A Citizen’s Guide

Former Wasilla Mayor Sarah Palin is incorrect in her commentary against Senate Bill 316 and House Bill 502 (News-Miner, April 23) when she asserts that “the governor is unfairly replacing the unbiased decision-making of the court with the political decision making of the Legislature.”

This is not a public policy issue that would take away a right to go to court that normally exists, but rather a housekeeping measure to correct an artifact of the Stranded Gas Development Act as it was originally introduced in 1998.

SB316 and HB502 would eliminate a conflict within the Stranded Gas Act in how a proposed gas pipeline contract receives its final approval.

As the act was originally introduced by the Knowles administration, it had a provision that allowed for a judicial challenge and review of the “fiscal interest finding” of the commissioner of revenue. That provision stayed in the bill when it was passed into law in 1998.

As originally constructed, the act put the power in the hands of the commissioner of revenue to approve and sign a gas pipeline contract. This included all terms allowed under the act, including payments in lieu of taxes, etc.

A “best interest finding” is, in effect, a certification by the commissioner of revenue that the requirements of law were met before he signed the contract. As such, it made sense to include a provision allowing for judicial challenge and review of the commissioner’s fiscal interest finding.

However, as the act went through the legislative process in 1998, the Legislature amended the bill to give itself the responsibility for final review and approval in the process for obtaining a gas pipeline contract.

The administrative determinations of the commissioner of revenue then became no more than a recommendation to the Legislature. The administration can take no action based on the fiscal interest finding—it is only a recommendation to the Legislature.

Our recommendation on the gas pipeline contract should be just like our recommendations on any other piece of legislation to the Legislature, none of which are subject to litigation before they become law.

The Legislature has its own experts and its own process to review the contract we propose, just as it does with any other proposal we make.

SB316 and HB502 will simply move the potential litigation to a time after the Legislature acts.

We expect there will be legal challenges to the gas pipeline contract, but those should test the constitutional power of the Legislature, not the revenue commissioner’s recommendations to the Legislature.

While the judicial challenge of the fiscal interest finding is no longer necessary, such a challenge could be used by a person or organization opposed to a gas pipeline project to delay it. Indeed, this may be what is behind Ms. Palin’s commentary, as she has appeared in newspaper and television ads advocating for the liquefied natural gas proposal of the Alaska Gasline Port Authority. Many port authority supporters also oppose the Alaska Highway pipeline proposal that Gov. Murkowski has been negotiating with the three North Slope producer companies.

Regarding SB316 and HB502, we need to ask ourselves which is better— a review and determination by a single judge or review and approval by 60 legislators representing Alaskans in every region of the state.

We believe that the review and approval process is better placed with the Legislature. The provision allowing challenges of the fiscal interest finding is an artifact of the original bill. Repealing it will further improve the stranded gas act process.

Jim Clark is chief of staff to Gov. Frank Murkowski.