HB276 - Oil and Gas Production Tax Summary

• Provides a 30 percent reduction in production tax value for oil and gas produced from leases or properties north of 68 degrees North latitude that were not in commercial production or within a unit as of January 1, 2008, applied for the first 10 consecutive years after sustained production begins.

• Caps the tax rate at 4 percent of gross value at the point of production for new oil or gas production south of 68 degrees North latitude and outside the Cook Inlet sedimentary basin, with commercial production beginning after December 31, 2012 and before January 1, 2022.

• Establishes exploration tax credits of up to $25 million (80 percent of costs) for the first four exploration drilling wells and up to $7.5 million (75 percent of costs) for the first four seismic exploration projects in specified geographic areas, with work performed between June 1, 2012 and July 1, 2016.

• Adds seismic exploration and exploration drilling expenditures as eligible exploration activities for production tax credits in six designated basin areas across Alaska.

• Takes effect January 1, 2013.