Backers say AG Clarkson, state are intentionally misrepresenting the oil tax initiative

ANCHORAGE—There was plenty of celebration on Wednesday afternoon when backers of the Fair Share Act left the Division of Elections’ Anchorage office with 500 signature booklets, but ask lead backer Robin Brena if he’s happy with the process so far and you’ll get an earful.

“Does ‘And’ mean ‘or?'” asked Brena, an oil an gas attorney who’s won landmark cases against the oil industry, after being asked if he’s happy with how the state’s represented the initiative.

The Fair Share Act primarily seeks to increase oil taxes on large, legacy fields by raising tax rates and removing tax credits on fields that produce more than 40,000 barrels per day and that have produced more than 400 million barrels in their lifetime.

According to Brena, that would only apply to the Prudhoe Bay, Kuparuk and Alpine oil fields and raise somewhere in the neighborhood of $1 billion a day.

But the summary produced by the state and slapped on the front of the signature booklets tells a very different story:

“This act would change the oil and gas production tax for areas of the North Slope where the company produced more than 40,000 barrels of oil per day in the prior year and/or 400 million barrels total. It is unclear whether the area has to meet both the 40,000 and 400,000 million thresholds or just one of them.”

(Also, yes, that says 400,000 million, a 339.6-billion-barrel difference.)

Here’s what the initiative says:

“The provisions (of this initiative) only apply to oil produced from fields … that have produced in excess of 40,000 barrels of oil per day in the previous calendar year and in excess of 400,000,000 barrels of total cumulative oil production.”

Brena says there’s no ambiguity about it at all.

“They put in the booklet saying and/or saying there was confusion about whether one criteria or both criteria need to be met,” he said. “I don’t think there’s any confusion if I ask you to do ‘A and B’ that I meant ‘A or B.’ That’s disappointing.”

It’s just one of several points that Brena says the Department of Law and the Division of Elections got it wrong. In speaking with The Midnight Sun after leaving the Division of Elections office, Brena outlined two additional issues:

• Brena also argues that the state is ignoring part of the initiative that says tax returns from the oil companies will be a matter of public record and plans to keep the records confidential. “That’s ridiculous,” Brena exclaimed, asking why he would have included it if he had intended for the companies to keep their taxes secret.
• Brena says the state also got it wrong on how a 15 percent net tax provision would work, saying the state also got it wrong there. He said the intent was for the tax to kick in as an additional tax at $50 per barrel, but the state has interpreted it as the only net tax. “Give me a break,” he said.

Brena said much of the state’s legal analysis relies on the argument that the two-page initiative was ambiguous and unclear (but short of being disqualified). He said the state could have reached out on any of these points during the analysis and that he’s since attempted to reach out to the state but has received no response on his concerns.

He says he believes the effort was motivated by politics. That Attorney General Kevin Clarkson couldn’t find a way to disqualify the initiative on statutory or constitutional grounds and is instead attempting to undermine the measure and hand opponents ammunition for their campaign.

“Obviously, the administration used this as an opportunity to raise talking points against the Fair Share Act that they couldnt’ find enough wrong with to deny its way to the ballot. They chose instead to speculate on constitutional issues that they ultimately did not opine on,” he said, “and to interpret the law so as to twist the human language out of all recognition.”

But does Brena plan to take any legal action against the state?

“We have our booklets and will be collecting our signatures,” he said. “We’re reviewing our options and we might have more to talk about shortly about what those options might include.”

Why it matters

The state’s handling of the initiative is obviously problematic. The differences between “and” and “or” are significant and, we thought, were pretty clearly understood by anyone familiar with how laws work.

The fact that the state wouldn’t handle something related to elections in a fair and even-handed manner is, by itself, concerning heading into what ought to be a contentious 2020 election and that’s not to mention the looming efforts for the recall. Can anyone count on it being fair?

The Department of Law and the Division of Elections have yet to make a decision on the legal grounds for the recall petition. A decision is due on that in early November, but if this is any grounds to go by we’d expect the matter to be hashed out in the courts.

As for the Fair Share Act, there’s certainly merit to the concerns that any legal fight over the booklet covers could potentially snarl the groups’ signature-gathering efforts, which must be wrapped up before the start of the legislative session on Jan. 21, 2020, if they plan to appear on the 2020 ballot.

However, the courts have already found that there’s sufficient merit to allow groups to continue to gather signatures while something is hashed out in the courts. Still, at the end of the day, the description generated by the state for the cover of the petition booklets does not affect the text of the ballot measure.