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HOUSE BILL NO. 4004
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-SECOND LEGISLATURE - FOURTH SPECIAL SESSION
BY REPRESENTATIVE TARR
Introduced: 10/4/21
Referred: Resources, Finance
A BILL
FOR AN ACT ENTITLED
1 "An Act relating to the oil and gas production tax; and providing for an effective date."
2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
3 * Section 1. AS 43.55.011(e) is amended to read:
4 (e) There is levied on the producer of oil or gas a tax for all oil and gas
5 produced each calendar year from each lease or property in the state, less any oil and
6 gas the ownership or right to which is exempt from taxation or constitutes a
7 landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as
8 otherwise provided under (f), (j), (k), (o), [AND] (p), and (q) of this section, for oil
9 and gas produced
10 (1) before January 1, 2014, the tax is equal to the sum of
11 (A) the annual production tax value of the taxable oil and gas
12 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and
13 (B) the sum, over all months of the calendar year, of the tax
14 amounts determined under (g) of this section;
15 (2) on and after January 1, 2014, and before January 1, 2022, the tax is
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1 equal to the annual production tax value of the taxable oil and gas as calculated under
2 AS 43.55.160(a)(1) multiplied by 35 percent;
3 (3) on and after January 1, 2022, the tax for
4 (A) oil is equal to the annual production tax value of the
5 taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent;
6 (B) gas is equal to 13 percent of the gross value at the point of
7 production of the taxable gas; if the gross value at the point of production of
8 gas produced from a lease or property is less than zero, that gross value at the
9 point of production is considered zero for purposes of this subparagraph.
10 * Sec. 2. AS 43.55.011(f) is amended to read:
11 (f) The levy of tax under (e) of this section for
12 (1) oil and gas produced before January 1, 2022, from leases or
13 properties that include land north of 68 degrees North latitude, other than gas subject
14 to (o) of this section, may not be less than
15 (A) four percent of the gross value at the point of production
16 when the average price per barrel for Alaska North Slope crude oil for sale on
17 the United States West Coast during the calendar year for which the tax is due
18 is more than $25;
19 (B) three percent of the gross value at the point of production
20 when the average price per barrel for Alaska North Slope crude oil for sale on
21 the United States West Coast during the calendar year for which the tax is due
22 is over $20 but not over $25;
23 (C) two percent of the gross value at the point of production
24 when the average price per barrel for Alaska North Slope crude oil for sale on
25 the United States West Coast during the calendar year for which the tax is due
26 is over $17.50 but not over $20;
27 (D) one percent of the gross value at the point of production
28 when the average price per barrel for Alaska North Slope crude oil for sale on
29 the United States West Coast during the calendar year for which the tax is due
30 is over $15 but not over $17.50; or
31 (E) zero 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 $15 or less; and
4 (2) oil produced on and after January 1, 2022, and before
5 January 1, 2024, from leases or properties that include land north of 68 degrees
6 North latitude, is six percent of the gross value at the point of production; and
7 (3) oil produced on and after January 1, 2024 [January 1, 2022], from
8 leases or properties that include land north of 68 degrees North latitude, may not be
9 less than
10 (A) four percent of the gross value at the point of production
11 when the average price per barrel for Alaska North Slope crude oil for sale on
12 the United States West Coast during the calendar year for which the tax is due
13 is more than $25;
14 (B) three percent of the gross value at the point of production
15 when the average price per barrel for Alaska North Slope crude oil for sale on
16 the United States West Coast during the calendar year for which the tax is due
17 is over $20 but not over $25;
18 (C) two percent of the gross value at the point of production
19 when the average price per barrel for Alaska North Slope crude oil for sale on
20 the United States West Coast during the calendar year for which the tax is due
21 is over $17.50 but not over $20;
22 (D) one percent of the gross value at the point of production
23 when the average price per barrel for Alaska North Slope crude oil for sale on
24 the United States West Coast during the calendar year for which the tax is due
25 is over $15 but not over $17.50; or
26 (E) zero percent of the gross value at the point of production
27 when the average price per barrel for Alaska North Slope crude oil for sale on
28 the United States West Coast during the calendar year for which the tax is due
29 is $15 or less.
30 * Sec. 3. AS 43.55.011 is amended by adding a new subsection to read:
31 (q) Notwithstanding the relevant provisions of this section, the tax on oil
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1 produced from leases or properties that include land north of 68 degrees North latitude
2 under (e)(3)(A) of this section is suspended for a period beginning January 1, 2022,
3 and ending January 1, 2024. For the period the tax under (e)(3)(A) of this section is
4 suspended for a producer, the minimum tax under (f) of this section will instead apply.
5 For purposes of calculating an installment payment under AS 43.55.020 for the time
6 the tax under (e)(3)(A) of this section is suspended under this subsection, a producer
7 shall pay tax at the rate set out in (f)(2) of this section. For the purposes of the tax
8 credits under AS 43.55.024 and 43.55.025, a producer may calculate its tax under
9 (e)(3)(A) of this section, but tax is not due under (e)(3)(A) of this section.
10 * Sec. 4. AS 43.55.020(a) is amended to read:
11 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay
12 the tax as follows:
13 (1) for oil and gas produced before January 1, 2014, an installment
14 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied
15 as allowed by law, is due for each month of the calendar year on the last day of the
16 following month; except as otherwise provided under (2) of this subsection, the
17 amount of the installment payment is the sum of the following amounts, less 1/12 of
18 the tax credits that are allowed by law to be applied against the tax levied by
19 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may
20 not be less than zero:
21 (A) for oil and gas not subject to AS 43.55.011(o) or (p)
22 produced from leases or properties in the state outside the Cook Inlet
23 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),
24 the greater of
25 (i) zero; or
26 (ii) the sum of 25 percent and the tax rate calculated for
27 the month under AS 43.55.011(g) multiplied by the remainder obtained
28 by subtracting 1/12 of the producer's adjusted lease expenditures for the
29 calendar year of production under AS 43.55.165 and 43.55.170 that are
30 deductible for the oil and gas under AS 43.55.160 from the gross value
31 at the point of production of the oil and gas produced from the leases or
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1 properties during the month for which the installment payment is
2 calculated;
3 (B) for oil and gas produced from leases or properties subject
4 to AS 43.55.011(f), the greatest of
5 (i) zero;
6 (ii) zero percent, one percent, two percent, three
7 percent, or four percent, as applicable, of the gross value at the point of
8 production of the oil and gas produced from the leases or properties
9 during the month for which the installment payment is calculated; or
10 (iii) the sum of 25 percent and the tax rate calculated for
11 the month under AS 43.55.011(g) multiplied by the remainder obtained
12 by subtracting 1/12 of the producer's adjusted lease expenditures for the
13 calendar year of production under AS 43.55.165 and 43.55.170 that are
14 deductible for the oil and gas under AS 43.55.160 from the gross value
15 at the point of production of the oil and gas produced from those leases
16 or properties during the month for which the installment payment is
17 calculated;
18 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for
19 each lease or property, the greater of
20 (i) zero; or
21 (ii) the sum of 25 percent and the tax rate calculated for
22 the month under AS 43.55.011(g) multiplied by the remainder obtained
23 by subtracting 1/12 of the producer's adjusted lease expenditures for the
24 calendar year of production under AS 43.55.165 and 43.55.170 that are
25 deductible under AS 43.55.160 for the oil or gas, respectively,
26 produced from the lease or property from the gross value at the point of
27 production of the oil or gas, respectively, produced from the lease or
28 property during the month for which the installment payment is
29 calculated;
30 (D) for oil and gas subject to AS 43.55.011(p), the lesser of
31 (i) the sum of 25 percent and the tax rate calculated for
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1 the month under AS 43.55.011(g) multiplied by the remainder obtained
2 by subtracting 1/12 of the producer's adjusted lease expenditures for the
3 calendar year of production under AS 43.55.165 and 43.55.170 that are
4 deductible for the oil and gas under AS 43.55.160 from the gross value
5 at the point of production of the oil and gas produced from the leases or
6 properties during the month for which the installment payment is
7 calculated, but not less than zero; or
8 (ii) four percent of the gross value at the point of
9 production of the oil and gas produced from the leases or properties
10 during the month, but not less than zero;
11 (2) an amount calculated under (1)(C) of this subsection for oil or gas
12 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by
13 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as
14 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in
15 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable
16 gas produced during the month for the amount of taxable gas produced during the
17 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced
18 during the month for the amount of taxable oil produced during the calendar year;
19 (3) an installment payment of the estimated tax levied by
20 AS 43.55.011(i) for each lease or property is due for each month of the calendar year
21 on the last day of the following month; the amount of the installment payment is the
22 sum of
23 (A) the applicable tax rate for oil provided under
24 AS 43.55.011(i), multiplied by the gross value at the point of production of the
25 oil taxable under AS 43.55.011(i) and produced from the lease or property
26 during the month; and
27 (B) the applicable tax rate for gas provided under
28 AS 43.55.011(i), multiplied by the gross value at the point of production of the
29 gas taxable under AS 43.55.011(i) and produced from the lease or property
30 during the month;
31 (4) any amount of tax levied by AS 43.55.011, net of any credits
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1 applied as allowed by law, that exceeds the total of the amounts due as installment
2 payments of estimated tax is due on March 31 of the year following the calendar year
3 of production;
4 (5) for oil and gas produced on and after January 1, 2014, and before
5 January 1, 2022, an installment payment of the estimated tax levied by
6 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each
7 month of the calendar year on the last day of the following month; except as otherwise
8 provided under (6) of this subsection, the amount of the installment payment is the
9 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be
10 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount
11 of the installment payment may not be less than zero:
12 (A) for oil and gas not subject to AS 43.55.011(o) or (p)
13 produced from leases or properties in the state outside the Cook Inlet
14 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),
15 the greater of
16 (i) zero; or
17 (ii) 35 percent multiplied by the remainder obtained by
18 subtracting 1/12 of the producer's adjusted lease expenditures for the
19 calendar year of production under AS 43.55.165 and 43.55.170 that are
20 deductible for the oil and gas under AS 43.55.160 from the gross value
21 at the point of production of the oil and gas produced from the leases or
22 properties during the month for which the installment payment is
23 calculated;
24 (B) for oil and gas produced from leases or properties subject
25 to AS 43.55.011(f), the greatest of
26