HB 223: "An Act relating to the production tax and royalty rates on certain gas; and providing for an effective date."
00 HOUSE BILL NO. 223 01 "An Act relating to the production tax and royalty rates on certain gas; and providing 02 for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 38.05.180(f) is amended to read: 05 (f) Except as provided by AS 38.05.131 - 38.05.134 and (mm) of this 06 section, the commissioner may issue oil and gas leases or leases for gas only on state 07 land to the highest responsible qualified bidder as follows: 08 (1) the commissioner shall issue an oil and gas lease or a gas only 09 lease, as appropriate, to the successful bidder determined by competitive bidding 10 under regulations adopted by the commissioner; bidding may be by sealed bid or 11 according to any other bidding procedure the commissioner determines is in the best 12 interests of the state; 13 (2) whenever, under any of the leasing methods listed in this 14 subsection, a royalty share is reserved to the state, it shall be delivered in pipeline
01 quality and free of all lease or unit expenses, including but not limited to separation, 02 cleaning, dehydration, gathering, salt water disposal, and preparation for transportation 03 off the lease or unit area; 04 (3) following a pre-sale analysis, the commissioner may choose at least 05 one of the following leasing methods: 06 (A) a cash bonus bid with a fixed royalty share reserved to the 07 state of not less than 12.5 percent in amount or value of the production 08 removed or sold from the lease; 09 (B) a cash bonus bid with a fixed royalty share reserved to the 10 state of not less than 12.5 percent in amount or value of the production 11 removed or sold from the lease and a fixed share of the net profit derived from 12 the lease of not less than 30 percent reserved to the state; 13 (C) a fixed cash bonus with a royalty share reserved to the state 14 as the bid variable but not [NO] less than 12.5 percent in amount or value of 15 the production removed or sold from the lease; 16 (D) a fixed cash bonus with the share of the net profit derived 17 from the lease reserved to the state as the bid variable; 18 (E) a fixed cash bonus with a fixed royalty share reserved to the 19 state of not less than 12.5 percent in amount or value of the production 20 removed or sold from the lease with the share of the net profit derived from the 21 lease reserved to the state as the bid variable; 22 (F) a cash bonus bid with a fixed royalty share reserved to the 23 state based on a sliding scale according to the volume of production or other 24 factor but in no event less than 12.5 percent in amount or value of the 25 production removed or sold from the lease; 26 (G) a fixed cash bonus with a royalty share reserved to the state 27 based on a sliding scale according to the volume of production or other factor 28 as the bid variable but not less than 12.5 percent in amount or value of the 29 production removed or sold from the lease; 30 (4) notwithstanding a requirement in the leasing method chosen of a 31 minimum fixed royalty share, on and after March 3, 1997, the lessee under a lease
01 issued in the Cook Inlet sedimentary basin who is the first to file with the 02 commissioner a nonconfidential sworn statement claiming to be the first to have 03 drilled a well discovering oil or gas in a previously undiscovered oil or gas pool and 04 who is certified by the commissioner within one year of completion of that discovery 05 well to have drilled a well in that pool that is capable of producing in paying quantities 06 shall pay a royalty of five percent on all production of oil or gas from that pool 07 attributable to that lease for a period of 10 years following the date of discovery of that 08 pool, and thereafter the royalty payable on all production of oil or gas from the pool 09 attributable to that lease shall be determined and payable as specified in the lease; for 10 purposes of this paragraph, the reduced royalty authorized by this paragraph is subject 11 to the following: 12 (A) only one reduction of royalty authorized by this paragraph 13 may be allowed on each lease that qualifies for reduction of royalty under this 14 paragraph; 15 (B) if, under this paragraph, application is made for a royalty 16 reduction for a lease that was entered into before March 3, 1997, the 17 commissioner may approve the application only if, on that date, the lease was a 18 nonproducing lease that was not committed to a unit approved by the 19 commissioner under (m) of this section, that is not part of a unit under (p) or 20 (q) of this section, and that has not been made part of a unit under AS 31.05; 21 (C) if application for a royalty reduction is made under this 22 paragraph for a lease on which a discovery royalty was claimed or may be 23 claimed under the discovery royalty provisions of former AS 38.05.180(a) in 24 effect before May 6, 1969, the commissioner shall disallow the application 25 under this paragraph unless the applicant waives the right to claim the right to 26 a reduced royalty under the discovery royalty provisions of former 27 AS 38.05.180(a) in effect before May 6, 1969; and 28 (D) the commissioner shall adopt regulations setting out the 29 standards, criteria, and definitions of terms that apply to implement the filing 30 of applications for, and the review and certification of, discovery certifications 31 under this paragraph;
01 (5) notwithstanding and in lieu of a requirement in the leasing method 02 chosen of a minimum fixed royalty share, or the royalty provision of a lease, for leases 03 unitized as described in (p) of this section, leases subject to an agreement described in 04 (s) or (t) of this section, or interests unitized under AS 31.05, the lessee of all or part of 05 an oil or gas field identified in this section that has been granted approval of a written 06 plan submitted to the Alaska Oil and Gas Conservation Commission under 07 AS 31.05.030(i) shall, subject to (dd) of this section, pay a royalty of five percent on 08 the first 25,000,000 barrels of oil and the first 35,000,000,000 cubic feet of gas 09 produced for sale from that field that occurs in the 10 years following the date on 10 which the production for sale commences; the fields eligible for royalty reduction 11 under this paragraph, all of which are located within the Cook Inlet sedimentary basin, 12 were discovered before January 1, 1988, and have been undeveloped or shut in from at 13 least January 1, 1988, through December 31, 1997, are 14 (A) Falls Creek; 15 (B) Nicolai Creek; 16 (C) North Fork; 17 (D) Point Starichkof; 18 (E) Redoubt Shoal; and 19 (F) West Foreland; 20 (6) notwithstanding and in lieu of a requirement in the leasing method 21 chosen of a minimum fixed royalty share, or the royalty provision of a lease, for leases 22 unitized as described in (p) of this section, leases subject to an agreement described in 23 (s) or (t) of this section, or interests unitized under AS 31.05, the lessee of all or part of 24 an oil field located offshore in Cook Inlet on which an oil production platform 25 specified in (A), (C), or (E) of this paragraph operates, or the lessee of all or part of the 26 field located offshore in Cook Inlet and described in (G) of this paragraph, 27 (A) shall pay a royalty of five percent on oil produced from the 28 platform if oil production that equaled or exceeded a volume of 1,200 barrels a 29 day declines to less than that amount for a period of at least one calendar 30 quarter, as certified by the Alaska Oil and Gas Conservation Commission, for 31 as long as the volume of oil produced from the platform remains less than
01 1,200 barrels a day; the provisions of this subparagraph apply to 02 (i) Dolly; 03 (ii) Grayling; 04 (iii) King Salmon; 05 (iv) Steelhead; and 06 (v) Monopod; 07 (B) shall pay a royalty calculated under this subparagraph if the 08 volume of oil produced from the platform that was certified by the Alaska Oil 09 and Gas Conservation Commission under (A) of this paragraph later increases 10 to 1,200 or more barrels a day and remains at 1,200 or more barrels a day for a 11 period of at least one calendar quarter; until the royalty rate determined under 12 this subparagraph applies, the royalty continues to be calculated under (A) of 13 this paragraph; on and after the first day of the month following the month the 14 increased production exceeds the period specified in this subparagraph, the 15 royalty payable under this subparagraph is 16 (i) for production of at least 1,200 barrels a day but not 17 more than 1,300 barrels a day - seven percent; 18 (ii) for production of more than 1,300 barrels a day but 19 not more than 1,400 barrels a day - 8.5 percent; 20 (iii) for production of more than 1,400 barrels a day but 21 not more than 1,500 barrels a day - 10 percent; and 22 (iv) for production of more than 1,500 barrels a day - 23 12.5 percent; 24 (C) shall pay a royalty of five percent on oil produced from the 25 platform if oil production that equaled or exceeded a volume of 975 barrels a 26 day declines to less than that amount for a period of at least one calendar 27 quarter, as certified by the Alaska Oil and Gas Conservation Commission, for 28 as long as the volume of oil produced from the platform remains less than 975 29 barrels a day; the provisions of this subparagraph apply to 30 (i) Baker; 31 (ii) Dillon;
01 (iii) XTO.A; and 02 (iv) XTO.C; 03 (D) shall pay a royalty calculated under this subparagraph if the 04 volume of oil produced from the platform that was certified by the Alaska Oil 05 and Gas Conservation Commission under (C) of this paragraph later increases 06 to 975 or more barrels a day and remains at 975 or more barrels a day for a 07 period of at least one calendar quarter; until the royalty rate determined under 08 this subparagraph applies, the royalty continues to be calculated under (C) of 09 this paragraph; on and after the first day of the month following the month the 10 increased production exceeds the period specified in this subparagraph, the 11 royalty payable under this subparagraph is 12 (i) for production of at least 975 barrels a day but not 13 more than 1,100 barrels a day - seven percent; 14 (ii) for production of more than 1,100 barrels a day but 15 not more than 1,200 barrels a day - 8.5 percent; 16 (iii) for production of more than 1,200 barrels a day but 17 not more than 1,350 barrels a day - 10 percent; and 18 (iv) for production of more than 1,350 barrels a day - 19 12.5 percent; 20 (E) shall pay a royalty of five percent on oil produced from the 21 platform if oil production that equaled or exceeded a volume of 750 barrels a 22 day declines to less than that amount for a period of at least one calendar 23 quarter, as certified by the Alaska Oil and Gas Conservation Commission, for 24 as long as the volume of oil produced from the platform remains less than 750 25 barrels a day; the provisions of this subparagraph apply to 26 (i) Granite Point; 27 (ii) Anna; and 28 (iii) Bruce; 29 (F) shall pay a royalty calculated under this subparagraph if the 30 volume of oil produced from the platform that was certified by the Alaska Oil 31 and Gas Conservation Commission under (E) of this paragraph later increases
01 to 750 or more barrels a day and remains at 750 or more barrels a day for a 02 period of at least one calendar quarter; until the royalty rate determined under 03 this subparagraph applies, the royalty continues to be calculated under (E) of 04 this paragraph; on and after the first day of the month following the month the 05 increased production exceeds the period specified in this subparagraph, the 06 royalty payable under this subparagraph is 07 (i) for production of at least 750 barrels a day but not 08 more than 850 barrels a day - seven percent; 09 (ii) for production of more than 850 barrels a day but 10 not more than 1,000 barrels a day - 8.5 percent; 11 (iii) for production of more than 1,000 barrels a day but 12 not more than 1,200 barrels a day - 10 percent; and 13 (iv) for production of more than 1,200 barrels a day - 14 12.5 percent; 15 (G) shall pay a royalty of five percent on oil produced from the 16 field if oil production that equaled or exceeded a volume of 750 barrels a day 17 declines to less than that amount for a period of at least one calendar quarter, 18 as certified by the Alaska Oil and Gas Conservation Commission, for as long 19 as the volume of oil produced from the field remains less than 750 barrels a 20 day; the provisions of this subparagraph apply to the West McArthur River 21 field; 22 (H) shall pay a royalty calculated under this subparagraph if the 23 volume of oil produced from the field that was certified by the Alaska Oil and 24 Gas Conservation Commission under (G) of this paragraph later increases to 25 750 or more barrels a day and remains at 750 or more barrels a day for a period 26 of at least one calendar quarter; until the royalty rate determined under this 27 subparagraph applies, the royalty continues to be calculated under (G) of this 28 paragraph; on and after the first day of the month following the month the 29 increased production exceeds the period specified in this subparagraph, the 30 royalty payable under this subparagraph is 31 (i) for production of at least 750 barrels a day but not
01 more than 850 barrels a day - seven percent; 02 (ii) for production of more than 850 barrels a day but 03 not more than 1,000 barrels a day - 8.5 percent; 04 (iii) for production of more than 1,000 barrels a day but 05 not more than 1,200 barrels a day - 10 percent; and 06 (iv) for production of more than 1,200 barrels a day - 07 12.5 percent; and 08 (I) may obtain the benefits of the royalty adjustments set out in 09 (A) - (H) of this paragraph only if the commissioner determines that the 10 reduction in production from the platform or the field is 11 (i) based on the average daily production during the 12 calendar quarter based on reservoir conditions; and 13 (ii) not the result of short-term production declines due 14 to mechanical or other choke-back factors, temporary shutdowns or 15 decreased production due to environmental or facility constraints, or 16 market conditions. 17 * Sec. 2. AS 38.05.180 is amended by adding a new subsection to read: 18 (mm) For a contract entered into on or after the effective date of this section, 19 the royalty share reserved to the state for gas that is explored for and produced on or 20 after June 5, 2023, is 21 (1) zero if the gas was offered for sale to an in-state electric or heating 22 utility before being offered for sale to another person; 23 (2) reduced by 50 percent if the gas does not receive a reduction under 24 (1) of this subsection. 25 * Sec. 3. AS 43.55.011(j) is amended to read: 26 (j) Except as provided in (q) of this section, for [FOR] a calendar year, the 27 tax levied by (e) of this section for gas produced from a lease or property in the Cook 28 Inlet sedimentary basin may not exceed 29 (1) for a lease or property that first commenced commercial production 30 of gas before April 1, 2006, the product obtained by multiplying (A) the amount of 31 taxable gas produced during the calendar year from the lease or property, times (B) the
01 average rate of tax that was imposed under this chapter for taxable gas produced from 02 the lease or property for the 12-month period ending on March 31, 2006, times (C) the 03 quotient obtained by dividing the total gross value at the point of production of the 04 taxable gas produced from the lease or property during the 12-month period ending on 05 March 31, 2006, by the total amount of that gas; 06 (2) for a lease or property that first commences commercial production 07 of gas after March 31, 2006, the product obtained by multiplying (A) the amount of 08 taxable gas produced during the calendar year from the lease or property, times (B) the 09 average rate of tax that was imposed under this chapter for taxable gas produced from 10 all leases or properties in the Cook Inlet sedimentary basin for the 12-month period 11 ending on March 31, 2006, times (C) the average prevailing value for gas delivered in 12 the Cook Inlet area for the 12-month period ending March 31, 2006, as determined by 13 the department under AS 43.55.020(f). 14 * Sec. 4. AS 43.55.011(p) is amended to read: 15 (p) Except as provided in (q) of this section, for [FOR] the seven years 16 immediately following the commencement of commercial production of oil or gas 17 produced from leases or properties in the state that are outside the Cook Inlet 18 sedimentary basin and that do not include land located north of 68 degrees North 19 latitude, where that commercial production began after December 31, 2012, and 20 before January 1, 2027, the levy of tax under (e) of this section for oil and gas may not 21 exceed four percent of the gross value at the point of production. 22 * Sec. 5. AS 43.55.011 is amended by adding a new subsection to read: 23 (q) The levy of tax under (e) of this section may not exceed zero for gas that 24 was 25 (1) explored for only on or after June 5, 2023; and 26 (2) offered for sale to an in-state electric or heating utility before being 27 offered for sale to another person. 28 * Sec. 6. AS 43.55.020(a) is amended to read: 29 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 30 the tax as follows: 31 (1) for oil and gas produced before January 1, 2014, an installment
01 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 02 as allowed by law, is due for each month of the calendar year on the last day of the 03 following month; except as otherwise provided under (2) of this subsection, the 04 amount of the installment payment is the sum of the following amounts, less 1/12 of 05 the tax credits that are allowed by law to be applied against the tax levied by 06 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 07 not be less than zero: 08 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 09 produced from leases or properties in the state outside the Cook Inlet 10 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 11 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 for the oil and gas under AS 43.55.160 from the gross value 18 at the point of production of the oil and gas produced from the leases or 19 properties during the month for which the installment payment is 20 calculated; 21 (B) for oil and gas produced from leases or properties subject 22 to AS 43.55.011(f), the greatest of 23 (i) zero; 24 (ii) zero percent, one percent, two percent, three 25 percent, or four percent, as applicable, of the gross value at the point of 26 production of the oil and gas produced from the leases or properties 27 during the month for which the installment payment is calculated; or 28 (iii) the sum of 25 percent and the tax rate calculated for 29 the month under AS 43.55.011(g) multiplied by the remainder obtained 30 by subtracting 1/12 of the producer's adjusted lease expenditures for the 31 calendar year of production under AS 43.55.165 and 43.55.170 that are
01 deductible for the oil and gas under AS 43.55.160 from the gross value 02 at the point of production of the oil and gas produced from those leases 03 or properties during the month for which the installment payment is 04 calculated; 05 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 06 each lease or property, the greater of 07 (i) zero; or 08 (ii) the sum of 25 percent and the tax rate calculated for 09 the month under AS 43.55.011(g) multiplied by the remainder obtained 10 by 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 or gas, respectively, 13 produced from the lease or property from the gross value at the point of 14 production of the oil or gas, respectively, produced from the lease or 15 property during the month for which the installment payment is 16 calculated; 17 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 18 (i) 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, but not less than zero; or 26 (ii) four percent of the gross value at the point of 27 production of the oil and gas produced from the leases or properties 28 during the month, but not less than zero; 29 (2) an amount calculated under (1)(C) of this subsection for oil or gas 30 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 31 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as
01 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 02 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 03 gas produced during the month for the amount of taxable gas produced during the 04 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 05 during the month for the amount of taxable oil produced during the calendar year; 06 (3) an installment payment of the estimated tax levied by 07 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 08 on the last day of the following month; the amount of the installment payment is the 09 sum of 10 (A) the applicable tax rate for oil provided under 11 AS 43.55.011(i), multiplied by the gross value at the point of production of the 12 oil taxable under AS 43.55.011(i) and produced from the lease or property 13 during the month; and 14 (B) the applicable tax rate for gas provided under 15 AS 43.55.011(i), multiplied by the gross value at the point of production of the 16 gas taxable under AS 43.55.011(i) and produced from the lease or property 17 during the month; 18 (4) any amount of tax levied by AS 43.55.011, net of any credits 19 applied as allowed by law, that exceeds the total of the amounts due as installment 20 payments of estimated tax is due on March 31 of the year following the calendar year 21 of production; 22 (5) for oil and gas produced on and after January 1, 2014, and before 23 January 1, 2022, an installment payment of the estimated tax levied by 24 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 25 month of the calendar year on the last day of the following month; except as otherwise 26 provided under (6) of this subsection, the amount of the installment payment is the 27 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 28 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 29 of the installment payment may not be less than zero: 30 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 31 produced from leases or properties in the state outside the Cook Inlet
01 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 02 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 for the oil and gas under AS 43.55.160 from the gross value 08 at the point of production of the oil and gas produced from the leases or 09 properties during the month for which the installment payment is 10 calculated; 11 (B) for oil and gas produced from leases or properties subject 12 to AS 43.55.011(f), the greatest of 13 (i) zero; 14 (ii) zero percent, one percent, two percent, three 15 percent, or four percent, as applicable, of the gross value at the point of 16 production of the oil and gas produced from the leases or properties 17 during the month for which the installment payment is calculated; or 18 (iii) 35 percent multiplied by the remainder obtained by 19 subtracting 1/12 of the producer's adjusted lease expenditures for the 20 calendar year of production under AS 43.55.165 and 43.55.170 that are 21 deductible for the oil and gas under AS 43.55.160 from the gross value 22 at the point of production of the oil and gas produced from those leases 23 or properties during the month for which the installment payment is 24 calculated, except that, for the purposes of this calculation, a reduction 25 from the gross value at the point of production may apply for oil and 26 gas subject to AS 43.55.160(f) or (g); 27 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 28 each lease or property, the greater of 29 (i) zero; or 30 (ii) 35 percent multiplied by the remainder obtained by 31 subtracting 1/12 of the producer's adjusted lease expenditures for the
01 calendar year of production under AS 43.55.165 and 43.55.170 that are 02 deductible under AS 43.55.160 for the oil or gas, respectively, 03 produced from the lease or property from the gross value at the point of 04 production of the oil or gas, respectively, produced from the lease or 05 property during the month for which the installment payment is 06 calculated; 07 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 08 (i) 35 percent multiplied by the remainder obtained by 09 subtracting 1/12 of the producer's adjusted lease expenditures for the 10 calendar year of production under AS 43.55.165 and 43.55.170 that are 11 deductible for the oil and gas under AS 43.55.160 from the gross value 12 at the point of production of the oil and gas produced from the leases or 13 properties during the month for which the installment payment is 14 calculated, but not less than zero; or 15 (ii) four percent of the gross value at the point of 16 production of the oil and gas produced from the leases or properties 17 during the month, but not less than zero; 18 (6) an amount calculated under (5)(C) of this subsection for oil or gas 19 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 20 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 21 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 22 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 23 gas produced during the month for the amount of taxable gas produced during the 24 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 25 during the month for the amount of taxable oil produced during the calendar year; 26 (7) for oil and gas produced on or after January 1, 2022, an installment 27 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 28 as allowed by law, is due for each month of the calendar year on the last day of the 29 following month; except as otherwise provided under (10) of this subsection, the 30 amount of the installment payment is the sum of the following amounts, less 1/12 of 31 the tax credits that are allowed by law to be applied against the tax levied by
01 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 02 not be less than zero: 03 (A) for oil produced from leases or properties subject to 04 AS 43.55.011(f), the greatest of 05 (i) zero; 06 (ii) zero percent, one percent, two percent, three 07 percent, or four percent, as applicable, of the gross value at the point of 08 production of the oil produced from the leases or properties during the 09 month for which the installment payment is calculated; or 10 (iii) 35 percent multiplied by the remainder obtained by 11 subtracting 1/12 of the producer's adjusted lease expenditures for the 12 calendar year of production under AS 43.55.165 and 43.55.170 that are 13 deductible for the oil under AS 43.55.160(h)(1) from the gross value at 14 the point of production of the oil produced from those leases or 15 properties during the month for which the installment payment is 16 calculated, except that, for the purposes of this calculation, a reduction 17 from the gross value at the point of production may apply for oil 18 subject to AS 43.55.160(f) or 43.55.160(f) and (g); 19 (B) for oil produced before or during the last calendar year 20 under AS 43.55.024(b) for which the producer could take a tax credit under 21 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 22 sedimentary basin, no part of which is north of 68 degrees North latitude, other 23 than leases or properties subject to AS 43.55.011(o) or (p), the greater of 24 (i) zero; or 25 (ii) 35 percent multiplied by the remainder obtained by 26 subtracting 1/12 of the producer's adjusted lease expenditures for the 27 calendar year of production under AS 43.55.165 and 43.55.170 that are 28 deductible for the oil under AS 43.55.160(h)(2) from the gross value at 29 the point of production of the oil produced from the leases or properties 30 during the month for which the installment payment is calculated; 31 (C) for oil and gas produced from leases or properties subject
01 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection, 02 the sum of 03 (i) 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)(3) 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, but 09 not less than zero; and 10 (ii) 13 percent of the gross value at the point of 11 production of the gas produced from the leases or properties during the 12 month, but not less than zero; 13 (D) for oil produced from leases or properties in the state, no 14 part of which is north of 68 degrees North latitude, other than leases or 15 properties subject to (B), (C), or (F) of this paragraph, the greater of 16 (i) zero; or 17 (ii) 35 percent multiplied by the remainder obtained by 18 subtracting 1/12 of the producer's adjusted lease expenditures for the 19 calendar year of production under AS 43.55.165 and 43.55.170 that are 20 deductible for the oil under AS 43.55.160(h)(4) from the gross value at 21 the point of production of the oil produced from the leases or properties 22 during the month for which the installment payment is calculated; 23 (E) for gas produced from each lease or property in the state 24 outside the Cook Inlet sedimentary basin, other than a lease or property subject 25 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of 26 production of the gas produced from the lease or property during the month for 27 which the installment payment is calculated, but not less than zero; 28 (F) for oil subject to AS 43.55.011(k), for each lease or 29 property, the greater of 30 (i) zero; or 31 (ii) 35 percent multiplied by the remainder obtained by
01 subtracting 1/12 of the producer's adjusted lease expenditures for the 02 calendar year of production under AS 43.55.165 and 43.55.170 that are 03 deductible under AS 43.55.160 for the oil produced from the lease or 04 property from the gross value at the point of production of the oil 05 produced from the lease or property during the month for which the 06 installment payment is calculated; 07 (G) for gas subject to AS 43.55.011(j) or (o), for each lease or 08 property, the greater of 09 (i) zero; or 10 (ii) 13 percent of the gross value at the point of 11 production of the gas produced from the lease or property during the 12 month for which the installment payment is calculated; 13 (H) for gas subject to AS 43.55.011(q), for each lease or 14 property, zero; 15 (8) an amount calculated under (7)(C) of this subsection may not 16 exceed four percent of the gross value at the point of production of the oil and gas 17 produced from leases or properties subject to AS 43.55.011(p) during the month for 18 which the installment payment is calculated; 19 (9) for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and 20 (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point 21 of production is determined under AS 43.55.011(f)(1) or (2) but substituting the 22 phrase "month for which the installment payment is calculated" in AS 43.55.011(f)(1) 23 and (2) for the phrase "calendar year for which the tax is due"; 24 (10) an amount calculated under (7)(F) or (G) of this subsection for oil 25 or 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 taxable 29 gas produced during the month for the amount of taxable gas produced during the 30 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 31 during the month for the amount of taxable oil produced during the calendar year.
01 * Sec. 7. Sections 1 and 2 of this Act take effect immediately under AS 01.10.070(c). 02 * Sec. 8. Except as provided in sec. 7 of this Act, this Act takes effect January 1, 2025.