Here’s what didn’t pass in final days of legislative session, and on hold until 2024

The end of any legislative session sees drama and strong public interest in what passed in the final hours, but what didn’t pass is equally important. In the middle of a two-year legislative cycle bills that didn’t make it across the threshold in the first session are still active in the second session.

A major increase in oil and gas taxes, for example, will wait until 2024. For a while it appeared that SB 114 and SB 122, raising taxes on oil and gas producers, had a head of steam up and might at least pass the Senate this year.

But now both bills remain in Senate committees for the interim SB 114 in the Finance committee and SB 122 in the Senate Rules Committee. Activity is expected to resume in the 2024 session on these.

SB 114 reduces the per-barrel production tax credit available for North Slope producers and also requires producers organized as S Corporations to pay the state corporate income tax. They are presently exempt. SB 122, as originally written, requires out-of-state corporations selling online in Alaska to pay corporate income tax.

SB 122 was amended in the Senate Finance Committee to include the oil producer S Corporation provision, which many see as making the digital income bill an alternate vehicle for oil taxes if SB 114 is held. Strong push-back from the oil and gas industry in Senate Finance Committee hearings may have caused legislators to slow the momentum on these. The House is strongly opposed to these bill, so senators likely figured they didn’t need another late-session fight with House leaders.

Another issue that may be held until 2024 is the state’s assumption of “primacy” on Section 404 federal wetlands permitting. A $4.9 million appropriation is needed for the state to assume management of this program. The money was in the House budget but not in the Senate’s, so the final outcome will await …

Meanwhile, there is a resolution asking the congressional delegation to help secure federal funds to help the state pay startup costs (this has been done in several states).

This could be a stopgap that would allow the state to start up work on taking over the program. The ongoing cost is estimated at about $4.8 million a year but it is anticipated that fees charged to applicants for permits will cover most of the costs after the startup. This is done with other federal programs managed by the state, such as air quality permits issued by the state under the federal Clean Air Act.

Other legislation that will now wait until next year includes authorization for a “Green Bank” to provide lower-cost financing for small private energy conservation and small renewable energy projects, mostly for residential and commercial structures. This was in HB 154 and SB 125, wehich reached an advanced stage in both the House and Senate but will now wait for 2024.

If the program is approved the state’s Alaska Housing Finance Corp., or AHFC, would set up a nonprofit subsidiary to apply for federal funds and work with Alaska financing entities to put the program in place. It would take advantage of new federal funds made available through President Biden’s carbon-reduction and renewable energy initiatives.

The U.S. Environmental Protection Agency’s new Greenhouse Gas Reduction Fund has $27 billion in available funding. Applications will open this summer. These will be competitive grants available only to nonprofits, such as one that AHFC would set up under HB 154 and SB 125.

Another bill that will wait until 2024 is one establishing renewable energy portfolio standards, or mandated goals, for electric utilities on Alaska’s “railbelt,” or regions from the Kenai Peninsula to Interior Alaska and including Matanuska Electric Association’s territory. The bills authorizing this are SB 101 and HB 121.

The bills are controversial within the energy community. Electric utilities don’t like having mandates to achieve specified percentages of renewables in their power supply portfolio. Renewable energy advocate are pushing hard for it, complaining that the utilities are foot-dragging. Such portfolio requirements are common in other states, advocates say. Utilities say this is easier in the Lower 48 because the regional power grids are interconnected, making it easier to shift wind, solar and hydro power.

Meanwhile, a bill streamlining state timber sales, will also wait until 2024. HB 104 has also become controversial and while the Senate Resources Committee adopted a possible compromise measure the bill will stay in the committee until next year.

Sponsored by Rep. Mike Cronk, R-Tok, HB 104 started out as a relatively simple measure to streamline sales of state timber threatened by fire or insect damage. It was expanded in the House Resources Committee to broaden and lineralize commercial timber sale procedures in state forests.

That brought sharp objections from several House members and although the bill passed the House the dispute carried over to the Senate. The new substitute softens some of the changes from the original bill. Cronk, through his staff, told the committee he would accept the changes but wants to see state natural resource commissioner John Boyle’s follow-through on a commitment to review current state sale procedures and to consult with owners of local small sawmills. Boyle said there’s currently more demand for wood products in the Interior than local mills can supply from current state timber sales.