the leases or properties
01 during the month for which the installment payment is calculated; or 02 (iii) the sum of the amount calculated for the month 03 under AS 43.55.011(g), as applicable, and 35 percent multiplied by 04 the remainder obtained by subtracting 1/12 of the producer's adjusted 05 lease expenditures for the calendar year of production under 06 AS 43.55.165 and 43.55.170 that are deductible for the oil and gas 07 under AS 43.55.160 from the gross value at the point of production of 08 the oil and gas produced from those leases or properties during the 09 month for which the installment payment is calculated, except that, for 10 the purposes of this calculation, a reduction from the gross value at the 11 point of production may apply for oil and gas subject to 12 AS 43.55.160(f) [OR (g)]; 13 (C) for [OIL OR] gas subject to AS 43.55.011(j) [, (k),] or (o), 14 for each lease or property, the greater of 15 (i) zero; or 16 (ii) 35 percent multiplied by the remainder obtained by 17 subtracting 1/12 of the producer's adjusted lease expenditures for the 18 calendar year of production under AS 43.55.165 and 43.55.170 that are 19 deductible under AS 43.55.160 for the [OIL OR] gas [, 20 RESPECTIVELY,] produced from the lease or property from the gross 21 value at the point of production of the [OIL OR] gas [, 22 RESPECTIVELY,] produced from the lease or property during the 23 month for which the installment payment is calculated; 24 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 25 (i) 35 percent multiplied by the remainder obtained by 26 subtracting 1/12 of the producer's adjusted lease expenditures for the 27 calendar year of production under AS 43.55.165 and 43.55.170 that are 28 deductible for the oil and gas under AS 43.55.160 from the gross value 29 at the point of production of the oil and gas produced from the leases or 30 properties during the month for which the installment payment is 31 calculated, but not less than zero; or
01 (ii) four percent of the gross value at the point of 02 production of the oil and gas produced from the leases or properties 03 during the month, but not less than zero; 04 (E) for oil produced from leases or properties in the Cook 05 Inlet sedimentary basin, the greater of 06 (i) zero; or 07 (ii) the sum of the amount calculated for the month 08 under AS 43.55.011(g), as applicable, and 22.5 percent multiplied 09 by the remainder obtained by subtracting 1/12 of the producer's 10 adjusted lease expenditures for the calendar year of production 11 under AS 43.55.165 and 43.55.170 that are deductible for the oil 12 under AS 43.55.160 from the gross value at the point of production 13 of the oil produced from those leases or properties during the 14 month for which the installment payment is calculated; 15 (4) [(6)] an amount calculated under (3)(C) [(5)(C)] of this subsection 16 for [OIL OR] gas subject to AS 43.55.011(j) [, (k),] or (o) may not exceed the product 17 obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 18 43.55.011(o), as applicable, [FOR GAS OR SET OUT IN AS 43.55.011(k) FOR 19 OIL,] but substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as 20 applicable, the amount of taxable gas produced during the month for the amount of 21 taxable gas produced during the calendar year [AND SUBSTITUTING IN 22 AS 43.55.011(k) THE AMOUNT OF TAXABLE OIL PRODUCED DURING THE 23 MONTH FOR THE AMOUNT OF TAXABLE OIL PRODUCED DURING THE 24 CALENDAR YEAR]; 25 (5) [(7)] for oil and gas produced on or after January 1, 2022, an 26 installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax 27 credits applied as allowed by law, is due for each month of the calendar year on the 28 last day of the following month; except as otherwise provided under (8) [(10)] of this 29 subsection, the amount of the installment payment is the sum of the following 30 amounts, less 1/12 of the tax credits that are allowed by law to be applied against the 31 tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment
01 payment may not be less than zero: 02 (A) for oil produced from leases or properties subject to 03 AS 43.55.011(f), the greatest of 04 (i) zero; 05 (ii) the percentages applicable under AS 43.55.011(f) 06 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 07 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 08 value at the point of production or the production tax value, as 09 applicable, of the oil produced from the leases or properties during the 10 month for which the installment payment is calculated; or 11 (iii) the sum of the amount calculated for the month 12 under AS 43.55.011(g), as applicable, and 35 percent multiplied by 13 the remainder obtained by subtracting 1/12 of the producer's adjusted 14 lease expenditures for the calendar year of production under 15 AS 43.55.165 and 43.55.170 that are deductible for the oil under 16 AS 43.55.160(h)(1)(A) [AS 43.55.160(h)(1)] from the gross value at 17 the point of production of the oil produced from those leases or 18 properties during the month for which the installment payment is 19 calculated, except that, for the purposes of this calculation, a reduction 20 from the gross value at the point of production may apply for oil 21 subject to AS 43.55.160(f) [OR 43.55.160(f) AND (g)]; 22 (B) for oil produced before or during the last calendar year 23 under AS 43.55.024(b) for which the producer could take a tax credit under 24 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 25 sedimentary basin, no part of which is north of 68 degrees North latitude, other 26 than leases or properties subject to AS 43.55.011(o) or (p), the greater of 27 (i) zero; or 28 (ii) 35 percent multiplied by the remainder obtained by 29 subtracting 1/12 of the producer's adjusted lease expenditures for the 30 calendar year of production under AS 43.55.165 and 43.55.170 that are 31 deductible for the oil under AS 43.55.160(h)(1)(B)
01 [AS 43.55.160(h)(2)] from the gross value at the point of production of 02 the oil produced from the leases or properties during the month for 03 which the installment payment is calculated; 04 (C) for oil and gas produced from leases or properties subject 05 to AS 43.55.011(p), except as otherwise provided under (6) [(8)] of this 06 subsection, the sum of 07 (i) 35 percent multiplied by the remainder obtained by 08 subtracting 1/12 of the producer's adjusted lease expenditures for the 09 calendar year of production under AS 43.55.165 and 43.55.170 that are 10 deductible for the oil under AS 43.55.160(h)(1)(C) 11 [AS 43.55.160(h)(3)] from the gross value at the point of production of 12 the oil produced from the leases or properties during the month for 13 which the installment 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), (C), or (F) of this paragraph, 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 for the oil under AS 43.55.160(h)(1)(D) 25 [AS 43.55.160(h)(4)] from the gross value at the point of production of 26 the oil produced from the leases or properties during the month for 27 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 produced from leases or properties in the Cook 03 Inlet sedimentary basin [SUBJECT TO AS 43.55.011(k)], for each lease or 04 property, the greater of 05 (i) zero; or 06 (ii) the sum of the amount calculated for the month 07 under AS 43.55.011(g), as applicable, and 22.5 [35] percent 08 multiplied by the remainder obtained by subtracting 1/12 of the 09 producer's adjusted lease expenditures for the calendar year of 10 production under AS 43.55.165 and 43.55.170 that are deductible under 11 AS 43.55.160 for the oil produced from the lease or property from the 12 gross value at the point of production of the oil produced from the lease 13 or property during the month for which the installment payment is 14 calculated; 15 (G) for gas subject to AS 43.55.011(j) or (o), for each lease or 16 property, the greater of 17 (i) zero; or 18 (ii) 13 percent of the gross value at the point of 19 production of the gas produced from the lease or property during the 20 month for which the installment payment is calculated; 21 (6) [(8)] an amount calculated under (5)(C) [(7)(C)] of this subsection 22 may not exceed four percent of the gross value at the point of production of the oil and 23 gas produced from leases or properties subject to AS 43.55.011(p) during the month 24 for which the installment payment is calculated; 25 (7) [(9)] for purposes of the calculation under (3)(B)(ii) and (5)(A)(ii) 26 [(1)(B)(ii), (5)(B)(ii), AND (7)(A)(ii)] of this subsection, the applicable percentage of 27 the gross value at the point of production or the production tax value is determined 28 under AS 43.55.011(f) [AS 43.55.011(f)(1) OR (2)] but substituting the phrase "month 29 for which the installment payment is calculated" in AS 43.55.011(f) 30 [AS 43.55.011(f)(1) AND (2)] for the phrase "calendar year for which the tax is due"; 31 (8) [(10)] an amount calculated under (5)(G) [(7)(F) OR (G)] of this
01 subsection for [OIL OR] gas subject to AS 43.55.011(j) [, (k),] or (o) may not exceed 02 the product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or 03 (2) or 43.55.011(o), as applicable, [FOR GAS, OR SET OUT IN AS 43.55.011(k) 04 FOR OIL,] but substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as 05 applicable, the amount of taxable gas produced during the month for the amount of 06 taxable gas produced during the calendar year; 07 (9) for purposes of the calculation under (3)(B)(ii) or (5)(A)(ii) of 08 this subsection, a credit under this chapter may not be applied to reduce an 09 installment payment to less than the applicable percentages under 10 AS 43.55.011(f) [AND SUBSTITUTING IN AS 43.55.011(k) THE AMOUNT OF 11 TAXABLE OIL PRODUCED DURING THE MONTH FOR THE AMOUNT OF 12 TAXABLE OIL PRODUCED DURING THE CALENDAR YEAR]. 13 * Sec. 9. AS 43.55.020(g) is amended to read: 14 (g) Notwithstanding any contrary provision of AS 43.05.225, 15 (1) [BEFORE JANUARY 1, 2014, AN UNPAID AMOUNT OF AN 16 INSTALLMENT PAYMENT REQUIRED UNDER (a)(1) - (3) OF THIS SECTION 17 THAT IS NOT PAID WHEN DUE BEARS INTEREST (A) AT THE RATE 18 PROVIDED FOR AN UNDERPAYMENT UNDER 26 U.S.C. 6621 (INTERNAL 19 REVENUE CODE), AS AMENDED, COMPOUNDED DAILY, FROM THE DATE 20 THE INSTALLMENT PAYMENT IS DUE UNTIL MARCH 31 FOLLOWING THE 21 CALENDAR YEAR OF PRODUCTION, AND (B) AS PROVIDED FOR A 22 DELINQUENT TAX UNDER AS 43.05.225 AFTER THAT MARCH 31; 23 INTEREST ACCRUED UNDER (A) OF THIS PARAGRAPH THAT REMAINS 24 UNPAID AFTER THAT MARCH 31 IS TREATED AS AN ADDITION TO TAX 25 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 27 WHEN DUE BEARS INTEREST AS PROVIDED FOR A DELINQUENT TAX 28 UNDER AS 43.05.225; 29 (2)] on and after January 1, 2014, an unpaid amount of an installment 30 payment required under (a)(1), (3), (4), or (5) [(a)(3), (5), (6), OR (7)] of this section 31 that is not paid when due bears interest
01 (A) at the rate provided for an underpayment under 26 U.S.C. 02 6621 (Internal Revenue Code), as amended, compounded daily, from the date 03 the installment payment is due until March 31 following the calendar year of 04 production; [,] and 05 (B) as provided for a delinquent tax under AS 43.05.225 after 06 that March 31; interest accrued under (A) of this paragraph that remains unpaid 07 after that March 31 is treated as an addition to tax that bears interest under (B) 08 of this paragraph; 09 (2) an unpaid amount of tax due under (a)(2) [(a)(4)] of this section 10 that is not paid when due bears interest as provided for a delinquent tax under 11 AS 43.05.225. 12 * Sec. 10. AS 43.55.020(h) is amended to read: 13 (h) Notwithstanding any contrary provision of AS 43.05.280, 14 (1) an overpayment of an installment payment required under (a)(1), 15 (3), (4), or (5) [(a)(1), (2), (3), (5), (6), OR (7)] of this section bears interest at the rate 16 provided for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as 17 amended, compounded daily, from the later of the date the installment payment is due 18 or the date the overpayment is made, until the earlier of 19 (A) the date it is refunded or is applied to an underpayment; or 20 (B) March 31 following the calendar year of production; 21 (2) except as provided under (1) of this subsection, interest with 22 respect to an overpayment is allowed only on any net overpayment of the payments 23 required under (a) of this section that remains after the later of March 31 following the 24 calendar year of production or the date that the statement required under 25 AS 43.55.030(a) is filed; 26 (3) interest is allowed under (2) of this subsection only from a date that 27 is 90 days after the later of March 31 following the calendar year of production or the 28 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 29 if the overpayment was refunded within the 90-day period; 30 (4) interest under (2) and (3) of this subsection is paid at the rate and in 31 the manner provided in AS 43.05.225(1).
01 * Sec. 11. AS 43.55.020(i) is amended to read: 02 (i) Notwithstanding any contrary provision of AS 43.05.225 or (g) or (h) of 03 this section, if the amount of a tax payment, including an installment payment, due 04 under (a)(1) and (2) [(a)(1) - (4)] of this section is affected by the retroactive 05 application of a regulation adopted under this chapter, the department shall determine 06 whether the retroactive application of the regulation caused an underpayment or an 07 overpayment of the amount due and adjust the interest due on the affected payment as 08 follows: 09 (1) if an underpayment of the amount due occurred, the department 10 shall waive interest that would otherwise accrue for the underpayment before the first 11 day of the second month following the month in which the regulation became 12 effective, if 13 (A) the department determines that the producer's 14 underpayment resulted because the regulation was not in effect when the 15 payment was due; and 16 (B) the producer demonstrates that it made a good faith 17 estimate of its tax obligation in light of the regulations then in effect when the 18 payment was due and paid the estimated tax; 19 (2) if an overpayment of the amount due occurred and the department 20 determines that the producer's overpayment resulted because the regulation was not in 21 effect when the payment was due, the obligation for a refund for the overpayment does 22 not begin to accrue interest earlier than the following, as applicable: 23 (A) except as otherwise provided under (B) of this paragraph, 24 the first day of the second month following the month in which the regulation 25 became effective; 26 (B) 90 days after an amended statement under AS 43.55.030(a) 27 and an application to request a refund of production tax paid is filed, if the 28 overpayment was for a period for which an amended statement under 29 AS 43.55.030(a) was required to be filed before the regulation became 30 effective. 31 * Sec. 12. AS 43.55.020(k) is amended to read:
01 (k) For oil and gas produced on and after January 1, 2014, and before 02 January 1, 2022, in making settlement with the royalty owner for oil and gas that is 03 taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on 04 taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in 05 value at the time the tax becomes due to the amount of the tax paid. If the total 06 deductions of installment payments of estimated tax for a calendar year exceed the 07 actual tax for that calendar year, the producer shall, before April 1 of the following 08 year, refund the excess to the royalty owner. Unless otherwise agreed between the 09 producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on 10 taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or 11 right to which constitutes a landowner's royalty interest, is considered to be the gross 12 value at the point of production of the taxable royalty oil and gas produced during the 13 calendar year multiplied by a figure that is a quotient, in which 14 (1) the numerator is the producer's total tax liability under 15 AS 43.55.011(e) [AS 43.55.011(e)(2)] for the calendar year of production; and 16 (2) the denominator is the total gross value at the point of production 17 of the oil and gas taxable under AS 43.55.011(e) produced by the producer from all 18 leases and properties in the state during the calendar year. 19 * Sec. 13. AS 43.55.020(l) is amended to read: 20 (l) For oil and gas produced on and after January 1, 2022, in making 21 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, 22 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or 23 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes 24 due to the amount of the tax paid. If the total deductions of installment payments of 25 estimated tax for a calendar year exceed the actual tax for that calendar year, the 26 producer shall, before April 1 of the following year, refund the excess to the royalty 27 owner. In making settlement with the royalty owner for gas that is taxable under 28 AS 43.55.014, the producer may deduct the amount of the gas paid as in-kind tax on 29 taxable royalty gas or may deduct the gross value at the point of production of the gas 30 paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the 31 producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on
01 taxable royalty oil for a calendar year, other than oil the ownership or right to which 02 constitutes a landowner's royalty interest, is considered to be the gross value at the 03 point of production of the taxable royalty oil produced during the calendar year 04 multiplied by a figure that is a quotient, in which 05 (1) the numerator is the producer's total tax liability under 06 AS 43.55.011(e)(4)(A) - (C) [AS 43.55.011(e)(3)(A)] for the calendar year of 07 production; and 08 (2) the denominator is the total gross value at the point of production 09 of the oil taxable under AS 43.55.011(e) produced by the producer from all leases and 10 properties in the state during the calendar year. 11 * Sec. 14. AS 43.55.023(b) is amended to read: 12 (b) Before January 1, 2014, a producer or explorer may elect to take a tax 13 credit in the amount of 25 percent of a carried-forward annual loss. For lease 14 expenditures incurred on and after January 1, 2014, and before January 1, 2016, to 15 explore for, develop, or produce oil or gas deposits located north of 68 degrees North 16 latitude, a producer or explorer may elect to take a tax credit in the amount of 45 17 percent of a carried-forward annual loss. For lease expenditures incurred on and after 18 January 1, 2016, to explore for, develop, or produce oil or gas deposits located north 19 of 68 degrees North latitude, a producer or explorer may elect to take a tax credit in 20 the amount of 35 percent of a carried-forward annual loss. For lease expenditures 21 incurred on or after January 1, 2014, and before January 1, 2017, to explore for, 22 develop, or produce oil or gas deposits located south of 68 degrees North latitude, a 23 producer or explorer may elect to take a tax credit in the amount of 25 percent of a 24 carried-forward annual loss. For lease expenditures incurred on or after January 1, 25 2017, to explore for, develop, or produce oil or gas deposits located south of 68 26 degrees North latitude, a producer or explorer may elect to take a tax credit in the 27 amount of 15 percent of a carried-forward annual loss, except that a credit for lease 28 expenditures incurred to explore for, develop, or produce oil or gas deposits located in 29 the Cook Inlet sedimentary basin may only be taken if the expenditure is incurred 30 before January 1, 2018. A credit under this subsection may be applied against a tax 31 levied by AS 43.55.011(e). For purposes of this subsection,
01 (1) a carried-forward annual loss is the amount of a producer's or 02 explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a 03 previous calendar year that was not deductible in calculating production tax values for 04 that calendar year under AS 43.55.160; 05 (2) for lease expenditures incurred on or after January 1, 2017, any 06 reduction under AS 43.55.160(f) [OR (g)] is added back to the calculation of 07 production tax values for that calendar year under AS 43.55.160 for the determination 08 of a carried-forward annual loss. 09 * Sec. 15. AS 43.55.024(i) is amended to read: 10 (i) A producer may apply against the producer's tax liability for the calendar 11 year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under 12 AS 43.55.011(e) that receives a reduction in the gross value at the point of production 13 under AS 43.55.160(f) [OR (g)] and that is produced during a calendar year after 14 December 31, 2013. [A TAX CREDIT AUTHORIZED BY THIS SUBSECTION 15 MAY NOT REDUCE A PRODUCER'S TAX LIABILITY FOR A CALENDAR 16 YEAR UNDER AS 43.55.011(e) BELOW ZERO.] 17 * Sec. 16. AS 43.55.024(j) is amended to read: 18 (j) A producer may apply against the producer's tax liability for the calendar 19 year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for 20 each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in 21 the gross value at the point of production under AS 43.55.160(f) [OR (g)] and that is 22 produced during a calendar year after December 31, 2013, from leases or properties 23 north of 68 degrees North latitude. [A TAX CREDIT UNDER THIS SUBSECTION 24 MAY NOT REDUCE A PRODUCER'S TAX LIABILITY FOR A CALENDAR 25 YEAR UNDER AS 43.55.011(e) BELOW THE AMOUNT CALCULATED UNDER 26 AS 43.55.011(f).] The amount of the tax credit for a barrel of taxable oil subject to this 27 subsection produced during a month of the calendar year is 28 (1) $8 for each barrel of taxable oil if the average gross value at the 29 point of production for the month is less than $80 a barrel; 30 (2) $7 for each barrel of taxable oil if the average gross value at the 31 point of production for the month is greater than or equal to $80 a barrel, but less than
01 $90 a barrel; 02 (3) $6 for each barrel of taxable oil if the average gross value at the 03 point of production for the month is greater than or equal to $90 a barrel, but less than 04 $100 a barrel; 05 (4) $5 for each barrel of taxable oil if the average gross value at the 06 point of production for the month is greater than or equal to $100 a barrel, but less 07 than $110 a barrel; 08 (5) $4 for each barrel of taxable oil if the average gross value at the 09 point of production for the month is greater than or equal to $110 a barrel, but less 10 than $120 a barrel; 11 (6) $3 for each barrel of taxable oil if the average gross value at the 12 point of production for the month is greater than or equal to $120 a barrel, but less 13 than $130 a barrel; 14 (7) $2 for each barrel of taxable oil if the average gross value at the 15 point of production for the month is greater than or equal to $130 a barrel, but less 16 than $140 a barrel; 17 (8) $1 for each barrel of taxable oil if the average gross value at the 18 point of production for the month is greater than or equal to $140 a barrel, but less 19 than $150 a barrel; 20 (9) zero if the average gross value at the point of production for the 21 month is greater than or equal to $150 a barrel. 22 * Sec. 17. AS 43.55.160(a) is amended to read: 23 (a) For oil and gas produced before January 1, 2022, except as provided in (b) 24 and [,] (f) [, AND (g)] of this section, for the purposes of 25 (1) AS 43.55.011(e)(1) - (3) [AS 43.55.011(e)(1) AND (2)], the annual 26 production tax value of taxable oil, gas, or oil and gas produced during a calendar year 27 in a category for which a separate annual production tax value is required to be 28 calculated under this paragraph is the gross value at the point of production of that oil, 29 gas, or oil and gas taxable under AS 43.55.011(e), less the producer's lease 30 expenditures under AS 43.55.165 for the calendar year applicable to the oil, gas, or oil 31 and gas in that category produced by the producer during the calendar year, as
01 adjusted under AS 43.55.170; a separate annual production tax value shall be 02 calculated for 03 (A) oil and gas produced from leases or properties in the state 04 that include land north of 68 degrees North latitude, other than gas produced 05 before 2022 and used in the state; 06 (B) oil and gas produced from leases or properties in the state 07 outside the Cook Inlet sedimentary basin, no part of which is north of 68 08 degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a) 09 and (b); this subparagraph does not apply to 10 (i) gas produced before 2022 and used in the state; or 11 (ii) oil and gas subject to AS 43.55.011(p); 12 (C) oil produced before 2022 from each lease or property in the 13 Cook Inlet sedimentary basin; 14 (D) gas produced before 2022 from each lease or property in 15 the Cook Inlet sedimentary basin; 16 (E) gas produced before 2022 from each lease or property in 17 the state outside the Cook Inlet sedimentary basin and used in the state, other 18 than gas subject to AS 43.55.011(p); 19 (F) oil and gas subject to AS 43.55.011(p) produced from 20 leases or properties in the state; 21 (G) oil and gas produced from leases or properties in the state 22 no part of which is north of 68 degrees North latitude, other than oil or gas 23 described in (B), (C), (D), (E), or (F) of this paragraph; 24 (2) AS 43.55.011(g)(1) [AS 43.55.011(g)], for oil and gas produced 25 before January 1, 2014, the monthly production tax value of the taxable 26 (A) oil and gas produced during a month from leases or 27 properties in the state that include land north of 68 degrees North latitude is the 28 gross value at the point of production of the oil and gas taxable under 29 AS 43.55.011(e) and produced by the producer from those leases or properties, 30 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 31 calendar year applicable to the oil and gas produced by the producer from
01 those leases or properties, as adjusted under AS 43.55.170; this subparagraph 02 does not apply to gas subject to AS 43.55.011(o); 03 (B) oil and gas produced during a month from leases or 04 properties in the state outside the Cook Inlet sedimentary basin, no part of 05 which is north of 68 degrees North latitude, is the gross value at the point of 06 production of the oil and gas taxable under AS 43.55.011(e) and produced by 07 the producer from those leases or properties, less 1/12 of the producer's lease 08 expenditures under AS 43.55.165 for the calendar year applicable to the oil and 09 gas produced by the producer from those leases or properties, as adjusted under 10 AS 43.55.170; this subparagraph does not apply to gas subject to 11 AS 43.55.011(o); 12 (C) oil produced during a month from a lease or property in the 13 Cook Inlet sedimentary basin is the gross value at the point of production of 14 the oil taxable under AS 43.55.011(e) and produced by the producer from that 15 lease or property, less 1/12 of the producer's lease expenditures under 16 AS 43.55.165 for the calendar year applicable to the oil produced by the 17 producer from that lease or property, as adjusted under AS 43.55.170; 18 (D) gas produced during a month from a lease or property in 19 the Cook Inlet sedimentary basin is the gross value at the point of production 20 of the gas taxable under AS 43.55.011(e) and produced by the producer from 21 that lease or property, less 1/12 of the producer's lease expenditures under 22 AS 43.55.165 for the calendar year applicable to the gas produced by the 23 producer from that lease or property, as adjusted under AS 43.55.170; 24 (E) gas produced during a month from a lease or property 25 outside the Cook Inlet sedimentary basin and used in the state is the gross 26 value at the point of production of that gas taxable under AS 43.55.011(e) and 27 produced by the producer from that lease or property, less 1/12 of the 28 producer's lease expenditures under AS 43.55.165 for the calendar year 29 applicable to that gas produced by the producer from that lease or property, as 30 adjusted under AS 43.55.170; 31 (3) AS 43.55.011(g)(2), for oil produced on or after January 1,
01 2018, the monthly production tax value of the taxable 02 (A) oil produced during a month from leases or properties 03 in the state that include land north of 68 degrees North latitude is the 04 gross value at the point of production of the oil taxable under 05 AS 43.55.011(e) and produced by the producer from those leases or 06 properties, less 1/12 of the producer's lease expenditures under 07 AS 43.55.165 for the calendar year applicable to the oil produced by the 08 producer from those leases or properties, as adjusted under AS 43.55.170; 09 (B) oil produced during a month from leases or properties 10 in the Cook Inlet sedimentary basin is the gross value at the point of 11 production of the oil taxable under AS 43.55.011(e) and produced by the 12 producer from those leases or properties, less 1/12 of the producer's lease 13 expenditures under AS 43.55.165 for the calendar year applicable to the 14 oil produced by the producer from those leases or properties, as adjusted 15 under AS 43.55.170. 16 * Sec. 18. AS 43.55.160(c) is amended to read: 17 (c) Notwithstanding any contrary provision of AS 43.55.150, for purposes of 18 calculating a monthly production tax value under (a)(2) or (3) of this section, the gross 19 value at the point of production of the oil or oil and gas is calculated under regulations 20 adopted by the department that provide for using an appropriate monthly share of the 21 producer's costs of transportation for the calendar year. 22 * Sec. 19. AS 43.55.160(e) is amended to read: 23 (e) Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that 24 would otherwise be deductible by a producer in a calendar year but whose deduction 25 would cause an annual production tax value calculated under (a)(1) or (h)(1) [(h)] of 26 this section of taxable oil or gas produced during the calendar year to be less than zero 27 may be used to establish a carried-forward annual loss under AS 43.55.023(b). 28 However, the department shall provide by regulation a method to ensure that, for a 29 period for which a producer's tax liability is limited by AS 43.55.011(j), [(k),] (o), or 30 (p), any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that would 31 otherwise be deductible by a producer for that period but whose deduction would
01 cause a production tax value calculated under (a)(1)(C), (D), (E), or (F), or (h)(1)(C) 02 [(h)(3)] of this section to be less than zero are accounted for as though the adjusted 03 lease expenditures had first been used as deductions in calculating the production tax 04 values of oil or gas subject to any of the limitations under AS 43.55.011(j), [(k),] (o), 05 or (p) that have positive production tax values so as to reduce the tax liability 06 calculated without regard to the limitation to the maximum amount provided for under 07 the applicable provision of AS 43.55.011(j), [(k),] (o), or (p). Only the amount of 08 those adjusted lease expenditures remaining after the accounting provided for under 09 this subsection may be used to establish a carried-forward annual loss under 10 AS 43.55.023(b). In this subsection, "producer" includes "explorer." 11 * Sec. 20. AS 43.55.160(f) is amended to read: 12 (f) On and after January 1, 2014, in the calculation of an annual production tax 13 value of a producer under (a)(1)(A) or (h)(1)(A) [(h)(1)] of this section, the gross 14 value at the point of production of oil or gas produced from a lease or property north 15 of 68 degrees North latitude meeting one or more of the following criteria is reduced 16 by 20 percent: (1) the oil or gas is produced from a lease or property that does not 17 contain a lease that was within a unit on January 1, 2003; (2) the oil or gas is produced 18 from a participating area established after December 31, 2011, that is within a unit 19 formed under AS 38.05.180(p) before January 1, 2003, if the participating area does 20 not contain a reservoir that had previously been in a participating area established 21 before December 31, 2011; (3) the oil or gas is produced from acreage that was added 22 to an existing participating area by the Department of Natural Resources on and after 23 January 1, 2014, and the producer demonstrates to the department that the volume of 24 oil or gas produced is from acreage added to an existing participating area. This 25 subsection does not apply to oil produced from a field that produces an average 26 of more than 50,000 barrels a day during a calendar year. This subsection does not 27 apply to gas produced before 2022 that is used in the state or to gas produced on and 28 after January 1, 2022. Except as otherwise provided under this subsection [FOR 29 OIL AND GAS FIRST PRODUCED FROM A LEASE OR PROPERTY AFTER 30 DECEMBER 31, 2016], a reduction allowed under this subsection applies from the 31 date of commencement of regular production of oil and gas from that lease or property
01 and expires after three years, consecutive or nonconsecutive, in which the average 02 annual price per barrel for Alaska North Slope crude oil for sale on the United States 03 West Coast is more than $70 or after five [SEVEN] years, whichever occurs first. For 04 heavy oil [AND GAS] first produced from a lease or property on and after 05 January 1, 2018 [BEFORE JANUARY 1, 2017], a reduction allowed under this 06 subsection expires on [THE EARLIER OF JANUARY 1, 2023, OR] January 1 07 following five [THREE] years, consecutive or nonconsecutive, in which the average 08 annual price per barrel for Alaska North Slope crude oil for sale on the United States 09 West Coast is more than $70. The Alaska Oil and Gas Conservation Commission shall 10 determine the commencement of regular production of oil and gas for purposes of this 11 subsection. A reduction under this subsection may not reduce the gross value at the 12 point of production below zero. In this subsection, "participating area" means a 13 reservoir or portion of a reservoir producing or contributing to production as approved 14 by the Department of Natural Resources. 15 * Sec. 21. AS 43.55.160(h) is amended to read: 16 (h) For oil produced on and after 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)(4) [AS 43.55.011(e)(3)], the annual production 19 tax value of oil taxable under AS 43.55.011(e) produced by a producer during a 20 calendar year 21 (A) [(1)] from leases or properties in the state that include land 22 north of 68 degrees North latitude is the gross value at the point of production 23 of that oil, less the producer's lease expenditures under AS 43.55.165 for the 24 calendar year incurred to explore for, develop, or produce oil and gas deposits 25 located in the state north of 68 degrees North latitude or located in leases or 26 properties in the state that include land north of 68 degrees North latitude, as 27 adjusted under AS 43.55.170; 28 (B) [(2)] before or during the last calendar year under 29 AS 43.55.024(b) for which the producer could take a tax credit under 30 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 31 sedimentary basin, no part of which is north of 68 degrees North latitude, other
01 than leases or properties subject to AS 43.55.011(p), is the gross value at the 02 point of production of that oil, less the producer's lease expenditures under 03 AS 43.55.165 for the calendar year incurred to explore for, develop, or produce 04 oil and gas deposits located in the state outside the Cook Inlet sedimentary 05 basin and south of 68 degrees North latitude, other than oil and gas deposits 06 located in a lease or property that includes land north of 68 degrees North 07 latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from 08 which commercial production has not begun, as adjusted under AS 43.55.170; 09 (C) [(3)] from leases or properties subject to AS 43.55.011(p) 10 is the gross value at the point of production of that oil, less the producer's lease 11 expenditures under AS 43.55.165 for the calendar year incurred to explore for, 12 develop, or produce oil and gas deposits located in leases or properties subject 13 to AS 43.55.011(p) or, before January 1, 2027, located in leases or properties 14 in the state outside the Cook Inlet sedimentary basin, no part of which is north 15 of 68 degrees North latitude from which commercial production has not begun, 16 as adjusted under AS 43.55.170; 17 (D) [(4)] from leases or properties in the state no part of which 18 is north of 68 degrees North latitude, other than leases or properties subject to 19 (B) or (C) of this paragraph [(2) OR (3) OF THIS SUBSECTION], is the 20 gross value at the point of production of that oil less the producer's lease 21 expenditures under AS 43.55.165 for the calendar year incurred to explore for, 22 develop, or produce oil and gas deposits located in the state south of 68 23 degrees North latitude, other than oil and gas deposits located in a lease or 24 property in the state that includes land north of 68 degrees North latitude, and 25 excluding lease expenditures that are deductible under (B) or (C) of this 26 paragraph [(2) OR (3) OF THIS SUBSECTION] or would be deductible 27 under (B) or (C) of this paragraph [(2) OR (3) OF THIS SUBSECTION] if 28 not prohibited by (b) of this section, as adjusted under AS 43.55.170; a 29 separate annual production tax value shall be calculated for 30 (i) [(A)] oil produced from each lease or property in the 31 Cook Inlet sedimentary basin;
01 (ii) [(B)] oil produced from each lease or property 02 outside the Cook Inlet sedimentary basin, no part of which is north of 03 68 degrees North latitude, other than leases or properties subject to (C) 04 of this paragraph; 05 (2) AS 43.55.011(g)(3), the monthly production tax value of the 06 taxable 07 (A) oil produced during a month from leases or properties 08 in the state that include land north of 68 degrees North latitude is the 09 gross value at the point of production of the oil taxable under 10 AS 43.55.011(e) and produced by the producer from those leases or 11 properties, less 1/12 of the producer's lease expenditures under 12 AS 43.55.165 for the calendar year applicable to the oil produced by the 13 producer from those leases or properties, as adjusted under AS 43.55.170; 14 (B) oil produced during a month from leases or properties 15 in the Cook Inlet sedimentary basin is the gross value at the point of 16 production of the oil taxable under AS 43.55.011(e) and produced by the 17 producer from those leases or properties, less 1/12 of the producer's lease 18 expenditures under AS 43.55.165 for the calendar year applicable to the 19 oil and gas produced by the producer from those leases or properties, as 20 adjusted under AS 43.55.170 [(3) OF THIS SUBSECTION]. 21 * Sec. 22. AS 43.55.900 is amended by adding a new paragraph to read: 22 (27) "heavy oil" means oil with an API gravity of less than 18 degrees. 23 * Sec. 23. AS 43.98.050 is amended to read: 24 Sec. 43.98.050. Duties. The duties of the board include the following: 25 (1) establish and maintain a salient collection of information related to 26 oil and gas exploration, development, and production in the state and related to tax 27 structures, rates, and credits in other regions with oil and gas resources; 28 (2) review historical, current, and potential levels of investment in the 29 state's oil and gas sector; 30 (3) identify factors that affect investment in oil and gas exploration, 31 development, and production in the state, including tax structure, rates, and credits;
01 royalty requirements; infrastructure; workforce availability; and regulatory 02 requirements; 03 (4) review the competitive position of the state to attract and maintain 04 investment in the oil and gas sector in the state as compared to the competitive 05 position of other regions with oil and gas resources; 06 (5) in order to facilitate the work of the board, establish procedures to 07 accept and keep confidential information that is beneficial to the work of the board, 08 including the creation of a secure data room and confidentiality agreements to be 09 signed by individuals having access to confidential information; 10 (6) make written findings and recommendations to the Alaska State 11 Legislature before 12 (A) January 31, 2015, or as soon thereafter as practicable, 13 regarding 14 (i) changes to the state's regulatory environment and 15 permitting structure that would be conducive to encouraging increased 16 investment while protecting the interests of the people of the state and 17 the environment; 18 (ii) the status of the oil and gas industry labor pool in 19 the state and the effectiveness of workforce development efforts by the 20 state; 21 (iii) the status of the oil-and-gas-related infrastructure 22 of the state, including a description of infrastructure deficiencies; and 23 (iv) the competitiveness of the state's fiscal oil and gas 24 tax regime when compared to other regions of the world; 25 (B) January 15, 2017, regarding 26 (i) the state's tax structure and rates on oil and gas 27 produced south of 68 degrees North latitude; 28 (ii) a tax structure that takes into account the unique 29 economic circumstances for each oil and gas producing area south of 30 68 degrees North latitude; 31 (iii) a reduction in the gross value at the point of
01 production for oil and gas produced south of 68 degrees North latitude 02 that is similar to the reduction in gross value at the point of production 03 in AS 43.55.160(f) and former AS 43.55.160(g) [(g)]; 04 (iv) other incentives for oil and gas production south of 05 68 degrees North latitude; 06 (C) January 31, 2021, or as soon thereafter as practicable, 07 regarding 08 (i) changes to the state's fiscal regime that would be 09 conducive to increased and ongoing long-term investment in and 10 development of the state's oil and gas resources; 11 (ii) alternative means for increasing the state's ability to 12 attract and maintain investment in and development of the state's oil 13 and gas resources; and 14 (iii) a review of the current effectiveness and future 15 value of any provisions of the state's oil and gas tax laws that are 16 expiring in the next five years. 17 * Sec. 24. AS 43.55.011(k) and 43.55.160(g) are repealed. 18 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 APPLICABILITY. The limitations on the use of tax credits in AS 43.55.011(r), added 21 by sec. 6 of this Act, and the adjustment to the calculation of a tax payment under 22 AS 43.55.020(a)(9), added by sec. 8 of this Act, apply to credits applied to reduce a tax 23 liability for a tax year starting on or after the effective date of secs. 6 and 8 of this Act. 24 * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 TRANSITION: REDUCTIONS IN THE GROSS VALUE AT THE POINT OF 27 PRODUCTION. Notwithstanding AS 43.55.160(f), as amended by sec. 20 of this Act, and the 28 repeal of AS 43.55.160(g) by sec. 24 of this Act, the gross value at the point of production 29 may be reduced under AS 43.55.160(f) or (g) or 43.55.160(f) and (g), as those subsections 30 read on the day before the effective date of secs. 20 and 24 of this Act, for oil or gas produced 31 before the effective date of secs. 20 and 24 of this Act.
01 * Sec. 27. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 TRANSITION: PAYMENT OF TAX; FILING. (a) Notwithstanding the amendments 04 to AS 43.55.020 by secs. 8 - 13 of this Act, 05 (1) a person subject to tax under AS 43.55 that is required to make one or 06 more installment payments of estimated tax or other payments of tax under AS 43.55.020 for 07 production before the effective date of secs. 8 - 13 of this Act shall pay the tax under 08 AS 43.55.020, as that section read on the day before the effective date of secs. 8 - 13 of this 09 Act; 10 (2) an unpaid amount of an installment payment required under AS 43.55.020 11 for production before the effective date of secs. 8 - 13 of this Act that is not paid when due 12 bears interest under AS 43.55.020, as that section read on the day before the effective date of 13 secs. 8 - 13 of this Act; 14 (3) an overpayment of an installment payment required under AS 43.55.020 15 for production before the effective date of secs. 8 - 13 of this Act bears interest under 16 AS 43.55.020, as that section read on the day before the effective date of secs. 8 - 13 of this 17 Act. 18 (b) The Department of Revenue may continue to apply and enforce AS 43.55.020, as 19 that section read on the day before the effective date of secs. 8 - 13 of this Act, for a tax or 20 installment payment for production before the effective date of secs. 8 - 13 of this Act. 21 * Sec. 28. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 TRANSITION: PRODUCTION TAX. Notwithstanding the repeal of AS 43.55.011(k) 24 by sec. 24 of this Act and the amendments to AS 43.55.011(e) and (f) by secs. 3 and 4 of this 25 Act and 43.55.160 by secs. 17 - 21 of this Act, for oil and gas produced before the repeal of 26 AS 43.55.011(k) by sec. 24 of this Act, the production tax and production tax value of that oil 27 and gas shall be determined under AS 43.55.011 and 43.55.160, as those sections read on the 28 day before the repeal of AS 43.55.011(k) by sec. 24 of this Act and the amendments to 29 AS 43.55.011 by secs. 3 and 4 of this Act and AS 43.55.160 by secs. 17 - 21 of this Act. 30 * Sec. 29. This Act takes effect January 1, 2018.