Homer, Alaska - Opinion

A bill sponsored by Rep. Paul Seaton, R-Homer, that would change parts of the state’s mining law for the first time since statehood and significantly increase what miners pay deserves some attention.

In a sponsor statement, Seaton said House Bill 156 would allow the state “a reasonable share of the wealth for its mined resources through many long-overdue changes to the mining tax structure. It is important that we establish a stable tax structure that is fair to the private sector and provides the people of Alaska with a reasonable benefit from their resources.” That’s logical.

The oil and gas industry pays a 12.5 percent royalty for operating on state land and a 22.5 percent tax on the net profits. It also pays a property tax of 20 mills. State fisheries contribute 2.8 percent of the total production value to the state and an additional 2.5 percent in severance and use taxes to municipalities. Vessels, docks and processing plants also pay municipal property taxes.

By way of comparison, mining has a far lighter tax burden. The state gets less than 1 percent of the value of what’s mined as tax revenue. Municipal governments get another 1 percent, mostly as property tax.

Changes to the state’s mining law should not discourage exploration, but at the same time the state should be able to expect a reasonable return on its resources. What HB 156 proposes as reasonable and a fair share for the state and what miners see as reasonable and a fair share for the state, however, may be two different things.

While the state’s mining law likely made perfect sense back in 1959, times have changed. House Bill 156, co-sponsored by Rep. Andrea Doll, D-Juneau, gets the mining issues on the table for discussion where lawmakers can dig more deeply into them. That’s exactly what should happen.

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