Despite pending lawsuit, Gov. Bill Walker signs oil and gas borrowing bill

Gov. Bill Walker speaks to members of the media in April 2015. (Michael Penn | Juneau Empire file photo)

Gov. Bill Walker speaks to members of the media in April 2015. (Michael Penn | Juneau Empire file photo)

Despite a pending lawsuit, Gov. Bill Walker on Wednesday signed legislation allowing the state of Alaska to borrow up to $1 billion in order to pay tax credits promised to oil and gas companies.

Those credits were pledged to smaller firms during the flush years of the late decade, but after oil prices plummeted and the state accrued a multibillion-dollar deficit, Walker vetoed more than the minimum contribution toward the debt.

Many companies had leveraged the promised credits, using them as collateral for loans, and Walker’s actions pinched them financially. A few declared bankruptcy.

Last week, Walker signed a suite of bills that sliced the state’s on-the-books deficit to $700 million per year and opened the door for Wednesday’s action.

The signing took place at Laborers Local 942 in Fairbanks, signaling the governor’s message.

“Alaska turned a corner this year, and we’re ready to tackle the future with new investment and new jobs,” Walker wrote in a statement shared on social media. “We are closing old debts to independent oil and gas entities, helping companies invest in their operations, and putting Alaskans to work.”

Mike Barnhill, deputy commissioner of the Alaska Department of Revenue, spoke with the Empire by phone Wednesday and referred to testimony given during the legislative session. In that testimony, bankers suggested that approving the bill could make it easier for oil companies to raise capital for new projects.

Though the Legislature has approved it and the governor signed it, HB 331 now faces a challenge in the third branch of government. Two Juneau men have sued the state, arguing that HB 331 borrows money for an unconstitutional purpose.

Eric Forrer and Joe Geldhof told the Empire in late May that they don’t have a problem with repaying the oil companies; they object to the way the state is borrowing to pay for the tax credits.

Reached Wednesday by phone, Forrer said he wasn’t surprised by the governor’s signature, given that he had requested the legislation in the first place.

“I’m not attacking this governor. I’m not angry with this governor. I intend to maintain a civil approach to this issue and let it get resolved by reasonable argument in the courts,” he said.

Forrer said his determination hasn’t wavered since he last spoke with the Empire.

“I’m emphatically committed to this,” he said. “I’m going to the supreme court if necessary.”

Austin Baird, a spokesman for the governor, said by phone, “the governor is confident that the courts will side with the department of law and rule that HB 331 is constitutional.”

If the court battle is a protracted one that prevents the state from borrowing money, oil companies won’t be left entirely in the lurch. The state’s operating budget, approved by lawmakers, contains contingency language that calls for up to $100 million to be paid from the state’s general fund if bonds are not issued before June 30, 2019.


• Contact reporter James Brooks at jbrooks@juneauempire.com or 523-2258.


More in News

Kenai Peninsula Education Association President LaDawn Druce, left, and committee Chair Jason Tauriainen participate in the first meeting of the Kenai Peninsula Borough School District’s Four Day School Week Ad Hoc Committee on Wednesday, Jan. 10, 2024, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
4-day school week committee adjourns

The committee will deliver recommendations to school board in July

Soldotna Elementary School Principal Dr. Austin Stevenson points out corroded insulation outside of the school building on Friday, Sept. 30, 2022 in Soldotna . (Ashlyn O’Hara/Peninsula Clarion)
Soldotna Elementary awaits action on approved bond

Almost two years after public OKs bond, borough asking for more time

Soldotna Police Chief Dale “Gene” Meek stands in his office on Tuesday, Aug. 30, 2022, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Soldotna police chief resigns

The resignation was effective immediately on Friday, City Manager Janette Bower confirmed Monday

A sign along a trail to Exit Glacier marks the spot to where the toe of the glacier reached in 2010, photographed on June 22, 2018. (Photo by Erin Thompson/Peninsula Clarion)
Exit Glacier reopened for summer, snow and bears reported

Visitors should check the park website for updated conditions and ensure they are prepared before visiting the area

Dale Chorman stands with his wife, Dianne. (Photo provided by Tom Kizzia)
Long-time Homer resident, photographer dead after Sunday moose encounter

Troopers on Monday identified the victim as 70-year-old Dale Chorman

A sign warning of a June 28, 2021, bear attack is placed at the head of the Kenai River Trail on Skilak Loop Road in the Kenai National Wildlife Refuge on June 30, 2021. (Photo by Erin Thompson/Peninsula Clarion)
Federal wildlife officers seek information about early-May black bear poaching

Officials think the poaching happened near the east entrance of Skilak Loop roughly 2 miles from Jims’ Landing

Alaska State Troopers logo.
Ninilchik woman dead after Tuesday collision

The woman was attempting to cross the Sterling Highway from Oil Well Road when she was struck by a pickup truck

Graduates listen to Connections Homeschool Principal Doug Hayman speak during the school’s commencement ceremony on Thursday in Soldotna. (Ashlyn O’Hara/Peninsula Clarion)
Graduates listen to Connections Homeschool Principal Doug Hayman speak during the school’s commencement ceremony on Thursday, May 16, 2024 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
‘Expect a lot from yourself and from others’

Connections Homeschool students accept diplomas at commencement ceremony

Most Read