Section 11 AAC 83.241 - Production tax lease allowance(a) The production tax lease allowance for purposes of 11 AAC 83.240(b) is the greater of zero or the amount calculated by subtracting the tax credit, if any, under (b) of this section from the production tax before credits. The production tax before credits is the greater of the following two amounts: (1) the sum of either (A) or (B) of this paragraph, depending on the month of production, and (C) of this paragraph. (A) For a month before September 2017, the monthly production tax net revenue under (c) of this section multiplied by the net profit deductibility factor under (e) of this section multiplied by (i) 22.5 percent, for a month before July 2007;(ii) 25 percent, for a month after June 2007 and before January 2014; or(iii) 35 percent, for a month after December 2013 and before September 2017; or (B) For a month after August 2017, 35 percent multiplied by the amount resulting from substracting (ii) from (i) of this subparagraph: (i) the net profit deductibility factor under (e) of this section multiplied by the amount resulting from subtracting the royalty payments under 11 AAC 83.242 and the amounts calculated under paragraph (1) and (2) under (c) of this section from the production revenue under 11 AAC 83.222; (ii) for oil and gas that meet one or more criteria in AS 43.55.160(f) and that have not expired as to that oil and gas under AS 43.55.160(f), 0.2 multiplied by the lessee's production revenue under 11 AAC 83.222 generated from that oil and gas net of the corresponding royalty payments under 11 AAC 83.242 multiplied by the net credit augmentation rate under (f)(1) of this section and(C) the lease-allocated tax based on price index under (d) of this section;(2) the product of (A) the percentage rate that would be applicable under AS 43.55.011(f)(1) or (f)(2) if the phrase "calendar year" were replaced by the phrase "month of production," based on the average spot price during the month as calculated under 15 AAC 55.171(m) for ANS; and(B) the production revenue under 11 AAC 83.222 less the royalty owed to the state under 11 AAC 83.242.(b) The tax credit for purposes of (a) of this section are(1) for a month before September 2017, the product of (A) and (B) of this paragraph. For a month after August 2017, the minimum of the production tax before credits under (a) of this section and the amount resulting from the product of (A) and (C) of this paragraph. (A) the fraction obtained by dividing the amount of oil and gas in Btu-equivalents produced by the lessee from the NPSL during the month and taxable under AS 43.55.011(e), by the amount of Btu-equivalents of oil and gas produced by the lessee statewide during the month and taxable under AS 43.55.011(e); (B) 1/12 of the maximum amount of the tax credit for the calendar year calculated under AS 43.55.024(c)(1) or (2), as applicable, but substituting in that calculation the lessee's average amount of oil and gas in Btu-equivalents, as defined in 11 AAC 83.295, produced a day statewide during the month and taxable under AS 43.55.011(e), for the lessee's average amount of oil and gas in BTU equivalent barrels, as defined in AS 43.55.900, produced a day statewide during the calendar year and taxable under AS 43.55.011(e);(C) the product of the net credit augmentation rate under (f)(2) of this section and 1/12 of the maximum amount of the tax credit for the calendar year calculated under AS 43.55.024(c)(1) or (2), as applicable, but substituting in that calculation the lessee's average amount of oil and gas in Btu-equivalents, as defined in 11 AAC 83.295, produced a day statewide during the month and taxable under AS 43.55.011(e), for the lessee's average amount of oil and gas in BTU equivalent barrels, as defined in AS 43.55.900, produced a day statewide during the calendar year and taxable under AS 43.55.011(e); (2) for a month after December 2013 and before January 2017, the amount resulting from the calculation under subparagraph (A) of this paragraph. For a month after December 2016 and before September 2017, the amount resulting from the calculation under subparagraph (B) of this paragraph. For a month after August 2017, the minimum of the amounts resulting from the calculation under subparagraphs (C) and (D) of this paragraph.(A) the product of $5 and the number of barrels, if any, of oil, other than state royalty oil, that is produced from the NPSL during the months and that meets one or more of the criteria in AS 43.55.160(f); (B) the product of $5 and the number of barrels, if any, of oil, other than state royalty oil, that is produced from the NPSL during the months and that meets one or more of the criteria in AS 43.55.160(f); and that have not expired as to that oil and gas under AS 43.55.160(f);(C) the production tax before credits under (a) of this section less the amount resulting from paragraph (1) of this subsection; (D) the product of the net credit augmentation rate under (f)(2) of this section, $5, and the number of barrels. if any, of oil, other than the state royalty oil, that is produced from the NPSL during the month that meets one or more criteria in AS 43.55.160(f) and that have not expired as to that oil and gas under AS 43.55.160(f). (3) for a month after December 2013 and before September 2017, the smaller of the amounts calculated under (A) and (C) of this paragraph. For a month after August 2017, the smaller of the amounts calculated under (B) and (C) of this paragraph. (A) the product of the number of barrels, if any, of oil, other than state royalty oil, that is produced from the NPSL during the month and that does not meet any of the criteria in AS 43.55.160(f) and the dollar per barrel amount that would be applicable under AS 43.55.024(j)(1) - (9), if the phrase "average gross value at the point of production" were replaced by the phrase "NPSL production revenue under 11 AAC 83.222 attributable to oil other than state royalty oil, divided by the number of barrels of oil, other than state royalty oil, produced from the NPSL";(B)the product of the net credit augmentation rate under (f)(2) of this section, the number of barrels, if any, of oil, other than state royalty oil, produced from the NPSL during the month that does not meet any of the criteria in AS 143.55.160(f) and the dollar per barrel amount that would be applicable under AS 43.55.024(j)(1) - (9), if the phrase "average gross value at the point of production " were replaced by the phrase "NPSL production revenue under 11 AAC 83.222 attributable to oil other than state royalty oil, divided by the number of barrels of oil, other than state royalty oil, produced from the NPSL"; and (C) the greater of zero, or the following amount: A minus B minus C, where
"A" equals the greater of the amounts calculated under (a)(1) and (2) of this section;
"B" equals the total amount of tax credits under (1) and (2) of this subsection; and
"C" equals the amount calculated under (a)(2) of this section.
(c) For purposes of 11 AAC 83.209(b) and (a) of this section, the monthly production tax net revenue equals the lessee's production revenue under 11 AAC 83.222 net of the lessee's royalty payments under 11 AAC 83.242, except that for a month after December 2013, the lessee's production revenue under 11 AAC 83.222 net of the lessee's royalty payments under 11 AAC 83.242 is only for purposes of (a) of this section multiplied by 0.8 for oil and gas that meet one or more of the criteria in AS 43.55.160(f) and that have not expired as to that oil and gas under AS 45.55.160(f) less the following amounts: (1) the lessee's direct operating costs during the month under 11 AAC 83.240, excluding the production tax lease allowance under (a) of this section and abandonment costs allowed under 11 AAC 83.240(e); however, if the NPSL is within a unit subject to AS 43.55.165(j), for purposes of the calculation under this paragraph the lessee's direct operating costs during the month are replaced by one-ninth of the lessee's direct operating costs during the period April 1, 2006, through December 31, 2006, multiplied by the following factor: (A) 1.03 for a month in 2007; (B) 1.061 for a month in 2008; (C) 1.093 for a month in 2009; and (2) the lessee's development costs under 11 AAC 83.219 incurred during the month less the product of $.30 multiplied by the amount of the lessee's working interest Btu-equivalents of oil and gas produced from the NPSL during the month, including any overriding royalty share of oil and gas share of oil or gas. (d) The lease-allocated tax based on price index for purposes of (b) of this section equals, for a month (1) before July 2007, the amount of tax calculated under AS 43.55.011(g) and (h), as those provisions read on June 30, 2007, but substituting in that calculation, on a per Btu-equivalent basis as applicable, as "Btu-equivalent" is defined in 11 AAC 83.295, the monthly production tax net revenue under (c) of this section, for the monthly production tax value of the taxable oil and gas as calculated under AS 43.55.160, on a per BTU equivalent barrel basis as applicable, as "BTU equivalent barrel" is defined in AS 43.55.900; (2) after June 2007 and before January 2014, the amount of tax calculated under AS 43.55.011(g), as repealed and reenacted by sec. 17, ch. 1, SSSLA 2007, but substituting in that calculation (A) the monthly production tax net revenue under (c) of this section, for the monthly production tax value of taxable oil and gas as calculated under AS 43.55.160; (B) the lessee's Btu-equivalents, as defined in 11 AAC 83.295, of oil and gas produced from the NPSL divided by the net profit deductibility factor for the month under (e) of this section, for the BTU equivalent barrels, as defined in AS 43.55.900, of taxable oil and gas; (3) after December 2013, zero. (e) For purposes of (a) and (d) of this section, the net profit deductibility factor (1) equals one for a month (B) after June 2007, if the development account beginning debit balance less the monthly production tax net revenue under (c) of this section, if any, is positive or zero; (2) otherwise is calculated according to the following formula: Before January 2014
NPDF = (1 - NPR) / (1 - (.25 * NPR)),
After December 2013
NPDF = (1 - NPR) / (1 - (.35 * NPR)), where
"NPDF" equals the net profit deductibility factor; and
"NPR" equals the net profit share defined in the lease expressed as a fixed percentage of the net profit payment account.
(f) For the purposes of (1) subsection (a) of this section, the net augumentation rate if equal to 1 for a month if (A) the development account beginning debit balance less the monthly production tax net revenue under (c) of this section, if any, is positive; or (B) if the month of production is before September 2017; otherwise, the net credit augmentation rate is calculated according to the following formula: NCAR = 1 / (1 - (. 35 * NPR)), where
"NCAR" equals the net credit augmentation rate; and
" NPR" equals the net profit share defined in the lease expressed as a fixed percentage of the net profit payment account.
(2) subsection (b) of this section, the net augumentation rate if equal to 1 for a month if (A) the development account beginning debit balance less the monthly production tax net revenue under (c) of this section, if any, is positive; or (B) if the month of production is before September 2017; or(C) the production tax before credits under (a) of this section is no greater than the amount resulting from (a)(2), otherwise, the net credit augmentation rate is calculated according to the following formula: NCAR = 1 / (1 - (. 35 * NPR))
Eff. 2/13/2010, Register 193; am 1/9/2014, Register 209, April 2014; am 8/10/2017,Register 223, October 2017Authority:AS 38.05.020
AS 38.05.180