SB 3002: "An Act relating to the Alaska Stranded Gas Development Act; relating to municipal impact money received under the terms of a stranded gas fiscal contract; relating to determination of full and true value of property and required contributions for education in municipalities affected by stranded gas fiscal contracts; and providing for an effective date."
00 SENATE BILL NO. 3002 01 "An Act relating to the Alaska Stranded Gas Development Act; relating to municipal 02 impact money received under the terms of a stranded gas fiscal contract; relating to 03 determination of full and true value of property and required contributions for 04 education in municipalities affected by stranded gas fiscal contracts; and providing for 05 an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 43.82.010 is amended to read: 08 Sec. 43.82.010. Purpose. The purpose of this chapter is to 09 (1) encourage new investment to develop the state's stranded gas 10 resources by authorizing establishment of fiscal terms related to oil and gas 11 agreements and taxes related to oil and gas business activity in the state [THAT 12 NEW INVESTMENT WITHOUT SIGNIFICANTLY ALTERING TAX AND 13 ROYALTY METHODOLOGIES AND RATES ON EXISTING OIL AND GAS
01 INFRASTRUCTURE AND PRODUCTION]; 02 (2) allow the fiscal terms applicable to a qualified sponsor or the 03 members of a qualified sponsor group, with respect to a qualified project, to be 04 tailored to the particular economic conditions of the project and to establish those 05 fiscal terms in advance with as much certainty as the Constitution of the State of 06 Alaska allows; and 07 (3) maximize the benefit to the people of the state of the development 08 of the state's stranded gas resources. 09 * Sec. 2. AS 43.82.505 is amended to read: 10 Sec. 43.82.505. Payments to economically affected municipalities. If the 11 commissioner executes a contract under AS 43.82.020 that will produce one or more 12 economically affected municipalities, the commissioner shall include a term in the 13 contract that provides for [A PORTION OF THE] periodic impact payments to the 14 state that may be appropriated to the Alaska natural gas pipeline construction 15 impact fund established in (c) of this section to benefit the economically affected 16 municipalities under the principles in AS 43.82.520. 17 * Sec. 3. AS 43.82.505 is amended by adding new subsections to read: 18 (b) A special account is established in the general fund into which the 19 Department of Revenue shall deposit impact payments received by the state under (a) 20 of this section. 21 (c) The Alaska natural gas pipeline construction impact fund is established in 22 the Department of Commerce, Community, and Economic Development. The 23 legislature may appropriate money deposited in the special account established in (b) 24 of this section, as well as any additional money considered necessary, to the Alaska 25 natural gas pipeline construction impact fund to address the economic and social 26 impacts incurred by an economically affected municipality, or incurred by a nonprofit 27 organization serving the unorganized borough, during the construction of a project that 28 is the subject of a proposed contract developed under this chapter. 29 (d) The Department of Commerce, Community, and Economic Development 30 shall adopt regulations under which economically affected municipalities and 31 nonprofit organizations may apply for and be eligible to receive grants to alleviate
01 impact caused by construction of a gas pipeline. The department shall give priority in 02 the allocation of grants to municipalities and organizations that are experiencing or 03 will experience the most direct or severe impact from gas pipeline construction. The 04 department shall finance, under (e) of this section, all meritorious grant applications 05 each year, to the extent money is available in the Alaska natural gas pipeline 06 construction impact fund. Within 10 days after the convening of each regular session 07 of the legislature, the department shall submit to the legislature a list of all 08 municipalities and organizations that have received grants, a list of all municipalities 09 and organizations determined by the department to be eligible for further grants, a 10 recommendation of the amount of money to be granted for those additional 11 applications, and written justification of each past and potential grant. 12 (e) The commissioner of commerce, community, and economic development, 13 in consultation with the relevant municipal advisory group established under 14 AS 43.82.510, shall use money appropriated to the Alaska natural gas pipeline 15 construction impact fund to make grants to municipalities, and to nonprofit 16 organizations serving the unorganized borough, for impacts on transportation, 17 infrastructure, law enforcement, emergency services, health and human services, 18 education, the labor force, population, wages, and subsistence and for socio-cultural 19 impacts, brought about by the construction of the gas pipeline. In determining whether 20 an expenditure or proposed expenditure by a municipality or nonprofit organization is 21 eligible for a grant under this subsection and in allocating available money among 22 grant proposals, the commissioner shall consider the recommendations of the relevant 23 municipal advisory group established under AS 43.82.510 and whether the proposed 24 expenditure meets the purposes of this section. 25 (f) Before making awards of grants under this section for a fiscal year, the 26 commissioner of commerce, community, and economic development shall provide 27 reasonable public notice of all grant applications received, the recommendations of the 28 relevant municipal advisory group, preliminary determinations made concerning the 29 eligibility of each municipality or organization for a grant, the eligibility of each 30 expenditure or proposed expenditure for a grant, and the proposed allocation of 31 available money among grant proposals. The public notice must specify a time and
01 place for a public hearing during which the commissioner will receive comments 02 concerning the preliminary determinations and allocations of the department. The 03 commissioner shall give reasonable public notice of the final awards of grants made 04 under this section. Thirty days after such public notice is given, final awards take 05 effect and may be paid to the grantees according to procedures established by 06 regulation. 07 (g) Grant money received under this section may not be used for the 08 retirement of municipal debt. 09 (h) Amounts appropriated to the Alaska natural gas pipeline construction 10 impact fund under (c) of this section for a fiscal year that are not used for grants to 11 municipalities and organizations under (d) and (e) of this section shall be retained in 12 the Alaska natural gas pipeline construction impact fund and remain available for 13 distribution as grants under this section in succeeding fiscal years. 14 (i) Nothing in this chapter exempts money deposited into the special account 15 in the general fund established in (b) of this section from the requirements of AS 37.07 16 (Executive Budget Act) or dedicates that money, or money appropriated to the Alaska 17 natural gas pipeline construction impact fund, for a specific purpose. 18 (j) In this section, "direct or severe impact" means a clearly demonstrable 19 effect on a community that proximately contributes to a material change to 20 transportation, infrastructure, law enforcement, emergency services, health and human 21 services, education, the labor force, population, wages, subsistence, or for socio- 22 cultural impacts brought about by the construction of a gas pipeline. 23 * Sec. 4. AS 43.82.510(c) is amended to read: 24 (c) Each municipal advisory group serves until the later of 90 days after 25 final distribution of impact payment money under AS 43.82.505, or 26 commencement of operations of the qualified project. Expenses of a municipal 27 advisory group are eligible for reimbursement under a grant made under 28 AS 43.82.505 [A FINAL ACTION IS TAKEN ON THE APPLICATION FOR 29 WHICH THE GROUP WAS APPOINTED]. 30 * Sec. 5. AS 43.82 is amended by adding a new section to article 7 to read: 31 Sec. 43.82.650. Calculations of education funding. To determine the amount
01 of required local contribution under AS 14.17.410(b)(2) and (c) for a school district in 02 a revenue-affected municipality, and to perform its duties under AS 14.17.510, the 03 Department of Commerce, Community, and Economic Development shall adopt 04 regulations. The regulations must establish assessment standards for any property that 05 would have been assessed under AS 43.56 but is instead generating a payment to a 06 revenue-affected municipality in lieu of a municipal property tax as provided in a 07 contract developed under this chapter. The regulations must ensure that the property is 08 included in the full and true value of the city or borough school district for the purpose 09 of determining required local contributions for education funding under 10 AS 14.17.410(b)(2) and (c). 11 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 RETROACTIVITY. Sections 1 and 2 of this Act are retroactive to January 1, 2004. 14 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).