§40-20-23. Allocation and distribution of taxes.

(a) Ninety percent (90%) of the net amount of taxes collected by the department on oil or gas produced from submerged lands which are not deemed to be onshore lands for allocation and distribution purposes pursuant to subsections (d) or (e) shall be deposited to the State General Fund. The remaining ten percent (10%) of the taxes collected on oil or gas produced from submerged lands which are not deemed to be onshore lands for allocation and distribution purposes shall be allocated and distributed by the Comptroller to the county in which the oil or gas was produced for county purposes to be expended at the discretion of the county governing body.

(b) The net amount of taxes collected by the department pursuant to this article on oil or gas produced from submerged lands which are deemed to be onshore lands for allocation and distribution purposes pursuant to subsections (d) or (e) shall be allocated and distributed pursuant to Section 40-20-8, as if it was collected pursuant to Article 1 of this chapter on oil or gas produced from onshore lands.

(c) Of the taxes herein levied and collected by the department on oil or gas produced from submerged lands which are deemed to be onshore lands for allocation and distribution purposes pursuant to subsections (d) or (e), sixty-five percent (65%) of the net amount of the taxes collected shall be allocated and distributed as if the taxes were levied and collected at the rate of four percent (4%), for purposes of the allocations and distributions required under Section 40-20-8. The remaining thirty-five percent (35%) of the taxes collected on oil or gas produced from submerged lands which are deemed to be onshore lands for allocation and distribution purposes shall be allocated and distributed pursuant to Section 40-20-8, as if the taxes were levied and collected at a rate other than four percent (4%).

(d) For the purposes of this section, when part of the property within the drilling or production unit or within the unit area for any producing wells consists of submerged lands and part consists of lands other than submerged lands (herein called onshore lands), all of the following shall apply:

(1) Only that portion of production of oil or gas or both from the wells allocated under or pursuant to an order of the State Oil and Gas Board to the submerged lands shall be deemed to have been produced from submerged lands, regardless of where the actual wells from which the production was obtained are located.

(2) The portion of production allocated under or pursuant to an order of the State Oil and Gas Board to the onshore lands shall be deemed to have been produced from a well located on the onshore lands to which the production is allocated, and the portion of production allocated under or pursuant to an order of the State Oil and Gas Board to any onshore lands located within the police jurisdiction or the corporate limits of any municipality shall be deemed to have been produced from a well located within the corporate limits or police jurisdiction.

(3) If, because of common ownership or otherwise, no specific portion of the production from the wells has been separately allocated under or pursuant to an order of the State Oil and Gas Board to any or all of the onshore lands located within the drilling or production unit or within a designated tract in the unit area, then, for the purposes of this section, a portion of the production shall be deemed to have been allocated under or pursuant to an order of the State Oil and Gas Board to the onshore lands in question, such portion to be in the proportion that the acreage of the onshore land to which no specific portion of the production has been separately allocated bears to the total acreage included within the unit or designated tract, whichever is applicable.

(4) Any production not allocated to or deemed to have been allocated to the onshore lands shall be deemed to have been allocated under or pursuant to an order of the State Oil and Gas Board to the submerged lands.

(e) Anything in this section to the contrary notwithstanding, onshore lands shall mean all lands that are not submerged lands as defined in this chapter. Provided, however, if any submerged lands are located within the police jurisdiction or corporate limits of any municipality, those submerged lands shall, for the purposes of this section, be defined as, and deemed to be, onshore lands and not submerged lands.

(f) This section shall apply only to the allocation and distribution of taxes and shall not apply to the levy and collection of taxes. Nothing contained in this section shall be construed to affect in any way Section 40-20-2 or Section 40-20-21.

(Act 2009-147, p. 284, §4.)