SB 305 : Oil And Gas Production Tax
Passed Senate!
Sponsored by Sen. Rules Committee
Requested by Gov. Frank Murkowski

An Act repealing the oil production tax and the gas production tax and providing for a production tax on oil and gas; relating to the calculation of the gross value at the point of production of oil and gas and to the determination of the value of oil and gas for purposes of the production tax on oil and gas; providing for tax credits against the production tax on oil and gas; relating to the relationship of the production tax on oil and gas to other taxes, to the dates those tax payments and surcharges are due, to interest on overpayments of the tax, and to the treatment of the tax in a producer's settlement with the royalty owners; relating to flared gas, and to oil and gas used in the operation of a lease or property under the production tax; relating to the prevailing value of oil and gas under the production tax; relating to surcharges on oil; relating to statements or other information required to be filed with or furnished to the Department of Revenue, to the penalty for failure to file certain reports for the tax, to the powers of the Department of Revenue, and to the disclosure of certain information required to be furnished to the Department of Revenue as applicable to the administration of the tax; relating to criminal penalties for violating conditions governing access to and use of confidential information relating to the tax, and to the deposit of tax money collected by the Department of Revenue; amending the definitions of 'gas,' 'oil,' and certain other terms for purposes of the production tax, and as the definition of the term 'gas' applies in the Alaska Stranded Gas Development Act, and adding further definitions; making conforming amendments; and providing for an effective date.

Version : HCS CS SB 305 (FIN) Am H
Companion Bill : HB 488
Contact : : 465-3500
Last Action : Failed » (S) FLD CONCUR(H) AM : 06-21-06

| Petroleum Production Tax Overview |
| SB 305 Backup Material and On-Line Resources |
| Charts - Graphs by Econ One for the Final House version of SB 305 | [PDF - 31 KB]

05-10-06 : Senate failed to concur with House amendments 10-10. Eliminates the economic limit factor (ELF) and replaces it with a petroleum production tax (PPT). It levies a 21.5 percent tax on an oil field's net cash flow and provides a 20 percent tax credit for all upstream capital investment that increases oil production. Contains progressivity so the tax rate increases when oil prices are high. A tax credit is also allowed for losses. The production tax takes effect April 1, 2006.

05-06-06 : House Finance Passes PTT Legislation

04-25-06 : PPT Legislation Passes Alaska Senate - SB 305 Delivers Additional $1.6 Billion in Revenue Per Year

04-05-06 : Public can Weigh in on Petroleum Tax Saturday

HB 488 : Oil And Gas Production Tax
Companion Bill SB 305 Passed Senate!
Sponsored by Hou. Rules Committee
Requested by Gov. Frank Murkowski

An Act repealing the oil production tax and gas production tax and providing for a production tax on the net value of oil and gas; relating to the relationship of the production tax to other taxes; relating to the dates tax payments and surcharges are due under AS 43.55; relating to interest on overpayments under AS 43.55; relating to the treatment of oil and gas production tax in a producer's settlement with the royalty owner; relating to flared gas, and to oil and gas used in the operation of a lease or property, under AS 43.55; relating to the prevailing value of oil or gas under AS 43.55; providing for tax credits against the tax due under AS 43.55 for certain expenditures, losses, and surcharges; relating to statements or other information required to be filed with or furnished to the Department of Revenue, and relating to the penalty for failure to file certain reports, under AS 43.55; relating to the powers of the Department of Revenue, and to the disclosure of certain information required to be furnished to the Department of Revenue, under AS 43.55; relating to criminal penalties for violating conditions governing access to and use of confidential information relating to the oil and gas production tax; relating to the deposit of money collected by the Department of Revenue under AS 43.55; relating to the calculation of the gross value at the point of production of oil or gas; relating to the determination of the net value of taxable oil and gas for purposes of a production tax on the net value of oil and gas; relating to the definitions of 'gas,' 'oil,' and certain other terms for purposes of AS 43.55; making conforming amendments; and providing for an effective date.

Version : CS HB 488 (RES)
Companion Bill : SB 305
Last Action : (H) RES » (H) FIN : 03-22-06

| Sponsor Statement |
| Petroleum Production Tax Overview |
| HB 488 Backup Material and On-Line Resources |
| Hou Res work draft 24-GH2052Y | [PDF - 4.99 MB]
| Amendments offered to work draft on 03-16-06 | [PDF - 1.43 MB]
| Amendments offered to work draft on 03-17-06 | [PDF - 909 KB]

03-17-06 : Passed House Resources Committee with a committee substitute, to be moved to House Finance Committee. The committee substitute creates a profits-based tax structure, while providing the industry with credits and other incentives for renewed exploration activity statewide. It also removed gas from the progressivity portion of the bill.

HB 488 eliminates the economic limit factor (ELF) and replaces it with a petroleum production tax (PPT). It levies a 20 percent tax on an oil field's net cash flow and provides a 20 percent tax credit for all upstream capital investment that increases oil production. A tax credit is also allowed for any losses. The production tax takes effect July 1, 2006.

05-06-06 : House Finance Passes PTT Legislation

04-05-06 : Public can Weigh in on Petroleum Tax Saturday

03-17-06 : HB 488 Passes with Olson Amendment

03-17-06 : House Natural Resources Committee Passes Committee Substitute for HB 488