Alaska News

Alaska Senate abruptly adjourns, calling Parnell's actions 'unauthorized'

In what appears to be an unprecedented move that may foretell a constitutional showdown, the Alaska Senate on Thursday adjourned, rejecting Gov. Sean Parnell's order to take oil tax legislation off the table in the special session that Parnell himself called.

Relying on a legal opinion the Senate received from Legislative Legal Services, the Senate called the governor's actions--calling for a special session debating on whether to lower oil taxes, then rescinding that call--unconstitutional. In a vote of 15-2, with three members not present, the Senate called Parnell's actions "unprecedented, and unauthorized" before the body gaveled out

The House majority will caucus on Friday to decide what to do. It could stay in session, call the Senate back to finish the special session or call it a day and gavel out.

Parnell could also call the Legislature back for yet another special session or challenge the Legislative Legal Services opinion.

On Thursday evening, however, those decisions were up in the air. Because of this and the confusion, Senate President Gary Stevens said in a press conference that "the Senate had no choice but to adjourn."

It will continue to hold hearings on Friday, however, related to the Point Thomson settlement and price gouging.

The legal opinion, written by Legislative Legal Services Director Doug Gardner, said that the power to remove a subject during the session would give the governor unprecedented powers "not contemplated in the constitution," he wrote. "It would be, in effect, like the governor saying, 'I don't like the bill you are considering, so I'll prevent you from passing it,'" Gardner wrote.

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Gardner said that if the governor doesn't like a bill, his constitutional remedy is the veto.

Stevens said that neither Alaskans nor the Senate were "quitters," but that the body had no other options.

All that remained on the special session agenda, Stevens said, was controversial legislation on a small-diameter gasline that the Senate knew it couldn't get through committees in the two weeks left in the special session. Besides, because Parnell allegedly overstepped his constitutional bounds, the legal opinion the Senate asked for declared the session dead. Anything passed in the session could be subject to a legal challenge.

The political drama centers around oil taxes, which fund about 90 percent of Alaska's bulging state coffers.

Cutting oil taxes has dominated Alaska politics, with Parnell advocating for big cuts -- upwards of $2 billion a year -- that would most benefit ConocoPhillips, Exxon Mobil Corp. and BP. Parnell and others have been trying to boost oil production by rolling back tax hikes approved by the Legislature in 2007 when Parnell served as lieutenant governor under Sarah Palin.

But there haven't been any guarantees, and the standoff between lawmakers, Parnell and the oil companies has played out like a game of Risk at a time when redistricting has put nearly every legislative seat up for grabs, and when Parnell has linked much of his political clout to cutting oil industry taxes.

After a tumultuous 90-day session in which oil taxes figured prominently, the Alaska Legislature gaveled out April 16 without passing an oil tax bill. Parnell called lawmakers back for a special session, which started two days later, to debate his most recent attempt at what he and the oil industry call "meaningful oil tax reform."

But things did not go well for the governor the past two weeks, particularly with the Senate, which has been skeptical of significant cuts to the state's oil tax system. Parnell's administration faltered under tough questioning from the Senate. The more they did so, the harder Parnell seemed to push back against the Senate, resorting to accusations that the co-chair of the Senate Natural Resources Committee Joe Paskvan called "unhinged."

Even the Republican dominated House, which had passed Parnell's previous bill, was begining to question Parnell's latest version of an oil tax bill. House Majority Leader Alan Austerman, R-Kodiak, said that among other things that "surprised" him this session was how ill prepared Parnell's administration has been defending the tax break.

So on Wednesday night, reportedly with oil industry blessing, Parnell rescinded his call to deal with oil taxes. His announcement created confusion in the halls of Juneau. Staffers scurried. Politicians huddled. Lobbyists strategized.

Some were wondering if an oil tax bill that the Senate favored against the wishes of Parnell and the big three, which died in the regular session, could still be alive. That bill that would give oil producers, especially independents and newcomers to Alaska's oil patch, a big tax break. Perhaps it could be added to the in-state gasline bill that Parnell ordered the Legislature to work on.

In a press conference Thursday evening, Rep. Mike Chenault, a sponsor and big booster of the in-state line, said that he didn't think such a maneuver had been seriously considered.

He and Rep. Mike Hawker, R-Anchorage, a co-sponsor of the in-state line, blasted the Senate's actions. "Unfortunately, the Senate's actions have delayed in-state gas for a year -- or probably longer," Chenault said.

He also suggested that someone -- perhaps the governor -- take the Senate to court to challenge the recent legal decision. That decision, he said "hasn't been tested in court," and maybe someone needs to be.

"Abandon hope, all ye who enter here," said Hawker referring to the Legislature and the state's long, and deferred, dreams of getting a gasline built.

But some legislators, particularly in the Senate, have said that the small diameter pipeline bill would have given the agency charged with building it, the Alaska Gasline Development Corp., unprecedented powers. Hawker's response to that criticism mirrored the Senate's response when dealing with the big three producers on oil taxes.

"We do need a powerful agency," Hawker said. "When you're negotiating with Exxon Mobil, you better be equally powerful, equally strong and have equal resources on the table."

Contact Amanda Coyne at amanda@alaskadispatch.com

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