First hearing on initiative that would raise taxes on Alaska's oil industry
The Alaska Legislature held its first hearing on an initiative that seeks to raise taxes on oil companies that operate the state’s three legacy fields.
On Tuesday, the 13-member Legislative Council heard from representatives from the Departments of Law and Revenue as well as the Legislature’s legal advisers about the Fair Share Act.
Cori Mills, an assistant attorney general, told the committee that the lieutenant governor will make a decision whether the initiative will appear on the ballot by March 17.
In October, supporters of the initiative submitted over 44,000 signatures to the Division of Elections. According
, the initiative is on the brink of passing the 28,501-vote threshold needed to get the initiative before voters.
Advocates of the Fair Share Act estimate that it would raise over $1 billion more in revenue per year from the state’s most profitable oilfields. Opponents of the tax change say it endangers the oil industry itself.
Sen. Natasha von Imhof, an Anchorage Republican, was forthright in her opinions about what the initiative would do: “We’re essentially just wanting to drive the oil companies into the ground and make them shutdown.”
In October, the lieutenant governor certified that the petition could begin signature gathering after a
concluded that it satisfied constitutional and statutory requirements for an initiative.
The Legislature has the ability to pass its own legislation to void the initiative process. Under Alaska statue, the Legislature’s legislation must be substantially similar to the initiative bill.
Rep. Bryce Edgmon, I-Dillingham, asked Mills about that process, she said it would depend on how specific or broad the initiative is.
The Department of Law would only provide advice to lawmakers if its bill met the “substantially similar” provision after the legislation was signed by the governor, Mills said.
If the initiative passes, lawmakers would also be prevented from repealing the bill for two years. Officials estimate it would cost $7.5 million to make changes necessary to implement the bill.
Sen. Bill Wielechowski, D-Anchorage, has introduced virtually identical legislation to the initiative but it’s yet to have a hearing during the ongoing legislative session.
No other legislators have introduced bills that would change Alaska’s oil tax structure. “I hope the Legislature does take something up and does charge ahead and figure out what the right balance is,” Wielechowski said.
In the meantime, the initiative process continues.
According to its most recent filings,
a group formed in support of the initiative, has raised $318,524.
, a group opposed to the initiative, had raised $2,057,213, largely through two big donations from Hilcorp and ExxonMobil.
Mills told lawmakers that if the Legislature adjourns by April 19, the initiative would likely appear on the ballot for a primary election. If the Legislature adjourns after April 19, the initiative would probably be on the general election ballot or it could appear alongside a vote on whether to recall the governor from office.