Friday, May 24, 2013

Advocacy Groups Take Sides In Battle Over Proposed Ballot Initiative To Overturn Alaska SB21 Oil Tax Reform Bill

The passage of Alaska SB21, the bill to roll back ACES and institute oil tax reform which could be either interpreted as restoring more balance between development and revenue or as a giveaway to Big Oil, depending upon one's point of view, has resulted in one group launching an organized campaign to get a repeal initiative on the ballot for the August 2014 primary election, and two other groups responding with campaigns against repeal. The identities and missions of the three groups are presented below, while a summary of the provisions of SB21 is presented towards the end of this post. Read a related article in the Alaska Dispatch (slightly biased towards repeal of SB21).

Vote Yes - Repeal the Giveaway: Online resources include a website and a Facebook page. This group opposes SB21 and has launched a petition campaign to gather enough signatures to put a repeal measure on the August 2014 ballot to overturn the bill. They are required to collect signatures of qualified voters equal in number to 10 percent of those who voted in the preceding General Election and are residents of at least three-fourths of the house districts of the state and who, in each of the house districts, are equal in number to at least seven percent of those who voted in the preceding General Election in the house district; over 900 petition books have been deployed. As of this post, they have collected around 10,000 signatures, and say they're on track to gather 30,000 before the July 13th deadline. According to their APOC report, the group has raised $24,147 through May 15th from 47 donations, most under $50. While petitions are fielded at irregular intervals, there are people fielding petitions all over Alaska, including small towns like Hope. Check the Facebook page to find out the nearest locations and times. The three prime sponsors of their referendum are Vic Fischer of Anchorage, Bella Hammond of Port Alsworth, and Jim Whitaker of Fairbanks, although former Republican Moderate Party Chairman Ray Metcalfe is also prominently involved. This Mudflats post also highlights a few state lawmakers who are opposed to SB21 (all Democrats).

Repeal The Giveaway outlines ten reasons why they are opposed to SB21, many of which overlap one another:

(1). It is a massive giveaway for nothing in return.
(2). It gives away even more than they claim.
(3). It gives away billions for oil we're already going to get.
(4). It is unlikely to ever pay for itself.
(5). It undersells Alaska when our oil is worth the most.
(6). It removes incentives to reinvest in Alaska.
(7). It gives extra "new oil" breaks to old oil.
(8). It is based on false pretenses.
(9). It drains Alaska's hard-won savings.
(10).It repeats historic mistakes. [Ed. Note: Actually, there are other "historic mistakes" which have nothing to do with oil, such as two dairies that went tits up, a Mat-Su Ferry that's useless, and a state jet that had to be sold at a loss]

We Are Alaska: Online resources include a website and a separate Facebook page: A state-based group fighting the repeal effort, and funded primarily by the Alaska Support Industry Alliance. They say they represent more than 30,000 employees whose jobs involve everything from transportation to employee placement and professional training. So far, most of their advocacy has been in the form of radio ads, costing them about $30,000. Although they don't have to register or file disclosure reports with APOC, they will voluntarily file quarterly reports beginning in July. According to a recently-issued advisory opinion by APOC, groups opposing a referendum during the signature-gathering stage aren't required to register with APOC. This group maintains that Repeal the Giveaway leader Ray Metcalfe is misleading the public about the expected effects of SB21, questioning Metcalfe's claim that "BP has zero investment out of their own pocket since they paid off the pipeline in 1982." They also state that if SB21 is repealed, Alaska will go back to the system that was promoting declining production by discouraging new investment.

We Are Alaska believes that their point of view would prevail in a referendum, writing on Facebook "In the 2012 General Election, voters were given the opportunity to decide how they felt about oil tax reform. It was the main issue in that election. 91,697 Alaskans voted for 9 Senators who campaigned on oil tax reform and elected a Senate Majority that supported oil tax reform. Opposing a possible referendum isn't about denying the public an opportunity - its about maintaining a stable investment climate. SB 21 doesn't go into effect until January 1, 2014, and a primary election would occur in August of 2014; 8 months of instability for businesses who are making investment decisions. Investment decisions that will determine the future for Alaska".

Consumer Energy Alliance: Online resource include a website. This is an industry-backed national group that has fought the confiscatory cap-and-trade legislation which has been spawned by hysterical and unproven climate-change theory, a theory which took a severe beating because of our extended winter this year. They believe that repeal of SB21 would result in massive tax increases, reduction of Alaska’s global competitiveness, curtailment of Alaskan employment and income opportunities, reduce US energy production, increased dependence on foreign oil, reduction in state revenue, and contraction of permanent fund dividends, all of which will adversely affect Alaskans. Their primary form of activism is to persuade Alaskans and others to sign an e-mail letter placing one on public record as opposing repeal of SB21. They are endorsed by most every chamber of commerce and business organization in Alaska.

So what precisely did Alaska SB21 do? You can read the actual bill HERE; the House approved it 24-15-1, and the Senate approved it 12-8. Here are eight specific provisions of the bill:

(1). Eliminated the progressivity formula in the production tax.
(2). Eliminated a 20% capital investment tax credit for North Slope industry investment that included maintenance. (The 20% capital investment tax credit still continues for Cook Inlet and “Middle Earth” the unexplored basins of Interior and Northwest Alaska.)
(3). Replaces the capital investment tax credit with a per-barrel production tax credit. This links the company’s production to their tax reduction.
(4). Establishes two amounts for the per-barrel tax credit; a flat $5-ber-barrel credit that applies in new oil fields, and a sliding-scale tax rate that applies in existing fields that begins at $8 per barrel at low price ranges ($90) and is reduced to zero at high prices.($150)
(5). Establishes an additional incentive called a “Gross Revenue Exclusion,” or GRE, that applies to new fields or new projects within existing fields. The GRE allows 20% of new oil to be tax-free
(6). Extends the Loss Carry forward tax credit for small to medium-sized independent companies from 2016 to 2022. For the North Slope this is a 45% tax credit until 2016 and 35% after that. For Cook Inlet and Middle Earth, the Loss Carry forward remains at 25%.
(7). Eliminated the Exploration Incentive Credit (EIC) for the North Slope. Retained the EIC for Cook Inlet and Middle Earth.
(8). Added a 10% tax credit, up to $10 million a year, for expenditures in manufacturing or modifying equipment for oil and gas exploration and development – in the state of Alaska. The credit can be taken against the state corporate income tax.

1 comment:

  1. Roy Wagahuski6/24/2013 2:48 AM

    Oh no, don't let those "corrupt bastards" "give" back the money that rightfully belongs to the producers, it may mean $2 fewer in every monkey's welfare check. The horror.