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CSHB 177(O&G): "An Act relating to the Alaska Gasline Inducement Act; providing inducements for the construction of a natural gas pipeline and shippers that commit to use that pipeline; establishing the Alaska Gasline Inducement Act matching contribution fund; providing for an Alaska Gasline Inducement Act coordinator; establishing the gas utility revolving loan fund; making conforming amendments; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 177(O&G)                                                                    
01 "An Act relating to the Alaska Gasline Inducement Act; providing inducements for the                                    
02 construction of a natural gas pipeline and shippers that commit to use that pipeline;                                   
03 establishing the Alaska Gasline Inducement Act matching contribution fund; providing                                    
04 for an Alaska Gasline Inducement Act coordinator; establishing the gas utility revolving                                
05 loan fund; making conforming amendments; and providing for an effective date."                                          
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. AS 43 is amended by adding a new chapter to read:                                                     
08                  Chapter 90. Alaska Gasline Inducement Act.                                                           
09      Article 1. Inducement to Construction of a Natural Gas Pipeline in this State.                                   
10            Sec. 43.90.010. Purpose. The purpose of this chapter is to encourage                                       
11       expedited construction of a natural gas pipeline that                                                             
12                 (1)  facilitates commercialization of North Slope gas resources of the                                  
13       state;                                                                                                            
01                 (2)  promotes exploration and development of oil and gas resources on                                   
02       the North Slope;                                                                                                  
03                 (3)  maximizes benefits to the people of the state from the development                                 
04       of oil and gas resources in the state; and                                                                        
05                 (4)  encourages oil and gas lessees and other persons in the state to                                   
06       commit natural gas from the North Slope to a gas pipeline system for transportation to                            
07       markets in this state or elsewhere.                                                                               
08                Article 2. Alaska Gasline Inducement Act License.                                                      
09            Sec. 43.90.100. Gas project. The commissioner of revenue and the                                           
10       commissioner of natural resources, acting jointly, may award an Alaska Gasline                                    
11       Inducement Act license as provided in this chapter. The person awarded a license                                  
12       under this chapter is entitled to the inducement set out in AS 43.90.110.                                         
13            Sec. 43.90.110. Natural gas pipeline project construction inducement. (a)                                
14       Subject to the limitations of this chapter, a license issued under this chapter entitles the                      
15       licensee or its designated affiliate to receive                                                                   
16                 (1)  subject to appropriation, state matching contributions in a total                                  
17       amount not to exceed $500,000,000, paid to the licensee during the five-year period                               
18       immediately following the date the license is awarded; a payment under this paragraph                             
19       shall be made according to the following:                                                                         
20                      (A)  on or before the close of the first binding open season, the                                  
21            state shall contribute the amount of the licensee's qualified expenditures at a                              
22            level specified in the license; however, the state's contribution may not exceed                             
23            50 percent of the qualified expenditures incurred before the end of the first                                
24            binding open season;                                                                                         
25                      (B)  after the close of the first binding open season, the state                                   
26            may contribute an amount for the licensee's qualified expenditures at the level                              
27            specified in the license; however, the state's contribution may not be greater                               
28            than 80 percent of the qualified expenditures incurred after the close of the first                          
29            binding open season;                                                                                         
30                      (C)  a qualified expenditure is a cost that is incurred after the                                  
31            license is issued under this chapter, is incurred by the licensee or the licensee's                          
01            designated affiliate, and is directly and reasonably related to obtaining a                                  
02            certificate of public convenience and necessity from the Federal Energy                                      
03            Regulatory Commission or the Regulatory Commission of Alaska, as                                             
04            appropriate, for development of the project, but does not include overhead                                   
05            costs, litigation costs, the cost of an asset or work product acquired by the                                
06            licensee before the license is issued, civil penalties, criminal penalties, or fines;                        
07                 (2)  the benefit of an Alaska Gasline Inducement Act coordinator who                                    
08       has the authority prescribed in AS 43.90.250; and                                                                 
09                 (3)  the benefits of coordination with qualified training organizations                                 
10       that prepare individuals for employment in gas pipeline project management,                                       
11       construction, operation, maintenance, and other gas pipeline-related positions.                                   
12            (b)  The commissioner of revenue in consultation with the commissioner of                                    
13       natural resources shall adopt regulations for determining whether an expenditure is a                             
14       qualified expenditure for the purposes of (a) of this section.                                                    
15            Sec. 43.90.120. Request for applications for the license. (a) The                                          
16       commissioners shall commence a public process to request applications for a license                               
17       as soon as practicable after the effective date of this chapter.                                                  
18            (b)  The commissioners may use independent contractors, including technical                                  
19       advisors, to assist them in developing the application and in evaluating the                                      
20       applications received.                                                                                            
21            (c)  The provisions of AS 36.30 do not apply to requests for applications under                              
22       this chapter, but the commissioners shall adopt regulations that provide protest and                              
23       appeal procedures relating to the solicitation of the applications and award of a license                         
24       that are substantially similar to the provisions of AS 36.30.550 - 36.30.699.                                     
25            Sec. 43.90.130. Application requirements. In order to be considered for the                                
26       license, an applicant shall file an application that is consistent with the terms of the                          
27       request for applications under AS 43.90.120 and shall                                                             
28                 (1)  file the application by the deadline established by the                                            
29       commissioners in the request for applications;                                                                    
30                 (2)  provide a detailed description of a proposed natural gas pipeline                                  
31       project for transporting natural gas from the North Slope to market, including                                    
01                      (A)  the route proposed for the natural gas pipeline, which may                                    
02            not be the route described in AS 38.35.017(b);                                                               
03                      (B)  the location of receipt and delivery points and the size and                                  
04            design capacity of the proposed natural gas pipeline at the proposed receipt and                             
05            delivery points, except that this information is not required for in-state delivery                          
06            points;                                                                                                      
07                      (C)  an analysis demonstrating the economic and technical                                          
08            viability of the project;                                                                                    
09                      (D)  an economically and technically viable work plan, timeline,                                   
10            and associated budget for developing the proposed project and work associated                                
11            with the project that includes field work, environmental studies, design and                                 
12            engineering, and complying with all applicable state, federal, and international                             
13            regulatory requirements that affect the proposed project; the applicant shall                                
14            provide the following:                                                                                       
15                           (i)  if the proposed project involves a pipeline into or                                      
16                 through Canada, a detailed description of the applicant's plan to obtain                                
17                 necessary rights-of-way and authorizations in Canada, a description of                                  
18                 the transportation services to be provided and a description of rate-                                   
19                 making methodologies the applicant will propose to the regulatory                                       
20                 agencies, an estimate of rates and charges for all services, and a                                      
21                 detailed description of all access and tariff terms that the applicant                                  
22                 would propose to offer;                                                                                 
23                           (ii)  if the proposed project involves marine                                                 
24                 transportation of liquefied natural gas, a description of the pipeline                                  
25                 route, system, and capacity proposed to bring North Slope gas to                                        
26                 tidewater, including a description of transportation services to be                                     
27                 provided and a description of proposed rate-making methodologies; an                                    
28                 estimate of rates and charges for all services; and a detailed description                              
29                 of all access and tariff terms that the applicant would offer including                                 
30                 any services by third parties; a detailed description of all proposed                                   
31                 access and tariff terms for liquefaction services or, if a third party                                  
01                 would perform liquefaction services, the identification of that third                                   
02                 party and the terms applicable to the liquefaction services; a complete                                 
03                 description of the marine segment of the project, including the                                         
04                 proposed ownership, control, and cost of liquefied natural gas tankers,                                 
05                 the management of shipping services, liquefied natural gas export                                       
06                 destination, regasification facilities and pipeline facilities needed for                               
07                 transport to market destinations; the entity or entities that would be                                  
08                 required to obtain necessary export permits and licenses or a certificate                               
09                 of public convenience and necessity from the Federal Energy                                             
10                 Regulatory Commission; and all rights-of-way or authorizations                                          
11                 required from a foreign country;                                                                        
12                 (3)  if the proposed project is within the jurisdiction of the Federal                                  
13       Energy Regulatory Commission, commit to                                                                           
14                      (A)  conclude, by a date certain that is not later than 36 months                                  
15            after the date the license is issued, a binding open season that is consistent with                          
16            the requirements of Subpart B of 18 C.F.R. Part 157 (Open Seasons for Alaska                                 
17            Natural Gas Transportation Projects) and 18 C.F.R. 157.30 - 157.39;                                          
18                      (B)  apply for Federal Energy Regulatory Commission approval                                       
19            to use the pre-filing procedures set out in 18 C.F.R. 157.21 by a date certain,                              
20            and use those procedures before filing an application for a certificate of public                            
21            convenience and necessity; and                                                                               
22                      (C)  apply for a Federal Energy Regulatory Commission                                              
23            certificate of public convenience and necessity to authorize the construction                                
24            and operation of the proposed project described in this section by a date                                    
25            certain;                                                                                                     
26                 (4)  if the proposed project is within the jurisdiction of the Regulatory                               
27       Commission of Alaska, commit to                                                                                   
28                      (A)  conclude, by a date certain that is not later than 36 months                                  
29            after the date the license is issued, a binding open season that is consistent with                          
30            the requirements of AS 42.06; and                                                                            
31                      (B)  apply for a certificate of public convenience and necessity                                   
01            to authorize the construction and operation of the proposed project by a date                                
02            certain;                                                                                                     
03                 (5)  after the first binding open season, commit to assess the market                                   
04       demand for additional pipeline capacity at least every two years through public non-                              
05       binding solicitations or similar means;                                                                           
06                 (6)  commit to expand the proposed project in reasonable engineering                                    
07       increments and on commercially reasonable terms that encourage exploration and                                    
08       development of gas resources in this state; in this paragraph,                                                    
09                      (A)  "commercially reasonable terms" means that, subject to the                                    
10            provisions of (7)(A) of this section, revenue from transportation contracts                                  
11            covers the cost of the expansion, including increased fuel costs, and a                                      
12            reasonable return on capital as authorized by the Federal Energy Regulatory                                  
13            Commission or the Regulatory Commission of Alaska, as applicable, and there                                  
14            is no impairment of the proposed project's ability to recover the costs of                                   
15            existing facilities;                                                                                         
16                      (B)  "reasonable engineering increments" means the amount of                                       
17            additional capacity that could be added by compression or a pipe addition                                    
18            using a compressor size or pipe size, as applicable, that is substantially similar                           
19            to the original compressor size and the original pipe size;                                                  
20                 (7)  commit to                                                                                          
21                      (A)  propose and support recovery of mainline capacity                                             
22            expansion costs from all mainline system users through rolled-in rates if the                                
23            recovery of all expansion costs through rolled-in rates would increase existing                              
24            shippers' rates by not more than 15 percent above the initial maximum recourse                               
25            rates from the North Slope to the proposed project's downstream terminus; if                                 
26            rolled-in expansion costs would increase existing shippers' rates from the                                   
27            North Slope to the project's downstream terminus by more than 15 percent,                                    
28            propose and support the partial roll-in of mainline expansion costs from all                                 
29            mainline system users to the extent that existing shippers' rates would not be                               
30            increased by more than 15 percent above the initial maximum recourse rates                                   
31            from the North Slope to the proposed project's downstream terminus; in this                                  
01            subparagraph, "initial maximum recourse rates" means the highest cost-based                                  
02            rates for any specific transportation service set by the Federal Energy                                      
03            Regulatory Commission, the Regulatory Commission of Alaska, or the                                           
04            National Energy Board of Canada, as appropriate, at the time of the initial                                  
05            regulatory approval of the proposed project;                                                                 
06                      (B)  consider proposing any combination of incremental or                                          
07            rolled-in rates for recovery of costs of mainline capacity expansion that                                    
08            exceeds the 15 percent level described in (A) of this paragraph;                                             
09                      (C)  agree not to enter into a negotiated rate agreement that                                      
10            would preclude collecting from any shipper, including a shipper with                                         
11            negotiated rate agreements, the rolled-in rates that are required to be proposed                             
12            and supported under (A) of this paragraph; in this subparagraph, "negotiated                                 
13            rate agreement" means a transportation service agreement that is subject to                                  
14            rates that vary from the otherwise applicable cost-based rates, or recourse rates,                           
15            set out in a gas pipeline's tariff approved by the Federal Energy Regulatory                                 
16            Commission, the Regulatory Commission of Alaska, or the National Energy                                      
17            Board of Canada, as appropriate;                                                                             
18                 (8)  state how the applicant proposes to deal with a North Slope gas                                    
19       treatment plant regardless of whether such a plant is part of the applicant's proposal,                           
20       and, to the extent that such a plant will be owned entirely or in part by the applicant,                          
21       commit to seek certificate authority from the Federal Energy Regulatory Commission                                
22       if the proposed project is engaged in interstate commerce or from the Regulatory                                  
23       Commission of Alaska if the project is not engaged in interstate commerce, for a                                  
24       North Slope gas treatment plant that will be owned entirely or in part by the applicant                           
25       and, for rate-making purposes, commit to value previously owned assets that are part                              
26       of the gas treatment plant at net book value; describe the gas treatment plant, including                         
27       its design, engineering, construction, ownership, and plan of operation, the identity of                          
28       any third party that will participate in the ownership or operation of the gas treatment                          
29       plant, and the means by which the applicant will work to minimize the effect of the                               
30       costs of the facility on the tariff;                                                                              
31                 (9)  propose a percentage and total dollar amount, to be specified in the                               
01       license, that will define the level of the state's contribution under                                             
02       AS 43.90.110(a)(1)(A) and (B);                                                                                    
03                 (10)  commit to propose and support rates for the proposed project and                                  
04       for any North Slope gas treatment plant that the applicant may own, in whole or in                                
05       part, that are based on a capital structure for rate-making that consists of not less than                        
06       70 percent debt;                                                                                                  
07                 (11)  describe the means for preventing or managing cost overruns for                                   
08       the proposed project, and the measures for minimizing the effect from any overruns;                               
09                 (12)  commit to provide a minimum of five delivery points of natural                                    
10       gas in this state;                                                                                                
11                 (13)  commit to offer firm transportation service to delivery points in                                 
12       this state as part of the tariff regardless of whether any shippers bid successfully in a                         
13       binding open season for firm transportation service to delivery points in this state, and                         
14       commit to offer distance-sensitive rates to delivery points in this state consistent with                         
15       18 C.F.R. 157.34(c)(8);                                                                                           
16                 (14)  commit to establish a local headquarters in this state for the                                    
17       proposed project;                                                                                                 
18                 (15)  commit to hire qualified state residents for management,                                          
19       engineering, construction, operation, maintenance, and other positions on the proposed                            
20       project and to contract with businesses located in the state to the extent permitted by                           
21       law;                                                                                                              
22                 (16)  waive the right to appeal the award to another applicant or the                                   
23       determination under AS 43.90.180(b) that no application merits the issuance of a                                  
24       license;                                                                                                          
25                 (17)  commit to negotiate, prior to construction, a project labor                                       
26       agreement, to assure expedited construction and labor stability for the project by                                
27       qualified residents of the state;                                                                                 
28                 (18)  commit that the state contribution received by the licensee may                                   
29       not be included in the applicant's rate base and shall be used as a credit against the                            
30       licensee's cost of service;                                                                                       
31                 (19)  provide a detailed description of the applicant; the affiliates of the                            
01       applicant; all partners, members of a joint venture, and other entities participating with                        
02       the applicant in the application and the project proposed by the applicant; and persons                           
03       the applicant intends to involve in the construction and operation of the proposed                                
04       project; the description must include the nature of the affiliation for each person, the                          
05       commitments by the person to the applicant, and other information relevant to the                                 
06       commissioners' evaluation of the readiness and ability of the applicant to complete the                           
07       project presented in the application; and                                                                         
08                 (20)  otherwise demonstrate the readiness and ability to perform the                                    
09       activities specified in the application, including following the detailed work plan,                              
10       timeline, and operation within the associated budget.                                                             
11            Sec. 43.90.140. Initial application review; additional information requests;                               
12       complete applications. (a) The commissioners shall review each application to                                   
13       determine whether it meets the requirements in the request for applications and the                               
14       requirements in AS 43.90.130. The commissioners shall reject an application that does                             
15       not meet the requirements.                                                                                        
16            (b)  The commissioners may request additional information relating to the                                    
17       application from an applicant for the purpose of evaluating an application that is not                            
18       rejected under (a) of this section.                                                                               
19            (c)  An application shall be rejected if the applicant fails to timely provide the                           
20       information requested under (b) of this section, or submits additional information in                             
21       answer to a request under (b) of this section that is not responsive.                                             
22            (d)  The commissioners shall make a determination that an application not                                    
23       rejected under this section, including any requested additional information, is                                   
24       complete.                                                                                                         
25            Sec. 43.90.150. Proprietary information and trade secrets. (a) At the                                    
26       request of the applicant, information submitted under this chapter that the applicant                             
27       identifies and demonstrates is proprietary or is a trade secret is confidential and not                           
28       subject to public disclosure under AS 40.25 unless the applicant is granted a license                             
29       under this chapter; after a license is awarded, all information submitted by the licensee                         
30       under this chapter shall be made public.                                                                          
31            (b)  If the commissioners determine that the information submitted by the                                    
01       applicant is not proprietary or is not a trade secret, the commissioners shall notify the                         
02       applicant and return the information at the request of the applicant.                                             
03            (c)  An applicant that protests or appeals the award of a license or the process                             
04       by which the award of a license is made shall be considered to have consented to the                              
05       disclosure of all of the information submitted under this chapter by the applicant                                
06       making the protest or appeal, including information that is confidential under (a) of                             
07       this section.                                                                                                     
08            (d)  In this section, "proprietary" means that the information is treated by the                             
09       applicant as confidential and the public disclosure of that information would adversely                           
10       affect the competitive position of the applicant, or materially diminish the commercial                           
11       value of the information to the applicant.                                                                        
12            Sec. 43.90.160. Notice, review, and comment. (a) The commissioners shall                                   
13       publish notice and provide a 60-day period for public review and comment on all                                   
14       applications determined complete under AS 43.90.140.                                                              
15            (b)  Applications received under this chapter are not public records and are not                             
16       subject to public disclosure under AS 40.25 until the commissioners publish notice                                
17       under this section. However, information that the commissioners have determined is                                
18       confidential under AS 43.90.150 may not be made public even after the notice is                                   
19       published under (a) of this section, except as provided in AS 43.90.150. If information                           
20       is held confidential under this subsection, the applicant shall provide a summary of the                          
21       information satisfactory to the commissioners and the commissioners shall make the                                
22       summary available to the public.                                                                                  
23            (c)  Information provided by an applicant to the commissioners under this                                    
24       chapter, including information determined by the commissioners to be confidential                                 
25       under AS 43.90.150, shall be disclosed to the legislative auditor, the fiscal analyst who                         
26       serves as head of the legislative finance division, agents and contractors of the                                 
27       legislative auditor and the fiscal analyst, and members of the legislature, upon request                          
28       and after the individual making the request signs a confidentiality agreement prepared                            
29       by the commissioners.                                                                                             
30            Sec. 43.90.170. Application evaluation and ranking. (a) The commissioners                                  
31       shall evaluate all applications determined to be complete under AS 43.90.150 and rank                             
01       each application according to the net present value of the anticipated cash flow to the                           
02       state from the applicant's project proposal using the factors in (b) of this section and                          
03       weighted by the project's likelihood of success based on the commissioners'                                       
04       assessment of the factors listed in (c) of this section.                                                          
05            (b)  When evaluating the net present value of anticipated cash flow to the state                             
06       from the applicant's project proposal, the commissioners shall use an undiscounted                                
07       value and, at a minimum, discount rates of two, five, and eight percent, and consider                             
08                 (1)  how quickly the applicant proposes to begin construction of the                                    
09       proposed project and how quickly the project will commence commercial operation;                                  
10                 (2)  the wellhead value of the gas determined by the destination market                                 
11       value of the gas and estimated transportation costs;                                                              
12                 (3)  the ability of the applicant to prevent or reduce project cost                                     
13       overruns that would increase the tariff;                                                                          
14                 (4)  the initial design capacity of the applicant's project and the extent                              
15       to which the design can accommodate low-cost expansion;                                                           
16                 (5)  the amount of the contribution by the state under                                                  
17       AS 43.90.110(a)(1)(A) and (B) proposed by the applicant under AS 43.90.130(9); and                                
18                 (6)  other factors found by the commissioners to be relevant to the                                     
19       evaluation of the net present value of the anticipated cash flow to the state.                                    
20            (c)  When evaluating the project's likelihood of success, the commissioners                                  
21       shall consider                                                                                                    
22                 (1)  the reasonableness, specificity, and feasibility of the applicant's                                
23       work plan, timeline, and budget required to be submitted under AS 43.90.130,                                      
24       including the applicant's plan to manage cost overruns, the degree to which the                                   
25       applicant intends to insulate shippers from the effect of cost overruns, and the plan for                         
26       encouraging shippers to participate in the first binding open season;                                             
27                 (2)  the financial resources of the applicant;                                                          
28                 (3)  the ability of the applicant to comply with the proposed                                           
29       performance schedule;                                                                                             
30                 (4)  the applicant's organization, experience, accounting and operational                               
31       controls, technical skills or the ability to obtain them, necessary equipment or the                              
01       ability to obtain the necessary equipment;                                                                        
02                 (5)  the applicant's record of                                                                          
03                      (A)  performance on projects not licensed under this chapter;                                      
04                      (B)  integrity and good business ethics; and                                                       
05                 (6)  other evidence and factors found by the commissioners to be                                        
06       relevant to the evaluation of the project's likelihood of success.                                                
07            (d)  In this section, "net present value" means the discounted value of a future                             
08       stream of cash flow.                                                                                              
09            Sec. 43.90.180. Notice to the legislature of intent to issue license; denial of                            
10       license. (a) If, after evaluation of complete applications under AS 43.90.170 and                               
11       consideration of public comments received under AS 43.90.160, the commissioners                                   
12       determine that an application proposes a project that will sufficiently maximize the                              
13       benefits to the people of this state and merits issuance of a license, the commissioners                          
14       shall                                                                                                             
15                 (1)  issue a determination, with written findings addressing the basis for                              
16       the determination; the determination becomes a final agency action in accordance with                             
17       AS 43.90.190;                                                                                                     
18                 (2)  publish a notice of intent to issue a license that includes findings                               
19       addressing the basis for the determination; and                                                                   
20                 (3)  submit the determination along with the findings, supporting                                       
21       documentation, and a copy of the notice published under (2) of this subsection to the                             
22       presiding officer of each house of the legislature for action as provided in                                      
23       AS 43.90.190.                                                                                                     
24            (b)  If the commissioners determine that no application proposes a project that                              
25       sufficiently maximizes the benefits to the people of this state and merits issuance of a                          
26       license, the commissioners shall issue a written notice of that determination and the                             
27       findings on which the determination is based.                                                                     
28            (c)  The commissioners' determination under this (b) of this section is a final                              
29       agency action for purposes of appeal to the superior court.                                                       
30            (d)  Within 90 days after a determination under (b) of this section, the                                     
31       commissioners may issue a new request for applications for a license under                                        
01       AS 43.90.120.                                                                                                     
02            Sec. 43.90.190. Legislative approval; issuance of license. (a) After the                                   
03       presiding officer of each house of the legislature receives a determination from the                              
04       commissioners under AS 43.90.180, the rules committee of each house of the                                        
05       legislature shall introduce a bill in the committee's respective chamber that provides                            
06       for the approval of the license proposed to be issued by the commissioners.                                       
07            (b)  If a bill approving the issuance of the license becomes law, the                                        
08       commissioners shall issue the license as soon as practicable after the effective date of                          
09       the Act approving the issuance of the license. The issuance of the license approved by                            
10       the legislature is a final administrative action on the date the license is issued for                            
11       purposes of appeal to the superior court.                                                                         
12            (c)  If the legislature fails to approve the issuance of the license, the                                    
13       commissioners may request new applications for a license under AS 43.90.120.                                      
14            Sec. 43.90.200. Certification by regulatory authority and project sanction.                                
15       (a) A licensee that is awarded a certificate of public convenience and necessity from a                           
16       regulatory agency with jurisdiction over the project shall accept the certificate after all                       
17       rights of appeal relating to the certificate have expired.                                                        
18            (b)  If the licensee has the ability at the time the certificate is awarded to                               
19       finance construction of the project through ownership of rights to produce and market                             
20       gas resources, firm transportation commitments, or government financing, the licensee                             
21       shall sanction the project within one year after the effective date of the certificate of                         
22       public convenience and necessity issued by the regulatory agency with jurisdiction                                
23       over the project.                                                                                                 
24            (c)  If the licensee does not have the ability at the time the certificate is                                
25       awarded to finance construction of the project through ownership of rights to produce                             
26       and market gas resources, firm transportation commitments, or government financing,                               
27       the licensee shall sanction the project within five years after the effective date of the                         
28       certificate of public convenience and necessity issued by the regulatory agency with                              
29       jurisdiction over the project.                                                                                    
30            (d)  If the licensee fails to sanction the project timely as required under this                             
31       section, the licensee shall, upon request by the state,                                                           
01                 (1)  seek approval to abandon the project and transfer the certificate of                               
02       public convenience and necessity to the state or the state's designee; and                                        
03                 (2)  assign to the state or the state's designee all project data,                                      
04       engineering designs, contracts, and permits owned or acquired by the licensee during                              
05       the term of the license as of the date of the abandonment or transfer.                                            
06            (e)  The transfer of any certificate of public convenience and necessity or                                  
07       transfer under (d) of this section as a result of failure to comply with (a), (b), or (c) of                      
08       this section is at no cost to the state or the state's designee.                                                  
09            (f)  In this section, "time the certificate is awarded" means the date after which                           
10       all rights of appeal relating to the certificate have expired.                                                    
11            Sec. 43.90.210. Amendment of or modification to the project plan. Subject                                  
12       to the approval of the commissioners, a licensee may amend or modify its project plan                             
13       if the amendments or modifications are necessary as a result of changed circumstances                             
14       outside the licensee's control and not reasonably foreseeable before the license was                              
15       issued. An amendment or modification approved under this section must be consistent                               
16       with the requirements in AS 43.90.130 and may not diminish the net present value to                               
17       the state of the project or the likelihood of success for the project.                                            
18            Sec. 43.90.220. Records, reports, conditions, and audit requirements. (a) A                                
19       licensee shall maintain complete and accurate records of all expenditures and                                     
20       commitments of state contributions received under this chapter, including receipts and                            
21       records showing the payment or cost of purchased items and services, the names and                                
22       addresses of the sellers and service providers, and the dates of service or delivery.                             
23            (b)  Upon reasonable notice, the commissioners may audit the records of the                                  
24       entity receiving a contribution from the state under this chapter relating to                                     
25       expenditures, commitments, or contributions under this chapter and may                                            
26                 (1)  examine all books, records, and files of the entity;                                               
27                 (2)  conduct hearings or other investigative inquiries, and compel the                                  
28       attendance of witnesses and production of documents; and                                                          
29                 (3)  require the entity to furnish information and documents relating to                                
30       the project in hard copy or electronic format.                                                                    
31            (c)  After a license has been issued and so long as the terms of the license                                 
01       continue to apply, the licensee shall allow the commissioners to                                                  
02                 (1)  have a representative present at all meetings of the licensee's                                    
03       governing body and meetings of equity holders that relate to the project;                                         
04                 (2)  receive all relevant notices and information sent to the governing                                 
05       body and equity holders;                                                                                          
06                 (3)  enjoy the same access to information about the licensee as the                                     
07       governing body members and equity owners receive; and                                                             
08                 (4)  receive relevant reports or information from the licensee that the                                 
09       commissioners reasonably request.                                                                                 
10            (d)  A licensee shall maintain the records and reports required under this                                   
11       section for seven years from the date the licensee receives a contribution from the state                         
12       under this chapter.                                                                                               
13            Sec. 43.90.230. License violations; damages. (a) A licensee is in violation of                             
14       the license if the commissioners determine that the licensee has                                                  
15                 (1)  committed a contribution received from the state under this chapter                                
16       for an expenditure that is not a qualified expenditure under AS 43.90.110;                                        
17                 (2)  substantially departed from the specifications in the application                                  
18       without state approval of an amendment or modification as required under                                          
19       AS 43.90.210;                                                                                                     
20                 (3)  violated any provision of this chapter or any other provision of                                   
21       state or federal law material to the license; or                                                                  
22                 (4)  otherwise violated a material term of the license.                                                 
23            (b)  The commissioners shall provide a written notice to the licensee that                                   
24       identifies a license violation. The commissioners and the licensee shall have 90 days                             
25       after the date the notice is issued to informally resolve the violation.                                          
26            (c)  The commissioners may suspend disbursement of state contributions on                                    
27       the date the notice in (b) of this section is sent to the licensee. The commissioners may                         
28       resume disbursement on the date that the commissioners determine that the license                                 
29       violation is cured.                                                                                               
30            (d)  If the commissioners and the licensee are unable under (b) of this section                              
31       to resolve the issue of whether a violation has occurred, the commissioners shall                                 
01       provide the licensee with notice that the violation has not been cured and provide the                            
02       opportunity for the licensee to be heard. If after notice and hearing the commissioners                           
03       determine that the violation has not been cured, the commissioners shall issue a                                  
04       written decision that is a final administrative action for purposes of appeal to the                              
05       superior court.                                                                                                   
06            (e)  If the determination issued under (d) of this section finds that a violation                            
07       has not been cured, the commissioners may impose one or more of the following                                     
08       remedies:                                                                                                         
09                 (1)  discontinuation of state contributions under this chapter;                                         
10                 (2)  recoupment of state money that the licensee has received under this                                
11       chapter to date, with interest, regardless of whether the licensee has expended or                                
12       committed that money;                                                                                             
13                 (3)  license revocation;                                                                                
14                 (4)  assignment to the state or the state's designee of all project data,                               
15       engineering designs, contracts, and permits related to the project that are acquired by                           
16       the licensee during the term of the license;                                                                      
17                 (5)  any other remedies provided by law or in equity.                                                   
18            (f)  If the license is revoked under (e) of this section, the licensee                                       
19                 (1)  may not submit an application for the license in the event a request                               
20       for applications is issued under AS 43.90.120 after the date of revocation; and                                   
21                 (2)  shall deliver to the state all project data, engineering designs,                                  
22       contracts, rights-of-way, and other work product of the licensee that is related to the                           
23       licensed project.                                                                                                 
24            Sec. 43.90.240. Abandonment of project. (a) If the commissioners and the                                   
25       licensee agree that the project is uneconomic, the project shall be abandoned, the                                
26       entitlement provided for in AS 43.90.110 terminated and the state and the licensee no                             
27       longer have an obligation under this chapter with respect to the license, except for                              
28       requirements imposed on the licensee under (d) of this section and AS 43.90.220.                                  
29            (b)  If the commissioners and the licensee do not agree that the project is                                  
30       uneconomic, the disagreement shall be settled by arbitration administered by the                                  
31       American Arbitration Association under its Commercial Arbitration Rules, and                                      
01       judgment on the award rendered by the arbitrators may be entered in any court of                                  
02       competent jurisdiction. In the event of arbitration, each party shall select an arbitrator                        
03       and the two arbitrators shall appoint a third arbitrator from the American Arbitration                            
04       Association's National Roster who shall serve as the chair of the three member                                    
05       arbitration panel. If the arbitration panel determines that the project is                                        
06                 (1)  uneconomic, the project shall be abandoned and the state and the                                   
07       licensee no longer have an obligation under this chapter with respect to the license,                             
08       except for requirements imposed on the licensee under (d) of this section and                                     
09       AS 43.90.220; or                                                                                                  
10                 (2)  not uneconomic, the obligations of the licensee and the state                                      
11       continue under this chapter and the terms of the license.                                                         
12            (c)  If the state makes a payment to the licensee under AS 43.90.440, the                                    
13       license is considered abandoned, and the state and the licensee no longer have any                                
14       obligations under this chapter with respect to the license, except that the licensee must                         
15       comply with the                                                                                                   
16                 (1)  requirements imposed on the licensee under AS 43.90.220                                            
17       regarding state money received by the licensee before the license was considered                                  
18       abandoned; and                                                                                                    
19                 (2)  requirements of AS 43.90.440.                                                                      
20            (d)  If the commissioners and the licensee agree that the project is uneconomic                              
21       or an arbitration panel makes a final determination that the project is uneconomic, the                           
22       licensee shall deliver to the state or the state's designee all project data, engineering                         
23       designs, contracts, and permits related to the licensed project on reimbursement by the                           
24       state of the net amount of expenditures incurred and paid by the licensee that are                                
25       qualified expenditures for the purposes of AS 43.90.110.                                                          
26            Sec. 43.90.250. Alaska Gasline Inducement Act coordinator. (a) There is                                    
27       created in the office of the governor the position of Alaska Gasline Inducement Act                               
28       coordinator. Administrative support for the position shall be provided by the office of                           
29       the governor. The position shall continue until one year after commencement of                                    
30       commercial operations of the project.                                                                             
31            (b)  The governor shall appoint a person to the position of Alaska Gasline                                   
01       Inducement Act coordinator. The initial appointment is subject to confirmation by the                             
02       legislature and an appointment is subject to reconfirmation by the legislature during                             
03       the first regular legislative session after a general election at which a governor is                             
04       elected. The person may be removed from the position at the discretion of the                                     
05       governor.                                                                                                         
06            (c)  The Alaska Gasline Inducement Act coordinator is entitled to receive an                                 
07       annual salary equal to Step A, Range 28, of the salary schedule set out in                                        
08       AS 39.27.011(a) for Juneau.                                                                                       
09            (d)  The Alaska Gasline Inducement Act coordinator shall, in conjunction with                                
10       the commissioners,                                                                                                
11                 (1)  coordinate expeditious performance of all activities by state                                      
12       agencies for the project;                                                                                         
13                 (2)  ensure compliance by state agencies with the provisions of this                                    
14       chapter; and                                                                                                      
15                 (3)  coordinate with the Office of the Federal Coordinator for Alaska                                   
16       Natural Gas Transportation Projects (29 U.S.C. 720d) for natural gas transportation                               
17       projects in the state.                                                                                            
18            Sec. 43.90.260. Expedited review and action by state agencies. (a) A review                                
19       conducted and action taken by a state agency relating to the project shall be expedited                           
20       in a manner consistent with the completion of the necessary approvals in accordance                               
21       with this chapter.                                                                                                
22            (b)  Notwithstanding any contrary provision of law, a state agency may not                                   
23       include in any project certificate, right-of-way, permit, or other authorization issued to                        
24       the licensee a term or condition that is not required by law if the coordinator                                   
25       determines that the term or condition would prevent or impair in any significant                                  
26       respect the expeditious construction and operation or expansion of the project.                                   
27            (c)  Unless required by law, a state agency may not add to, amend, or abrogate                               
28       a certificate, right-of-way, permit, or other authorization issued to a licensee if the                           
29       coordinator determines that the action would prevent or impair in any significant                                 
30       respect the expeditious construction, operation, or expansion of the project.                                     
31                      Article 3. Resource Inducement.                                                                  
01            Sec. 43.90.300. Qualification for resource inducement. Notwithstanding any                                 
02       contrary provision of law, a lessee or other person that demonstrates to the satisfaction                         
03       of the commissioners that the person has committed to acquire firm transportation                                 
04       capacity in the first binding open season of the project is qualified to receive the                              
05       resource inducement set out in AS 43.90.310 and 43.90.320 for gas produced on the                                 
06       North Slope and shipped in firm transportation capacity acquired in the first binding                             
07       open season of the project. The inducement in AS 43.90.310 and 43.90.320 are                                      
08       contractual.                                                                                                      
09            Sec. 43.90.310. Royalty inducement. (a) Before the start of the first binding                              
10       open season to be conducted by the licensee, the commissioner of natural resources                                
11       shall adopt regulations that provide a method to determine the monthly value of the                               
12       state's royalty share of gas production and provide terms under which the state will                              
13       exercise its right to switch between taking its royalty in value or in kind for gas                               
14       committed for firm transportation in the first binding open season of the project.                                
15            (b)  The regulations must                                                                                    
16                 (1)  minimize retroactive adjustments to the monthly value of the state's                               
17       royalty share of gas production;                                                                                  
18                 (2)  provide a method for establishing a fair market value for each                                     
19       component of the state's royalty gas that is based on pricing data from reliable and                              
20       widely available industry trade publications and that uses appropriate adjustments to                             
21       reflect                                                                                                           
22                      (A)  deductions for actual and reasonable transportation costs                                     
23            for the state's royalty gas, including a reasonable share of the costs associated                            
24            with unused capacity commitments on gas pipelines from the North Slope to                                    
25            the first destination market with reasonable market liquidity;                                               
26                      (B)  location differentials between the destination markets                                        
27            where North Slope gas could be sold;                                                                         
28                      (C)  reasonable and actual costs for gas processing; and                                           
29                      (D)  deductions permitted under the 1980 Royalty Settlement                                        
30            Agreement for Prudhoe Bay gas;                                                                               
31                 (3)  establish terms under which the state will exercise its authority to                               
01       switch between taking its royalty gas in value and in kind to ensure that the state's                             
02       actions do not unreasonably                                                                                       
03                      (A)  cause the lessee or other qualified person to bear                                            
04            disproportionate transportation costs with respect to the state's royalty gas;                               
05                      (B)  interfere with the long-term marketing by a lessee or                                         
06            another person of its production.                                                                            
07            (c)  If a lessee or other person qualified for resource inducement under                                     
08       AS 43.90.300 agrees under (d) of this section, the lessee or other person is entitled to                          
09       elect whether                                                                                                     
10                 (1)  to calculate its gas royalty obligation under the regulations adopted                              
11       under (a) of this section for natural gas transported on a firm contract negotiated                               
12       during the project's first binding open season or under the methodology set out in the                            
13       existing leases from which the gas is produced; with the consent of the lessee, the                               
14       commissioner of natural resources shall contractually amend the existing lease to                                 
15       reflect the election under this paragraph and incorporate into the lease, the terms of the                        
16       relevant regulations as fixed contract terms; the election under this paragraph remains                           
17       in effect until new regulations are adopted as a result of the review under (e) of this                           
18       section, when a lessee or other person qualified under AS 43.90.300 may change its                                
19       election under this paragraph; on the request of the lessee, the commissioner of natural                          
20       resources shall contractually amend the lease to incorporate as fixed contract terms,                             
21       the relevant revised regulatory provisions; or                                                                    
22                 (2)  to enter into a contract with the state that amends the existing lease                             
23       terms by extending the required period of notice that the state must provide before                               
24       exercising the state's right to switch between taking its royalty in value or in kind for                         
25       gas committed for firm transportation in the first binding open season of the project.                            
26            (d)  To claim the inducement under (c) of this section, a lessee or other                                    
27       qualified person shall agree, on an application form provided by the Department of                                
28       Natural Resources, that the lessee or qualified person, and the affiliates, successors,                           
29       assigns, and agents of the lessee or qualified person, will not protest or appeal a filing                        
30       by the licensee to roll in expansion costs of the mainline up to a level that is required                         
31       in AS 43.90.130(7) if the Federal Energy Regulatory Commission does not have a                                    
01       policy in effect that presumes that rolled-in rates apply to the recovery of expansion                            
02       costs for the project; the agreement not to protest may not preclude the lessee or other                          
03       qualified person, or the affiliates, successors, assigns, and agents of the lessee or other                       
04       qualified person, from protesting a filing to roll in mainline expansion costs that                               
05       licensee is not required to propose and support under AS 43.90.130(7).                                            
06            (e)  The commissioner of natural resources shall provide for review of the                                   
07       regulations adopted under (a) of this section at least every two years after the                                  
08       commencement of commercial operations to determine whether the regulations                                        
09       continue to minimize retroactive adjustments to the monthly value of the state's                                  
10       royalty share of gas production under current conditions; the commissioner shall                                  
11       amend the regulations when the requirement is not being met.                                                      
12            (f)  No provision of this chapter precludes the election set out in (c) of this                              
13       section, nor may the commissioner of natural resources assert any provision of any                                
14       existing lease or unit agreement as precluding the elections set out in (c) of this                               
15       section.                                                                                                          
16            Sec. 43.90.320. Gas production tax exemption. (a) If a person qualified for                                
17       resource inducement under AS 43.90.300 agrees under (c) of this section, the person is                            
18       entitled to an annual exemption from the state's gas production tax in an amount equal                            
19       to the difference between the amount of the person's gas production tax obligation                                
20       calculated under the gas production tax in effect during that tax year and the amount of                          
21       the person's gas production tax obligation calculated under the gas production tax in                             
22       effect at the start of the first binding open season held under this chapter. If the                              
23       difference is less than zero, the gas production tax exemption is zero.                                           
24            (b)  The exemption under this section shall be issued by the commissioner of                                 
25       revenue in a certificate signed by the person and the commissioner, and the certificate                           
26       shall constitute a contract between the person and the state; the certificated exemption                          
27       may be applied within 10 years immediately following commencement of commercial                                   
28       operations of the project only to production taxes that are levied on North Slope gas                             
29       shipped through firm transportation capacity the person acquired during the first                                 
30       binding open season.                                                                                              
31            (c)  The exemption issued under (b) of this section must contain a contractual                               
01       commitment that the person and the person's affiliates, successors, assigns, or agents                            
02       will not protest or appeal a filing by the licensee to roll in mainline expansion costs up                        
03       to the level that the licensee is required to propose and support under AS 43.90.130(7)                           
04       if the Federal Energy Regulatory Commission does not have a policy in effect that                                 
05       presumes that rolled-in rates apply to the recovery of expansion costs for the project;                           
06       the contractual commitment required under this subsection may not preclude the                                    
07       person or the person's affiliates, successors, assigns, and agents, from protesting a                             
08       filing to roll in mainline expansion costs that the licensee is not required to propose                           
09       and support under AS 43.90.130(7).                                                                                
10                     Article 4. Miscellaneous Provisions.                                                              
11            Sec. 43.90.400. Alaska Gasline Inducement Act matching contribution                                        
12       fund; disbursements; audits. (a) There is established in the general fund an Alaska                             
13       Gasline Inducement Act matching contribution fund. The fund consists of money                                     
14       appropriated to it by the legislature for disbursement to pay the state's contributions                           
15       under AS 43.90.110. Money appropriated to the fund may be spent for the purposes of                               
16       the fund without further appropriation. Appropriations to the fund do not lapse under                             
17       AS 37.25.010, but remain in the fund for future disbursements. Nothing in this                                    
18       subsection creates a dedicated fund.                                                                              
19            (b)  The Department of Revenue shall manage the fund, and may invest money                                   
20       in the fund so as to yield competitive market rates as provided in AS 37.10.071.                                  
21       Income earned on the fund shall be accounted for separately and may be appropriated                               
22       to the fund.                                                                                                      
23            (c)  The commissioners shall adopt regulations that provide for application to                               
24       receive contributions for qualified expenditures as provided under AS 43.90.110, and                              
25       that provide for periodic audits of the use of money disbursed as contributions under                             
26       this chapter.                                                                                                     
27            (d)  Within 10 days after the convening of each regular session of the                                       
28       legislature, the commissioners shall submit to the legislature a report that lists the                            
29       disbursements from the fund during the preceding fiscal year with a written                                       
30       justification for each disbursement and the projected amount of money that will be                                
31       required for contributions in each of the next three fiscal years.                                                
01            Sec. 43.90.410. Regulations. The commissioner of revenue may adopt                                         
02       regulations on behalf of the commissioners for the purpose of implementing the                                    
03       provisions of this chapter. The commissioner of revenue and the commissioner of                                   
04       natural resources may change regulations adopted under authority outside of this                                  
05       chapter as necessary to implement the provisions of this chapter.                                                 
06            Sec. 43.90.420. Statute of limitations. A person may not bring a judicial                                  
07       action challenging the constitutionality of this chapter or a license issued under this                           
08       chapter unless the action is commenced in a court of competent jurisdiction in this                               
09       state within 90 days after the date that a license is issued.                                                     
10            Sec. 43.90.430. Interest. When a payment due to the state under this chapter                               
11       becomes delinquent, the payment bears interest at the rate applicable to a delinquent                             
12       tax under AS 43.05.225.                                                                                           
13            Sec. 43.90.440. Licensed project assurances. (a) Except as otherwise                                     
14       provided in this chapter, the state grants a licensee assurances that the licensee has                            
15       exclusive enjoyment of the inducement provided under this chapter before the                                      
16       commencement of commercial operations. If, before the commencement of                                             
17       commercial operations, the state extends to another person preferential royalty, tax, or                          
18       monetary treatment for the purpose of facilitating the construction of a competing                                
19       natural gas pipeline project in this state and if the licensee is in compliance with the                          
20       requirements of the license and with the requirements of state and federal statutes and                           
21       regulations relevant to the project, the licensee is entitled to payment from the state of                        
22       an amount equal to three times the total amount of the expenditures incurred and paid                             
23       by the licensee that are qualified expenditures for the purposes of AS 43.90.110 that                             
24       the licensee incurred in developing the licensee's project before the date that the state                         
25       first extended preferential treatment to another person. Upon payment by the state of                             
26       the amount owed under this section, the licensee shall, at no additional cost to the                              
27       state, assign to the state or the state's designee all project data, engineering designs,                         
28       contracts, and permits related to the project that are owned or were acquired by the                              
29       licensee during the term of the license.                                                                          
30            (b)  In this section, "competing natural gas project" means a project designed                               
31       to accommodate throughput of more than 500,000,000 cubic feet of North Slope gas a                                
01       day.                                                                                                              
02            Sec. 43.90.450. Assignments. (a) A licensee may transfer all or part of the                                
03       license, including the rights and obligations arising under the license, if                                       
04                 (1)  the transfer is approved in writing in advance by the                                              
05       commissioners; and                                                                                                
06                 (2)  the transfer does not increase or diminish the obligations created by                              
07       the license or diminish the likelihood of success of the project or the net present value                         
08       of the license to the state.                                                                                      
09            (b)  Notwithstanding the commissioners' approval of a transfer of all or part of                             
10       a license under (a) of this section, the transferor of the license remains subject to the                         
11       requirements of AS 43.90.220 for all state money received by the licensee before the                              
12       effective date of the transfer.                                                                                   
13            (c)  A person may transfer that person's rights to the royalty inducement under                              
14       AS 43.90.310 and the gas production tax exemptions under AS 43.90.320 only in                                     
15       connection with a sale or merger that results in transfer of all the person's assets in the                       
16       North Slope of this state, along with the person's firm transportation capacity contracts                         
17       in the project.                                                                                                   
18            Sec. 43.90.460. Conflicting laws. Nothing in this chapter shall be construed to                            
19       repeal or abrogate the administrative, regulatory, or statutory procedures and functions                          
20       of state and federal law governing the development and oversight of a project.                                    
21            Sec. 43.90.470. State pipeline employment development. The commissioner                                    
22       of labor and workforce development shall develop a job training program that will                                 
23       provide training for Alaskans in gas pipeline project management, construction,                                   
24       operations, maintenance, and other gas pipeline-related positions.                                                
25                       Article 5. General Provisions.                                                                  
26            Sec. 43.90.900. Definitions. In this chapter, unless the context otherwise                                 
27       requires,                                                                                                         
28                 (1)  "affiliate" means another person that controls, is controlled by, or is                            
29       under common control with a person and includes a division that operates as a                                     
30       functional unit;                                                                                                  
31                 (2)  "Alaska Gasline Inducement Act coordinator" and "coordinator"                                      
01       means the person appointed under AS 43.90.250;                                                                    
02                 (3)  "commencement of commercial operations" means the first flow of                                    
03       gas in the project that generates revenue to the owners;                                                          
04                 (4)  "commissioners" means the commissioner of revenue and the                                          
05       commissioner of natural resources;                                                                                
06                 (5)  "control" means the possession of ownership interest or authority                                  
07       sufficient to, directly or indirectly, and whether acting alone or in conjunction with                            
08       others, direct or cause the direction of the management or policies of a company, and                             
09       is rebuttably presumed if the voting interest held is 10 percent or more;                                         
10                 (6)  "equity holder" means the                                                                          
11                      (A)  stockholders of a corporation;                                                                
12                      (B)  members of a limited liability company;                                                       
13                      (C)  partners of a partnership;                                                                    
14                      (D)  joint venturers of a joint venture;                                                           
15                      (E)  members of a governmental authority and similar persons;                                      
16            or                                                                                                           
17                      (F)  holders of any other entity or person;                                                        
18                 (7)  "gas processing" means the treatment of gas downstream of the                                      
19       point of production to extract natural gas liquids;                                                               
20                 (8)  "governing body" means a corporation's board of directors, a                                       
21       limited liability company's managing members, a partnership's general partners, a joint                           
22       venturer's joint venturers, a governmental authority's board or council members, and                              
23       similar entities;                                                                                                 
24                 (9)  "lease" means an oil and gas, or gas only, lease issued by this state;                             
25                 (10)  "lessee" means a person that holds a working interest in an oil and                               
26       gas, or gas only, lease issued by this state;                                                                     
27                 (11)  "license" means a license issued under this chapter;                                              
28                 (12)  "licensee" means the holder of a license issued under this chapter                                
29       and all affiliates, successors, assigns, and agents of the holder;                                                
30                 (13)  "North Slope" means that part of the state that lies North of 68                                  
31       degrees North latitude;                                                                                           
01                 (14)  "North Slope gas" means natural gas produced on the North                                         
02       Slope;                                                                                                            
03                 (15)  "open season" means the period during which a shipper may                                         
04       commit to use a portion of the capacity of the project for the transportation of natural                          
05       gas;                                                                                                              
06                 (16)  "project" means a natural gas pipeline project authorized under a                                 
07       license issued under this chapter;                                                                                
08                 (17)  "recourse rates" means cost-based rates with a minimum and                                        
09       maximum range that are approved by the Federal Energy Regulatory Commission, the                                  
10       Regulatory Commission of Alaska, or the National Energy Board of Canada, as                                       
11       appropriate, and set out in the pipeline's tariff; "recourse rates" includes only those                           
12       rates that the pipeline must make available to all shippers;                                                      
13                 (18)  "sanction" means financial commitments to go forward with the                                     
14       project as evidenced by entering into financial commitments of at least                                           
15       $1,000,000,000 with third parties;                                                                                
16                 (19)  "under common control with" has the meaning given "control" in                                    
17       this section;                                                                                                     
18                 (20)  "unit agreement" means an agreement executed by the working                                       
19       interest owners and royalty owners creating the unit.                                                             
20            Sec. 43.90.990. Short title. This chapter may be cited as the Alaska Gasline                               
21       Inducement Act.                                                                                                   
22    * Sec. 2. AS 36.30.850(b) is amended by adding a new paragraph to read:                                            
23                 (45)  contracts for an arbitration panel to determine abandonment of a                                  
24       project under AS 43.90.240, and contracts for the development of application                                      
25       provisions for licensure and for the evaluation of those applications under AS 43.90.                             
26    * Sec. 3. AS 39.25.110 is amended by adding a new paragraph to read:                                               
27                 (41)  the Alaska Gasline Inducement Act coordinator appointed under                                     
28       AS 43.90.250.                                                                                                     
29    * Sec. 4. AS 40.25.120(a) is amended to read:                                                                      
30            (a)  Every person has a right to inspect a public record in the state, including                             
31       public records in recorders' offices, except                                                                      
01                 (1)  records of vital statistics and adoption proceedings, which shall be                               
02       treated in the manner required by AS 18.50;                                                                       
03                 (2)  records pertaining to juveniles unless disclosure is authorized by                                 
04       law;                                                                                                              
05                 (3)  medical and related public health records;                                                         
06                 (4)  records required to be kept confidential by a federal law or                                       
07       regulation or by state law;                                                                                       
08                 (5)  to the extent the records are required to be kept confidential under                               
09       20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure                              
10       or retain federal assistance;                                                                                     
11                 (6)  records or information compiled for law enforcement purposes, but                                  
12       only to the extent that the production of the law enforcement records or information                              
13                      (A)  could reasonably be expected to interfere with enforcement                                    
14            proceedings;                                                                                                 
15                      (B)  would deprive a person of a right to a fair trial or an                                       
16            impartial adjudication;                                                                                      
17                      (C)  could reasonably be expected to constitute an unwarranted                                     
18            invasion of the personal privacy of a suspect, defendant, victim, or witness;                                
19                      (D)  could reasonably be expected to disclose the identity of a                                    
20            confidential source;                                                                                         
21                      (E)  would disclose confidential techniques and procedures for                                     
22            law enforcement investigations or prosecutions;                                                              
23                      (F)  would disclose guidelines for law enforcement                                                 
24            investigations or prosecutions if the disclosure could reasonably be expected to                             
25            risk circumvention of the law; or                                                                            
26                      (G)  could reasonably be expected to endanger the life or                                          
27            physical safety of an individual;                                                                            
28                 (7)  names, addresses, and other information identifying a person as a                                  
29       participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the                                
30       advance college tuition savings program under AS 14.40.803 - 14.40.817;                                           
31                 (8)  public records containing information that would disclose or might                                 
01       lead to the disclosure of a component in the process used to execute or adopt an                                  
02       electronic signature if the disclosure would or might cause the electronic signature to                           
03       cease being under the sole control of the person using it;                                                        
04                 (9)  reports submitted under AS 05.25.030 concerning certain                                            
05       collisions, accidents, or other casualties involving boats;                                                       
06                 (10)  records or information pertaining to a plan, program, or                                          
07       procedures for establishing, maintaining, or restoring security in the state, or to a                             
08       detailed description or evaluation of systems, facilities, or infrastructure in the state,                        
09       but only to the extent that the production of the records or information                                          
10                      (A)  could reasonably be expected to interfere with the                                            
11            implementation or enforcement of the security plan, program, or procedures;                                  
12                      (B)  would disclose confidential guidelines for investigations or                                  
13            enforcement and the disclosure could reasonably be expected to risk                                          
14            circumvention of the law; or                                                                                 
15                      (C)  could reasonably be expected to endanger the life or                                          
16            physical safety of an individual or to present a real and substantial risk to the                            
17            public health and welfare;                                                                                   
18                 (11)  the written notification regarding a proposed regulation provided                                 
19       under AS 24.20.105 to the Department of Law and the affected state agency and                                     
20       communications between the Legislative Affairs Agency, the Department of Law, and                                 
21       the affected state agency under AS 24.20.105;                                                                 
22                 (12)  records that are                                                                              
23                      (A)  proprietary or a trade secret in accordance with                                          
24            AS 43.90.150;                                                                                            
25                      (B)  applications that are received under AS 43.90.120 -                                       
26            43.90.140 until notice is published under AS 43.90.160.                                                  
27    * Sec. 5. AS 42.45 is amended by adding a new section to read:                                                     
28            Sec. 42.45.025. Gas utility revolving loan fund. (a) The gas utility revolving                             
29       loan fund is established in the authority. The fund consists of                                                   
30                 (1)  appropriations made to the fund; and                                                               
31                 (2)  repayments of principal and interest on loans made under this                                      
01       section.                                                                                                          
02            (b)  The authority may make loans from the gas utility revolving loan fund to                                
03       gas utilities certificated under AS 42.05. A loan from the fund may be made only for                              
04       the purpose of constructing or extending new gas service into an area of the state that a                         
05       gas utility may serve under a certificate of public convenience and necessity issued                              
06       under AS 42.05. A loan may be made from the fund to a gas utility if the utility invests                          
07       the money necessary to provide service for each consumer for whom service would be                                
08       provided by the construction or extension of gas service.                                                         
09            (c)  A loan from the gas utility revolving loan fund shall bear an annual rate of                            
10       interest of two percent of the unpaid balance of the loan.                                                        
11            (d)  When the authority makes a loan under this section, the gas utility                                     
12       receiving the loan shall                                                                                          
13                 (1)  in addition to the rates that it is authorized to charge, charge the                               
14       consumers served by the gas service constructed or extended with the loan proceeds an                             
15       amount sufficient to pay the interest costs of the loan;                                                          
16                 (2)  pay to the authority annually an amount equal to                                                   
17                      (A)  interest of two percent on the unpaid balance of the loan;                                    
18            and                                                                                                          
19                      (B)  payments on the unpaid balance of the principal of the loan                                   
20            for each new consumer served by the gas service constructed or extended with                                 
21            the loan proceeds; payments on the unpaid balance of the principal of the loan                               
22            shall be made at a rate equal to the difference between the actual cost of                                   
23            making the service connection to the consumers and the minimum investment                                    
24            for each consumer required of the utility before a loan is made under (b) of this                            
25            section.                                                                                                     
26            (e)  The authority shall                                                                                     
27                 (1)  adopt regulations necessary to carry out the provisions of this                                    
28       section; and                                                                                                      
29                 (2)  administer the gas utility revolving loan fund.                                                    
30            (f)  Money in the gas utility revolving loan fund may be used by the legislature                             
31       to make appropriations for costs of administering the fund.                                                       
01            (g)  On June 30 of each fiscal year, the unexpended and unobligated cash                                     
02       balance of the fund that is attributable to loans owned by the fund lapses into the                               
03       general fund.                                                                                                     
04            (h)  In this section,                                                                                        
05                 (1)  "consumer" means a person or a governmental agency, if the                                         
06       person or governmental agency requests and offers to pay for gas service to a facility                            
07       or part of a facility;                                                                                            
08                 (2)  "facility" means a structure capable of receiving and using natural                                
09       gas energy; and                                                                                                   
10                 (3)  "governmental agency" includes, with respect to the state or federal                               
11       government or a municipal government, a legislative body, board of regents,                                       
12       administrative body, board, commission, committee, subcommittee, authority, council,                              
13       agency, public corporation, school board, department, division, bureau, or other                                  
14       subordinate unit, whether advisory or otherwise, of the state, federal, or municipal                              
15       government.                                                                                                       
16    * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to                          
17 read:                                                                                                                   
18       FIRST REQUEST FOR APPLICATIONS FOR THE LICENSE. It is the intent of the                                           
19 legislature that the first request for applications for the license by the commissioners under                          
20 AS 43.90.120 as enacted in sec. 1 of this Act be issued within 90 days after the effective date                         
21 of this Act.                                                                                                            
22    * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to                          
23 read:                                                                                                                   
24       SEVERABILITY. Under AS 01.10.030, if any provision of this Act, or the application                                
25 of it to any person or circumstance, is held invalid, the remainder of this Act and the                                 
26 application to other persons or circumstances are not affected.                                                         
27    * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to                          
28 read:                                                                                                                   
29       CONDITIONAL EFFECT. AS 42.45.025, enacted by sec. 5 of this Act, takes effect                                     
30 only if a natural gas pipeline project that provides for delivery points in the state receives a                        
31 license under AS 43.90.                                                                                                 
01    * Sec. 9. If sec. 5 of this Act takes effect, it takes effect on the date a natural gas pipeline                   
02 project that provides for delivery points in the state receives a license under AS 43.90, as                            
03 enacted by sec. 1 of this Act.                                                                                          
04    * Sec. 10. Except as provided in sec. 9 of this Act, this Act takes effect immediately under                       
05 AS 01.10.070(c).