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Alabama Code (Last Updated: November 28, 2014) |
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Title40 REVENUE AND TAXATION. |
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Chapter20. OIL AND GAS. |
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Article1. Privilege Tax on Production. |
§40-20-1. Definitions.
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For the purpose of this article, the following terms shall have the respective meanings ascribed by this section:
(1) DEPARTMENT. The state Department of Revenue.
(2) ANNUAL. The calendar year or the taxpayer's fiscal year, when permission is obtained from the department to use a fiscal year as a tax period in lieu of a calendar year.
(3) VALUE. The sale price or market value at the mouth of the well. If the oil or gas is exchanged for something other than cash, if there is no sale at the time of severance or if the relation between the buyer and the seller is such that the consideration paid, if any, is not indicative of the true value or market price, then the department shall determine the value of the oil or gas subject to the tax hereinafter provided for, considering the sale price for cash of oil or gas of like quality.
(4) OIL. Crude petroleum oil and other hydrocarbons regardless of gravity which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas after it leaves the well.
(5) GAS. All natural gas, including casinghead gas, and all other hydrocarbons not defined as oil in subdivision (4) above.
(6) SEVERED. The extraction or withdrawing from the soil or water or from below the surface of the soil or water of any oil or gas, whether such extraction or withdrawal shall be by natural flow, mechanically enforced flow, pumping, or any other means employed to get the oil or gas from the soil or water or from below the surface of the soil or water.
(7) PERSON. Any natural person, firm, copartnership, joint venture, association, corporation, estate, trust, and any other group or combination acting as a unit, and the plural as well as the singular number.
(8) PRODUCER. Any person engaging or continuing in the business of oil or gas production, which, for the purpose of this article, includes the owning, controlling, managing, or leasing of any oil or gas property or oil or gas well, and producing in any manner any oil or gas by taking it from the soil or waters, or from beneath the soil or waters, of the State of Alabama, and further includes receiving money or other valuable consideration as royalty or rental for oil or gas produced or because of oil or gas produced, whether produced by him or by some other person on his behalf, either by lease, contract or otherwise, and whether the royalty consists of a portion of the oil or gas produced being run to his account or a payment in money or other valuable consideration.
(9) SUBMERGED LANDS. All lands within the territorial jurisdiction of the State of Alabama that are continuously or intermittently covered by marine or marine influenced waters and are below the mean high tide mark on all islands and land adjacent to the Mississippi Sound, Mobile Bay, Bon Secour Bay, Wolf Bay, Arnica Bay, Bay La Launch, and Perdido Bay; and excludes all areas upstream of the confluence of the Mississippi Sound, Mobile Bay, Wolf Bay and Perdido Bay with their natural tributaries.
(10) OFFSHORE DRILLING OR PRODUCTION FACILITIES. Barges, platforms or other drilling or production facilities located on submerged lands to drill or to produce oil or gas.
(11) OFFSHORE PRODUCTION. Gas or oil produced from offshore drilling or production facilities from wells located on submerged lands within the territorial jurisdiction of the State of Alabama.
(12) DISCOVERY WELL. Any well capable of producing oil and/or gas from a single pool in which a well has not been previously completed as a well capable of producing.
(13) DEVELOPMENT WELLS. All oil and/or gas producing wells other than discovery wells and replacement wells.
(14) ONSHORE WELL. Any oil or gas well that is drilled in an area other than submerged lands as defined herein.
(15) REPLACEMENT WELLS. A well drilled on a drilling and/or production unit to replace another well which is drilled in the same unit and completed in the same pool.
(16) COMMENCED. A well shall be deemed to have commenced when the well is spudded.
(17) COMPLETION. A well shall be deemed to be completed for purposes of this article when drilling and logging operations have ceased.
(18) POOL. As used herein, pool shall mean a single underground reservoir containing a common accumulation of oil or gas or both. Each zone of a general structure which is completely separated from any other zone in the structure is a single pool as that term is used herein.
(19) ENHANCED RECOVERY PROJECT. An oil or gas recovery project which is approved by the State Oil and Gas Board of Alabama employing one or more of the following methods:
a. Recycling, injecting or flooding a pool, or pools, or portion thereof, with air, gas, water, hydrocarbons, carbon dioxide (CO2), or any other substance, or any combination or combinations thereof; or
b. The use of polymers, steam flooding or fire flooding.
(20) SUPPLEMENTAL ENHANCED RECOVERY PROJECT. An enhanced recovery project in which injection of substances into a unitized area was initiated prior to January 1, 1985, and thereafter is improved by expanding or otherwise changing the unit operations associated with the project as approved by the State Oil and Gas Board of Alabama for the purpose of increasing the ultimate recovery of hydrocarbons.
(21) INCREMENTAL OIL OR GAS PRODUCTION. The amount of oil or gas which will be produced as a result of a qualified enhanced recovery project and which is in excess of the amount of oil or gas which could have been produced economically and efficiently from a pool or pools or portion thereof by production methods being utilized prior to said qualified enhanced recovery project being approved by the State Oil and Gas Board of Alabama.
(22) QUALIFIED ENHANCED RECOVERY PROJECT. A qualified enhanced recovery project shall mean an enhanced recovery project or supplemental enhanced recovery project that meets all of the following criteria:
a. That the area where the enhanced recovery project or supplemental enhanced recovery project is employed has been unitized in accordance with the provisions of Article 3, Chapter 17 of Title 9, as amended.
b. That injection of substances associated with the enhanced recovery project or supplemental enhanced recovery project has been or will be implemented as an integral part of the operations of the unitized area.
c. That the enhanced recovery project or supplemental enhanced recovery project be certified by the State Oil and Gas Board of Alabama as capable of incremental oil or gas production.
d. That the enhanced recovery project or supplemental enhanced recovery project be implemented on or after January 1, 1985.