In my most recent column for State Tax Notes, I provide an update on H.B. 331, which was passed by the State Legislature in 2018 to create a mechanism for the issuance of up to $1 billion in bonds to finance oil and gas tax credit purchases. I also look at budget tensions created by the impasse over H.B. 331 as well as a push by some state legislators for additional changes to the structure of the production tax.
A lawsuit was filed challenging in two respects the constitutionality of H.B. 331 – that it might violate the requirement to not dedicate future revenue for a specific purpose or violate limitations on contracting for state debt. In January 2019, a judge of the Juneau Superior Court dismissed the complaint based on a failure to state a claim on which relief can be granted. The plaintiff filed an appeal to the Alaska Supreme Court, and oral arguments before the court were scheduled for September, with the court promising to “decide the case expeditiously.”
With state budget tensions running high, the legislature made no appropriation to the oil and gas tax credit fund this year for the purchase of tax credits, but added a placeholder appropriation of an estimated $700 million for the H.B. 331 bond program to the operating budget, which was signed by the governor.
My next column will include an update on the constitutional challenge to H.B. 331 as well as further discussion about Alaska’s revenue outlook and legislative activity.
Read the article here.
Originally published as “Alaska Taxpayers Feel the Heat” on August 19, 2019, by State Tax Notes.