Politics takes over as session opens

Posted: Tuesday, January 09, 2001

JUNEAU --Gov. Tony Knowles took steps Monday to speed construction of a natural gas pipeline by establishing a coordinator's office to streamline permitting and introducing legislation that may provide tax incentives for a gas line.

The administrative order Knowles signed also creates a natural gas policy cabinet. He wants the pipeline to follow the Alaska Highway route, rather than a more northern route that would run almost completely through Canada.

He said he will seek $4 million to help fund work on permits and rights of way on the highway route.

''It's time to jump-start this important project,'' Knowles said.

Knowles also introduced a bill that would let the administration negotiate a special tax structure that would make the project more attractive to developers. The measure amends a bill passed two years ago that allowed such an alternative tax structure for liquefied natural gas projects.

Knowles' spokesman Bob King rejected characterization of the bill as a tax break, saying while taxes might be deferred at the beginning of a project, the state would seek to ultimately earn an equivalent amount of taxes.

Once a tax deal is negotiated with the industry, it would have to come back to the Legislature for approval, King said.

Knowles' legislation joins two other bills already proposed. One by Rep. Joe Green, R-Anchorage, is similar to the governor's bill. Another introduced by Rep. Eldon Mulder, R-Anchorage, and House Speaker Brian Porter is a largely empty measure that can be adapted as lawmakers decided what needs to be done to promote a project.

''The intent is to create a bill that will provide for incentives, inducements, to develop a natural gas pipeline through the state,'' Mulder said.

Knowles' legislation won't necessarily sail through the Legislature, however.

Sen. John Torgerson, R-Kasilof, said Monday he plans to do a lot more research before moving any gas line legislation through his Senate Resources Committee.

Incentives, such as the tax flexibility envisioned by Knowles, may be a good idea, he said, but he's not sure of that yet.

''We may be giving away the house, I don't know,'' Torgerson said.

Rep. Scott Ogan, R-Palmer, chairman of the House Special Committee on Oil and Gas, said he generally likes Knowles' ideas, particularly the one-stop shopping approach to permitting.

''It looks pretty Republican to me,'' Ogan said.

He's not ready, however, to say an Alaska Highway route is the best plan for getting natural gas to market. He and some other legislators aren't prepared to rule out a trans-Alaska oil pipeline route, which would require shipping the gas in a liquefied form.

Knowles spokesman King said the prospects for a liquefied natural gas facility don't look good, but he doesn't object to legislators deciding that for themselves.

''I think it's appropriate that legislators want to take a good close look at this just as we've been taking a good close look,'' Knowles spokesperson Bob King said.

HEAD:Knowles plans to speed construction of gas line


BYLINE2:Associated Press Writer

JUNEAU -- The strains of ceremonial music had scarcely faded on the Legislature's first day Monday when the Senate's Republican majority denied a Democrat a key committee post.

Sen. Kim Elton, D-Juneau, had been the minority's choice for one of its two seats on the Finance Committee, which writes budgets and deals with virtually all bills of substance. But the Committee on Committees, controlled by Republicans, rejected Elton in favor of freshman Donny Olson, D-Nome.

Senate President Rick Halford, R-Chugiak, said he wanted to make sure the oil-rich North Slope was represented on the committee.

''Sen. Olson represents the area where most of the money comes from, '' Halford said. ''The capital city is always well-represented because we're all here.''

Elton and other minority Democrats protested the majority's intrusion into their organization.

''I'm disappointed that the first thing that has happened this session is to short-sheet the minority,'' said Elton.

Republicans said they were simply trying to maintain geographic balance on the committee and noted that Southeast Alaska is already represented on the panel by Alan Austerman, R-Kodiak, whose district stretches into the region's rural islands.

''It is not about partisanship, it is not about personality, it is not about politics,'' said Sen. Pete Kelly, R-Fairbanks. ''It is about regionalism.''

However, the majority's move rids the Finance Committee of one of the Legislature's most liberal members, who would likely be a vocal opponent of budget cuts and other conservative proposals.

Olson said he had not approached the majority in search of the seat, although he said he had sought a Finance assignment from his fellow Democrats. He praised Elton and voted against the GOP's move to oust him, but agreed with Halford's position that the area that produces the majority of state revenue should be represented on the committee that spends the money.

''Somebody from that area should be on the committee,'' Olson said.

Earlier in the day, the session began with pomp and music. A color guard of Girl Scouts straining to hold in giggles brought in the flags in the House, while Senators were treated to the Alaska Flag Song played as a violin solo by Audrey Solomon, the current Miss Alaska.

Lt. Gov. Fran Ulmer opened both the House and the Senate, swearing in 39 members of the House and the 10 senators elected in November. Rep. Jim Whitaker, R-Fairbanks, was the only member absent, kept away by Juneau's inhospitable weather.

The House then confirmed the decision of its Republican majority, reelecting House Speaker Brian Porter, R-Anchorage, to a second term on a 39-0 vote.

Porter used the occasion to call for bipartisan cooperation and asked members to set aside any bitterness lingering from the election.

''It may be my last opportunity for unabashed pontification from this position,'' Porter said. ''I would like to ask us to close the lid on the election box.''

In the Senate, Halford was chosen Senate President without objection. Like Porter's, his election had been preordained by the GOP majority caucus.

Among the newly elected lawmakers was Sen. Bettye Davis, D-Anchorage, the Senate's first black member. The Senate's galleries were crowded with black leaders from her east Anchorage district and elsewhere in Alaska, as well as her grandchildren.

Aside from the Senate's rejection of Elton, ceremony was more the order of the day than policy and politics, with delegations from both houses marching down the halls of the Capitol to inform Gov. Tony Knowles they were ready to do business

But little real business was conducted. More than 50 bills and resolutions already filed by lawmakers were formally introduced, and the House created a Special Committee on Education.

After the session adjourned, House Republicans retreated into a closed-door caucus meeting to work out their priorities for the session. The GOP Senate majority held a similar meeting Sunday.

Although a natural gas line from the North Slope, education, drunken driving and budget issues are expected to loom large this session, Republicans will likely hold off on any formal announcements until after Gov. Tony Knowles, a Democrat, delivers his State of the State speech on Wednesday.

On Monday, Knowles singled out the gas line to the Lower 48 as his top priority, signing an administrative order creating a pipeline coordinator's office to streamline permitting for such a project. He also introduced a bill designed to give the state more flexibility to alter the state's tax structure to make such a project more attractive to potential developers.

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