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Inside track: Legislators focus on energy, education, tax laws

Posted: Monday, March 22, 2010

JUNEAU -- The countdown to April 18 is under way in the state Legislature. That's the 90th day, when lawmakers must adjourn and all bills not yet approved will hit the dumpster.

The 90-day limit is set in law, of course, and legislators write the laws, so they could extend the session toward its 120-day constitutional limit if they want to. But that's unlikely this year, as lawmakers face an election.

Meanwhile, bills are piling up in the finance committees in both the House and Senate. All legislation with financial implications, which covers the majority of bills, must be reviewed by the finance committees to consider their budgetary implications.

More than 200 bills are now in both finance committees and wagers are being made as to how many will actually emerge from those committees, most likely quite few.

Senate Finance co-chair Bert Stedman, R-Sitka, said his committee will give priority to three sets of issues besides the capital and operating budgets, which are the Legislature's constitutional responsibilities. These include several bills related to energy, several related to education -- including some form of Gov. Sean Parnell's university scholarship proposal -- and a change in the way the state oil and gas production tax is administered, Stedman said in a March 16 briefing by Senate leaders.

Senate finance subcommittees, meanwhile, are closing out their work on what will be the Senate's version of the state operating budget for fiscal year 2011, Stedman said, and the full finance committee has a detailed review of state agency and university capital budget requests under way that Stedman hopes to have complete by March 20.

Sen. Lyman Hoffman, D-Bethel, the other finance committee co-chair, said he expects the Senate's capital budget to be larger than what the governor has proposed, and that the governor accepts this.

"In conversations with us he has said he has left some room for additions by the Legislature," Hoffman said.

He added that the Legislature agreed to a small capital budget last year because of revenue constraints imposed by a sharp drop in oil prices.

"That has put us behind the curve in keeping up with public needs," on capital improvements, Hoffman said.

Getting more capital construction money on the street this year is also important because, "our economy is slipping a little," Hoffman said. He said the governor's $100 million deferred maintenance proposal, which Parnell had hoped would be passed early, will be merged with the regular fiscal 2011 capital budget and passed before adjournment April 18.

Some items in the capital budget, such as deferred maintenance, will be given an early effective date so state agencies can get the work under contract quickly, Hoffman said.

The House, meanwhile, passed its version of the operating budget March 12. It is slightly less than what Parnell proposed, but the budget does not include money in two key areas that are still under negotiation with the governor, said House finance co-chair Rep. Mike Hawker, R-Anchorage.

These include funds for work on an in-state gas pipeline that is being directed from the governor's office, and money for the governor's university scholarship proposal.

On other issues, considerable momentum is developing behind a set of energy-related bills. Senate Bill 220, a so-called energy "omnibus" bill, that includes new energy conservation, low-income heating assistance, emerging energy technology initiatives and a state energy policy statement, is in the Senate Finance Committee.

The House Energy Committee is working on its version of this bill, HB 305, and expects to have a proposed committee substitute ready by March 20 that will be generally similar to the Senate bill.

Although there will be differences between the two -- the House bill creates a new state Department of Energy to combine energy-related functions, for example -- the two versions should be easy to reconcile. The House, meanwhile, passed a proposed state energy policy March 17 as a separate bill, HB 306.

One point of tension between the governor and legislators is over the work on an in-state gas pipeline. House Speaker Mike Chenault's HB 369 imposes new deadlines on work now under way in the governor's office to complete preliminary planning and engineering for a possible 24-inch gas pipeline from the North Slope to Southcentral Alaska. Bob Swenson, director of the in-state gas team in the governor's office, feels the new deadlines would be difficult to meet.

There is also the issue of funding. A $6 million appropriation to continue the work by Swenson's team was not included in the House operating budget and is still up in the air. This is a signal that there are disagreements beween the administration and the Legislature over the in-state gas work.

One source of unhappiness among legislators is that the in-state gas work is focused on a 24-inch gas pipeline that, in the end, would be costly in serving consumers in Southcentral Alaska, as well as needed industrial customers.

Rep. Mark Neuman, R-Big Lake, co-chair of the House Resources Committee, feels the administration has demonstrated a lack of flexibility, for example in considering a larger-diameter in-state gas pipeline that might be more economical.

This indicates that the administration wants to limit the amount of gas coming to industrial customers and consumers in Southcentral in deference to the large-diameter pipeline being worked on by TransCanada Corp., Neuman said. This is in spite of Parnell's comments that he is committed to an in-state gas delivery system.

Chenault, Neuman and other legislators want to ramp up work on the in-state pipeline as an option in case the large-diameter pipeline is seriously delayed. Neuman said the in-state delivery won't work unless there are large industrial customers in Southcentral to share the cost of the pipeline with the regional utilities.

Despite this, the administration's team has also been reluctant to do the needed planning work to woo industrial customers, such as a gas-to-liquids plant.

Harry Noah, the previous director of the governor's gas team, had initiated work on these areas as well as on larger-diameter pipeline options, but those initiatives were shelved by the administration after Noah resigned late last year, Neuman said.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.



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