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Enrolled HB 16: Amending, for purposes of the Alaska Stranded Gas Development Act, the standards applicable to determining whether a proposed new investment constitutes a qualified project, the standards used to determine whether a person or group qualifies as a project sponsor or project sponsor group, and the deadline for applications relating to the development of contracts for payments in lieu of taxes and for royalty adjustments that may be submitted for consideration, and modifying the conditions bearing on the use of independent contractors to evaluate applications or to develop contract terms; providing statements of intent for the Act relating to use of project labor agreements and to reopening of contracts; and providing for an effective date.

00 Enrolled HB 16                                                                                                          
01 Amending, for purposes of the Alaska Stranded Gas Development Act, the standards                                        
02 applicable to determining whether a proposed new investment constitutes a qualified project,                            
03 the standards used to determine whether a person or group qualifies as a project sponsor or                             
04 project sponsor group, and the deadline for applications relating to the development of                                 
05 contracts for payments in lieu of taxes and for royalty adjustments that may be submitted for                           
06 consideration, and modifying the conditions bearing on the use of independent contractors to                            
07 evaluate applications or to develop contract terms; providing statements of intent for the Act                          
08 relating to use of project labor agreements and to reopening of contracts; and providing for an                         
09 effective date.                                                                                                         
10                           _______________                                                                               
11    * Section 1.  The uncodified law of the State of Alaska is amended by adding a new section                         
12 to read:                                                                                                                
01       LEGISLATIVE INTENT.  It is the intent of the legislature that                                                     
02            (1)  in awarding contracts under the Alaska Stranded Gas Development Act, a                                  
03 qualified sponsor or qualified sponsor group and contractors of the qualified sponsor or                                
04 qualified sponsor group may develop and enter into project labor agreements with appropriate                            
05 collective bargaining organizations for each project for which a contract is entered into; and                          
06            (2)  each contract for payments in lieu of taxes and for royalty adjustments                                 
07 entered into under the Alaska Stranded Gas Development Act contain a provision by which                                 
08 the contract may be reopened by any party to the contract; the subject matter of the reopening                          
09 may be dealt with through the use of arbitration proceedings agreed on by the parties.                                  
10    * Sec. 2.  AS 43.82.100 is amended to read:                                                                        
11            Sec. 43.82.100.  Qualified project.  Based on information available to the                                 
12       commissioner, the commissioner may determine that a proposal for new investment is                                
13       a qualified project under this chapter [ONLY] if the project                                                      
14                 (1)  principally involves                                                                           
15                      (A)  the transportation of natural gas by pipeline to one or                                   
16            more markets, together with any associated processing or treatment;                                      
17                      (B)  [IS A PROJECT FOR] the export of liquefied natural gas                                    
18            from the state to one or more other states or countries; or                                              
19                      (C)  any other technology that commercializes the shipment                                     
20            of natural gas within the state or from the state to one or more other states                            
21            or countries;                                                                                            
22                 (2)  would produce at least 500,000,000,000 cubic feet of stranded gas                                  
23       within 20 years from the commencement of commercial operations; and                                               
24                 (3)  is capable, subject to applicable commercial regulation and                                        
25       technical and economic considerations, of making gas available to meet the reasonably                             
26       foreseeable demand in this state for gas within the economic proximity of the project.                            
27    * Sec. 3.  AS 43.82.110 is amended to read:                                                                        
28            Sec. 43.82.110.  Qualified sponsor or qualified sponsor group.  The                                        
29       commissioner may determine that a person or group is a qualified sponsor or qualified                             
30       sponsor group if the person or a member of the group                                                              
31                 (1)  intends to own an equity interest in a qualified project, intends to                               
01       commit gas that it owns to a qualified project, or holds the permits that the department                          
02       determines are essential to construct and operate a qualified project; and                                        
03                 (2)  meets one or more of the following criteria:                                                       
04                      (A)  owns a working interest in at least 10 percent of the                                         
05            stranded gas proposed to be developed by a qualified project;                                                
06                      (B)  has the right to purchase at least 10 percent of the stranded                                 
07            gas proposed to be developed by a qualified project;                                                         
08                      (C)  has the right to acquire, control, or market at least 10                                      
09            percent of the stranded gas proposed to be developed by a qualified project;                                 
10                      (D)  has a net worth equal to at least 10 [33] percent of the                                  
11            estimated cost of constructing a qualified project;                                                          
12                      (E)  has an unused line of credit equal to at least 15 [25] percent                            
13            of the estimated cost of constructing a qualified project.                                                   
14    * Sec. 4.  AS 43.82.170 is amended to read:                                                                        
15            Sec. 43.82.170.  Application deadline.  The commissioner of revenue or the                                 
16       commissioner of natural resources may not act on an application for a contract                                    
17       submitted under AS 43.82.120 unless the application is received by the Department of                              
18       Revenue no later than March 31, 2005 [JUNE 30, 2001].                                                         
19    * Sec. 5.  AS 43.82.240(a) is amended to read:                                                                     
20            (a)  The commissioner may use independent contractors [AN                                                
21       INDEPENDENT CONTRACTOR] to assist in the evaluation of an application or in                                       
22       the development of contract terms under AS 43.82.200. The commissioner may                                        
23       condition the development of a contract under AS 43.82.020 on an agreement by the                                 
24       applicant to reimburse the state for the reasonable expenses of independent                               
25       contractors [AN INDEPENDENT CONTRACTOR] under this section.  A                                            
26       reimbursement of expenses that is required in an agreement authorized by this                                 
27       subsection may not exceed $1,500,000 for each application.                                                    
28    * Sec. 6.  This Act takes effect immediately under AS 01.10.070(c).