Severance tax measure filed with Arkansas Attorney General, again

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July 1, 2011


By Al Ortiz

LITTLE ROCK, Arkansas: In what has been an often occurrence for a proposed severance tax ballot measure, wording was again filed with the Arkansas Attorney General's office. Although the measure was previously approved for circulation, a revision to the ballot wording was made by the sponsor of the measure, mandating that another approval occur.

On June 30, a new revised version of the proposal was filed by Sheffield Nelson, a former gas company executive and gubernatorial candidate, with the new measure directing an additional $20 million for city street upgrades. The new addition to the proposal was added after Nelson stated he met with city officials across the state, concluding that more money is needed to fix city streets damaged by trucks coming to and from the Fayetteville Shale play area, where a majority of natural gas is produced in the state.

The measure mainly proposes to raise the severance tax levy on companies for natural gas from 5 to 7 percent. Nelson stated that it could generate about $250 million a year. The current tax that was passed in 2008 is designed to generate about $100 million per year, but Nelson argues that that amount of money is not enough for road projects.

In a letter to Arkansas Attorney General Dustin McDaniel about his revised proposal: "We are convinced that a true need exists for such funding and proposed to address the problem with this filing."[1]

Previously, Attorney General Dustin McDaniel rejected the proposed measure on February 22, 2011, citing ambiguities in the text of the proposal. Nelson stated that he would revise and re-submit the proposal in the days following the rejection.

During the week of March 15, 2011, after the measure was re-submitted, McDaniel approved the popular title, clearing the way for petition circulation, despite one recommendation to revise the ballot title. In McDaniel's opinion, the Arkansas Attorney General wrote, "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. With regard to the ballot title, a minor change is in my opinion necessary to make it more suitable and correct."[2][3]

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