Attorney General approves severance tax ballot title

Arkansas Attorney General Dustin McDaniel approved the ballot title of a citizen’s initiative that could raise the severance tax on natural gas in Arkansas to 7%.

The measure, notes this report from Talk Business, is being led by millionaire attorney and former natural gas company executive Sheffield Nelson, who contends that the industry can afford a tax hike.

His initiated act, The Natural Gas Severance Tax Act of 2012, would close exemptions and raise the rate on the state’s severance tax on natural gas extraction. The money would mostly go to road programs and could raise an estimated $250 million a year, according to Nelson.

Gas company executives argue that with low natural gas prices and the potential for more regulation and taxes, Arkansas’ boom activity in the lucrative Fayetteville Shale play could be threatened by the measure.

In an exclusive interview with Talk Business last week, Southwestern Energy general counsel Mark Boling said Nelson’s measure was "the wrong thing for Arkansas, a wrong thing for the economy."

In approving the measure today, McDaniel said Nelson had clarified language that earlier caused him to spike the proposal.

"Having analyzed your proposed amendment as well as your proposed popular name and ballot title under the above precepts, it is my conclusion that the popular name is sufficient as submitted. It is therefore hereby approved as submitted," McDaniel wrote. "With regard to the ballot title, a minor change is in my opinion necessary to make it more suitable and correct."

McDaniel proposed a slight modification to the ballot title, but okayed Nelson’s efforts to move forward with collecting 62,507 valid voter signatures needed to qualify the measure for the November 2012 general election.

Link here for McDaniel’s opinion.