The Alaska Legislature kicked off its second consecutive special session on Saturday, a day after Gov. Mike Dunleavy and key members of the House said the Senate’s version of a bill offering tax relief to the Alaska LNG project was unworkable.
Dunleavy and the House majority leader, Anchorage Republican Rep. Chuck Kopp, said Friday night that a series of changes on the Senate floor had resulted in a bill that was, as Dunleavy said, “not going to work.”
Key changes on the Senate floor included an amendment specifying how the project would use union labor and a long-sought change to Alaska’s corporate tax code that would subject oil and gas pass-through entities, including S corporations and LLCs, to pay income taxes.
Shortly after convening Saturday, leaders of the House and Senate appointed a conference committee to work out a final draft.
“We're hoping between now and our return date of July 1 that we'll have a working agreement, and something we just ratify on the floor — a one day session, basically,” said House Speaker Bryce Edgmon, a Dillingham independent.
Edgmon appointed himself, Anchorage independent Rep. Calvin Schrage and Soldotna Republican Rep. Justin Ruffridge to represent the House on the six-member conference committee. Schrage will serve as chair.
The House passed its version of the bill in a bipartisan 34-5 vote on June 12. Dunleavy and Glenfarne applauded what they called a “clean bill” that would ease the financial burden on the project and perhaps allow the decades-old dream of a North Slope gas pipeline to proceed.
Sen. Bert Stedman, a Sitka Republican who along with Bethel Democratic Sen. Lyman Hoffman and Tok Republican Sen. Mike Cronk, will represent the Senate on the committee, disputed the idea that the House passed a “clean bill.”
The administration provided the Senate with “four pages of cleanup,” modifications to the House bill, Stedman said. And there are still significant questions left unanswered, he said.
“There's some discussion points and concerns that have been brought up, I think, (that) should be discussed and laid on the public record,” Stedman said.
Chief among those, he said, are the economics of the project and just how much the various elements of the bill affect whether the project can go forward.
“It can't be just a statement (that) it's bad for the economics, therefore it shouldn't be done,” he said. “We want to know, is it really an economic issue, and if so, how big is the impact?”
Dunleavy is “encouraged” by the House and Senate working towards a compromise, spokesperson Jeff Turner said by email.
“It's an opportunity for both bodies to agree on a version of the bill that can incentivize the Alaska LNG Project while still providing steady, predictable revenue to communities along the pipeline corridor using a volumetric tax mechanism,” Turner said.
But can they come to an agreement that satisfies a majority of the House, a majority of the Senate and the governor?
“(The Senate) kind of went out and intentionally murdered the bill yesterday, so if that's the objective, then, no,” said Rep. Will Stapp, a Fairbanks Republican in the House’s minority caucus. “I just don't believe that people really want to do that at the end of the day, so I'm optimistic.”
It was unclear Saturday when precisely the committee’s meetings would begin.
But Stedman said he thought there was some compromise to be reached “if everybody gives a little bit, and stays a little flexible, and we get clarity on some of the concerns,” he said.
Edgmon offered a similar take.
“I feel like this is our chance to get it done right now,” Edgmon said.
