SCS CSHB 548(FIN): "An Act authorizing the amendment of Northstar Unit oil and gas leases between the State of Alaska and BP Exploration (Alaska) Inc.; and providing for an effective date."
00SENATE CS FOR CS FOR HOUSE BILL NO. 548(FIN) 01 "An Act authorizing the amendment of Northstar Unit oil and gas leases 02 between the State of Alaska and BP Exploration (Alaska) Inc.; and providing 03 for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. LEGISLATIVE FINDINGS AND INTENT. (a) The legislature finds that 06 (1) the production of oil and gas from state land is a matter of statewide 07 interest and effect because it is an important source of revenue to the state and job 08 opportunities for the people of the state; 09 (2) BP Exploration (Alaska) Inc. holds state oil and gas leases in the Northstar 10 Unit that include net profit share provisions; 11 (3) unless the net profit share provisions of the Northstar Unit leases are 12 amended, production of oil and gas from the unit is highly unlikely to begin before the year 13 2002, if at all; 14 (4) because of the development account provisions of the net profit share
01 leases, the later that these leases are developed, the less "net profits" the state receives; 02 (5) if the net profit share provisions of the Northstar Unit leases are amended, 03 full production of oil and gas from the unit may begin as early as the year 1999; 04 (6) amending the net profit share provisions of the Northstar Unit leases to 05 provide for a supplemental royalty will maximize the economic benefits of oil and gas 06 production to the people of the state by encouraging timely production from the unit; 07 (7) the development of the Northstar Unit will provide additional revenue to 08 the state; 09 (8) the timely development of the unit may result in increased state revenue 10 in future lease sales; and 11 (9) the timely development of the unit may result in technological 12 breakthroughs and other cost savings that may make other development opportunities in 13 Alaska economically feasible. 14 (b) With respect to the effect of the effort to secure earlier development of the leases 15 on employment opportunities for state residents and on the state's economy, the legislature 16 finds that 17 (1) paragraph 41 of the 1980 lease and paragraph 31 of the 1983 lease are to 18 be amended; under each of the proposed amendments, 19 (A) the lessee, BP Exploration (Alaska) Inc., undertakes 20 (i) to use its best efforts to advertise for, recruit, and employ 21 qualified residents of the state; 22 (ii) to contract with existing licensed Alaska firms to fabricate 23 the modules to develop the Northstar Unit leases within the state and, in 24 contracting with those firms, to encourage its contractors to employ and, when 25 necessary, train existing state residents; 26 (iii) to enter into contracts with Alaska-licensed vendors, 27 contractors, and suppliers for the provision of supplies and services; and 28 (B) several state agencies with responsibility for improving the 29 employment opportunities of state residents, including training, commit to efforts to 30 supplement and support the lessee's undertakings; 31 (2) the lessee, BP Exploration (Alaska) Inc., has made significant investments
01 in the state, is ranked as one of the state's largest private sector employers, and regularly 02 enters into contracts to obtain support services; consequently, the lessee's fulfillment of the 03 undertakings described in (1) of this subsection should materially contribute to existing 04 resident workforce employment opportunities and to the state's economic stability; 05 (3) a good faith effort by the lessee, BP Exploration (Alaska) Inc., and the state 06 agencies to fulfill the undertakings described in (1) of this subsection should ensure that, under 07 the amended leases, benefits will accrue directly and immediately to the people of the state; 08 and 09 (4) the mutual commitments made by the parties to the lease in these 10 amendments to secure to state residents and businesses the advantages and benefits of both 11 expanded resident hire opportunities and additional work by in-state businesses are in the best 12 interests of the people of the state and are considerations of paramount importance to the 13 legislature in its decision to conditionally approve the proposed amendments of the Northstar 14 Unit leases. 15 * Sec. 2. LEGISLATIVE INTENT REGARDING MEANING OF SPECIFIC RESIDENT 16 EMPLOYMENT REQUIREMENTS. (a) The legislature wishes to set out its intent regarding 17 meaning of certain words and phrases used in the "First Amendment to the Northstar Unit 18 Leases between the State of Alaska and BP Exploration (Alaska) Inc. (`Northstar 19 Amendment')" that is approved by this Act. Specifically, the legislature wishes to set out its 20 intent regarding the interpretation of the reporting obligations set out in Paragraph 41 of the 21 1980 Leases titled "Employment of Alaskan Residents" and Paragraph 31 of the 1983 Lease 22 titled "Employment of Alaskan Residents" in the Northstar Amendment, collectively the 23 "Employment Paragraphs." The legislature intends that the Alaska residents and contractors 24 discussed in the Employment Paragraphs are truly Alaskan and that Alaska residents 25 throughout the state be given an opportunity to obtain employment on the Northstar project. 26 (b) The legislature believes that 27 (1) the findings made by the legislature in AS 36.10.005(a)(1) - (8) and (11) - 28 (18), (c), and (d), regarding an employment preference for Alaska residents on state 29 construction projects are equally applicable to the Northstar Amendment; and 30 (2) the state has a compelling interest in reducing the level of unemployment 31 among its residents.
01 (c) The legislature intends, for purposes of accounting and reporting under the 02 Employment Paragraphs, that 03 (1) the phrases "Alaska resident," "residents of Alaska," and "resident 04 personnel" mean an individual who is physically present in the state with the intent to remain 05 in the state indefinitely and has a home in the state; 06 (2) an individual demonstrates that intent by maintaining a residence in the 07 state; 08 (3) the individual possesses a resident fishing, trapping, or hunting license or 09 receives a permanent fund dividend; and 10 (4) the hiring entity may also require that the individual state under oath that 11 the individual is not claiming residency outside of the state or obtaining benefits under a claim 12 of residency outside of the state. 13 (d) The legislature intends that for purposes of accounting and reporting under the 14 Employment Paragraphs, 15 (1) the word "available" means Alaska residents who are located anywhere in 16 the state, not just in the area of the state where the work is to be performed; and 17 (2) the word "qualified" means an individual who either currently possesses 18 the requisite education, training, skills, or experience to perform the work necessary for a 19 particular position or is capable of performing such skills after completing one of the job 20 training programs contemplated in the Employment Paragraphs. 21 (e) The legislature understands that nonresidents will be hired only if there are no 22 available and qualified Alaska residents to perform the work. For purposes of accounting and 23 reporting under the Employment Paragraphs, the legislature intends that the requirement to 24 "advertise for available positions locally" includes advertising in newspapers and other 25 publications located throughout the state, including rural areas, not just in the location where 26 the work is to be performed. 27 (f) The legislature further intends that the requirement to "use Alaska job service 28 organizations" includes those offices maintained by the Department of Labor whose functions 29 are to aid the unemployed in finding employment and any job service organization located 30 throughout the state, not just the location where the work is to be performed. 31 (g) The legislature intends that, for purposes of accounting and reporting under the
01 Employment Paragraphs, the phrases "Alaska Contractors" and "Alaska firms" mean a firm 02 or contractor that 03 (1) holds an Alaska business license; 04 (2) maintains its principal place of business in the state; and 05 (3) is 06 (A) a sole proprietorship and the proprietor is an Alaska resident; 07 (B) a partnership and more than 50 percent of the partners are Alaska 08 residents; 09 (C) a corporation that has been incorporated in the state or is authorized 10 to do business in the state; or 11 (D) is a joint venture composed entirely of ventures that qualify under 12 this paragraph. 13 (h) For purposes of Employment Paragraphs, the legislature intends that the lessee's 14 reporting obligations comply with the reporting requirements of 8 AAC 30.062 and shall 15 include information regarding the number of nonresidents hired within the past year, and the 16 number of Alaska contractors and non-Alaska contractors hired within the past year. 17 * Sec. 3. AMENDMENT OF LEASES AUTHORIZED. (a) The State of Alaska and BP 18 Exploration (Alaska) Inc. are parties to the following leases in the Northstar Unit: 19 (1) ADL 312798, effective February 1, 1980; 20 (2) ADL 312799, effective February 1, 1980; 21 (3) ADL 312808, effective February 1, 1980; 22 (4) ADL 312809, effective February 1, 1980; and 23 (5) ADL 355001, effective August 1, 1983. 24 (b) The commissioner of natural resources may amend the Northstar Unit leases 25 described in (a) of this section to the extent set out in the "First Amendment to the Northstar 26 Unit Leases Between the State of Alaska and BP Exploration (Alaska) Inc.", dated March 22, 27 1996, if the amendment includes a provision as follows: 28 (1)Paragraph 41 of each of the leases described in (a)(1) - (4) of this 29 section is replaced in its entirety as follows: 30 "41. EMPLOYMENT OF ALASKAN RESIDENTS. Lessee 31 shall comply with all valid federal, State and local laws in hiring
01 Alaska residents and contractors and shall not discriminate against 02 Alaska residents or contractors. Within the constraints of law, lessee 03 shall employ Alaska residents and contractors to the extent they are 04 available and qualified. Subject to the foregoing: 05 Lessee voluntarily agrees to adopt a program to hire residents of 06 Alaska. Lessee shall advertise for available positions locally and use 07 Alaska job service organizations to notify the Alaskan public. For work 08 in connection with this lease, lessee shall use best efforts to contract 09 with Alaska firms and fabricate modules in Alaska, whenever feasible. 10 Lessee shall encourage its contractors to employ and train, when 11 necessary, residents of Alaska. In determining feasibility, lessee shall 12 consider commercial, health, safety, and environmental conditions and 13 requirements to ensure maintenance of lessee's operational standards. 14 Lessee shall submit annually to the director, division of oil and gas, for 15 transmission to the Department of Labor, a report that details the 16 specific measures lessee and its contractors and subcontractors have 17 taken or are planning to take to recruit qualified Alaska residents for 18 available jobs, describes on-the-job training opportunities, and describes 19 lessee's efforts to hire Alaska firms for work in connection to this lease. 20 Lessee shall furnish the Department of Labor a quarterly report 21 regarding the employment of Alaska residents on the leased area in 22 compliance with regulations by the Commissioner of Labor. The report 23 must also include statistical data concerning the number of resident 24 personnel hired within the past year for this lease"; 25 (2) Paragraph 31 of the lease described in (a)(5) of this section is replaced 26 in its entirety as follows: 27 "31. EMPLOYMENT OF ALASKAN RESIDENTS. Lessee 28 shall comply with all valid federal, State and local laws in hiring 29 Alaska residents and contractors and shall not discriminate against 30 Alaska residents or contractors. Within the constraints of law, lessee 31 shall employ Alaska residents and contractors to the extent they are
01 available and qualified. Subject to the foregoing: 02 Lessee voluntarily agrees to adopt a program to hire residents of 03 Alaska. Lessee shall advertise for available positions locally and use 04 Alaska job service organizations to notify the Alaskan public. For work 05 in connection with this lease, lessee shall use best efforts to contract 06 with Alaska firms and fabricate modules in Alaska, whenever feasible. 07 Lessee shall encourage its contractors to employ and train, when 08 necessary, residents of Alaska. In determining feasibility, lessee shall 09 consider commercial, health, safety, and environmental conditions and 10 requirements to ensure maintenance of lessee's operational standards. 11 Lessee shall submit annually to the director, division of oil and gas, for 12 transmission to the Department of Labor, a report that details the 13 specific measures lessee and its contractors and subcontractors have 14 taken or are planning to take to recruit qualified Alaska residents for 15 available jobs, describes on-the-job training opportunities, and describes 16 lessee's efforts to hire Alaska firms for work in connection to this lease. 17 Lessee shall furnish the Department of Labor a quarterly report 18 regarding the employment of Alaska residents on the leased area in 19 compliance with regulations by the Commissioner of Labor. The report 20 must also include statistical data concerning the number of resident 21 personnel hired within the past year for this lease"; and 22 (3)These amendments take effect when and if an Act(s) substantially 23 similar to the act, attached as Exhibit D and incorporated by reference, 24 takes effect. This amendment is dated for reference purposes as of 25 March 22, 1996. 26 * Sec. 4. REPORTING PROVISIONS. (a) The lessee, BP Exploration (Alaska) Inc., shall 27 file with the commissioner of labor at least every six months the reports that the commissioner 28 of labor determines are necessary to evaluate the lessee's efforts described under sec. 3(b) of 29 this Act. The commissioner shall submit copies of these reports to the legislature. 30 (b) The commissioner of labor shall also prepare and present to the legislature 31 annually a comprehensive report by company on resident hire in the oil fields of the North
01 Slope of Alaska, which shall indicate residency of employees by borough, unorganized 02 borough, or economic region, and which shall compare the lessee's effort on voluntary 03 resident hire to the comparable data for other North Slope oil field projects. 04 * Sec. 5. AUDITING AND REPORTING. Four years after the effective date of this Act, 05 the Legislative Budget and Audit Committee shall undertake an audit of the lessee's 06 compliance with its obligations under the "First Amendment to the Northstar Unit Leases 07 between the State of Alaska and BP Exploration (Alaska) Inc." and make a report of its 08 findings to the president of the senate and the speaker of the house of representatives. 09 * Sec. 6. SEVERABILITY. Under AS 01.10.030, the provisions of this Act are severable. 10 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).