Notice Of Proposed Regulations Change: Intangible Drilling Expenses

NOTICE OF PROPOSED CHANGES ON INTANGIBLE DRILLING EXPENSES IN THE REGULATIONS OF THE DEPARTMENT OF REVENUE BRIEF DESCRIPTION The Department of Revenue proposes to change regulations to identify qualifying intangible expenses associated with drilling and initially completing wells, drilling pads, and access roads for purposes of oil and gas property valuation using actual or replacement cost. Summary of proposed changes: The Department of Revenue proposes to adopt regulation changes in Title 15 of the Alaska Administrative Code, dealing with intangible drilling expenses for oil and gas property tax, including the following: (1) 15 AAC 56.120(b) is proposed to be amended to expressly include qualifying intangible expenses associated with drilling and initially completing wells, including hydraulic fracturing, installation of completion equipment, well testing, and repeated completion attempts. The amendments also address qualifying intangible expenses associated with drilling pads, gravel installation, and access roads. Expenses for pads and roads serving both drilling and other purposes would require allocation using a reasonable, documented method. Continued use after drilling would not, by itself, disqualify an otherwise qualifying expense. (2) 15 AAC 56.120(c) is proposed to be amended to describe expenses excluded as intangible development expenses, including well intervention or recompletion after initial completion, routine well operation and maintenance, and expenses for separate production, processing, storage, or transportation facilities not necessary to drilling or initial completion. Existing exclusions concerning tangible property and salvage value would remain. Written comments: You may comment on the proposed regulation changes, by submitting written comments to Aimee Bushnell, Alaska Department of Revenue, Office of the Commissioner, PO Box 110400, Juneau, AK 99811-0400. Additionally, DOR will accept comments by electronic mail at aimee.bushnell@alaska.gov. Comments may also be submitted through the Alaska Online Public Notice System by accessing this notice on the system and using the comment link. Written comment deadline: The written comments must be received not later than 11:59PM on November 30, 2026. Questions: You may submit written questions relevant to the proposed action to Aimee Bushnell, Alaska Department of Revenue, Office of the Commissioner, PO Box 110400, Juneau, AK 99811-0400 or Aimee.Bushnell@alaska.gov. The questions must be received at least 10 days before the end of the public comment period. The Department of Revenue will aggregate its response to substantially similar questions and make the questions and responses available on the Alaska Online Public Notice System and dor.alaska.gov. Public nature of comments and questions: Public comments and questions, once submitted, are public records and subject to disclosure under the Alaska Public Records Act. See AS 40.25.100 - 40.25.295. Do NOT include in your comments or questions any information that you do not want made public. Accommodations: If you are a person with a disability who needs a reasonable accommodation in order to participate in this process, please contact Aimee Bushnell at (907) 465-6829 or (907) 465-3761 not later than November 25, 2026, to ensure that any necessary accommodation can be provided. Obtaining copies of proposed regulations: A copy of the proposed regulation changes is available on the Alaska Online Public Notice System and by contacting Aimee Bushnell at Aimee.Bushnell@alaska.gov or (907) 465-6829. Final version of regulations. After the public comment period ends, the Department of Revenue will either adopt the proposed regulation changes or other provisions dealing with the same subject, without further notice, or decide to take no action. The language of the final regulation may be different from that of the proposed regulation. Statutory authority: AS 43.05.080, AS 43.56.200 Statutes being implemented, interpreted, or made specific: AS 43.56.020; AS 43.56.060; AS 43.56.210 Fiscal information: The proposed regulation changes are not expected to require an increased appropriation. How to receive further notices: The Department of Revenue keeps a list of individuals and organizations interested in its regulations. Those on the list will automatically be sent a copy of all the department’s notices of proposed regulation changes. If you would like to be added or removed from the department’s “Interested Parties” list server to receive email notification of any proposed action, you may do so at http://list.state.ak.us. Individuals can also sign up to receive automated notifications of all State of Alaska notices, including public notice for regulation changes, by subscribing to the Alaska Online Public Notices System: https://aws.state.ak.us/OnlinePublicNotices/Default.aspx. Date: October 29, 2026 Lee Cruise, Deputy Commissioner Department of Revenue