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Gas line, permitting bills on legislature's agenda this week

Posted: March 9, 2014 - 7:46pm

JUNEAU — With the Legislature more than halfway through its scheduled 90-day session, major bills are starting to take shape — and a controversial bill from the past has re-emerged.

House Finance is set to complete its version of the state operating budget with a floor vote expected later this week. The committee took public comment last week after unveiling a $9.1 billion proposal that included $41 million less in unrestricted general funds that Gov. Sean Parnell’s proposal and $1.3 billion less than the authorized level of spending at the start of the current year.

The package does not address how the state will approach its unfunded pension obligation. Parnell has proposed moving $3 billion from savings toward helping pay down the roughly $12-billion liability for the public employees’ and teachers’ retirement systems.

Senate Finance Committee co-chair Pete Kelly said he sees that as a different discussion than determining what the cost of government operations for next year will be. But he said the pension discussion will have to happen.

Here are three other things to watch for:

■ GAS LINE: Senate Finance is expected to unveil its version of SB138 as early as Monday. The bill, from Parnell, would help set the state’s equity share in a major liquefied natural gas project and allow the project to advance to a stage of preliminary engineering and design.

The state signed an agreement with pipeline company TransCanada Corp., BP, ConocoPhillips, ExxonMobil Corp., and the Alaska Gasline Development Corp., setting broad terms for moving forward. The state signed a separate agreement with TransCanada to manage the state’s interest in a pipeline and gas treatment plant. The agreements are subject to passage of enabling legislation deemed acceptable by the parties.

Kelly, R-Fairbanks, said Thursday he didn’t think the bill would change that much. He said issues that needed to be figured out included the state’s participation rate and concerns raised by municipalities about having a say on project terms that would affect them, such as payments in lieu of property tax.

He said the temptation with lawmakers has been to start discussing “THE gas line” when the bill would allow simply to move to the next step in exploring a project. But some lawmakers have argued for limits to be incorporated into the bill for what can — and can’t — be up for negotiation as part of the project-enabling contracts that would be brought back to the Legislature for approval, to make clear what the Legislature would be willing to accept. Sen. Hollis French, D-Anchorage, has said oil taxes should be off the bargaining table.

With the state eyeing a role, questions have been raised about the kind of cash the state would have to come up with and what the state might get in return for its investment. While lawmakers have been given answers, the numbers depend on the potential equity stake and other assumptions. It’s not clear what the gas price will be. And what happens if a project goes over budget? How much will be left in savings when the state will have to make its cash calls, and what will those cash calls mean for other parts of the budget?

Sen. Click Bishop, R-Fairbanks, called it the fear of the unknown. He said he wanted to make sure the state wasn’t looking at the project through “rose-colored glasses” and said he would have to feel confident in the state’s ability to meet its financial obligations to the project moving forward. But first, he said, a bill has to move out to allow for work on project estimates to continue.

Senate President Charlie Huggins, R-Wasilla, said he took comfort in the stepped approach. “We don’t have to be too bold in the first step,” he said, “but we have to have a bit of courage.”

■ PERMITTING BILL: HB77, also from Parnell, has resurfaced and is scheduled for hearing by Senate Resources. The bill, which has been billed as a way to improve the permitting process, passed the House last year but stalled in the Senate amid lack of support.

Sen. Peter Micciche, R-Soldotna, asked that the bill be sent to Senate Resources for further review after hearing concerns from his constituents during the interim.

Critics say the bill court hurt the public’s ability to participate in permitting decisions and give the Natural Resources commissioner too much power.

Wyn Menefee, chief of operations for the state Division of Mining, Land and Water, said there was misunderstanding about the public comment portion. He said the administration was not trying to limit public participation but rather was trying to get people involved in the process early so their concerns could be addressed. He said that could also help cut down on project delays for companies.

The bill also said the Natural Resources commissioner — “notwithstanding any other provision of law” — could authorize an activity on state land by issuing a general permit if the commissioner finds that the activity unlikely to result in “significant and irreparable” harm to state land or resources. Some viewed that language as given the commissioner broad discretion but Menefee said it was meant as an efficiency tool — not an attempt to get around environmental or other laws. He expected that language to be addressed.

He said the types of activities that would fall under that category are fairly small, things like boat storage on a river or a filming operation on state land.

Lindsey Bloom, a fisheries consultant and critic of the bill, said if all that is the intent, it should be made clear in the bill so as not to leave the language open to interpretation.

■ BUILDING DESIGNS: HB343, from Rep. Charisse Millett, R-Anchorage, calls for standardized designs for public buildings to optimize efficiency. In her sponsor statement, she says this would lead to a reduction in the design and planning phase of buildings, “inevitably leading to a cost savings for the state.”

House Transportation is scheduled to hear the bill Thursday.

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WinchesterM1 03/10/14 - 01:37 pm
..the gas line is "an issue"?

..the gas line is "an issue"? so? Aren`t "issues" supposed to be vetted and debated? How does SB138 allow that?, when the legislation itself cuts off debate? The Governor doesn`t want to put "must haves", we demanded in AGIA, or even allow municipalities time to study this effort to get them to give away their(more importantly OUR) sovereignty to foreign multinational companies doing business in Alaska as well as the Mideast and Russia. Under SB138, if we take on the role of a "partner" with possibly those entities, we will have more than just collecting royalties and taxes to worry about. Without firms "asks" and guidelines for the state`s "must haves", there is nothing in SB138 guaranteeing they will even be addressed in the FEED. The municipalities involved should not be asked to trust blindly, because we`re looking at a gas AND oil tax giveaway with SB138, as it also requires we "commingle" and set in concrete oil AND gas taxes, credits, and "deductions". If you think the current resource royalty and tax system is complicated, if you wait to find out two years from now that If you mix the two taxes, we can forget ever catching up on state tax auditing ability. SB138 is a bad bill getting worse if we don`t vet it now. To this old Alaskan, these are more attacks on the state`s fiscal sovereignty and ability to extract fair taxes as it see`s fit for it`s owned resources. And now Parnell has the temerity to fire a good Alaskan on the oil tax review board (who fought for Alaska as expected!) and replaced him with a retired oil company executive from California!! ..a clear violation of the letter of the state law. More reckless disregard for our hard-fought-for state constitution. Thank you for the forum Clarion. Vote YES on 1. Take Alaska back.

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