By BECKY BOHRER | The Associated Press

JUNEAU – A vote could come this week on whether the state should cut oil production taxes as a way to boost investment.

Whether the vote will be on Gov. Sean Parnell’s plan, or a version of it crafted by the House Finance Committee, remains to be seen. The committee plans to unveil its proposal later Monday.

Leaders of the House’s Republican majority are pushing hard to get a bill passed before the Legislature adjourns next month. For weeks, lawmakers have heard dire predictions about the fate of the trans-Alaska pipeline if the trend of declining oil production isn’t stemmed or reversed, quickly. GOP leaders, like House Speaker Mike Chenault and Rep. Craig Johnson, consider passage a bill overhauling the state’s tax regime as critical to addressing throughput concerns.

Even if a bill passes the House, its prospects in the Senate are dicey, if not dim. A leader of the Senate Finance Committee has made clear his desire to delay action at least until lawmakers receive and review fiscal regime analyses they’re expecting later this year. And there remain questions about what Alaska will get in return and whether Parnell’s bill goes too far, too fast in altering the tax structure.

Johnson, R-Anchorage said he hasn’t received any commitments from industry that investment will rise if taxes are cut. But he told reporters Monday that he has “great confidence” that oil production will continue declining if the state does nothing.

Critics have charged that Parnell’s plan is little more than a corporate giveaway. But Parnell believes lower taxes will lead to more investment — and if it doesn’t, he has said lawmakers are free to tinker with the tax system again.

The Department of Revenue, in what has been cast as a worst-case scenario, said the state could begin running budget deficits by fiscal year 2013 if Parnell’s bill passes and there’s no new production. By 2020, the deficit would be around $2.8 billion and reserves would be around $10.3 billion, the analysis showed.

Those figures are most drastic than what Revenue Commissioner Bryan Butcher showed The Associated Press late Friday. Butcher blamed a computer glitch.

The Associated Press

JUNEAU – Military members under the age of 21 would be allowed to legally drink and smoke under a bill introduced by an Alaska lawmaker.

Republican Rep. Bob Lynn says that neither he nor the bill advocates drinking or smoking as a general practice. But he says both support “equal treatment for adults and the de facto adults in America’s military.”

The legal drinking age in Alaska is 21. The legal smoking age is 19.

The bill, HB 210, has been referred to two House committees for consideration.

The Associated Press

JUNEAU – A new report ranking Alaska No. 2 nationally for a business-friendly climate prompted some state business leaders to question it, saying there are other factors that change the picture.

The business tax climate index by the Tax Foundation in Washington measures how state tax laws affect economic performance.

“This report shows Alaska is open for business,” said state Sen. Hollis French, D-Anchorage. “In fact, the state ranks as having one of the most friendly business tax climates in America.”

But the Juneau Empire reported that officials in the Alaska State Chamber of Commerce said the business climate is not as rosy as the number suggests.

Chamber President and CEO Rachael Petro said the report doesn’t measure corporate taxes or consider worker’s compensation costs.

Petro said that Alaska has one of the nation’s highest worker compensation costs, making it a significant cost of doing business.

Petro also said it’s well known that taxes on the oil industry provide nearly 90 percent of the state’s general fund, leaving only the remainder to be made up by other corporate taxes and income and sales taxes — which are not statewide taxes in Alaska.

“The bottom line is we’re not attracting investments to Alaska,” Petro said. “Businesses are constantly moving out of state, and it’s very discouraging. This is something that has to be changed.”

Chamber Board Chairman Kip Knudson agreed with Petro and said private sector investment is needed.

Knudson noted another organization, the Council on State Taxation, shows Alaska as the worst in the nation for both state and local business taxes as a percentage of all taxes and for percentage of private sector gross national product.

Knudson also said other organizations or publications, such as CNBC and Forbes, rank Alaska among the worst for business.

“I have more faith in that broader look that what the foundation has produced,” he said.

The Tax Foundation website describes it as a nonpartisan tax research group founded in 1937. It is known for its annual calculation of “Tax Freedom Day,” an estimate on when the nation has earned enough income to fund its annual tax burden.

By BECKY BOHRER | The Associated Press

JUNEAU – A Republican lawmaker said Monday that he sees no ethical conflict between his serving as a volunteer firefighter and a bill he’s proposing that would give property tax breaks to volunteer firefighters.

Rep. Eric Feige, of Chickaloon, said the bill doesn’t single him out for benefit. It’s intended to encourage more people to join volunteer fire, emergency medical and rescue organizations, he said.

Joyce Anderson, administrator of the Select Committee on Legislative Ethics, told The Associated Press that if a bill affects an entire group of citizens the same — as it appears this bill would — then it is not considered a conflict of interest under Alaska law.

But she said Feige also should probably declare his position as chief of Chickaloon Fire Services Inc. on the House floor if the bill comes up for a vote. It would then be up to his colleagues to decide whether he could vote on the bill.

The measure would exempt taxation on the first $200,000 of assessed value of the volunteer’s primary home. The exemption also would apply to a widow or widower of someone who had been an active fire, rescue or emergency medical volunteer.

By CHRIS STEIN | The Associated Press

JUNEAU – Lawmakers scrutinized Alaska Gov. Sean Parnell’s approach to establishing a health care exchange Monday, with a leader of the powerful Senate Finance Committee questioning whether Parnell intended to consult with the Legislature on the “major public policy question.”

Jon Sherwood, medical assistance administrator for the state health department, told the committee that Parnell planned to establish an exchange using his executive powers. Parnell did not support a bill by Sen. Hollis French, D-Anchorage, to establish an exchange through the legislature, Sherwood said.

Sen. Lyman Hoffman, D-Bethel and the committee’s co-chairman, asked whether Parnell planned to consult with the Legislature on the issue.

Sherwood replied that Parnell would seek legislative input at a later stage in the exchange’s establishment.

“We’d like to be further along in our analysis before we feel comfortable talking about specifics of the legislation,” Sherwood said.

Sen. Lesil McGuire, R-Anchorage, took issue with Parnell’s rejection of a $1 million federal grant to fund the planning stages of the exchange.

“I wish that decision hadn’t been made,” McGuire said. “We don’t have to throw out the baby with the bathwater.”

Alaska was the only state not to accept federal funds for the program, and in doing so, may have denied itself access to future federal grants for the operations of the health exchanges.

That was done to allow the exchange to be implemented without federal entanglement, Sherwood said.

Alaska is one of 26 states named as plaintiffs in a Florida court case challenging the legality of the federal health care overhaul. The judge in that case deemed the overhaul unconstitutional but allowed the law to stay in effect while his ruling is being appealed.

Parnell has been implementing aspects of the overhaul.

By BRIELLE SCHAEFFER | Peninsula Clarion

KENAI – With a little bit of elbow – and some french fry – grease, Paul Reger can do just about anything.

Well, at least he’s hoping to.

The 62-year-old Soldotna resident uses old french fry grease to warm his shop, run his car and maybe one day heat his home.

“I got everything collected up; I’ve just got to find the time to do it,” Reger said. “A lot of big ideas. Hopefully it works.”

Since 2006, the easygoing Reger has been filtering old french fry oil picked up from local restaurants, filtering it and mixing it with diesel to run his impeccable baby blue 1976 Mercedes 300D.

“Runs great — I don’t have to do anything to the car,” Reger said.

And it takes the bite out of the rising fuel costs.

The Mercedes gets 25 miles to the gallon as it is, but by cutting it with the grease he’s getting 50 miles for each gallon of diesel he buys.

Reger, a retired City of Soldotna heavy machine mechanic, only uses the car as a commuter during the summer to go to town for grocery runs, he said. He avoids driving it in the winter because of the salt used to de-ice roads.

“That darn salt destroys the old car,” he said.

But, he said, he’s hoping to put an old diesel engine into a little pickup to run with his french fry grease-diesel year round.

At his home and shop on Birch Hill Drive last week, Reger, clad in a navy blue jumpsuit, hand-cranked old french fry grease through a tube and up to a filter in order to purify the oil. The filter, made of an old red T-shirt, looks like a full udder when the purified grease streams out into Reger’s large, plastic barrel.

“They throw away that french fry grease like crazy. Nobody wants it up here,” Reger said. “Why not run it on that if you can get it for nothing?”

He has a stockpile of old french fry grease — used soybean oil from Dairy Queen — that he lets sit and separate for a few weeks before he pours out the lighter oil to put through the filter.

The heavier oil that separates out, the “dregs” as he calls it, gets used to heat his shop.

He soaks rolls of newspaper and electrical tape in it and burns them in the wood stove instead of logs.

“It’ll run you out of here. It’s hot,” he said.

But there is a downside to his handmade firewood.

“After a while you get tired of smelling french fry grease,” Reger said.

He also uses recycled stove oil when he can get it as an alternative to diesel.

“If people give me stove oil when they’re converting to natural gas I just use stove oil and it doesn’t cost you anything,” he said.

Reger’s hottest idea yet is to use the french fry oil to heat his home as a sort of central boiler system.

“I want to try to fire a steam cleaner with this pure french fry grease and then heat up a big water tank that’s underground, a 2,000 gallon water tank, and then heat that up and heat the house out of that water tank,” he said. “That’d be kind of fun if it will work.”

By BECKY BOHRER | The Associated Press

JUNEAU – An official with TransCanada Corp. plans to testify on measure that would abandon state-sanctioned efforts to advance his company’s pipeline project absent proof the project is economic.

The bill’s scheduled for its first hearing Friday. TransCanada spokesman Shawn Howard says Tony Palmer plans to testify and that the company reserves comment on the bill until then.

Palmer is vice president of major projects development for TransCanada.

The bill was proposed after TransCanada missed a self-imposed target for securing agreements with gas shippers. The state promised TransCanada up to $500 million to advance a project but bill supporters say they don’t want to put more money into the project if it isn’t economically feasible.

Howard says negotiations continue. He wouldn’t say whether talks have been fruitful, saying only that they’re ongoing.

The Associated Press

JUNEAU – State Rep. Steve Thompson is a new dad.

Rep. Craig Johnson told reporters Monday that Thompson and his wife, Kathleen, had a baby boy this weekend.

Thompson, a Republican from Fairbanks, left Juneau Friday to be with his wife.

The Associated Press

JUNEAU – An acquisition by Glacier Holdings LLC has put a former Juneau car dealership site one step closer to becoming a fisheries logistics center.

The three-acre site is near the Juneau airport.

KINY reports that the new owners, Mike and Jim Erickson, say that the facility will be converted for packaging and airfreight preparation of fresh and fresh-frozen seafood for their business, Alaska Glacier Seafood Co.

The Associated Press

JUNEAU – An Alaska lawmaker is returning to Wisconsin to spend time with his ailing mother.

It was announced Friday that state Rep. Mark Neuman was absent from the House Finance Committee hearing to tend to a family emergency.

Neuman aide Rex Shattuck says he’s not sure how long Neuman will be gone. He says Neuman is very close to his family but struggled with what to do in the waning weeks of the legislative session.

Neuman, a Republican from Big Lake, is being replaced on the finance committee for the time being by Rep. Mike Hawker, of Anchorage.