State clears oil and gas tax initiative to begin signature-gathering effort

The backers of an initiative that would hike taxes on Alaska’s largest oil fields will get to skip the court and head right into the signature-gathering process.

Lt. Gov. Kevin Meyer today certified “Alaska’s Fair Share Act” to move ahead to the 2020 ballot. Some backers had expected a rejection from the conservative administration, which would have led to a legal fight that would have eaten into the time to collect the necessary 28,501 signatures to appear on the ballot.

The opinion from the Department of Law, signed by Attorney General Kevin Clarkson, argues that the initiative language is “difficult to interpret and raises a number of implementation and constitutional questions” but ultimately found there weren’t significant enough grounds to invalidate the measure.

“None of these issues amount to legal grounds to deny certification of the initiative. Instead, these are mainly post-enactment concerns,” explained the opinion. “Because the low threshold required of initiatives is met, we conclude that the application complies with the constitutional and statutory provisions governing the initiative process.”

The group must turn in its signatures before the Legislature gavels in on Jan. 21, 2020 if they want the measure to appear on the 2020 ballot. State law allows the Legislature to bump an initiative from the ballot by passing a measure that is similar though such a measure wouldn’t enjoy the two-year protection against repeal.

The group has just under 100 days to gather the signatures.

The group backing the repeal, Vote Yes for Alaska’s Fair Share, has reported an income of $45,420.48 as of Oct. 10, 2019. It has expended about $24,700, including $5,000 to the Alaska Democratic Party for access to the Alaska Democratic Party’s voter list.

Most of the income and expenditures are made to and from oil and gas attorney Robin Brena, who’s spearheading the effort. Brena has made a name for himself in litigating high-profile oil and gas cases in Alaska, successfully arguing that the oil and gas companies vastly underestimated the value of the trans-Alaska pipeline system and netting municipalities millions in property taxes in the process.

The initiative would raise revenues by about $1 billion annually, its supporters argue. The legislation is largely targeted at large legacy fields in Alaska that they say have unfairly benefitted from the oil tax changes passed in 2013.

Why it matters

The approval today came as a surprise to many watching the case, but it’s great news for the backers of the initiative who have limited time to get the signatures turned in before the start of the 2020 legislative session.

If the group meets the signature deadline, it will certainly make for an interesting discussion for legislators who would have the option of cutting off the initiative by passing something materially similar. The initiative group is skeptical that such a thing could happen, but there has been building political attention to the per barrel tax credits the state is paying out to fields that are already largely profitable.