JUNEAU -- In a six-minute hearing today, the House Rules Committee expanded Gov. Sean Parnell's bill to subsidize in-state refineries by adding the shuttered Agrium fertilizer plant in Nikiski to the list of entities qualifying for state aid.
The amendment, introduced by House Speaker Mike Chenault, R-Kenai, was offered at 9:25 a.m. in the committee.
The bill would offer a 40 percent tax credit or cash refund for "qualified infrastructure expenditures" by refineries. As proposed, if a refinery spends $25 million, it would qualify for a $10 million subsidy.
When it arrived at the committee, the bill applied to the Petro Star refineries in North Pole and Valdez and the Tesoro refinery in Kenai. The soon-to-be-shut Flint Hills refinery in North Pole would qualify, as well, if a buyer is found.
The amendment would expand the scope of the credit to include the fertilizer plant, which is located in Chenault's district.
A staff member for Chenault, Tom Wright, described the amendment this way: "What this amendment does basically is to put the Agrium plant into the bill as far as the tax credits and any other credits are included. Right now, Agrium is looking at inspecting, assessing and possible renovation of the existing facility."
The project would cost $200 million with a temporary workforce of about 440 workers, he said. Some $75 million in labor costs would be spent over a two-year period, he said.
"The amendment also changed the definition to include urea and ammonia," he said.
Public testimony opened at 9:26 a.m. No one testified.
"I want to make sure we give everybody an opportunity who's there," said Chairman Rep. Craig Johnson, R-Anchorage.
The committee adopted the $10 million amendment at 9:27 a.m., two minutes after it was introduced.
Anchorage Rep. Mike Hawker asked that as the bill moves forward the Department of Revenue take a "very good look at those provisions and make certain that they are the most cost-efficient and technically effective means of accomplishing the desired outcome."
He also suggested that the Department of Revenue and the Department of Natural Resources look at the definition of "qualified infrastructure expenditures."
The 40 percent credit would be for "an expenditure directly attributable to the in-state purchase, installation, modifications, adjustment or other alteration of tangible personal property for the manufacture or transport of refined petroleum products or petroleum-based feedstock."
The Department of Revenue has said it will not adopt regulations regarding the bill so the "statute has to be crystal clear and very understandable by everyone," Hawker insisted.
At 9:29 a.m., Natural Resources Commissioner Joe Balash said, "I would like to compliment the Speaker on the amendment. I think in principle we support what he is trying to do."
He said the administration had just seen the amendment and would be taking a "hard look at all of the words . . . I just hope that means you'll be flexible on your schedule sometime this weekend for concurrence."
There were no questions from the committee members and the panel agreed to advance it to the full House at 9:31 a.m.
Johnson said forwarding the bill does not necessarily mean that members support it.
Anchorage Democratic Sen. Berta Gardner said in a press conference after the hearing that it looks "like the Legislature's never met a tax incentive or a tax credit we didn't endorse if it's for the oil industry," and she is increasingly angry that education funding is not given a priority.
"The oil industry just can't get enough," she said.