Lawmakers consider possible amendments to Palin's gas line bill

Proposed changes include extending tax exemption

Posted: Thursday, March 29, 2007

As lawmakers wrap up testimony from Gov. Sarah Palin's administration and the oil and gas industry this week, potential amendments to Palin's gas line bill have emerged.

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For two weeks, the Senate Resources Committee and the House Oil & Gas Committee have dissected the Alaska Gasline Inducement Act, or AGIA.

Some suggested changes are as simple as language clarity, but others are far-reaching such as extending the production tax exemption.

The chairmen of both committees said they want to complete the lion's share of their work by early next week before the Legislature goes on Easter break Thursday.

When they return, they hope for the bills to be turned over to the Senate Judiciary Committee and the House Resources Committee.

Sen. Charlie Huggins, R-Wasilla, and chairman of the Senate Resources Committee, said he has been working with the administration to draft amendments, but has no specific wish list yet.

Meanwhile, Rep. Vic Kohring, R-Wasilla, chairman of the House Oil & Gas Committee, presented a list of 28 items for consideration to his committee this week.

The list, he said, does not constitute an official representation of what will or will not be amended.

"I'm not here to say I've got all the answers by a long shot," Kohring said. "We've got some great minds in the committee.

"We're going to make the bill better, but we are not going to make it 100 percent, so I'll leave the rest of it to subsequent committees."

Kohring outlined several priorities for his committee:

• How the state will weigh the seven criteria used to review the applications. Some lawmakers have expressed concern about them being too broad and subjective, thus also prohibitive in making an informed decision on the proposals.

• The Legislature's role in approving the winning proposal. The bill gives the lawmakers 30 days to review a proposal selected by the revenue and natural resources commissioners. Lawmakers are concerned about a bid being presented within 30 days of session ending or during an interim.

• The role of a state coordinator. This person will oversee "expeditious performance of all activities by state agencies with respect to the project," according to the bill. House committee members have called for more detail on the job description, to whom that person reports and the job's duration.

Rep. Mike Doogan, D-Anchorage, and a member of the oil and gas committee, said he's mindful that the bill still is Palin's and that no one is trying to run roughshod over it.

"My efforts are toward making her bill a better bill, not changing it into a different bill," Doogan said. "Representatives from the administration would agree some changes are necessary just to improve it."

Some of the heavy-hitting items - such as the production tax break and a $500 million inducement - could be passed on to subsequent committees for additional review.

"The first committee, we can make the box a little smaller," said Rep. Ralph Samuels, R-Anchorage. "With the next committee up, we'll get more of a consensus on these things because you will have had more people looking at it."

On Wednesday, members of the administration told the Senate Resources Committee that the state does not see the need to make any major changes to the bill.

Nor should the state take up where Gov. Frank Murkowski left off last year, said Department of Natural Resources Commissioner Tom Irwin.

The state had a contract in principle with North Slope producers Exxon Mobil Corp., BP PLC and ConocoPhillips, last year but the Legislature would not vote on it.

Many lawmakers said the contract was too generous to the producers and believed it did not foster competition.

When Palin was elected in November, she vowed to create a more competitive arena and met with several companies interested in the project just days after being sworn in.

"We are accountable to make that happen," Irwin told the Senate Resources Committee. "If AGIA is going to make that happen, don't destroy the important parts of AGIA."

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