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SENATE BILL NO. 129
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FIRST LEGISLATURE - SECOND SESSION
BY SENATOR WIELECHOWSKI
Introduced: 1/21/20
Referred: Resources, Finance
A BILL
FOR AN ACT ENTITLED
1 "An Act relating to the oil and gas production tax; relating to credits against the oil and
2 gas production tax; relating to payments of the oil and gas production tax; relating to
3 lease expenditures and adjustments to lease expenditures; making public certain
4 information related to the oil and gas production tax; relating to the Department of
5 Revenue; and providing for an effective date."
6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
7 * Section 1. AS 40.25.100(a) is amended to read:
8 (a) Information in the possession of the Department of Revenue that discloses
9 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
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1 required in an official investigation, administrative adjudication under AS 43.05.405 -
2 43.05.499, or court proceeding. These restrictions do not prohibit the publication of
3 statistics presented in a manner that prevents the identification of particular reports
4 and items, prohibit the publication of tax lists showing the names of taxpayers who are
5 delinquent and relevant information that may assist in the collection of delinquent
6 taxes, or prohibit the publication of records, proceedings, and decisions under
7 AS 43.05.405 - 43.05.499.
8 * Sec. 2. AS 43.05.230 is amended by adding a new subsection to read:
9 (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
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1 gas produced from a lease or property is less than zero, that gross value at the
2 point of production is considered zero for purposes of this subparagraph.
3 * Sec. 4. AS 43.55.011(f) is amended to read:
4 (f) The levy of tax under (e) of this section for
5 (1) oil and gas produced before January 1, 2022, from leases or
6 properties that include land north of 68 degrees North latitude, other than gas subject
7 to (o) of this section and oil subject to (q) of this section, may not be less than
8 (A) four percent of the gross value at the point of production
9 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
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1 when the average price per barrel for Alaska North Slope crude oil for sale on
2 the United States West Coast during the calendar year for which the tax is due
3 is more than $25;
4 (B) three percent of the gross value at the point of production
5 when the average price per barrel for Alaska North Slope crude oil for sale on
6 the United States West Coast during the calendar year for which the tax is due
7 is over $20 but not over $25;
8 (C) two percent of the gross value at the point of production
9 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
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1 production tax value under AS 43.55.160(j) of a barrel of taxable oil produced from
2 each major oil field is more than $50, the amount of additional tax for purposes of
3 (q)(2) of this section is determined by multiplying
4 (1) the monthly production tax value of the taxable oil produced by the
5 producer from the major oil field during the month, less $50; and
6 (2) the tax rate of 15 percent.
7 (s) For each month of the calendar year, the levy of tax under (q) of this
8 section for oil produced from each major oil field may not be less than
9 (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
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1 or more.
2 (t) A tax credit provided under this chapter may not be applied to reduce an
3 amount due under (s) of this section.
4 * Sec. 6. AS 43.55.019(a) is amended to read:
5 (a) A producer of oil or gas is allowed a credit against the tax levied by
6 AS 43.55.011 [AS 43.55.011(e)] for contributions of cash or equipment accepted for
7 (1) direct instruction, research, and educational support purposes,
8 including library and museum acquisitions, and contributions to endowment, by an
9 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,
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1 transferred, or applied in a subsequent tax year.
2 * Sec. 8. AS 43.55.020(a) is amended to read:
3 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay
4 the tax as follows:
5 (1) for oil and gas produced before January 1, 2014, an installment
6 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied
7 as allowed by law, is due for each month of the calendar year on the last day of the
8 following month; except as otherwise provided under (2) of this subsection, the
9 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 t