Why I'll be a 'No' vote on Ballot Measure 1 - Must Read Alaska
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Sunday, December 6, 2020
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Why I’ll be a ‘No’ vote on Ballot Measure 1

By CHAD HUTCHISON

Respectfully, I’m voting “no” on Ballot Measure 1.  “All or nothing” direct initiatives are generally an unwise way to change complex state policy.  Ballot Measure 1, which focuses on our complex state oil production tax, is no exception.   

Noteworthy:  Prior to the “vote of the people,” Alaska’s courts largely allow “broad leeway” for citizen initiatives that don’t have clear, egregious legal infirmities.  What does that mean?  The initiative may pass the minimum initiative standards for a statewide vote, but that does not necessarily mean they are insulated from future litigation, once they become law…especially as practical “implementation problems” arise.       

While the merits of changing our oil tax structure is debatable in some circles (substantially similar legislation to raise oil taxes failed to get support in the legislature over the years, as many still remember the not-too-distant, detrimental consequences surrounding ACES), Ballot Measure 1, if passed, may lead us down an uncertain, risky path.  

Uncertainty is likely because of the way the initiative is written.  Potential issues, including constitutional issues, arise and may not be quickly resolved through subsequent statute and/or regulation.  

Here is just one example:

Section 7 focuses on the disclosure of “all filing and supporting information” for the payment of taxes for producers at fields including Alpine, Kuparuk, and Prudhoe Bay (“the fields”).  There is no distinction between “confidential” and “non-confidential” records.  

If implemented, Alaska would be the only regime to require public disclosure of all documents associated with tax filings.  

As written, “all” records (including amended returns, audits, settlement negotiations, speech/communications between company personnel and Department of Revenue staff) no matter how sensitive (or useful to competitors) “shall be a matter of public record.”  

Does this raise equal protection concerns under Article 1, Section 1 of the Alaska Constitution?  In other words, are similarly situated people (i.e. a  handful of Alaska-operating energy companies) being treated differently, even within the state of Alaska?  Some are forced to disclose, depending on parameters designed by the initiative-backers, some aren’t.   

If “all” records concerning the legacy fields are compelled for disclosure (including normally privileged speech or speech protected under Article 1, Section 5), is “all” the least restrictive alterative?  Are the initiative proponents’ reasons “enough” to create this special disclosure requirement specifically for the producers at those fields?   

Also, Alaska, historically, has a broadly interpreted right to privacy (found in Article 1, Section 22 of the Alaska Constitution).  That same right to privacy protects private interests against government overreach.  

Alaska’s judicial interpretation of this right explains why the 1975 Ravin decision (which allowed personal use marijuana in the home) held for so long and why pro-life advocates have struggled on the issue of abortion in Alaska).   

Couple that “privacy interpretation” with the consistently-evolving-granting-of-rights for corporations in the United States (thanks to cases from the US Supreme Court, including the Citizens United decision (which, itself, was built using decades-old “building blocks” of Supreme Court precedent for corporations going back to the 1800s)).   

In these circumstances, how much does the public disclosure of “all filing and supporting information” correlate with Alaska’s unique constitutional right to privacy? 

These are all open questions.  

Answering those questions will take time.  

In some cases, if history is an indicator, timing is critical…and opportunity may be fleeting for our state (as investment decisions are measured against other world-wide jurisdictions).  

In 2020, eliminating “question marks” is critical for all of us.  If the voters approve BM1, there will very likely be an extended period of uncertainty within the petroleum industry.  The terms of the initiative, as evidenced by, minimally, Section 7 (where the government is forcing public disclosure of all tax-related documents), will generate conflict, delay, and possibly litigation. 

That’s bad for the producers, bad for potential investors, and most of all, bad for Alaska.  

Chad Hutchison was born and raised in Fairbanks, Alaska.  He is an attorney.  

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Latest comments

  • For Robin Brena and former Governor Walker both of who had a heavy hand in writing these measure and certainly are spending a good deal of cash getting dis-information out on the measure it will become a life long lawyers relief act..for them…the citizens of Alaska be darned….

    • Bingo!

  • Whatever one thinks about the Citizens United decision referenced in this column, it is a large stress to claim the US Supreme Court decision was built on long-standing “building blocks” going back hundreds of years. In fact, the decision by the US Supreme Court throttled long-standing legal doctrine and fixed a one size fits all federal rule for campaign contributions that deviated from historic interpretations of our federal constitution.
    Oh well ………………….

  • Mr. Joe Geldhof,

    Re: “Building blocks”

    The Citizens United decision continued SCOTUS’s evolved trend of providing more constitutional protections for corporations (which are “associations of people from whom rights can be derived”).

    Here are other brief examples of the historic granting of rights in a corporate/constitutional context:

    – Corporations are included within the meaning of “person” under the Fourteenth Amendment. Pembina Consolidated Silver Mining & Milling Co. v. Pennsylvania, 125 U.S. 181, 189 (1888)

    – A corporation’s property and business interests are entitled to Fourteenth Amendment protection. . . .First Nat. Bank of Bos. v. Bellotti, 435 U.S. 765, 771, 98 S. Ct. 1407, 1413, 55 L. Ed. 2d 707 (1978).

    – A corporation, like any other ‘client,’ is entitled to the attorney-client privilege. See Radiant Burners, Inc., v. American Gas Ass’n., 7 Cir., 320 F.2d 314.

    – A corporation is protected as a publisher by the Freedom of the Press Clause of the First Amendment. Grosjean v. American Press Co., 297 U.S. 233, 244, 56 S.Ct. 444, 446, 80 L.Ed. 660: New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686.

    – A corporation…was held entitled to protection against unreasonable searches and seizures by reason of the Fourth Amendment. Hale v. Henkel, 201 U.S. 43, 76—77, 26 S.Ct. 370, 379—380, 50 L.Ed. 652.” Bell v. State of Md., 378 U.S. 226, 263, 84 S. Ct. 1814, 1834, 12 L. Ed. 2d 822 (1964).

    CHAD: Viewed in that broader context, some view Citizens United as a “natural consistent evolution” as SCOTUS historically granted other growing constitutional rights to corporations (“associations of people”). That was occurring, even though campaign finance laws, in its specific “corner of the universe,” remained restricted for many years before the actual Citizens United decision came down.

    Hobby Lobby is another one to ponder. Expanded rights.

    Cheers
    Chad

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