Sara Chapell is circulating an oil tax reform initiative petition. More than 60 residents have signed the petition that would put the Fair Share Act on next year’s ballot.

If enacted, the act would only apply to larger North Slope fields that have produced a minimum of 40,000 barrels of oil per day on average in the last year and 400 million barrels of oil cumulatively. It would eliminate the $8 per barrel tax credit that oil companies in the three largest oilfields on the North Slope benefit from based on current law.

The act would, in part, increase the gross production tax on those fields from 4 percent to 10 percent, and would increase the tax by 1 percent for each $5 per-barrel increase beginning at a $50 per barrel of profit, according to a summary description of the act. The act, if effective last fiscal year, would have increased the state’s production revenues by about $1.1 billion compared to current law.

Chapell said she is motivated to see the initiative on the ballot based on this year’s state budget, and the toll the process took on Alaskans.

“All of these supposed budget shortfalls for the ferry, that would have been nonexistent if this law was in place last year,” Chapell said. “Worrying about whether our schools would be fully funded, it would be a non-issue. The conversation we’re having around the budget, this idea of scarcity, that there’s not enough money to pay for the basic services that we expect, that is just not true.”

Initiative proponents say the act is fair to oil producers and Alaskans by continuing tax breaks for new and developing fields while ensuring the state collects a larger share from the largest and most profitable fields. A group calling itself “Vote Yes for Alaska’s Fair Share” is attempting to collect 28,501 signatures from across the state in its effort to get the measure on next year’s ballot. The act would also make public tax returns and other documents from oil and gas producers.

Opponents, including the Alaska Oil and Gas Association, say the act would discourage investment, and decrease oil production in the North Slope. The trade group is the largest contributor to a group opposing the initiative named “OneAlaska,” according to Anchorage Daily News.

Opponents say changes to the state’s oil tax law requires more study and input, and that the Fair Share Act’s drafting wasn’t adequately vetted by the public, the legislature or “independent economic experts.”

Vote Yes for Alaska’s Fair Share filed a lawsuit against the state last week, asserting that the state’s division of elections failed to provide a “true and impartial” summary of the ballot proposal. It says, in part, that language in the summary over-emphasizes the impact the bill would have on oil and gas companies.

More information about each group and its arguments can be found at voteyesforalaskafairshare.com and onealaska.com.

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