Sen. Hoffman Says SB18 Energy Borough Would Only Tax Nonrenewable Resources

Mar 13, 2017

Sen. Lyman Hoffman during a Senate Finance Committee meeting on March 29, 2016.
Credit Skip Gray / 360 North

Senator Lyman Hoffman's proposal to create a new type of borough in the Yukon Kuskokwim Delta is already evolving. The senator told listeners on KYUK's call-in show Friday that Senate Bill 18 has been amended so the borough could only tax nonrenewable resources.

“It doesn’t say what is exempt," the Senator told listeners. "It says what is allowed. And the only one that is allowed by this resource borough is nonrenewable resources.”

Nonrenewable resources like the proposed Donlin Gold mine, which the Senator says could be taxed under this type of borough to fund energy projects in the region that could potentially reduce high electric and heating costs across the Delta.

Questions on the Senator's borough proposal dominated the call-in show. One caller asked if The Kuskokwim Corporation could still pursue its borough plan proposed last year, which would also tax the proposed Donlin Gold mine.

“That route is still available to them. That option is in state law, and I’m not taking that away,” the Senator responded.

The complication is that both borough proposals would use the undeveloped Donlin Gold mine as their revenue source. Hoffman says that under his plan the whole region, not just one part, could benefit.

“You know, the resource there is a resource that is owned by all the Calista Corporation and all its Calista shareholders," he said. "So what I’m putting forward is an option that the Calista shareholders could possibly look at taxing or coming up with a payment in lieu of taxes of that resource, and all the people of the region could benefit, potentially by lowering their energy costs.”

How those payments would be made, what type, and how they would reduce energy costs, Senator Hoffman says, would depend on the borough’s board.

During last Friday's call-in show, the Senator also shared his support for Senate Bill 26, Governor Walker’s solution to the state’s fiscal situation.

“It passes two tests for me. One is that it will continue to have the Permanent Fund itself continue to grow and it will initially cap the dividend at $1,000 per person, but over time, after that, it will start to grow again,” he said.

Another caller shared concerns about the rate of domestic violence in the region. Senator Hoffman said he has asked the Director of the Alaska Council on Domestic Violence and Sexual Assault to send him semi-annual reports to stay abreast of the issue.

Join us this week on KYUK as listeners talk with Representative Zach Fansler.