Backers of oil tax initiative file lawsuit calling state summary ‘factually inaccurate’

Robin Brena (left) poses with backers of the Fair Share Act on Oct. 24, 2019. (Photo by Matt Buxton/TMS)

When Robin Brena and the backers of an initiative to raise oil taxes on certain fields collected their signature booklets from the Division of Elections in late October, they could spot problems with the state-generated summary printed on the cover.

The state summary suggested there was uncertainty in how the proposed initiative would be applied, calling it an open question of whether the higher rates would target fields producing more than 40,000 barrels per day or 400 million barrels total. Brena said it’s crystal clear that the higher tax rates would only apply to fields that qualify for both: the Prudhoe Bay, Kuparuk and Alpine oil fields.

And that’s not to mention a nearly 400-billion-barrel error in the summary’s reference to a “400,000 million” barrel threshold.

On Friday afternoon, the group announced that it would be filing a lawsuit challenging the state’s handling of the initiative case. The state approved the initiative for signature-gathering though Attorney General Kevin Clarkson issued an opinion that raised many issues with the proposal.

Though much of the gripes are leveled at Clarkson, the lawsuit names Lt. Gov. Kevin Meyer as the defendant in the case. Meyer oversees the Division of Elections, which ultimately is responsible for approving and preparing initiatives.

“The right to propose and enact laws through initiative is a constitutional right of all Alaskans that should not be compromised by Lt. Governor Meyer or any other state official in the conduct of their official duties,” said Brena in a prepared statement accompanying the announcement of the lawsuit.

The lawsuit, a copy of which can be found here, argues that the state made several errors in the prepared summary. It seeks a declaration that the state got it wrong and an order to correct the prepared summary.

“This case concerns whether Defendant Meyer met his duty to prepare a ‘true and impartial summary of the Fair Share Act. He did not. Instead, Defendant Meyer’s and the Attorney General’s reluctant certification found clear expression in the confused and contradictory summary they have advanced,” argues the lawsuit. “The essential purpose of the summary is to be a true and impartial description of the Fair Share Act, but the summary advanced by Defendant Meyer is neither. These actions by Defendant Meyer undercut the initiative rights of Alaskans and should not be countenanced by the courts.”

Meanwhile…

An independent expenditure group opposing the initiative has formed, already taking on more than a quarter-million dollars in debt to battle the initiative. The spending, according to the latest report with the Alaska Public Offices Commission, has gone to consulting, advertising and public opinion polling.

That group, OneAlaska, is co-chaired by several business members, including former Rep. Jason Grenn, and reports contributions of staff time from ConocoPhillips, BP Alaska, ExxonMobil, the Alaska Oil and Gas Association and Hilcorp.

Why it matters

The oil tax initiative group still needs to collect the 28,501 signatures before the start of the legislative session on Jan. 21 to qualify to appear on the 2020 ballot (which ballot is a matter of when the Legislature adjourns). It’s unclear that the new lawsuit would interfere with the signature-gathering process, but the group would certainly contend that it shouldn’t.

According to the latest financial filing by the group backing the Fair Share Act, Brena has put $43,333.34 to collect signatures for the petition.

Still, the mere filing of the petition has sparked a serious response. The industry-backed OneAlaska is already putting not insignificant resources toward the fight.

There’s also been talk of a legislative alternative to the tax that’s allegedly being pitched by Gov. Michael J. Dunleavy’s administration. Such a proposal—as long as it’s largely similar to the initiative—would bump the law from the ballot. It would also give the governor some much-needed revenue in his bid to boost dividends.

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