SB 129: "An Act relating to the oil and gas production tax; relating to credits against the oil and gas production tax; relating to payments of the oil and gas production tax; relating to lease expenditures and adjustments to lease expenditures; making public certain information related to the oil and gas production tax; relating to the Department of Revenue; and providing for an effective date."
00 SENATE BILL NO. 129 01 "An Act relating to the oil and gas production tax; relating to credits against the oil and 02 gas production tax; relating to payments of the oil and gas production tax; relating to 03 lease expenditures and adjustments to lease expenditures; making public certain 04 information related to the oil and gas production tax; relating to the Department of 05 Revenue; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 40.25.100(a) is amended to read: 08 (a) Information in the possession of the Department of Revenue that discloses 09 the particulars of the business or affairs of a taxpayer or other person, including 10 information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement 11 under AS 38.05.020(b)(12), is not a matter of public record, except as provided in 12 AS 43.05.230(i) - (m) [AS 43.05.230(i) - (l)] or for purposes of investigation and law 13 enforcement. The information shall be kept confidential except when its production is
01 required in an official investigation, administrative adjudication under AS 43.05.405 - 02 43.05.499, or court proceeding. These restrictions do not prohibit the publication of 03 statistics presented in a manner that prevents the identification of particular reports 04 and items, prohibit the publication of tax lists showing the names of taxpayers who are 05 delinquent and relevant information that may assist in the collection of delinquent 06 taxes, or prohibit the publication of records, proceedings, and decisions under 07 AS 43.05.405 - 43.05.499. 08 * Sec. 2. AS 43.05.230 is amended by adding a new subsection to read: 09 (m) The information provided by a producer to the department on a return for 10 the payment of oil production taxes assessed under AS 43.55.011(q) is public 11 information. 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 15 gas the ownership or right to which is exempt from taxation or constitutes a 16 landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as 17 otherwise provided under (f), (j), (k), (o), [AND] (p), (q), and (s) of this section, for 18 oil and gas produced 19 (1) before January 1, 2014, the tax is equal to the sum of 20 (A) the annual production tax value of the taxable oil and gas 21 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 22 (B) the sum, over all months of the calendar year, of the tax 23 amounts determined under (g) of this section; 24 (2) on and after January 1, 2014, and before January 1, 2022, the tax is 25 equal to the annual production tax value of the taxable oil and gas as calculated under 26 AS 43.55.160(a)(1) multiplied by 35 percent; 27 (3) on and after January 1, 2022, the tax for 28 (A) oil is equal to the annual production tax value of the 29 taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent; 30 (B) gas is equal to 13 percent of the gross value at the point of 31 production of the taxable gas; if the gross value at the point of production of
01 gas produced from a lease or property is less than zero, that gross value at the 02 point of production is considered zero for purposes of this subparagraph. 03 * Sec. 4. AS 43.55.011(f) is amended to read: 04 (f) The levy of tax under (e) of this section for 05 (1) oil and gas produced before January 1, 2022, from leases or 06 properties that include land north of 68 degrees North latitude, other than gas subject 07 to (o) of this section and oil subject to (q) of this section, may not be less than 08 (A) four 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 more than $25; 12 (B) three 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 $20 but not over $25; 16 (C) two 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 $17.50 but not over $20; 20 (D) one 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 over $15 but not over $17.50; or 24 (E) zero percent of the gross value at the point of production 25 when the average price per barrel for Alaska North Slope crude oil for sale on 26 the United States West Coast during the calendar year for which the tax is due 27 is $15 or less; and 28 (2) oil produced on and after January 1, 2022, from leases or properties 29 that include land north of 68 degrees North latitude, other than oil subject to (q) of 30 this section, may not be less than 31 (A) four 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 more than $25; 04 (B) three 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 $20 but not over $25; 08 (C) two 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 $17.50 but not over $20; 12 (D) one 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 $15 but not over $17.50; or 16 (E) zero 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 $15 or less. 20 * Sec. 5. AS 43.55.011 is amended by adding new subsections to read: 21 (q) There is levied on the producer of oil or gas a tax for all oil produced from 22 each major oil field each month of the calendar year, less any oil and gas the 23 ownership or right to which is exempt from taxation or constitutes a landowner's 24 royalty interest. For oil produced from a major oil field on and after January 1, 2021, 25 the tax is equal to the sum of 26 (1) the annual production tax value of the taxable oil from the major 27 oil field as calculated under AS 43.55.160(h)(5) or (i)(8), as applicable, multiplied by 28 35 percent; and 29 (2) the sum, over all months of the calendar year, of the tax amounts 30 determined under (r) of this section. 31 (r) For each month of a calendar year for which the average monthly
01 production tax value under AS 43.55.160(j) of a barrel of taxable oil produced from 02 each major oil field is more than $50, the amount of additional tax for purposes of 03 (q)(2) of this section is determined by multiplying 04 (1) the monthly production tax value of the taxable oil produced by the 05 producer from the major oil field during the month, less $50; and 06 (2) the tax rate of 15 percent. 07 (s) For each month of the calendar year, the levy of tax under (q) of this 08 section for oil produced from each major oil field may not be less than 09 (1) 10 percent of the gross value at the point of production from the 10 major oil field when the average price per barrel for Alaska North Slope crude oil for 11 sale on the United States West Coast during the month for which the tax is due is less 12 than $50; 13 (2) 11 percent of the gross value at the point of production from the 14 major oil field when the average price per barrel for Alaska North Slope crude oil for 15 sale on the United States West Coast during the month for which the tax is due is $50 16 or more but less than $55; 17 (3) 12 percent of the gross value at the point of production from the 18 major oil field when the average price per barrel for Alaska North Slope crude oil for 19 sale on the United States West Coast during the month for which the tax is due is $55 20 or more but less than $60; 21 (4) 13 percent of the gross value at the point of production from the 22 major oil field when the average price per barrel for Alaska North Slope crude oil for 23 sale on the United States West Coast during the month for which the tax is due is $60 24 or more but less than $65; 25 (5) 14 percent of the gross value at the point of production from the 26 major oil field when the average price per barrel for Alaska North Slope crude oil for 27 sale on the United States West Coast during the month for which the tax is due is $65 28 or more but less than $70; or 29 (6) 15 percent of the gross value at the point of production from the 30 major oil field when the average price per barrel for Alaska North Slope crude oil for 31 sale on the United States West Coast during the month for which the tax is due is $70
01 or more. 02 (t) A tax credit provided under this chapter may not be applied to reduce an 03 amount due under (s) of this section. 04 * Sec. 6. AS 43.55.019(a) is amended to read: 05 (a) A producer of oil or gas is allowed a credit against the tax levied by 06 AS 43.55.011 [AS 43.55.011(e)] for contributions of cash or equipment accepted for 07 (1) direct instruction, research, and educational support purposes, 08 including library and museum acquisitions, and contributions to endowment, by an 09 Alaska university foundation or by a nonprofit, public or private, Alaska two-year or 10 four-year college accredited by a national or regional accreditation association; 11 (2) secondary school level vocational education courses, programs, and 12 facilities by a school district in the state; 13 (3) vocational education courses, programs, equipment, and facilities 14 by a state-operated vocational technical education and training school, a nonprofit 15 regional training center recognized by the Department of Labor and Workforce 16 Development, and an apprenticeship program in the state that is registered with the 17 United States Department of Labor under 29 U.S.C. 50 - 50b (National Apprenticeship 18 Act); 19 (4) a facility by a nonprofit, public or private, Alaska two-year or four- 20 year college accredited by a national or regional accreditation association; 21 (5) Alaska Native cultural or heritage programs and educational 22 support, including mentoring and tutoring, provided by a nonprofit agency for public 23 school staff and for students who are in grades kindergarten through 12 in the state; 24 (6) education, research, rehabilitation, and facilities by an institution 25 that is located in the state and that qualifies as a coastal ecosystem learning center 26 under the Coastal America Partnership established by the federal government; and 27 (7) the Alaska higher education investment fund under AS 37.14.750. 28 * Sec. 7. AS 43.55.019(e) is amended to read: 29 (e) The credit under this section may not reduce a person's tax liability under 30 AS 43.55.011 [AS 43.55.011(e)] to below zero for any tax year. An unused credit or 31 portion of a credit not used under this section for a tax year may not be sold, traded,
01 transferred, or applied in a subsequent tax year. 02 * Sec. 8. AS 43.55.020(a) is amended to read: 03 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 04 the tax as follows: 05 (1) for oil and gas produced before January 1, 2014, an installment 06 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 07 as allowed by law, is due for each month of the calendar year on the last day of the 08 following month; except as otherwise provided under (2) of this subsection, the 09 amount of the installment payment is the sum of the following amounts, less 1/12 of 10 the tax credits that are allowed by law to be applied against the tax levied by 11 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 12 not be less than zero: 13 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 14 produced from leases or properties in the state outside the Cook Inlet 15 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 16 the greater of 17 (i) zero; or 18 (ii) the sum of 25 percent and the tax rate calculated for 19 the month under AS 43.55.011(g) multiplied by the remainder obtained 20 by subtracting 1/12 of the producer's adjusted lease expenditures for the 21 calendar year of production under AS 43.55.165 and 43.55.170 that are 22 deductible for the oil and gas under AS 43.55.160 from the gross value 23 at the point of production of the oil and gas produced from the leases or 24 properties during the month for which the installment payment is 25 calculated; 26 (B) for oil and gas produced from leases or properties subject 27 to AS 43.55.011(f), the greatest of 28 (i) zero; 29 (ii) zero percent, one percent, two percent, three 30 percent, or four percent, as applicable, of the gross value at the point of 31 production 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 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 those leases 08 or properties during the month for which the installment payment is 09 calculated; 10 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 11 each lease or property, the greater of 12 (i) zero; or 13 (ii) the sum of 25 percent and the tax rate calculated for 14 the month under AS 43.55.011(g) multiplied by the remainder obtained 15 by subtracting 1/12 of the producer's adjusted lease expenditures for the 16 calendar year of production under AS 43.55.165 and 43.55.170 that are 17 deductible under AS 43.55.160 for the oil or gas, respectively, 18 produced from the lease or property from the gross value at the point of 19 production of the oil or gas, respectively, produced from the lease or 20 property during the month for which the installment payment is 21 calculated; 22 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 23 (i) the sum of 25 percent and the tax rate calculated for 24 the month under AS 43.55.011(g) multiplied by the remainder obtained 25 by 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, but not less than zero; or 31 (ii) four percent of the gross value at the point of
01 production of the oil and gas produced from the leases or properties 02 during the month, but not less than zero; 03 (2) an amount calculated under (1)(C) of this subsection for oil or gas 04 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 05 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 06 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 07 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 08 gas produced during the month for the amount of taxable gas produced during the 09 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 10 during the month for the amount of taxable oil produced during the calendar year; 11 (3) an installment payment of the estimated tax levied by 12 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 13 on the last day of the following month; the amount of the installment payment is the 14 sum of 15 (A) the applicable tax rate for oil provided under 16 AS 43.55.011(i), multiplied by the gross value at the point of production of the 17 oil taxable under AS 43.55.011(i) and produced from the lease or property 18 during the month; and 19 (B) the applicable tax rate for gas provided under 20 AS 43.55.011(i), multiplied by the gross value at the point of production of the 21 gas taxable under AS 43.55.011(i) and produced from the lease or property 22 during the month; 23 (4) any amount of tax levied by AS 43.55.011, net of any credits 24 applied as allowed by law, that exceeds the total of the amounts due as installment 25 payments of estimated tax is due on March 31 of the year following the calendar year 26 of production; 27 (5) for oil and gas produced on and after January 1, 2014, and before 28 January 1, 2021 [JANUARY 1, 2022], an installment payment of the estimated tax 29 levied by AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for 30 each month of the calendar year on the last day of the following month; except as 31 otherwise provided under (6) of this subsection, the amount of the installment payment
01 is the sum of the following amounts, less 1/12 of the tax credits that are allowed by 02 law to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but 03 the amount of the installment payment may not be less than zero: 04 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 05 produced from leases or properties in the state outside the Cook Inlet 06 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 07 the greater of 08 (i) zero; or 09 (ii) 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 the leases or 14 properties during the month for which the installment payment is 15 calculated; 16 (B) for oil and gas produced from leases or properties subject 17 to AS 43.55.011(f), the greatest of 18 (i) zero; 19 (ii) zero percent, one percent, two percent, three 20 percent, or four percent, as applicable, of the gross value at the point of 21 production of the oil and gas produced from the leases or properties 22 during the month for which the installment payment is calculated; or 23 (iii) 35 percent multiplied by the remainder obtained by 24 subtracting 1/12 of the producer's adjusted lease expenditures for the 25 calendar year of production under AS 43.55.165 and 43.55.170 that are 26 deductible for the oil and gas under AS 43.55.160 from the gross value 27 at the point of production of the oil and gas produced from those leases 28 or properties during the month for which the installment payment is 29 calculated, except that, for the purposes of this calculation, a reduction 30 from the gross value at the point of production may apply for oil and 31 gas subject to AS 43.55.160(f) or (g);
01 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 02 each lease or property, the greater of 03 (i) zero; or 04 (ii) 35 percent multiplied by the remainder obtained by 05 subtracting 1/12 of the producer's adjusted lease expenditures for the 06 calendar year of production under AS 43.55.165 and 43.55.170 that are 07 deductible under AS 43.55.160 for the oil or gas, respectively, 08 produced from the lease or property from the gross value at the point of 09 production of the oil or gas, respectively, produced from the lease or 10 property during the month for which the installment payment is 11 calculated; 12 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 13 (i) 35 percent multiplied by the remainder obtained by 14 subtracting 1/12 of the producer's adjusted lease expenditures for the 15 calendar year of production under AS 43.55.165 and 43.55.170 that are 16 deductible for the oil and gas under AS 43.55.160 from the gross value 17 at the point of production of the oil and gas produced from the leases or 18 properties during the month for which the installment payment is 19 calculated, but not less than zero; or 20 (ii) four percent of the gross value at the point of 21 production of the oil and gas produced from the leases or properties 22 during the month, but not less than zero; 23 (6) an amount calculated under (5)(C) of this subsection for oil or gas 24 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 25 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 26 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 27 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 28 gas produced during the month for the amount of taxable gas produced during the 29 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 30 during the month for the amount of taxable oil produced during the calendar year; 31 (7) for oil and gas produced on and after January 1, 2021, and
01 before January 1, 2022, an installment payment of the estimated tax levied by 02 AS 43.55.011, net of any tax credits applied as allowed by law, is due for each 03 month of the calendar year on the last day of the following month; except as 04 otherwise provided under (8) of this subsection, the amount of the installment 05 payment is the sum of the following amounts, less 1/12 of the tax credits that are 06 allowed by law to be applied against the tax levied by AS 43.55.011 for the 07 calendar year, but the amount of the installment payment may not be less than 08 zero: 09 (A) for oil and gas subject to AS 43.55.011(e) and not 10 subject to AS 43.55.011(o) or (p) produced from leases or properties in the 11 state outside the Cook Inlet sedimentary basin and outside a major oil 12 field, other than leases or properties subject to AS 43.55.011(f) or (s), the 13 greater of 14 (i) zero; or 15 (ii) 35 percent multiplied by the remainder obtained 16 by subtracting 1/12 of the producer's adjusted lease expenditures 17 for the calendar year of production under AS 43.55.165 and 18 43.55.170 that are deductible for the oil and gas under 19 AS 43.55.160 from the gross value at the point of production of the 20 oil and gas produced from the leases or properties during the 21 month for which the installment payment is calculated; 22 (B) for oil and gas produced from leases or properties 23 subject to AS 43.55.011(f), the greatest of 24 (i) zero; 25 (ii) the applicable percentage under AS 43.55.011(f) 26 of the gross value at the point of production of the oil and gas 27 produced from the leases or properties during the month for which 28 the installment payment is calculated; or 29 (iii) 35 percent multiplied by the remainder obtained 30 by subtracting 1/12 of the producer's adjusted lease expenditures 31 for the calendar year of production under AS 43.55.165 and
01 43.55.170 that are deductible for the oil and gas under 02 AS 43.55.160 from the gross value at the point of production of the 03 oil and gas produced from those leases or properties during the 04 month for which the installment payment is calculated, except that, 05 for the purposes of this calculation, a reduction from the gross 06 value at the point of production may apply for oil and gas subject 07 to AS 43.55.160(f) or (g); 08 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 09 each lease or property, the greater of 10 (i) zero; or 11 (ii) 35 percent multiplied by the remainder obtained 12 by subtracting 1/12 of the producer's adjusted lease expenditures 13 for the calendar year of production under AS 43.55.165 and 14 43.55.170 that are deductible under AS 43.55.160 for the oil or gas, 15 respectively, produced from the lease or property from the gross 16 value at the point of production of the oil or gas, respectively, 17 produced from the lease or property during the month for which 18 the installment payment is calculated; 19 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 20 (i) 35 percent multiplied by the remainder obtained 21 by subtracting 1/12 of the producer's adjusted lease expenditures 22 for the calendar year of production under AS 43.55.165 and 23 43.55.170 that are deductible for the oil and gas under 24 AS 43.55.160 from the gross value at the point of production of the 25 oil and gas produced from the leases or properties during the 26 month for which the installment payment is calculated, but not less 27 than zero; or 28 (ii) four percent of the gross value at the point of 29 production of the oil and gas produced from the leases or 30 properties during the month, but not less than zero; 31 (E) for oil produced from each major oil field subject to
01 AS 43.55.011(q), the greatest of 02 (i) zero; 03 (ii) the applicable percentage under AS 43.55.011(s) 04 of the gross value at the point of production of the oil produced 05 from the major oil field during the month for which the installment 06 payment is calculated; a tax credit may not be applied against the 07 tax levied by AS 43.55.011(s); 08 (iii) if the average monthly production tax value of a 09 barrel of oil produced from the major oil field is $50 or less, 35 10 percent of the average monthly production tax value of a barrel of 11 oil produced from the major oil field; for purposes of this sub- 12 subparagraph, the average monthly production tax value of a 13 barrel of oil produced from the major oil field is calculated under 14 AS 43.55.160(j); or 15 (iv) if the average monthly production tax value of a 16 barrel of oil produced from the major oil field is more than $50, the 17 sum of 35 percent of the average monthly production tax value of a 18 barrel of oil produced from the major oil field plus the difference 19 between the average monthly production tax value of a barrel of oil 20 produced from the major oil field and $50, multiplied by 15 21 percent; for the purposes of this sub-subparagraph, the average 22 monthly production tax value of a barrel of oil produced from the 23 major oil field is calculated under AS 43.55.160(j); 24 (8) an amount calculated under (7)(C) of this subsection for oil or 25 gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 26 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 27 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 28 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of 29 taxable gas produced during the month for the amount of taxable gas produced 30 during the calendar year and substituting in AS 43.55.011(k) the amount of 31 taxable oil produced during the month for the amount of taxable oil produced
01 during the calendar year; 02 (9) [(7)] for oil and gas produced on or after January 1, 2022, an 03 installment payment of the estimated tax levied by AS 43.55.011 [AS 43.55.011(e)], 04 net of any tax credits applied as allowed by law, is due for each month of the calendar 05 year on the last day of the following month; except as otherwise provided under (12) 06 [(10)] of this subsection, the amount of the installment payment is the sum of the 07 following amounts, less 1/12 of the tax credits that are allowed by law to be applied 08 against the tax levied by AS 43.55.011 [AS 43.55.011(e)] for the calendar year, but the 09 amount of the installment payment may not be less than zero: 10 (A) for oil produced from leases or properties subject to 11 AS 43.55.011(f), the greatest of 12 (i) zero; 13 (ii) the applicable percentage under AS 43.55.011(f) 14 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 15 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 16 value at the point of production of the oil produced from the leases or 17 properties during the month for which the installment payment is 18 calculated; or 19 (iii) 35 percent multiplied by the remainder obtained by 20 subtracting 1/12 of the producer's adjusted lease expenditures for the 21 calendar year of production under AS 43.55.165 and 43.55.170 that are 22 deductible for the oil under AS 43.55.160(h)(1) from the gross value at 23 the point of production of the oil produced from those leases or 24 properties during the month for which the installment payment is 25 calculated, except that, for the purposes of this calculation, a reduction 26 from the gross value at the point of production may apply for oil 27 subject to AS 43.55.160(f) or 43.55.160(f) and (g); 28 (B) for oil produced before or during the last calendar year 29 under 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(o) or (p), the greater of 02 (i) zero; or 03 (ii) 35 percent multiplied by the remainder obtained by 04 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 under AS 43.55.160(h)(2) from the gross value at 07 the point of production of the oil produced from the leases or properties 08 during the month for which the installment payment is calculated; 09 (C) for oil and gas produced from leases or properties subject 10 to AS 43.55.011(p), except as otherwise provided under (10) [(8)] of this 11 subsection, the sum of 12 (i) 35 percent multiplied by the remainder obtained by 13 subtracting 1/12 of the producer's adjusted lease expenditures for the 14 calendar year of production under AS 43.55.165 and 43.55.170 that are 15 deductible for the oil under AS 43.55.160(h)(3) from the gross value at 16 the point of production of the oil produced from the leases or properties 17 during the month for which the installment payment is calculated, but 18 not less than zero; and 19 (ii) 13 percent of the gross value at the point of 20 production of the gas produced from the leases or properties during the 21 month, but not less than zero; 22 (D) for oil produced from leases or properties in the state, no 23 part of which is north of 68 degrees North latitude, other than leases or 24 properties subject to (B), (C), or (F) of this paragraph, the greater of 25 (i) zero; or 26 (ii) 35 percent multiplied by the remainder obtained by 27 subtracting 1/12 of the producer's adjusted lease expenditures for the 28 calendar year of production under AS 43.55.165 and 43.55.170 that are 29 deductible for the oil under AS 43.55.160(h)(4) 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 (E) for gas produced from each lease or property in the state 02 outside the Cook Inlet sedimentary basin, other than a lease or property subject 03 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of 04 production of the gas produced from the lease or property during the month for 05 which the installment payment is calculated, but not less than zero; 06 (F) for oil subject to AS 43.55.011(k), for each lease or 07 property, the greater of 08 (i) zero; or 09 (ii) 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 under AS 43.55.160 for the oil produced from the lease or 13 property from the gross value at the point of production of the oil 14 produced from the lease or property during the month for which the 15 installment payment is calculated; 16 (G) for gas subject to AS 43.55.011(j) or (o), for each lease or 17 property, the greater of 18 (i) zero; or 19 (ii) 13 percent of the gross value at the point of 20 production of the gas produced from the lease or property during the 21 month for which the installment payment is calculated; 22 (H) for oil produced from each major oil field subject to 23 AS 43.55.011(q), the greatest of 24 (i) zero; 25 (ii) the applicable percentage under AS 43.55.011(s) 26 of the gross value at the point of production of the oil produced 27 from the major oil field during the month for which the installment 28 payment is calculated; a tax credit may not be applied against the 29 tax levied by AS 43.55.011(s); 30 (iii) if the average monthly production tax value of a 31 barrel of oil produced from the major oil field is $50 or less, 35
01 percent of the average monthly production tax value of a barrel of 02 oil produced from the major oil field; for the purposes of this sub- 03 subparagraph, the average monthly production tax value of a 04 barrel of oil produced from the major oil field is calculated under 05 AS 43.55.160(j); or 06 (iv) if the average monthly production tax value of a 07 barrel of oil produced from the major oil field is more than $50, the 08 sum of 35 percent of the average monthly production tax value of a 09 barrel of oil produced from the major oil field plus the difference 10 between the average monthly production tax value of a barrel of oil 11 produced from the major oil field and $50, multiplied by 15 12 percent; for the purposes of this sub-subparagraph, the average 13 monthly production tax value of a barrel of oil produced from the 14 major oil field is calculated under AS 43.55.160(j); 15 (10) [(8)] an amount calculated under (9)(C) [(7)(C)] of this subsection 16 may not exceed four percent of the gross value at the point of production of the oil and 17 gas produced from leases or properties subject to AS 43.55.011(p) during the month 18 for which the installment payment is calculated; 19 (11) [(9)] for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), 20 (7)(B)(ii), and (9)(A)(ii) [(7)(A)(ii)] of this subsection, the applicable percentage of 21 the gross value at the point of production is determined under AS 43.55.011(f)(1) or 22 (2) but substituting the phrase "month for which the installment payment is calculated" 23 in AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is due"; 24 (12) [(10)] an amount calculated under (9)(F) [(7)(F)] or (G) of this 25 subsection for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the 26 product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 27 43.55.011(o), as applicable, for gas, or set out in AS 43.55.011(k) for oil, but 28 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 29 amount of taxable gas produced during the month for the amount of taxable gas 30 produced during the calendar year and substituting in AS 43.55.011(k) the amount of 31 taxable oil produced during the month for the amount of taxable oil produced during
01 the calendar year. 02 * Sec. 9. AS 43.55.020(g) is amended to read: 03 (g) Notwithstanding any contrary provision of AS 43.05.225, 04 (1) before January 1, 2014, an unpaid amount of an installment 05 payment required under (a)(1) - (3) of this section that is not paid when due bears 06 interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal 07 Revenue Code), as amended, compounded daily, from the date the installment 08 payment is due until March 31 following the calendar year of production, and (B) as 09 provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued 10 under (A) of this paragraph that remains unpaid after that March 31 is treated as an 11 addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax 12 due under (a)(4) of this section that is not paid when due bears interest as provided for 13 a delinquent tax under AS 43.05.225; 14 (2) on and after January 1, 2014, an unpaid amount of an installment 15 payment required under (a)(3), (5), (6), [OR] (7), (8), or (9) of this section that is not 16 paid when due bears interest (A) at the rate provided for an underpayment under 26 17 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date 18 the installment payment is due until March 31 following the calendar year of 19 production, and (B) as provided for a delinquent tax under AS 43.05.225 after that 20 March 31; interest accrued under (A) of this paragraph that remains unpaid after that 21 March 31 is treated as an addition to tax that bears interest under (B) of this paragraph; 22 an unpaid amount of tax due under (a)(4) of this section that is not paid when due 23 bears interest as provided for a delinquent tax under AS 43.05.225. 24 * Sec. 10. AS 43.55.020(h) is amended to read: 25 (h) Notwithstanding any contrary provision of AS 43.05.280, 26 (1) an overpayment of an installment payment required under (a)(1), 27 (2), (3), (5), (6), [OR] (7), (8), or (9) of this section bears interest at the rate provided 28 for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended, 29 compounded daily, from the later of the date the installment payment is due or the date 30 the overpayment is made, until the earlier of 31 (A) the date it is refunded or is applied to an underpayment; or
01 (B) March 31 following the calendar year of production; 02 (2) except as provided under (1) of this subsection, interest with 03 respect to an overpayment is allowed only on any net overpayment of the payments 04 required under (a) of this section that remains after the later of March 31 following the 05 calendar year of production or the date that the statement required under 06 AS 43.55.030(a) is filed; 07 (3) interest is allowed under (2) of this subsection only from a date that 08 is 90 days after the later of March 31 following the calendar year of production or the 09 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 10 if the overpayment was refunded within the 90-day period; 11 (4) interest under (2) and (3) of this subsection is paid at the rate and in 12 the manner provided in AS 43.05.225(1). 13 * Sec. 11. AS 43.55.020(k) is amended to read: 14 (k) For oil and gas produced on and after 15 (1) January 1, 2014, and before January 1, 2021 [2022], in making 16 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, 17 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or 18 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes 19 due to the amount of the tax paid; if [. IF] the total deductions of installment 20 payments of estimated tax for a calendar year exceed the actual tax for that calendar 21 year, the producer shall, before April 1 of the following year, refund the excess to the 22 royalty owner; unless [. UNLESS] otherwise agreed between the producer and the 23 royalty owner, the amount of the tax paid under AS 43.55.011(e) on taxable royalty oil 24 and gas for a calendar year, other than oil and gas the ownership or right to which 25 constitutes a landowner's royalty interest, is considered to be the gross value at the 26 point of production of the taxable royalty oil and gas produced during the calendar 27 year multiplied by a figure that is a quotient, in which 28 (A) [(1)] the numerator is the producer's total tax liability under 29 AS 43.55.011(e)(2) for the calendar year of production; and 30 (B) [(2)] the denominator is the total gross value at the point of 31 production of the oil and gas taxable under AS 43.55.011(e) produced by the
01 producer from all leases and properties in the state during the calendar year; 02 (2) January 1, 2021, and before January 1, 2022, in making 03 settlement with the royalty owner for oil and gas that is taxable under 04 AS 43.55.011, the producer may deduct the amount of the tax paid on taxable 05 royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at 06 the time the tax becomes due to the amount of the tax paid; if the total deductions 07 of installment payments of estimated tax for a calendar year exceed the actual tax 08 for that calendar year, the producer shall, before April 1 of the following year, 09 refund the excess to the royalty owner; unless otherwise agreed between the 10 producer and the royalty owner, the amount of the tax paid under AS 43.55.011 11 on taxable royalty oil and gas for a calendar year, other than oil and gas the 12 ownership or right to which constitutes a landowner's royalty interest, is 13 considered to be the gross value at the point of production of the taxable royalty 14 oil and gas produced during the calendar year multiplied by a figure that is a 15 quotient, in which 16 (A) the numerator is the producer's total tax liability under 17 AS 43.55.011(e)(2) and (q) for the calendar year of production; and 18 (B) the denominator is the total gross value at the point of 19 production of the oil and gas taxable under AS 43.55.011(e) and (q) 20 produced by the producer from all leases and properties in the state 21 during the calendar year. 22 * Sec. 12. AS 43.55.020(l) is amended to read: 23 (l) For oil and gas produced on and after January 1, 2022, in making 24 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, 25 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or 26 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes 27 due to the amount of the tax paid. If the total deductions of installment payments of 28 estimated tax for a calendar year exceed the actual tax for that calendar year, the 29 producer shall, before April 1 of the following year, refund the excess to the royalty 30 owner. In making settlement with the royalty owner for gas that is taxable under 31 AS 43.55.014, the producer may deduct the amount of the gas paid as in-kind tax on
01 taxable royalty gas or may deduct the gross value at the point of production of the gas 02 paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the 03 producer and the royalty owner, the amount of the tax paid under AS 43.55.011 04 [AS 43.55.011(e)] on taxable royalty oil for a calendar year, other than oil the 05 ownership or right to which constitutes a landowner's royalty interest, is considered to 06 be the gross value at the point of production of the taxable royalty oil produced during 07 the calendar year multiplied by a figure that is a quotient, in which 08 (1) the numerator is the producer's total tax liability under 09 AS 43.55.011(e)(3)(A) and (q) for the calendar year of production; and 10 (2) the denominator is the total gross value at the point of production 11 of the oil taxable under AS 43.55.011(e) and (q) produced by the producer from all 12 leases and properties in the state during the calendar year. 13 * Sec. 13. AS 43.55.023(a) is amended to read: 14 (a) A producer or explorer may take a tax credit for a qualified capital 15 expenditure as follows: 16 (1) notwithstanding that a qualified capital expenditure may be a 17 deductible lease expenditure for purposes of calculating the production tax value of oil 18 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under 19 former AS 43.20.043 or AS 43.55.025, a producer or explorer that incurs a qualified 20 capital expenditure may also elect to apply a tax credit against a tax levied by 21 AS 43.55.011 [AS 43.55.011(e)] in the amount of 10 percent of that expenditure; 22 (2) a producer or explorer may take a credit for a qualified capital 23 expenditure incurred in connection with geological or geophysical exploration or in 24 connection with an exploration well only if the producer or explorer 25 (A) agrees, in writing, to the applicable provisions of 26 AS 43.55.025(f)(2); and 27 (B) submits to the Department of Natural Resources all data 28 that would be required to be submitted under AS 43.55.025(f)(2); 29 (3) a credit for a qualified capital expenditure incurred to explore for, 30 develop, or produce oil or gas deposits located 31 (A) north of 68 degrees North latitude may be taken only if the
01 expenditure is incurred before January 1, 2014; 02 (B) in the Cook Inlet sedimentary basin may be taken only if 03 the expenditure is incurred before January 1, 2018. 04 * Sec. 14. AS 43.55.023(c) is amended to read: 05 (c) A credit or portion of a credit under this section 06 (1) may not be 07 (A) used to reduce a person's tax liability under AS 43.55.011 08 [AS 43.55.011(e)] for any calendar year below zero; or 09 (B) applied against the tax imposed under AS 43.55.011(s); 10 (2) may, if not used under this subsection, be applied in a later 11 calendar year; 12 (3) may, regardless of when the credit was earned, be used to satisfy a 13 tax, interest, penalty, fee, or other charge that 14 (A) is related to the tax due under this chapter for a prior year, 15 except for a surcharge under AS 43.55.201 - 43.55.299 or 43.55.300 or the tax 16 levied by AS 43.55.011(i) or 43.55.014; and 17 (B) has not, for the purpose of art. IX, sec. 17(a), Constitution 18 of the State of Alaska, been subject to an administrative proceeding or 19 litigation. 20 * Sec. 15. AS 43.55.024(c) is amended to read: 21 (c) For a calendar year for which a producer's tax liability under AS 43.55.011 22 [AS 43.55.011(e)] exceeds zero before application of any credits under this chapter, 23 other than a credit under (a) of this section but after application of any credit under (a) 24 of this section, a producer that is qualified under (e) of this section and whose average 25 amount of oil and gas produced a day and taxable under AS 43.55.011 26 [AS 43.55.011(e)] is less than 100,000 BTU equivalent barrels a day may apply a tax 27 credit under this subsection against that liability. A producer whose average amount of 28 oil and gas produced a day and taxable under AS 43.55.011 [AS 43.55.011(e)] is 29 (1) not more than 50,000 BTU equivalent barrels may apply a tax 30 credit of not more than $12,000,000 for the calendar year; 31 (2) more than 50,000 and less than 100,000 BTU equivalent barrels
01 may apply a tax credit of not more than $12,000,000 multiplied by the following 02 fraction for the calendar year: 03 1 - [2 X (AP - 50,000)] ? 100,000 04 where AP = the average amount of oil and gas taxable under AS 43.55.011 05 [AS 43.55.011(e)], produced a day during the calendar year in BTU equivalent barrels. 06 * Sec. 16. AS 43.55.024(e) is amended to read: 07 (e) On written application by a producer that includes any information the 08 department may require, the department shall determine whether the producer 09 qualifies for a calendar year under (a) and (c) of this section. To qualify under (a) and 10 (c) of this section, a producer must demonstrate that its operation in the state or its 11 ownership of an interest in a lease or property in the state as a distinct producer would 12 not result in the division among multiple producer entities of any production tax 13 liability under AS 43.55.011 [AS 43.55.011(e)] that reasonably would be expected to 14 be attributed to a single producer if the tax credit provisions of (a) or (c) of this section 15 did not exist. 16 * Sec. 17. AS 43.55.024(g) is amended to read: 17 (g) A tax credit authorized by (c) of this section may not be applied 18 (1) to reduce a producer's tax liability for any calendar year under 19 AS 43.55.011 [AS 43.55.011(e)] below zero; or 20 (2) against the tax imposed under AS 43.55.011(s). 21 * Sec. 18. AS 43.55.024(i) is amended to read: 22 (i) A producer may apply against the producer's tax liability for the calendar 23 year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under 24 AS 43.55.011(e) that receives a reduction in the gross value at the point of production 25 under AS 43.55.160(f) or (g) and that is produced during a calendar year after 26 December 31, 2013. A tax credit authorized by this subsection 27 (1) may not reduce a producer's tax liability for a calendar year under 28 AS 43.55.011(e) below zero; and 29 (2) does not apply to oil produced from a major oil field. 30 * Sec. 19. AS 43.55.024(j) is amended to read: 31 (j) A producer may apply against the producer's tax liability for the calendar
01 year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for 02 each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in 03 the gross value at the point of production under AS 43.55.160(f) or (g) and that is 04 produced during a calendar year after December 31, 2013, from leases or properties 05 north of 68 degrees North latitude. A tax credit under this subsection may not reduce a 06 producer's tax liability for a calendar year under AS 43.55.011(e) below the amount 07 calculated under AS 43.55.011(f) and does not apply to oil produced from a major 08 oil field. The amount of the tax credit for a barrel of taxable oil subject to this 09 subsection produced during a month of the calendar year is 10 (1) $8 for each barrel of taxable oil if the average gross value at the 11 point of production for the month is less than $80 a barrel; 12 (2) $7 for each barrel of taxable oil if the average gross value at the 13 point of production for the month is greater than or equal to $80 a barrel, but less than 14 $90 a barrel; 15 (3) $6 for each barrel of taxable oil if the average gross value at the 16 point of production for the month is greater than or equal to $90 a barrel, but less than 17 $100 a barrel; 18 (4) $5 for each barrel of taxable oil if the average gross value at the 19 point of production for the month is greater than or equal to $100 a barrel, but less 20 than $110 a barrel; 21 (5) $4 for each barrel of taxable oil if the average gross value at the 22 point of production for the month is greater than or equal to $110 a barrel, but less 23 than $120 a barrel; 24 (6) $3 for each barrel of taxable oil if the average gross value at the 25 point of production for the month is greater than or equal to $120 a barrel, but less 26 than $130 a barrel; 27 (7) $2 for each barrel of taxable oil if the average gross value at the 28 point of production for the month is greater than or equal to $130 a barrel, but less 29 than $140 a barrel; 30 (8) $1 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 $140 a barrel, but less
01 than $150 a barrel; 02 (9) zero if the average gross value at the point of production for the 03 month is greater than or equal to $150 a barrel. 04 * Sec. 20. AS 43.55.025(a) is amended to read: 05 (a) Subject to the terms and conditions of this section, a credit against the tax 06 levied by AS 43.55.011 [AS 43.55.011(e)] or, if the credit is for exploration 07 expenditures incurred for work performed on or after July 1, 2016, against the tax 08 levied by AS 43.20 is allowed for exploration expenditures that qualify under (b) of 09 this section in an amount equal to one of the following: 10 (1) 30 percent of the total exploration expenditures that qualify only 11 under (b) and (c) of this section; 12 (2) 30 percent of the total exploration expenditures that qualify only 13 under (b) and (d) of this section; 14 (3) 40 percent of the total exploration expenditures that qualify under 15 (b), (c), and (d) of this section; 16 (4) 40 percent of the total exploration expenditures that qualify only 17 under (b) and (e) of this section; 18 (5) 80, 90, or 100 percent, or a lesser amount described in (l) of this 19 section, of the total exploration expenditures described in (b)(2) and (3) of this section 20 and not excluded by (b)(4) and (5) of this section that qualify only under (l) of this 21 section; 22 (6) the lesser of $25,000,000 or 80 percent of the total exploration 23 drilling expenditures described in (m) of this section and that qualify under (b) and 24 (c)(1), (c)(2)(A), and (c)(2)(C) of this section; or 25 (7) the lesser of $7,500,000 or 75 percent of the total seismic 26 exploration expenditures described in (n) of this section and that qualify under (b) of 27 this section. 28 * Sec. 21. AS 43.55.025(f) is amended to read: 29 (f) For a production tax credit under this section, 30 (1) an explorer shall, in a form prescribed by the department and, 31 except for a credit under (k) of this section, within six months of the completion of the
01 exploration activity, claim the credit and submit information sufficient to demonstrate 02 to the department's satisfaction that the claimed exploration expenditures qualify under 03 this section; in addition, the explorer shall submit information necessary for the 04 commissioner of natural resources to evaluate the validity of the explorer's compliance 05 with the requirements of this section; 06 (2) an explorer shall agree, in writing, 07 (A) to notify the Department of Natural Resources, within 30 08 days after completion of seismic or geophysical data processing, completion of 09 well drilling, or filing of a claim for credit, whichever is the latest, for which 10 exploration costs are claimed, of the date of completion and submit a report to 11 that department describing the processing sequence and providing a list of data 12 sets available; 13 (B) to provide to the Department of Natural Resources, within 14 30 days after the date of a request, unless a longer period is provided by the 15 Department of Natural Resources, specific data sets, ancillary data, and reports 16 identified in (A) of this paragraph; in this subparagraph, 17 (i) a seismic or geophysical data set includes the data 18 for an entire seismic survey, irrespective of whether the survey area 19 covers nonstate land in addition to state land or land in a unit in 20 addition to land outside a unit; 21 (ii) well data include all analyses conducted on physical 22 material, and well logs collected from the well, results, and copies of 23 data collected and data analyses for the well, including well logs; 24 sample analyses; testing geophysical and velocity data including 25 seismic profiles and check shot surveys; testing data and analyses; age 26 data; geochemical analyses; and tangible material; 27 (C) that, notwithstanding any provision of AS 38, information 28 provided under this paragraph will be held confidential by the Department of 29 Natural Resources, 30 (i) in the case of well data, until the expiration of the 31 24-month period of confidentiality described in AS 31.05.035(c), at
01 which time the Department of Natural Resources will release the 02 information after 30 days' public notice unless, in the discretion of the 03 commissioner of natural resources, it is necessary to protect 04 information relating to the valuation of unleased acreage in the same 05 vicinity, or unless the well is on private land and the owner, including 06 the lessor but not the lessee, of the oil and gas resources has not given 07 permission to release the well data; 08 (ii) in the case of seismic or other geophysical data, 09 other than seismic data acquired by seismic exploration subject to (k) of 10 this section, for 10 years following the completion date, at which time 11 the Department of Natural Resources will release the information after 12 30 days' public notice, except as to seismic or other geophysical data 13 acquired from private land, unless the owner, including a lessor but not 14 a lessee, of the oil and gas resources in the private land gives 15 permission to release the seismic or other geophysical data associated 16 with the private land; 17 (iii) in the case of seismic data obtained by seismic 18 exploration subject to (k) of this section, only until the expiration of 30 19 days' public notice issued on or after the date the production tax credit 20 certificate is issued under (5) of this subsection; 21 (3) if more than one explorer holds an interest in a well or seismic 22 exploration, each explorer may claim an amount of credit that is proportional to the 23 explorer's cost incurred; 24 (4) the department may exercise the full extent of its powers as though 25 the explorer were a taxpayer under this title, in order to verify that the claimed 26 expenditures are qualified exploration expenditures under this section; and 27 (5) if the department is satisfied that the explorer's claimed 28 expenditures are qualified under this section and that all data required to be submitted 29 under this section have been submitted, the department shall issue to the explorer a 30 production tax credit certificate for the amount of credit to be allowed against 31 production taxes levied by AS 43.55.011 [AS 43.55.011(e)] and, if the credit is for
01 exploration expenditures incurred for work performed on or after July 1, 2016, against 02 taxes levied by AS 43.20; notwithstanding any contrary provision of AS 38, 03 AS 40.25.100, or AS 43.05.230, the following information is not confidential: 04 (A) the explorer's name; 05 (B) the date of the application; 06 (C) the location of the well or seismic exploration; 07 (D) the date of the department's issuance of the certificate; and 08 (E) the date on which the information required to be submitted 09 under this section will be released. 10 * Sec. 22. AS 43.55.025(h) is amended to read: 11 (h) A producer that purchases a production tax credit certificate may apply the 12 credits against its production tax levied by AS 43.55.011 [AS 43.55.011(e)]. 13 Regardless of the price the producer paid for the certificate, the producer may receive 14 a credit against its production tax liability for the full amount of the credit, but for not 15 more than the amount for which the certificate is issued. A production tax credit or a 16 portion of a production tax credit or a production tax credit certificate or a portion of a 17 production tax credit certificate allowed under this section 18 (1) may not be applied 19 (A) more than once; 20 (B) against the tax imposed under AS 43.55.011(s); 21 (2) may be applied in a later calendar year; 22 (3) may, regardless of when the credit was earned, be applied to satisfy 23 a tax, interest, penalty, fee, or other charge that 24 (A) is related to the tax due under this chapter for a prior year, 25 except for a surcharge under AS 43.55.201 - 43.55.299 or 43.55.300 or the tax 26 levied by AS 43.55.011(i) or 43.55.014; and 27 (B) has not, for the purpose of art. IX, sec. 17(a), Constitution 28 of the State of Alaska, been subject to an administrative proceeding or 29 litigation. 30 * Sec. 23. AS 43.55.025(i) is amended to read: 31 (i) For a production tax credit under this section,
01 (1) a credit may not be applied to reduce a taxpayer's tax liability under 02 AS 43.55.011 [AS 43.55.011(e)] below zero for a calendar year; 03 (2) if the production tax credit is for exploration expenditures incurred 04 for work performed on or after July 1, 2016, the explorer may apply the credit to 05 reduce the explorer's tax liability under AS 43.20, except that the credit may not be 06 applied to reduce the explorer's tax liability under AS 43.20 below zero for a tax year; 07 and 08 (3) an amount of the production tax credit in excess of the amount that 09 may be applied for a calendar or tax year under this subsection may be carried forward 10 and applied against the taxpayer's tax liability under AS 43.55.011 [AS 43.55.011(e)] 11 in one or more later calendar years or under AS 43.20 in one or more later tax years. 12 * Sec. 24. AS 43.55.028(e) is amended to read: 13 (e) The department, on the written application of a person to whom a 14 transferable tax credit certificate has been issued under AS 43.55.023(d) or former 15 AS 43.55.023(m) for an expenditure incurred before July 1, 2017, or to whom a 16 production tax credit certificate has been issued under AS 43.55.025(f) for an 17 expenditure incurred before July 1, 2017, may use either available money in the oil 18 and gas tax credit fund or, subject to appropriation by the legislature, money disbursed 19 to the commissioner, or both, to purchase, in whole or in part, the certificate. The 20 department may not purchase with money from the oil and gas tax credit fund a total 21 of more than $70,000,000 in tax credit certificates from a person in a calendar year. 22 The total amount of purchases made by the department with money from the oil and 23 gas tax credit fund from a person in a year may not exceed the assumed payment 24 amount for each year, as calculated under (l) of this section without the discount 25 provided in (m) of this section. Before purchasing a certificate or part of a certificate, 26 the department shall find that 27 (1) the calendar year of the purchase is not earlier than the first 28 calendar year for which the credit shown on the certificate would otherwise be allowed 29 to be applied against a tax; 30 (2) the application is not the result of the division of a single entity into 31 multiple entities that would reasonably be expected to apply as a single entity if the
01 $70,000,000 limitation in this subsection did not exist; 02 (3) the applicant's total tax liability under AS 43.55.011 03 [AS 43.55.011(e)], after application of all available tax credits, for the calendar year in 04 which the application is made is zero; 05 (4) the applicant's average daily production of oil and gas taxable 06 under AS 43.55.011 [AS 43.55.011(e)] during the calendar year preceding the 07 calendar year in which the application is made was not more than 50,000 BTU 08 equivalent barrels; and 09 (5) the purchase is consistent with this section and regulations adopted 10 under this section. 11 * Sec. 25. AS 43.55.030(a) is amended to read: 12 (a) A producer that produces oil or gas from a lease or property in the state 13 during a calendar year, whether or not any tax payment is due under AS 43.55.020(a) 14 for that oil or gas, shall file with the department on March 31 of the following year a 15 statement, under oath, in a form prescribed by the department, giving, with other 16 information required, the following: 17 (1) a description of each lease or property and each major oil field 18 from which oil or gas was produced, by name, legal description, lease number, or 19 accounting codes assigned by the department; 20 (2) the names of the producer and, if different, the person paying the 21 tax, if any; 22 (3) the gross amount of oil and the gross amount of gas produced from 23 each lease or property and each major oil field, separately identifying the gross 24 amount of gas produced from each oil and gas lease to which an effective election 25 under AS 43.55.014(a) applies, the amount of gas delivered to the state under 26 AS 43.55.014(b), and the percentage of the gross amount of oil and gas owned by the 27 producer; 28 (4) the gross value at the point of production of the oil and of the gas 29 produced from each lease or property and each major oil field owned by the producer 30 and the costs of transportation of the oil and gas; 31 (5) the name of the first purchaser and the price received for the oil and
01 for the gas, unless relieved from this requirement in whole or in part by the 02 department; 03 (6) the producer's qualified capital expenditures, as defined in 04 AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other 05 payments or credits under AS 43.55.170; 06 (7) the production tax values of the oil and gas, separately, under 07 AS 43.55.160(a) or (i) or of the oil under AS 43.55.160(h) or (j), as applicable; 08 (8) any claims for tax credits to be applied; and 09 (9) calculations showing the amounts, if any, that were or are due 10 under AS 43.55.020(a) and interest on any underpayment or overpayment. 11 * Sec. 26. AS 43.55.075(b) is amended to read: 12 (b) A decision of a regulatory agency, court, or other body with authority to 13 resolve disputes that results in a retroactive change to a lease expenditure, to an 14 adjustment to a lease expenditure, to the allocation of a lease expenditure between 15 oil and gas, to costs of transportation, to sale price, to prevailing value, or to 16 consideration of quality differentials relating to the commingling of oils that has a 17 corresponding effect, either an increase or decrease, as applicable, on the production 18 tax value of oil or gas or the amount or availability of a tax credit as determined under 19 this chapter. For purposes of this section, a change to a lease expenditure includes a 20 change in the categorization of a lease expenditure as a qualified capital expenditure or 21 as not a qualified capital expenditure. The producer shall 22 (1) within 60 days after the change, notify the department in writing; 23 and 24 (2) within 120 days after the change, file amended returns covering all 25 periods affected by the change, unless the department agrees otherwise or a stay is in 26 place that affects the filing or payment, regardless of the pendency of appeals of the 27 decision. 28 * Sec. 27. AS 43.55.150 is amended by adding new subsections to read: 29 (d) The department shall adopt regulations consistent with this section for 30 determining the gross value at the point of production of 31 (1) oil;
01 (2) gas; and 02 (3) oil produced from a major oil field. 03 (e) The department shall adopt regulations consistent with this chapter for 04 determining the monthly gross value at the point of production for oil produced from 05 each major oil field. 06 * Sec. 28. AS 43.55.160(a) is amended to read: 07 (a) For oil and gas produced before January 1, 2021 [JANUARY 1, 2022], 08 except as provided in (b), (f), and (g) of this section, for the purposes of 09 (1) AS 43.55.011(e)(1) and (2), the annual production tax value of 10 taxable oil, gas, or oil and gas produced during a calendar year in a category for which 11 a separate annual production tax value is required to be calculated under this 12 paragraph is the gross value at the point of production of that oil, gas, or oil and gas 13 taxable under AS 43.55.011(e), less the producer's lease expenditures under 14 AS 43.55.165 for the calendar year applicable to the oil, gas, or oil and gas in that 15 category produced by the producer during the calendar year, as adjusted under 16 AS 43.55.170; a separate annual production tax value shall be calculated for 17 (A) oil and gas produced from leases or properties in the state 18 that include land north of 68 degrees North latitude, other than gas produced 19 before 2021 [2022] and used in the state; 20 (B) oil and gas produced from leases or properties in the state 21 outside the Cook Inlet sedimentary basin, no part of which is north of 68 22 degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a) 23 and (b); this subparagraph does not apply to 24 (i) gas produced before 2021 [2022] and used in the 25 state; or 26 (ii) oil and gas subject to AS 43.55.011(p); 27 (C) oil produced before 2021 [2022] from each lease or 28 property in the Cook Inlet sedimentary basin; 29 (D) gas produced before 2021 [2022] from each lease or 30 property in the Cook Inlet sedimentary basin; 31 (E) gas produced before 2021 [2022] from each lease or
01 property in the state outside the Cook Inlet sedimentary basin and used in the 02 state, other than gas subject to AS 43.55.011(p); 03 (F) oil and gas subject to AS 43.55.011(p) produced from 04 leases or properties in the state; 05 (G) oil and gas produced from leases or properties in the state 06 no part of which is north of 68 degrees North latitude, other than oil or gas 07 described in (B), (C), (D), (E), or (F) of this paragraph; 08 (2) AS 43.55.011(g), for oil and gas produced before January 1, 2014, 09 the monthly production tax value of the taxable 10 (A) oil and gas produced during a month from leases or 11 properties in the state that include land north of 68 degrees North latitude is the 12 gross value at the point of production of the oil and gas taxable under 13 AS 43.55.011(e) and produced by the producer from those leases or properties, 14 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 15 calendar year applicable to the oil and gas produced by the producer from 16 those leases or properties, as adjusted under AS 43.55.170; this subparagraph 17 does not apply to gas subject to AS 43.55.011(o); 18 (B) oil and gas produced during a month from leases or 19 properties in the state outside the Cook Inlet sedimentary basin, no part of 20 which is north of 68 degrees North latitude, is the gross value at the point of 21 production of the oil and gas taxable under AS 43.55.011(e) and produced by 22 the producer from those leases or properties, less 1/12 of the producer's lease 23 expenditures under AS 43.55.165 for the calendar year applicable to the oil and 24 gas produced by the producer from those leases or properties, as adjusted under 25 AS 43.55.170; this subparagraph does not apply to gas subject to 26 AS 43.55.011(o); 27 (C) oil produced during a month from a lease or property in the 28 Cook Inlet sedimentary basin is the gross value at the point of production of 29 the oil taxable under AS 43.55.011(e) and produced by the producer from that 30 lease or property, less 1/12 of the producer's lease expenditures under 31 AS 43.55.165 for the calendar year applicable to the oil produced by the
01 producer from that lease or property, as adjusted under AS 43.55.170; 02 (D) gas produced during a month from a lease or property in 03 the Cook Inlet sedimentary basin is the gross value at the point of production 04 of the gas taxable under AS 43.55.011(e) and produced by the producer from 05 that lease or property, less 1/12 of the producer's lease expenditures under 06 AS 43.55.165 for the calendar year applicable to the gas produced by the 07 producer from that lease or property, as adjusted under AS 43.55.170; 08 (E) gas produced during a month from a lease or property 09 outside the Cook Inlet sedimentary basin and used in the state is the gross 10 value at the point of production of that gas taxable under AS 43.55.011(e) and 11 produced by the producer from that lease or property, less 1/12 of the 12 producer's lease expenditures under AS 43.55.165 for the calendar year 13 applicable to that gas produced by the producer from that lease or property, as 14 adjusted under AS 43.55.170. 15 * Sec. 29. AS 43.55.160(c) is amended to read: 16 (c) Notwithstanding any contrary provision of AS 43.55.150, for purposes of 17 calculating a monthly production tax value under (a)(2) or (j) of this section, the gross 18 value at the point of production of the oil, gas, or oil and gas, as applicable, is 19 calculated under regulations adopted by the department that provide for using an 20 appropriate monthly share of the producer's costs of transportation for the calendar 21 year. 22 * Sec. 30. AS 43.55.160(d) is amended to read: 23 (d) Irrespective of whether a producer produces taxable oil or gas during a 24 calendar year or month, the producer is considered to have generated a positive 25 production tax value if a calculation described in (a), (h), (i), or (j) of this section 26 yields a positive number because the producer's adjusted lease expenditures for a 27 calendar year under AS 43.55.165 and 43.55.170 are less than zero as a result of the 28 producer's receiving a payment or credit under AS 43.55.170. An explorer that has 29 obtained a transferable tax credit certificate under AS 43.55.023(d) for the amount of a 30 tax credit under former AS 43.55.023(b) is considered a producer, subject to the tax 31 levied by AS 43.55.011(e), to the extent that the explorer generates a positive
01 production tax value as the result of the explorer's receiving a payment or credit under 02 AS 43.55.170. 03 * Sec. 31. AS 43.55.160(e) is amended to read: 04 (e) Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 05 incurred to explore for, develop, or produce oil or gas from a lease, [OR] property, or 06 major oil field outside the Cook Inlet sedimentary basin that would otherwise be 07 deductible by a producer in a calendar year but whose deduction would cause an 08 annual production tax value calculated under (a)(1), [OR] (h), or (i) of this section of 09 taxable oil or gas produced during the calendar year to be less than zero may be used 10 to establish a carried-forward [CARRIED- FORWARD] annual loss under 11 AS 43.55.165(a)(3). A reduction under (f) or (g) of this section must be added back to 12 the calculation of production tax values for that calendar year before the determination 13 of a carried-forward annual loss under this subsection. However, the department shall 14 provide by regulation a method to ensure that, for a period for which a producer's tax 15 liability is limited by AS 43.55.011(o) or (p), any adjusted lease expenditures under 16 AS 43.55.165 and 43.55.170 that would otherwise be deductible by a producer for that 17 period but whose deduction would cause a production tax value calculated under 18 (a)(1)(E) or (F), [OR] (h)(3), or (i)(5) or (6) of this section to be less than zero are 19 accounted for as though the adjusted lease expenditures had first been used as 20 deductions in calculating the production tax values of oil or gas subject to any of the 21 limitations under AS 43.55.011(o) or (p) that have positive production tax values so as 22 to reduce the tax liability calculated without regard to the limitation to the maximum 23 amount provided for under the applicable provision of AS 43.55.011(o) or (p). Only 24 the amount of those adjusted lease expenditures remaining after the accounting 25 provided for under this subsection may be used to establish a carried-forward annual 26 loss under AS 43.55.165(a)(3). In this subsection, "producer" includes "explorer." 27 * Sec. 32. AS 43.55.160(f) is amended to read: 28 (f) On and after January 1, 2014, in the calculation of an annual production tax 29 value of a producer under (a)(1)(A), [OR] (h)(1), (i)(1) or (8), or (j) of this section, 30 the gross value at the point of production of oil or gas produced from a lease, [OR] 31 property, or major oil field north of 68 degrees North latitude meeting one or more of
01 the following criteria is reduced by 20 percent: (1) the oil or gas is produced from a 02 lease, [OR] property, or major oil field that does not contain a lease that was within a 03 unit on January 1, 2003; (2) the oil or gas is produced from a participating area 04 established after December 31, 2011, that is within a unit formed under 05 AS 38.05.180(p) before January 1, 2003, if the participating area does not contain a 06 reservoir that had previously been in a participating area established before 07 December 31, 2011; (3) the oil or gas is produced from acreage that was added to an 08 existing participating area by the Department of Natural Resources on and after 09 January 1, 2014, and the producer demonstrates to the department that the volume of 10 oil or gas produced is from acreage added to an existing participating area. This 11 subsection does not apply to gas produced before 2022 that is used in the state or to 12 gas produced on and after January 1, 2022. For oil and gas first produced from a lease 13 or property after December 31, 2016, a reduction allowed under this subsection 14 applies from the date of commencement of regular production of oil and gas from that 15 lease or property and expires after three years, consecutive or nonconsecutive, in 16 which the average annual price per barrel for Alaska North Slope crude oil for sale on 17 the United States West Coast is more than $70 or after seven years, whichever occurs 18 first. For oil and gas first produced from a lease or property before January 1, 2017, a 19 reduction allowed under this subsection expires on the earlier of January 1, 2023, or 20 January 1 following three years, consecutive or nonconsecutive, in which the average 21 annual price per barrel for Alaska North Slope crude oil for sale on the United States 22 West Coast is more than $70. The Alaska Oil and Gas Conservation Commission shall 23 determine the commencement of regular production of oil and gas for purposes of this 24 subsection. A reduction under this subsection may not reduce the gross value at the 25 point of production below zero. In this subsection, "participating area" means a 26 reservoir or portion of a reservoir producing or contributing to production as approved 27 by the Department of Natural Resources. 28 * Sec. 33. AS 43.55.160(g) is amended to read: 29 (g) On and after January 1, 2014, in addition to the reduction under (f) of this 30 section, in the calculation of an annual production tax value of a producer under 31 (a)(1)(A), [OR] (h)(1), (i)(1) or (8), or (j) of this section, the gross value at the point
01 of production of oil or gas produced from a lease, [OR] property, or major oil field 02 north of 68 degrees North latitude that does not contain a lease that was within a unit 03 on January 1, 2003, is reduced by 10 percent if the oil or gas is produced from a unit 04 made up solely of leases that have a royalty share of more than 12.5 percent in amount 05 or value of the production removed or sold from the lease as determined under 06 AS 38.05.180(f). This subsection does not apply if the royalty obligation for one or 07 more of the leases in the unit has been reduced to 12.5 percent or less under 08 AS 38.05.180(j) for all or part of the calendar year for which the annual production tax 09 value is calculated. This subsection does not apply to gas produced before 2022 that is 10 used in the state or to gas produced on and after January 1, 2022. For oil and gas first 11 produced from a lease or property after December 31, 2016, a reduction allowed under 12 this subsection applies from the date of commencement of regular production of oil 13 and gas from that lease or property and expires after three years, consecutive or 14 nonconsecutive, in which the average annual price per barrel for Alaska North Slope 15 crude oil for sale on the United States West Coast is more than $70 or after seven 16 years, whichever occurs first. For oil and gas first produced from a lease or property 17 before January 1, 2017, a reduction allowed under this subsection expires on the 18 earlier of January 1, 2023, or January 1 following three years, consecutive or 19 nonconsecutive, in which the average annual price per barrel for Alaska North Slope 20 crude oil for sale on the United States West Coast is more than $70. The Alaska Oil 21 and Gas Conservation Commission shall determine the commencement of regular 22 production for purposes of this subsection. A reduction under this subsection may not 23 reduce the gross value at the point of production below zero. 24 * Sec. 34. AS 43.55.160(h) is amended to read: 25 (h) For oil produced on and after January 1, 2022, except as provided in (b), 26 (f), and (g) of this section, for the purposes of AS 43.55.011 [AS 43.55.011(e)(3)], the 27 annual production tax value of oil taxable under AS 43.55.011 [AS 43.55.011(e)] 28 produced by a producer during a calendar year 29 (1) from leases or properties in the state that include land north of 68 30 degrees North latitude, other than major oil fields, is the gross value at the point of 31 production of that oil, less the producer's lease expenditures under AS 43.55.165 for
01 the calendar year incurred to explore for, develop, or produce oil and gas deposits 02 located in the state north of 68 degrees North latitude or located in leases or properties 03 in the state that include land north of 68 degrees North latitude, as adjusted under 04 AS 43.55.170; 05 (2) before or during the last calendar year under AS 43.55.024(b) for 06 which the producer could take a tax credit under AS 43.55.024(a), from leases or 07 properties in the state outside the Cook Inlet sedimentary basin, no part of which is 08 north of 68 degrees North latitude, other than leases or properties subject to 09 AS 43.55.011(p), is the gross value at the point of production of that oil, less the 10 producer's lease expenditures under AS 43.55.165 for the calendar year incurred to 11 explore for, develop, or produce oil and gas deposits located in the state outside the 12 Cook Inlet sedimentary basin and south of 68 degrees North latitude, other than oil 13 and gas deposits located in a lease or property that includes land north of 68 degrees 14 North latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from 15 which commercial production has not begun, as adjusted under AS 43.55.170; 16 (3) from leases or properties subject to AS 43.55.011(p) is the gross 17 value at the point of production of that oil, less the producer's lease expenditures under 18 AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil and 19 gas deposits located in leases or properties subject to AS 43.55.011(p) or, before 20 January 1, 2027, located in leases or properties in the state outside the Cook Inlet 21 sedimentary basin, no part of which is north of 68 degrees North latitude from which 22 commercial production has not begun, as adjusted under AS 43.55.170; 23 (4) from leases or properties in the state no part of which is north of 68 24 degrees North latitude, other than leases or properties subject to (2) or (3) of this 25 subsection, is the gross value at the point of production of that oil less the producer's 26 lease expenditures under AS 43.55.165 for the calendar year incurred to explore for, 27 develop, or produce oil and gas deposits located in the state south of 68 degrees North 28 latitude, other than oil and gas deposits located in a lease or property in the state that 29 includes land north of 68 degrees North latitude, and excluding lease expenditures that 30 are deductible under (2) or (3) of this subsection or would be deductible under (2) or 31 (3) of this subsection if not prohibited by (b) of this section, as adjusted under
01 AS 43.55.170; a separate annual production tax value shall be calculated for 02 (A) oil produced from each lease or property in the Cook Inlet 03 sedimentary basin; 04 (B) oil produced from each lease or property outside the Cook 05 Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, 06 other than leases or properties subject to (3) of this subsection; 07 (5) for each major oil field in the state is the gross value at the 08 point of production of that oil, less the lease expenditures allocated to the major 09 oil field under AS 43.55.165 for the calendar year incurred to explore for, 10 develop, or produce oil and gas deposits located in the major oil field, as adjusted 11 under AS 43.55.170. 12 * Sec. 35. AS 43.55.160 is amended by adding new subsections to read: 13 (i) For oil and gas produced on and after January 1, 2021, and before 14 January 1, 2022, except as provided in (b), (f), and (g) of this section, for the purposes 15 of AS 43.55.011, the annual production tax value of taxable oil or gas produced during 16 a calendar year in a category for which a separate annual production tax value is 17 required to be calculated under this subsection is the gross value at the point of 18 production of that oil or gas taxable under AS 43.55.011, less the producer's lease 19 expenditures under AS 43.55.165 for the calendar year applicable to the oil or gas in 20 that category produced by the producer during the calendar year, as adjusted under 21 AS 43.55.170. A separate annual production tax value shall be calculated for 22 (1) oil and gas produced from leases or properties in the state that 23 include land north of 68 degrees North latitude, other than 24 (A) oil produced from a major oil field; and 25 (B) gas produced before 2022 and used in the state; 26 (2) oil and gas produced from leases or properties in the state outside 27 the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North 28 latitude and that qualifies for a tax credit under AS 43.55.024(a) and (b); this 29 paragraph does not apply to 30 (A) gas produced on and after January 1, 2021, and before 31 2022 and used in the state; or
01 (B) oil and gas subject to AS 43.55.011(p); 02 (3) oil produced on and after January 1, 2021, and before 2022 from 03 each lease or property in the Cook Inlet sedimentary basin; 04 (4) gas produced on and after January 1, 2021, and before 2022 from 05 each lease or property in the Cook Inlet sedimentary basin; 06 (5) gas produced on and after January 1, 2021, and before 2022 from 07 each lease or property in the state outside the Cook Inlet sedimentary basin and used in 08 the state, other than gas subject to AS 43.55.011(p); 09 (6) oil and gas subject to AS 43.55.011(p) produced from leases or 10 properties in the state; 11 (7) oil and gas produced from leases or properties in the state no part 12 of which is north of 68 degrees North latitude, other than oil or gas described in (2), 13 (3), (4), (5), or (6) of this subsection; 14 (8) oil produced from a major oil field. 15 (j) Except as provided in (b), (f), and (g) of this section, for the purposes of 16 AS 43.55.011(q) and AS 43.55.020(a)(7)(E), the monthly production tax value of the 17 taxable oil produced during a month from a major oil field is the gross value at the 18 point of production of the oil produced by the producer from the major oil field and 19 taxable under AS 43.55.011, less 1/12 of the producer's lease expenditures under 20 AS 43.55.165 for the calendar year applicable to the oil produced by the producer 21 from that major oil field, as adjusted under AS 43.55.170. For the purposes of the 22 calculation under this subsection, a reduction in the gross value at the point of 23 production may apply for oil subject to AS 43.55.160(f) and (g). 24 * Sec. 36. AS 43.55.165(a) is amended to read: 25 (a) For purposes of this chapter, a producer's lease expenditures for a calendar 26 year are 27 (1) costs, other than items listed in (e) of this section, that are 28 (A) incurred by the producer during the calendar year after 29 March 31, 2006, to explore for, develop, or produce oil or gas deposits located 30 within the producer's leases or properties in the state, a major oil field in the 31 state, or, in the case of land in which the producer does not own an operating
01 right, operating interest, or working interest, to explore for oil or gas deposits 02 within other land in the state; and 03 (B) allowed by the department by regulation, based on the 04 department's determination that the costs satisfy the following three 05 requirements: 06 (i) the costs must be incurred upstream of the point of 07 production of oil and gas; 08 (ii) the costs must be ordinary and necessary costs of 09 exploring for, developing, or producing, as applicable, oil or gas 10 deposits; and 11 (iii) the costs must be direct costs of exploring for, 12 developing, or producing, as applicable, oil or gas deposits; 13 (2) a reasonable allowance for that calendar year, as determined under 14 regulations adopted by the department, for overhead expenses that are directly related 15 to exploring for, developing, or producing, as applicable, the oil or gas deposits; and 16 (3) lease expenditures incurred in a previous calendar year, subject to 17 (l) - (r) of this section, that 18 (A) met the requirements of AS 43.55.160(e) in the year in 19 which the lease expenditures were incurred; 20 (B) have not been deducted in the determination of the 21 production tax value of oil and gas under AS 43.55.160(a), [OR] (h), (i), or (j) 22 in a previous calendar year; 23 (C) were not the basis of a credit under this title; and 24 (D) were incurred to explore for, develop, or produce an oil or 25 gas deposit located in the state outside the Cook Inlet sedimentary basin. 26 * Sec. 37. AS 43.55.165(h) is amended to read: 27 (h) The department shall adopt regulations that provide for reasonable 28 methods of allocating costs between oil and gas, between gas subject to 29 AS 43.55.011(o) and other gas, [AND] between leases or properties, between leases 30 or properties and major oil fields, and between major oil fields in those 31 circumstances where an allocation of costs is required to determine lease expenditures
01 that are costs of exploring for, developing, or producing oil deposits or costs of 02 exploring for, developing, or producing gas deposits, or that are costs of exploring for, 03 developing, or producing oil or gas deposits located within a different lease, property, 04 or major oil field. A producer shall report to the department lease expenditures 05 separately for oil subject to taxation under either AS 43.55.011(q) or (s) [LEASES 06 OR PROPERTIES]. 07 * Sec. 38. AS 43.55.165(m) is amended to read: 08 (m) During a calendar year in which a taxpayer's liability under 09 AS 43.55.011(e) is determined under AS 43.55.011(f), the maximum amount of 10 carried-forward annual loss that a taxpayer may apply in that year is equal to the 11 amount, when combined with the lease expenditures of the current year and any 12 credits under this chapter, necessary to reduce the amount calculated under 13 AS 43.55.011(e) to the equivalent amount of tax due under AS 43.55.011(f) before the 14 application of any credits under this chapter. During a calendar year in which a 15 taxpayer's liability under AS 43.55.011(q) is determined under AS 43.55.011(s), 16 the maximum amount of carried-forward annual loss that a taxpayer may apply 17 in that year is equal to the amount, when combined with the lease expenditures of 18 the current year and any credits under this chapter, necessary to reduce the 19 amount calculated under AS 43.55.011(q) to the equivalent amount of tax due 20 under AS 43.55.011(s) before the application of any credits under this chapter. 21 An amount of carried-forward annual loss not applied under this subsection may 22 continue to be carried forward. 23 * Sec. 39. AS 43.55.165(n) is amended to read: 24 (n) A carried-forward annual loss may only be applied 25 (1) to determine the production tax value of oil or gas for a category 26 for which a separate annual production tax value is required to be calculated under 27 AS 43.55.160(a), [OR] (h), (i), or (j) if the lease expenditure resulting in the carried- 28 forward annual loss was incurred in the same category; 29 (2) beginning in the calendar year in which regular production of oil or 30 gas from the lease or property where the lease expenditure resulting in the carried- 31 forward [CARRIED- FORWARD] annual loss was incurred commences.
01 * Sec. 40. AS 43.55.165(o) is amended to read: 02 (o) A carried-forward annual loss for a lease expenditure incurred on a lease, 03 [OR] property, or major oil field that 04 (1) did not commence regular production of oil or gas before or during 05 the year the lease expenditure was incurred decreases in value each year by one-tenth 06 of the value of the carried-forward annual loss in the preceding year, beginning 07 January 1 of the 11th calendar year after the lease expenditure is carried forward under 08 (a)(3) of this section; a decrease in value under this paragraph does not apply for a 09 year in which the department determines that regular production of oil or gas did not 10 commence because of a natural disaster, an injunction or other court order, or an 11 administrative order; 12 (2) commenced regular production of oil or gas before or during the 13 year the lease expenditure was incurred decreases in value each year by one-tenth of 14 the value of the carried-forward annual loss in the preceding year, beginning January 1 15 of the eighth calendar year after the lease expenditure is carried forward under (a)(3) 16 of this section. 17 * Sec. 41. AS 43.55.165(r) is amended to read: 18 (r) In adopting a regulation that defines the lease, [OR] property, or major oil 19 field where a lease expenditure resulting in a carried-forward annual loss is incurred 20 for purposes of (n) and (o) of this section, the department shall include an exploration 21 lease expenditure that is reasonably related to the lease, [OR] property, or major oil 22 field. 23 * Sec. 42. AS 43.55.170 is amended by adding a new subsection to read: 24 (d) The department shall adopt regulations that provide for reasonable 25 methods of allocating adjustments to lease expenditures for oil produced from a major 26 oil field subject to taxation under AS 43.55.011(q). A producer shall report to the 27 department adjustments to lease expenditures separately for oil subject to taxation 28 under AS 43.55.011(q). 29 * Sec. 43. AS 43.55.895(b) is amended to read: 30 (b) A municipal entity subject to taxation because of this section 31 (1) is eligible for tax credits proportionate to its production taxable
01 under AS 43.55.011 [AS 43.55.011(e)]; and 02 (2) shall allocate its lease expenditures in proportion to its production 03 taxable under AS 43.55.011 [AS 43.55.011(e)]. 04 * Sec. 44. AS 43.55.900 is amended by adding a new paragraph to read: 05 (27) "major oil field" means a field all or part of which is north of 68 06 degrees North latitude that 07 (A) produced an average of more than 40,000 barrels of oil a 08 day in the previous calendar year; and 09 (B) has produced more than 400,000,000 barrels of oil in 10 cumulative production. 11 * Sec. 45. This Act takes effect January 1, 2021.