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Three things to watch for in the Legislature

Posted: March 18, 2013 - 12:01am

JUNEAU — This could be a pivotal week in the debate over changing Alaska’s oil tax structure, with all eyes on the Senate and whether a plan crafted late last week can garner enough votes to pass.

Here are three things to watch for this week:

Oil taxes

Are there 11?

That’s the question surrounding the oil tax plan crafted by the Senate Finance Committee. The proposal will need 11 votes to pass. Debate on the plan could begin as early as Monday on the Senate floor.

Senate Minority Leader Johnny Ellis, D-Anchorage, said the vote will be “probably the most dramatic and most impactful decision that we as legislators will ever make in our legislative lives.”

There’s a lot at stake.

Supporters say the plan would make Alaska more competitive for investment dollars and should lead to more oil production, a point underscored by consultants who testified. Alaska relies heavily on oil revenues to run. Production has been on a downward trend since the late 1980s but higher prices in recent years have helped mask the impact of the decline.

Critics say the proposal would give too much to oil companies, without guarantees the state will get anything in return. They say more time is needed to fully understand the implications of the bill, arguing that once something is given up, it can be very hard to get it back.

A consultant to the administration told the committee last week it would take an additional estimated 90,000 barrels of oil a day to offset the projected fiscal impact of the bill from 2014 to 2019.

The House allowed the Senate to take the lead on the issue, but House Resources is ready to pick the issue back up, with SB21 on its schedule this week, pending referral from the Senate.

The committee had started hearings on the House version of the governor’s original oil tax overhaul before letting the Senate take over, freeing the committee to work on other bills in the meantime.

The Senate Finance version built off proposals put forth by Gov. Sean Parnell and Senate Resources.

Budget

The Senate Finance Committee has scheduled public testimony for Friday and Saturday on the state operating budget.

The House last week passed a $9.8-billion proposed operating budget, which the Senate will now consider. Legislative leaders in both chambers have said they want to limit growth of state government amid concerns about declining oil production. Senate Finance Co-chair Pete Kelly, R-Fairbanks, also has said he thinks the state is spending too much.

In-state gas line

The House Finance Committee plans to hold its first hearing on a bill aimed at advancing an in-state natural gas pipeline project. One of the prime sponsors of HB4, Rep. Mike Hawker, said the bill would empower the Alaska Gasline Development Corp. “to lead Alaska into a natural gas future.”

“This is Alaska’s opportunity to advance the state’s interests to get Alaskan gas into the hands of Alaskans on our schedule, without waiting for others to determine our future,” Hawker, R-Anchorage, added in his sponsor statement.

The city of Valdez has started a PR campaign opposing the bill, advocating instead for a large diameter gas pipeline.

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