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AGIA set to move out of Senate Judiciary House Resources still taking testimony, has hearings scheduled through April 28; Senate bill to Senate Finance; House also has Finance referral Kristen Nelson Petroleum News
The Alaska Senate, apparently benefiting from having half as many members as the House, is moving the governor’s Alaska Gas Inducement Act along at a faster pace than the larger body.
They were only a couple of days apart in getting bills out of their first committee referrals, the House Special Committee on Oil and Gas and the Senate Resources Committee, but Senate Judiciary is preparing to move a committee substitute April 19, while House Resources is still taking testimony and has the bill scheduled through April 28.
Senate Judiciary, a five-member committee, also benefits from having three members familiar with the bill from Senate Resources. The much larger nine-member House Resources has only two members also on Oil and Gas.
In both bodies AGIA goes next to Finance.
Final legislative timing also a concern The administration has said it wants to get AGIA passed this session so that it can begin the application process.
As Senate Judiciary discussed amendments to the committee substitute April 18, another concern over legislative timing received some attention — how long the Legislature will be given in the bill for its final approval and what will take place during that approval.
The Senate bill provides the Legislature with 60 days to approve a licensee once the president of the Senate and the speaker of the House have received the determination from the commissioners of Natural Resources and Revenue that a licensee has been selected. The rules committee of each house of the Legislature is responsible for introducing a bill providing for approval of the license.
Sen. Lesil McGuire, R-Anchorage, said she was concerned about the tremendous pressure and leveraging that would go on in the Legislature during a license approval. She said she was concerned about the political ramifications if the Legislature wasn’t able to approve a license in 60 days.
Marcia Davis, deputy commissioner of Revenue, told the committee that the administration wanted legislative involvement. If the Legislature had concerns about a license and was raising a lot of red flags the administration wanted an opportunity for the Legislature to unify and stop issuance of a license. The administration’s bill had 30 days for the Legislature to disapprove issuance of a license; both House and Senate have now changed that to 60 days to pass a bill approving the license.
Sen. Gene Therriault, R-North Pole, said he was initially concerned about 60 days being enough time but said with provisions now in the bill legislative evaluation could begin as soon as the administration starts working on applications, which would enable the Legislature to hit the ground running.
He asked Davis how legislative approval would affect the ability of a licensee to get out and do 2008 field work.
A 30 day legislative approval would make that field work easier, Davis said, because lining up summer workers and equipment is a risk of capital until a licensee has approval.
Winner and loser track in Legislature Don Bullock, an attorney with Legislative Legal Services, said he was concerned about how much time it would take with commissioners presumably testifying. And if there is a competing project, would the Legislature want to look at both, he asked.
Committee Chair Hollis French, D-Anchorage, said he envisioned both a winner track and a loser track in the Legislature, with losers wanting consideration of why their project wasn’t selected.
McGuire agreed that the licensee, as well as unsuccessful applicants, would be parading through the Legislature. Thirty days is too short, she said; 90 too long; 60 may be about right.
Inducement vouchers The committee substitute includes a voucher provision for those who acquire shipping capacity in the first open season — but do not own gas. Davis said the provision allows the buyer of gas from a producer to be able to acquire capacity and place gas into the pipe and ship it. The voucher goes to the producer who can redeem it for the tax and royalty inducement under the act for the gas shipped in the firm transportation capacity described in the voucher.
Davis said the administration’s gas team has been working on this provision and plans to tweak it further in the next committee.
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