Commerce committee refers severance-tax ordinance to assembly, backs legal review and permanent-fund language

The Haines Borough Commerce Committee on Feb. 24 voted to refer an amended severance-tax ordinance to the assembly while asking staff to begin concurrent legal review and to draft language directing proceeds to the borough permanent fund.

The committee’s draft would tax timber by thousand board feet (MBF), gravel by weight (per ton), and ore as a percentage of gross production value. The chair said the language mirrors approaches used in other Alaska jurisdictions and noted the draft timber rate of $5 per MBF and a gravel rate described in committee discussion as about 20¢ per ton.

Committee members discussed measurement and enforcement challenges. Industry stakeholders, represented in prior submissions by CERB, had objected to value-based reporting and to practical difficulties for gravel producers lacking certified scales. Committee members suggested conversion factors (weight-to-volume) and noted emerging technologies, such as drone volumetric measurement, as potential mitigations.

The chair used the Baby Brown timber sale as an example, saying the committee estimated the sale at roughly 20,000 MBF and that the $5/MBF draft rate would produce about $100,000 in gross revenue under that simplified calculation. The committee acknowledged those figures are illustrative and depend on final definitions and actual sale sizes.

On a revenue-allocation question, the clerk read draft ordinance language put forward to the committee: “Proceeds derived from severance taxes described in this chapter shall be transferred to the principal account of the borough permanent fund.” The committee signaled support for including a permanent-fund direction in the ordinance and asked staff to refine the wording during legal review.

Without a recorded roll-call vote on the floor, the committee formally moved to introduce the severance-tax ordinance as edited and to refer it to the assembly for introduction; the chair and committee members indicated consensus to proceed and to start staff and legal review in parallel.

Next steps: staff and legal will review definitions and code references (committee discussion flagged one in the draft as “3.84.030”); the assembly will receive the ordinance for potential introduction and additional public comment.

Clarifications and caveats: the committee discussed an exemption threshold in the draft but committee remarks were unclear on whether the threshold was $500 or $5,000 (the transcript language is ambiguous on that point); staff committed to confirm and clarify the final exemption level during drafting and legal review.