HB 15

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                                      HOUSE BILL NO. 15
                     IN THE LEGISLATURE OF THE STATE OF ALASKA
                     THIRTY-FOURTH LEGISLATURE - FIRST SESSION
 BY REPRESENTATIVES RAUSCHER, Costello, Prax
 Introduced: 1/22/25
 Referred: Resources, Finance
                                              A BILL
                                   FOR AN ACT ENTITLED
1 "An Act relating to royalty rates and payments for certain oil and gas; and providing
2 for an effective date."
3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
4   * Section 1. AS 38.05.180 is amended by adding new subsections to read:
5(mm) Notwithstanding and in lieu of a requirement in the leasing method
6chosen of a minimum fixed royalty share or the royalty provision of a lease, for leases
7issued for land south of 68 degrees North latitude from which commercial production
8of oil or gas begins after July 1, 2025, and before January 1, 2036, the lessee shall pay
9a royalty of three percent for qualified new gas and 6.25 percent for qualified new oil,
10unless payment is lower under another subsection of this section. A royalty rate in this
11subsection applies until the earlier of
12(1) 10 years following the commencement of commercial production;
13or
14(2) the date on which a commercial quantity of oil or gas produced by
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1the lessee from land south of 68 degrees North latitude is shipped out of the state.
2(nn) In (mm) of this section,
3(1) "qualified new gas" means gas produced from
4(A) a field or pool that the commissioner determines has not
5previously produced gas for commercial sale before January 1, 2025;
6(B) a field or pool that the commissioner determines has not
7produced gas during the preceding six months but that has previously produced
8gas; or
9(C)   a well that did not exist on January 1, 2026, if the
10commissioner determines that production of that gas from the field or pool
11from an existing well was not feasible;
12(2) "qualified new oil" means oil produced from
13(A) a field or pool that the commissioner determines has not
14previously produced oil for commercial sale before January 1, 2025;
15(B) a field or pool that the commissioner determines has not
16produced oil during the preceding one year but that has previously produced
17oil; or
18(C)   a well that did not exist on January 1, 2026, if the
19commissioner determines that production of that oil from the field or pool from
20an existing well was not feasible.
21(oo) Notwithstanding and in lieu of a requirement in the leasing method
22chosen of a minimum fixed royalty share, or the royalty provision of a lease or an
23existing royalty settlement agreement, for gas that is produced from leases that include
24land north of 68 degrees North latitude and that is later liquefied or used in the
25liquefaction or transportation process, the lessee shall pay a royalty rate of one percent
26if the lessee agrees to sell the gas to a publicly owned utility or a utility regulated
27under AS 42.05 at a rate that reflects the discounted royalty rate provided under this
28subsection. The royalty rate under this subsection applies until the earlier of either
29(1) 10 years following the first commercial use of liquefied natural gas
30receiving the royalty rate under this subsection; or
31(2) the date on which a commercial quantity of liquefied natural gas
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1produced from the lease receiving the royalty rate under this subsection is shipped out
2of the state.
3  * Sec. 2. AS 31.05.030(i); AS 38.05.180(f)(5), and 38.05.180(dd) are repealed.
4  * Sec. 3. AS 38.05.180(mm) and 38.05.180(nn) are repealed January 1, 2046.
5  * Sec. 4. This Act takes effect immediately under AS 01.10.070(c).
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