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Administration’s bond bill on House floor
Kristen Nelson Petroleum News
The House Finance Committee has passed out a committee substitute for House Bill 331, the administration’s proposal to issue bonds to pay for oil and gas tax credits. The bill moved to the House floor May 2, immediately after the committee action, and was held to the May 3 calendar.
Legislators have been concerned about the issue of whether issuance of the bonds would be constitutional, an issue raised by Sen. Bill Wielechowski, D-Anchorage. The Legislature’s legal division has told legislators that it cannot say with certainty that bonds issued under HB 331 would be constitutional.
Both the Department of Law and the state’s bond counsel have argued that the bonds would be constitutional. In a lengthy April 27 letter on the issue to the co-chairs of House Finance, arguing that the bonds would be constitutional, the department noted that the letter was not a formal opinion by the attorney general. “We note that if the bill passes and the process toward issuing these bonds is initiated, no bonds will be issued without the certification by both the Department of Law and State bond counsel that it is the respective belief of each organization that the bonds are permitted under Alaska law.”
If HB 331 passes the House, it would need to be taken up by Senate Finance, which has yet to hear the companion bill, Senate Bill 176.
Other bills A Senate bill, SB 125, extending the ability of the Alaska Industrial Development and Export Authority to issue bonds for the Interior Energy Project, which currently expires June 30, passed the Senate in February and has been in House Labor and Commerce since. The bill would extend the ability to issue bonds to July 1, 2023. The bill’s next referral is to House Finance. The bill, sponsored by Senate President Pete Kelly, R-Fairbanks, passed the Senate 19-0 and appears to have broad bipartisan report from Interior legislators, with Rep. Scott Kawasaki, D-Fairbanks, also listed as a sponsor.
The House version, HB 261, by Rep. Steve Thompson, R-Fairbanks, has been in House Labor and Commerce without a hearing since January; Kawasaki is also listed as a sponsor on that bill.
HB 322, increasing oil spill fines which can be charged by the Alaska Department of Environmental Conservation, passed the House 22-16 on April 27 and has been referred to Senate Resources. The bill, which increases fines, was amended on the House floor. It originally called for an annual update of spill charges based on the consumer price index. That was changed in House Finance to once every three years; it was changed on the House floor to once every 10 years.
The bill had not been scheduled for a Senate hearing when this issue of Petroleum News went to press.
HB 411, the House Finance Committee’s oil and gas production tax bill, has been forwarded to the Legislative Oil & Gas Working Group established in HB 111 last year, with a request that the working group use all three consultants available to the Legislature “to obtain an array of perspectives.” The working group is requested to submit a report and proposed legislation to the Legislature by Jan. 1.
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