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Natural gas firms must report spending against any ballot measures Saturday, Feb 16, 2008 By Rob Moritz and John Lyon Arkansas News Bureau LITTLE ROCK - Natural gas companies must report any money they spend to defeat any initiated act to raise Arkansas' severance tax, the state Ethics Commission said Friday. Also Friday, Gov. Mike Beebe briefed legislative leaders on his efforts to forge a consensus for a possible early March special session to raise the severance tax. He signaled his flexibility on the terms of an agreement, saying he would consider exemptions to a tax hike and that the percentage increase is negotiable. The Ethics Commission adopted an advisory opinion in response to a request from former gas company executive Sheffield Nelson, who is seeking to place a proposal to raise the severance tax on the November ballot. Nelson, the former head of Arkla Inc., had asked the commission whether corporations are covered by a state law requiring public servants, government bodies and individual persons to file financial reports when they spend more than $500 to advocate the passage or defeat of a ballot question. Nelson has said he expects gas companies to spend heavily to defeat his proposed initiated act to raise the severance tax. The attorney general's office has cleared the proposal for supporters to begin gathering the nearly 62,000 valid signatures required to qualify the measure for the November general election ballot. In its opinion Friday, the Ethics Commission said it believed a corporation would be included in the definition of a "person" under public disclosure laws, which it said "should be liberally interpreted." "Any other interpretation or construction would defeat public disclosure and the clear intent of the General Assembly," the commission said in the opinion. "I was gratified by that decision," Nelson said Friday. "The decision allows the intent of the law to meet the letter of the law. I think it's very important for the people of the state of Arkansas." Arkansas' severance tax on natural gas is one of the lowest in the nation. At three-tenths of one cent per 1,000 cubic feet of natural gas, it netted less than $700,000 for the state last year. Nelson has proposed raising the tax to 7 percent of market value, which he says would raise between $60 million and $100 million in state revenues annually. The percentage taken under Nelson's proposal would be equal to Oklahoma's severance tax and a half-percent lower than Texas' 7.5 percent. However, the measure does not include exemptions those states allow, such as for more expensive wells drilled and for start-up costs. Beebe said Friday he would be willing to provide exemptions to natural gas companies drilling in North-Central Arkansas' Fayetteville Shale play, which researchers estimate will have a $5.5 billion impact on the state economy through the end of the year. "I want Arkansans to be treated fairly and comparably to what goes on in Texas and what goes on in Oklahoma," Beebe said after a meeting the legislative leaders. "I'm willing to take exemptions and take less of a percentage as say Texas or Oklahoma, or more exemptions and a higher percentage. I'm pretty flexible about going either way." Lawmakers who attended the meeting at the Capitol said the governor explained all his options and told them he would call a special session only when he has an agreement with the gas industry and if he has the support of three-fourths of the Legislature, which is needed to raise the severance tax. Beebe has said early March would be the best time for a special session, before legislators become engrossed in election campaigns. Senate President Pro Tem Jack Critcher, D-Batesville, said the governor "just wanted to update us on where we are with the possibility of (a special session) and the negotiations he is having with the industry in trying to reach an agreement." "They aren't there, so there is no agreement," Critcher said. "If an agreement is not reached toward the end of the month or the first week in March, (a special session) is probably not going to happen." Beebe told reporters later he was not prepared to abandon his negotiations with the gas industry. He also said he had ruled out the possibility of pushing an initiated act of his own for the November ballot. |
