Section 15.55.206. Calculation of production tax values for oil and gas produced after June 30, 2007.

	(a)  A producer or, under AS 43.55.160(d), an explorer shall calculate a single production tax value for a calendar year, under AS 43.55.160(a)(1), and for a month before January 2014, under AS 43.55.160(a)(2), for each segment.  
	(b)  The provision of AS 43.55.160(b) that a production tax value may not be less than zero applies to each production tax value calculated for each segment. Adjusted lease expenditures applicable to a segment that exceed the amount of adjusted lease expenditures that may, under AS 43.55.160(b), be deducted in calculating a production tax value for the segment are considered excess adjusted lease expenditures and, except as otherwise provided under 15 AAC 55.224, may not be reallocated to, or deducted in calculating a production tax value for, a different segment. Excess adjusted lease expenditures relating to the calculation of an annual production tax value, but not a monthly production tax value, may be used to establish a carried-forward annual loss to the extent allowed under AS 43.55.023(b) and 43.55.160(e).  
	(c)  For purposes of this section,  
		(1) except as otherwise provided under (2) of this subsection, each of the following is a segment for a producer:  
			(A) all oil and gas, if any, taxable under AS 43.55.011(e), other than gas subject to AS 43.55.011(o), that the producer produces from leases or properties in the state that include land north of 68 degrees North latitude;  
			(B) all oil and gas, if any, taxable under AS 43.55.011(e), other than gas subject to AS 43.55.011(o) or oil or gas subject to AS 43.55.011(p), that the producer produces from leases or properties in the state outside the Cook Inlet sedimentary basin no part of which is north of 68 degrees North latitude, for a calendar year before or during the last calendar year under AS 43.55.024(b) for which the producer could take a tax credit under AS 43.55.024(a);  
			(C) oil, if any, taxable under AS 43.55.011(e) that the producer produces before 2022 from each lease or property in the Cook Inlet sedimentary basin; for purposes of this paragraph, oil produced from each lease or property constitutes a separate segment;  
			(D) gas, if any, taxable under AS 43.55.011(e) that the producer produces before 2022 from each lease or property in the Cook Inlet sedimentary basin; for purposes of this paragraph, gas produced from each lease or property constitutes a separate segment;  
			(E) gas, if any, taxable under AS 43.55.011(e) that the producer produces before 2022 from each lease or property in the state outside the Cook Inlet sedimentary basin and that is used in the state, other than gas subject to AS 43.55.011(p); for purposes of this paragraph, gas produced from each lease or property constitutes a separate segment;  
			(F) all oil and gas. if any, taxable under AS 43.55.011(e) and subject to AS 43.55.011(p) that the producer produces;  
			(G) all oil and gas, if any. taxable under AS 43.55.011(e) that the producer produces from leases or properties in the state no part of which is north of 68 degrees North latitude, other than oil or gas described in (B), (C), (D). (E). or (F) of this paragraph:  
		(2) if a producer or explorer does not produce any oil or gas from leases or properties in the  
			(A) state that include land north of 68 degrees North latitude, the area of the state north of 68 degrees North latitude is a segment for the producer or explorer;  
			(B) state outside the Cook Inlet sedimentary basin no part of which is north of 68 degrees North latitude, the area of the state outside the Cook Inlet sedimentary basin and not including any land north of 68 degrees North latitude is a segment for the producer or explorer for a calendar year before or during the latest of;  
				(i) 2021;  
				(ii) the last calendar year under AS 43.55.024(b) for which the producer could take a tax credit under AS 43.55.024(a); and  
				(iii) the last calendar year for which AS 43.55.011(p) could limit the levy of tax under AS 43.55.011(e) for any of the producer's oil or gas;  
			(C) Cook Inlet sedimentary basin, the Cook Inlet sedimentary basin is a segment for the producer or explorer for a calendar year before or during the latest of  
				(i) 2021;  
				(ii) the last calendar year under AS 43.55.024(b) for which the producer could take a tax credit under AS 43.55.024(a); and  
				(iii) the last calendar year for which AS 43.55.011(p) could limit the levy of tax under AS 43.55.011(e) for any of the producer's oil or gas;  
			(D) state no part of which is north of 68 degrees North latitude, the area of the state not including any land north of 68 degrees North latitude is a segment for the producer or explorer for a calendar year after the latest of  
				(i) 2021;  
				(ii) the last calendar year under AS 43.55.024(b) for which the producer could take a tax credit under AS 43.55.024(a); and  
				(iii) the last calendar year for which AS 43.55.011(p) could limit the levy of tax under AS 43.55.011(e) for any of the producer's oil or gas;  
	(d)  For leases or properties in the Cook Inlet sedimentary basin that first commenced commercial production of oil or gas before April 1, 2006, unless otherwise approved or required by the department, before 2022 the producer shall continue to treat as a single lease or property each tract, group of tracts, participating area, or unit that the producer consistently treated, subject to final audit resolution, as a single lease or property for purposes of calculating an economic limit factor under former AS 43.55.013. Production of oil or gas from a lease or property in the Cook Inlet sedimentary basin that first commences commercial production of oil or gas on or after April 1, 2006, and that corresponds to a participating area or unit approved by the Department of Natural Resources under AS 38.05.180, other than a lease or property for which the producer calculated an economic limit factor under former AS 43.55.013, must be treated before 2022 as production from a distinct lease or property.  
	(e)  Except as otherwise provided under (f) of this section,  
		(1) for gas used in the state and produced from leases or properties outside the Cook Inlet sedimentary basin that first commenced commercial gas production before April 1, 2006, unless otherwise approved or required by the department, before 2022 the producer shall continue to treat as a single lease or property each tract, group of tracts, participating area, or unit that the producer consistently treated, subject to final audit resolution, as a single lease or property for purposes of calculating an economic limit factor under former AS 43.55.013;  
		(2) production of gas used in the state from a lease or property outside the Cook Inlet sedimentary basin that first commences commercial production on or after April 1, 2006, and that corresponds to a participating area or unit approved by the Department of Natural Resources under AS 38.05.180, other than a lease or property for which the producer calculated an economic limit factor under former AS 43.55.013, must be treated before 2022 as production from a distinct lease or property.  
	(f)  For purposes of this section and 15 AAC 55.215, a unit, other than a unit within the Cook Inlet sedimentary basin before 2022, may be treated as a single lease or property even if it contains multiple participating areas, unless any producer's ownership interests differ by 10 percentage points or more between two or more of the participating areas.  
	(g)  This section applies to oil and gas produced after June 30, 2007.  

Authorities

43.05.080;43.55.011;43.55.024;43.55.110;43.55.160;43.55.165

Notes

Reference

15 AAC 55.215
15 AAC 55.224
15 AAC 55.275
15 AAC 55.280
15 AAC 55.431
15 AAC 55.800
15 AAC 55.815

Authority

AS 43.05.080 AS 43.55.011 AS 43.55.024 AS 43.55.110 AS 43.55.160 AS 43.55.165

History

Eff. 10/21/2009, Register 192; am 12/25/2013, Register 208