HB 306 Summary

• Implements tiered tax rates on oil and gas production based on average monthly production tax value, with rates of 0.4% per dollar above $30 (up to $92.50) and 0.1% per dollar above $92.50, capped at 50% total rate.

• Separates tax calculation for gas produced in Cook Inlet sedimentary basin and gas used in-state from gas produced outside Cook Inlet and not used in-state, applying different tax rates to each category.

• Modifies community revenue sharing fund to allow appropriation of 20% of money received under the new tax provisions, not to exceed $60 million or total fund balance of $180 million.

• Revises lease expenditure deductions to allocate costs between oil and gas production and among different geographic areas (north of 68° North latitude, Cook Inlet basin, and areas outside Cook Inlet), with regulations required from the Department of Revenue.

• Makes provisions retroactive to January 1, 2012, with transition rules allowing producers to submit underpayments on the next installment payment date without accruing interest until after the first payment due date following enactment.