Aug 6 - McClatchy-Tribune Regional News - Wesley Loy Anchorage Daily News, Alaska

The Alaska House of Representatives late Tuesday passed a nearly $1 billion spending bill that includes funding for a potential $1,200 "resource rebate" for Alaskans plus preparations toward a natural gas pipeline.

The bill now moves to the Senate, which must act on it before the special legislative session ends at midnight Thursday.

The bill that passed Tuesday night on a 34-3 vote is an appropriations bill and doesn't necessarily mean the $1,200 rebate is assured.

The full Legislature first will need to pass separate energy relief legislation that includes the rebate, and right now lawmakers in the House and Senate are far apart on their ideas for how to help Alaskans struggling with high fuel and other energy costs.

The House today is expected to take up an energy bill that includes the $1,200 rebate as well as a temporary suspension of the state's 8-cent tax per gallon of gasoline.

The Senate already has passed its own energy bill that includes an array of state electricity and home heating subsidies plus a much smaller rebate of $500 per Alaska resident.

House and Senate leaders appear destined for a conference committee to try to hammer out a compromise, and many in the Capitol don't think it will be easy.

Of the $977.9 million appropriations bill the House passed Tuesday night, the biggest chunk, $744 million, would go to pay an estimated 620,000 Alaskans a $1,200 rebate, should lawmakers ultimately decide that's the amount they want to pay.

Another $50 million in the bill is to fund preparations for TransCanada Corp.'s proposed natural gas pipeline.

In addition, the House appropriated $60 million to continue a popular home weatherization program. And about $53 million would go toward repairing the rough Dalton Highway, an industrial artery leading north of Fairbanks to the North Slope oil fields.

The final two days of the special session are likely to be tense ones in the Capitol as leaders try to find a compromise on energy relief. Much of the tussle centers on how to spread aid equitably between rural and urban areas.

Some lawmakers don't support subsidies and a $1,200 rebate, the amount Gov. Sarah Palin originally proposed.

During a hearing in the House Finance Committee on Tuesday, Fairbanks Republican Rep. Mike Kelly called such aid "morphine and welfare payments."

Handouts don't build "self-reliance and character," Kelly said, they just let people sleep in and put off energy problems for another day. He argued the state ought to spend its money on projects such as the Susitna hydroelectric dam or a road to Nome.

Bethel Democratic Sen. Lyman Hoffman, a powerful finance leader in the Senate, countered that the state is raking in billions of dollars in surplus oil revenue and can well afford a temporary relief effort to help strapped Alaskans get through the next two winters.

"Sure, I would like the road to Nome. But if I can't afford to live here, that road is going to do me no good," Hoffman said.

One major component in the Senate's energy relief bill would have the state cover the cost of heating oil above $3 a gallon. Heating oil is widely used in villages and in the coastal communities of Southeast Alaska.

Rep. Kevin Meyer, R-Anchorage, opposes that idea, saying fuel sellers would have no incentive to keep costs down knowing the state pays above $3.

Meyer initially had supported putting more money toward electricity subsidies plus a heating assistance program for low-income people, but he pulled that funding Tuesday in favor of a simpler bill featuring the $1,200 rebate and the temporary suspension of the state's motor fuel tax.

"We've reverted back to saying, 'Here's $1,200, you decide best how to deal with your heating and fuel costs.' It's easier to let the people decide themselves rather than us," Meyer said.

Some rural representatives, however, were upset the subsidies fell out of the House bill.

"Twelve hundred dollars in one part of Alaska does not meet the same needs that $1,200 in another part of Alaska does," said Rep. Mary Nelson, D-Bethel.

The Associated Press contributed to this story.

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