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State certifies reserves 3-cent gas tax proposal Proponents need nearly 33,000 signatures to get measure on a future ballot; state lawyers noted ambiguities in proposal Eric Lidji Petroleum News
A renewed push to tax large natural gas reserves in Alaska passed its first hurdle recently, but a state legal review raised concerns about “ambiguities” in the proposal.
Lt. Gov. Sean Parnell certified the proposed ballot measure on Nov. 28.
The certification means the proposal passes the hurdle for ballot measures set by the state constitution, which only requires that petitions for ballot measures have three sponsors, at least 100 signatures from qualified voters and that the measure not be unconstitutional.
The state is now required to make a booklet outlining and explaining the proposal. After the booklets have been printed, proponents have one year to collect enough signatures to get their measure on a future ballot, most likely the ballot for the 2010 general election.
Rep. Harry Crawford, D-Anchorage; Rep. David Guttenberg, D-Fairbanks; and Rep. Beth Kerttula, D-Juneau, sponsored the proposed ballot measure.
The proposal is based on a similar measure rejected by voters in 2006. The proposal would levy a 3-cent tax on every thousand cubic feet of certain gas reserves in Alaska.
The measure is not only designed to spur North Slope gas production, but also to force reserve holders to commit their reserves to a pipeline under terms preferred by the State.
Ambiguities in the measure In a required review, the Alaska Department of Law noted “ambiguities” in the language of the proposed ballot measure that could become problematic, if implemented.
While the proposal is clearly meant to be levied against lease holding companies, the department noted the measure “does not specify who pays.” As a result, lessees might be able to legally argue they don’t have to pay the tax because they don’t own the reserves.
The tax would apply only to leases in existence since 1990 and within a unit containing at least 1 trillion cubic feet of known conventional natural gas reserves. This is designed to cover both the Prudhoe Bay and Kuparuk River units, but the Department of Law said the measure does not explain whether the tax impacts “marginally economic” reserves.
The tax would not cover gas used for field operations within seven years after the tax is levied. The Department of Law questioned “whether it is practicable to require payment of a tax without knowing until seven years later whether such liability actually existed.”
The ambiguities noted by the department do not disqualify the proposed measure.
Need nearly 33,000 signatures Gathering signatures for a proposed ballot measure is a far-flung and intricate process.
State statute requires petitioners to collect a minimum number of signatures from at least 75 percent of the 40 House districts, as well as a certain number of total signatures. The number is based on the turnout from the most recent general election. According to the Division of Elections, a record 327,341 ballots were cast in the November 2008 election.
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