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CSHB 177(RES): "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; making conforming amendments; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 177(RES)                                                                    
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; making conforming amendments;                                         
05 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 in 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. (a) 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            (b)  Nothing in this chapter precludes a person from pursuing a gas pipeline                                 
14       project independently from this chapter.                                                                          
15            Sec. 43.90.110. Natural gas pipeline project construction inducement. (a)                                
16       Subject to the limitations of this chapter, a license issued under this chapter entitles the                      
17       licensee or its designated affiliate to receive                                                                   
18                 (1)  subject to appropriation, state matching contributions in a total                                  
19       amount not to exceed $500,000,000, paid to the licensee during the five-year period                               
20       immediately following the date the license is awarded; the payment period may be                                  
21       extended under an amendment or modification under AS 43.90.210; a payment under                                   
22       this paragraph shall be made according to the following:                                                          
23                      (A)  on or before the close of the first binding open season, the                                  
24            state shall match the licensee's qualified expenditures at the level specified in                            
25            the license; however, the state's matching contribution may not exceed 50                                    
26            percent of the qualified expenditures incurred before the end of the first                                   
27            binding open season;                                                                                         
28                      (B)  after the close of the first binding open season, the state                                   
29            shall match the licensee's qualified expenditures at the level specified in the                              
30            license; however, the state's matching contribution may not be greater than 80                               
31            percent of the qualified expenditures incurred after the close of the first                                  
01            binding open season;                                                                                         
02                      (C)  a qualified expenditure is a cost that is incurred after the                                  
03            license is issued under this chapter, is incurred by the licensee or the licensee's                          
04            designated affiliate, and is directly and reasonably related to obtaining a                                  
05            certificate or amended certificate of public convenience and necessity from the                              
06            Federal Energy Regulatory Commission or the Regulatory Commission of                                         
07            Alaska, as appropriate, for development of the project; "qualified expenditure"                              
08            does not include overhead costs, litigation costs, the cost of an asset or work                              
09            product acquired by the licensee before the license is issued, civil penalties,                              
10            criminal penalties, or fines; and                                                                            
11                 (2)  the benefit of an Alaska Gasline Inducement Act coordinator who                                    
12       has the authority prescribed in AS 43.90.250.                                                                     
13            (b)  The commissioner of revenue in consultation with the commissioner of                                    
14       natural resources shall adopt regulations for determining whether an expenditure is a                             
15       qualified expenditure for the purposes of (a) of this section.                                                    
16            Sec. 43.90.120. Request for applications for the license. (a) The                                          
17       commissioners shall commence a public process to request applications for a license                               
18       under this chapter as soon as practicable after the effective date of this chapter.                               
19            (b)  The commissioners may use independent contractors to assist them in                                     
20       developing the application and in evaluating the applications received.                                           
21            (c)  The provisions of AS 36.30 do not apply to requests for applications under                              
22       this chapter.                                                                                                     
23            Sec. 43.90.130. Application requirements. In order to be considered for the                                
24       license, an applicant shall file an application that is consistent with the terms of the                          
25       request for applications under AS 43.90.120 and shall                                                             
26                 (1)  file the application by the deadline established by the                                            
27       commissioners in the request for applications;                                                                    
28                 (2)  provide a detailed description of a proposed natural gas pipeline                                  
29       project for transporting natural gas from the North Slope to market, which may                                    
30       include multiple design proposals, including different proposals for pipe diameter,                               
31       wall thickness, and transportation capacity, and which shall include                                              
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 unless the application proposes specific in-state delivery points;                                    
07                      (C)  an analysis demonstrating the economic and technical                                          
08            viability of the project, including a detailed description of all pipeline access                            
09            and tariff terms the applicant plans to offer;                                                               
10                      (D)  an economically and technically viable work plan, timeline,                                   
11            and associated budget for developing the proposed project and work associated                                
12            with the project that includes field work, environmental studies, design and                                 
13            engineering, implementing practices for controlling carbon emissions from                                    
14            natural gas systems as established by the United States Environmental                                        
15            Protection Agency, and complying with all applicable state, federal, and                                     
16            international regulatory requirements that affect the proposed project; the                                  
17            applicant shall address the following:                                                                       
18                           (i)  if the proposed project involves a pipeline into or                                      
19                 through Canada, a detailed description of the applicant's plan to obtain                                
20                 necessary rights-of-way and authorizations in Canada, a description of                                  
21                 the transportation services to be provided and a description of rate-                                   
22                 making methodologies the applicant will propose to the regulatory                                       
23                 agencies, an estimate of rates and charges for all services;                                            
24                           (ii)  if the proposed project involves marine                                                 
25                 transportation of liquefied natural gas, a description of the marine                                    
26                 transportation services to be provided and a description of proposed                                    
27                 rate-making methodologies; an estimate of rates and charges for all                                     
28                 services by third parties; a detailed description of all proposed access                                
29                 and tariff terms for liquefaction services or, if a third party would                                   
30                 perform liquefaction services, the identification of that third party and                               
31                 the terms applicable to the liquefaction services; a complete description                               
01                 of the marine segment of the project, including the proposed                                            
02                 ownership, control, and cost of liquefied natural gas tankers, the                                      
03                 management of shipping services, liquefied natural gas export                                           
04                 destination, regasification facilities and pipeline facilities needed for                               
05                 transport to market destinations; the entity or entities that would be                                  
06                 required to obtain necessary export permits and licenses or a certificate                               
07                 or amended certificate of public convenience and necessity from the                                     
08                 Federal Energy Regulatory Commission for the transportation of                                          
09                 liquefied natural gas in interstate commerce if United States markets                                   
10                 are proposed; and all rights-of-way or authorizations required from a                                   
11                 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 18 C.F.R. Part 157, Subpart B (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 or                                   
21            amended certificate of public convenience and necessity; and                                                 
22                      (C)  apply for a Federal Energy Regulatory Commission                                              
23            certificate or amended certificate of public convenience and necessity to                                    
24            authorize the construction and operation of the proposed project described in                                
25            this section by a date 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 or amended certificate of public                                      
01            convenience and necessity to authorize the construction and operation of the                                 
02            proposed project by a date 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                                   
05       nonbinding 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) of this section, revenue from transportation contracts covers                              
11            the cost of the expansion, including increased fuel costs, and a reasonable                                  
12            return on capital as authorized by the Federal Energy Regulatory Commission                                  
13            or the Regulatory Commission of Alaska, as applicable, and there is no                                       
14            impairment of the proposed project's ability to recover the costs of existing                                
15            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)  make a commitment that the applicant                                                               
21                      (A)  will propose and support the recovery of mainline capacity                                    
22            expansion costs, including fuel costs, from all mainline system users through                                
23            rolled-in rates as provided in (B) and (C) of this paragraph or through a                                    
24            combination of incremental and rolled-in rates as provided in (D) of this                                    
25            paragraph;                                                                                                   
26                      (B)  will propose and support the recovery of mainline capacity                                    
27            expansion costs, including fuel costs, from all mainline system users through                                
28            rolled-in rates; an applicant is obligated under this subparagraph only if the                               
29            rolled-in rates would increase the rates                                                                     
30                           (i)  not described in (ii) of this subparagraph by not more                                   
31                 than 15 percent above the initial maximum recourse rates for capacity                                   
01                 acquired before commercial operations commence; in this sub-                                            
02                 subparagraph, "initial maximum recourse rates" means the highest cost-                                  
03                 based rates for any specific transportation service set by the Federal                                  
04                 Energy Regulatory Commission, the Regulatory Commission of                                              
05                 Alaska, or the National Energy Board of Canada, as appropriate, when                                    
06                 the pipeline commences commercial operations;                                                           
07                           (ii)  by not more than 15 percent above the negotiated                                        
08                 rate for pipeline capacity on the date of commencement of commercial                                    
09                 operations where the holder of the capacity is not an affiliate of the                                  
10                 owner of the pipeline project; for the purposes of this sub-                                            
11                 subparagraph, "negotiated rate" means the rate in a transportation                                      
12                 service agreement that provides for a rate that varies from the otherwise                               
13                 applicable cost-based rate, or recourse rate, set out in a gas pipeline's                               
14                 tariff approved by the Federal Energy Regulatory Commission, the                                        
15                 Regulatory Commission of Alaska, or the National Energy Board of                                        
16                 Canada, as appropriate; or                                                                              
17                           (iii)  for capacity acquired in an expansion after                                            
18                 commercial operations commence, to a level that is not more than 115                                    
19                 percent of the volume-weighted average of all rates collected by the                                    
20                 project owner for pipeline capacity on the date commercial operations                                   
21                 commence;                                                                                               
22                      (C)  will, if recovery of mainline capacity expansion costs,                                       
23            including fuel costs, through rolled-in rate treatment would increase the rates                              
24            for capacity described in (B) of this paragraph, propose and support the partial                             
25            roll-in of mainline expansion costs, including fuel costs, to the extent that rates                          
26            acquired before commercial operations commence do not exceed the levels                                      
27            described in (B) of this paragraph;                                                                          
28                      (D)  may, for the recovery of mainline capacity expansion costs,                                   
29            including fuel costs, that, under rolled-in rate treatment, would result in rates                            
30            that exceed the level in (B) of this paragraph, propose and support the recovery                             
31            of those costs through any combination of incremental and rolled-in rates;                                   
01                      (E)  will not enter into a negotiated rate agreement that would                                    
02            preclude the applicant from collecting from any shipper, including a shipper                                 
03            with a negotiated rate agreement, the rolled-in rates that are required to be                                
04            proposed and supported by the applicant under (B) of this paragraph or the                                   
05            partial rolled-in rates that are required to be proposed and supported by the                                
06            applicant under (C) of this paragraph;                                                                       
07                 (8)  state how the applicant proposes to deal with a North Slope gas                                    
08       treatment plant regardless of whether that plant is part of the applicant's proposal, and,                        
09       to the extent that the plant will be owned entirely or in part by the applicant, commit to                        
10       seek certificate authority from the Federal Energy Regulatory Commission if the                                   
11       proposed project is engaged in interstate commerce or from the Regulatory                                         
12       Commission of Alaska if the project is not engaged in interstate commerce; for a                                  
13       North Slope gas treatment plant that will be owned entirely or in part by the applicant,                          
14       for rate-making purposes, commit to value previously owned assets that are part of the                            
15       gas treatment plant at net book value; describe the gas treatment plant, including its                            
16       design, engineering, construction, ownership, and plan of operation, the identity of any                          
17       third party that will participate in the ownership or operation of the gas treatment                              
18       plant, and the means by which the applicant will work to minimize the effect of the                               
19       costs of the facility on the tariff;                                                                              
20                 (9)  propose a percentage and total dollar amount for the state's                                       
21       matching contribution under AS 43.90.110(1)(A) and (B), to be specified in the                                    
22       license;                                                                                                          
23                 (10)  commit to propose and support rates for the proposed project and                                  
24       for any North Slope gas treatment plant that the applicant may own, in whole or in                                
25       part, that are based on a capital structure for rate-making that consists of not less than                        
26       70 percent debt;                                                                                                  
27                 (11)  describe the means for preventing or managing cost overruns for                                   
28       the proposed project, and the measures for minimizing the effect from any overruns;                               
29                 (12)  commit to provide a minimum of five delivery points of natural                                    
30       gas in this state;                                                                                                
31                 (13)  commit to offer firm transportation service to delivery points in                                 
01       this state as part of the tariff regardless of whether any shippers bid successfully in a                         
02       binding open season for firm transportation service to delivery points in this state, and                         
03       commit to offer distance-sensitive rates to delivery points in this state consistent with                         
04       18 C.F.R. 157.34(c)(8);                                                                                           
05                 (14)  commit to establish a local headquarters in this state for the                                    
06       proposed project;                                                                                                 
07                 (15)  to the extent permitted by law, commit to                                                         
08                      (A)  hire qualified residents from throughout the state for                                        
09            management, engineering, construction, operations, maintenance, and other                                    
10            positions on the proposed project;                                                                           
11                      (B)  contract with businesses located in the state;                                                
12                      (C)  establish hiring facilities or use existing hiring facilities in                              
13            the state; and                                                                                               
14                      (D)  use, as far as is practicable, the job centers and associated                                 
15            services operated by the Department of Labor and Workforce Development                                       
16            and an Internet-based labor exchange system operated by the state;                                           
17                 (16)  waive the right to appeal the issuance of a license to another                                    
18       applicant or to appeal the determination under AS 43.90.180(b) that no application                                
19       merits the issuance of a license;                                                                                 
20                 (17)  commit to negotiate, before construction, a project labor                                         
21       agreement; in this paragraph, "project labor agreement" means a comprehensive                                     
22       collective bargaining agreement between the licensee or its agent and the appropriate                             
23       labor representatives to ensure expedited construction with labor stability for the                               
24       project by qualified residents of the state;                                                                      
25                 (18)  commit that the state matching contribution received by the                                       
26       licensee may not be included in the applicant's rate base and shall be used as a credit                           
27       against the licensee's cost of service;                                                                           
28                 (19)  provide a detailed description of the applicant and other entities                                
29       participating with the applicant in the application and the project proposed by the                               
30       applicant; and persons the applicant intends to involve in the construction and                                   
31       operation of the proposed project; the description must include the nature of the                                 
01       affiliation for each person, the commitments by the person to the applicant, and other                            
02       information relevant to the commissioners' evaluation of the readiness and ability of                             
03       the applicant to complete the project presented in the application; and                                           
04                 (20)  otherwise demonstrate the readiness and ability to perform the                                    
05       activities specified in the application, including following the detailed work plan,                              
06       timeline, and operation within the associated budget.                                                             
07            Sec. 43.90.140. Initial application review; additional information requests;                               
08       complete applications. (a) The commissioners shall review each application filed                                
09       under AS 43.90.130 to determine whether it is consistent with the terms of the request                            
10       for applications and meets the requirements in AS 43.90.130. The commissioners shall                              
11       reject an application that does not meet the terms of the request for applications or the                         
12       requirements in AS 43.90.130.                                                                                     
13            (b)  The commissioners may request additional information relating to the                                    
14       application.                                                                                                      
15            (c)  If, within the time specified by the commissioners, the applicant fails to                              
16       provide the additional information requested under (b) of this section, or submits                                
17       additional information that is not responsive, the application shall be rejected.                                 
18            (d)  For an application not rejected under this section, the commissioners shall                             
19       make a determination that the application, including any requested additional                                     
20       information, is complete.                                                                                         
21            Sec. 43.90.150. Proprietary information and trade secrets. (a) At the                                    
22       request of the applicant, information submitted under this chapter that the applicant                             
23       identifies and demonstrates is proprietary or is a trade secret is confidential and not                           
24       subject to public disclosure under AS 40.25, unless the applicant is granted a license                            
25       under this chapter. After a license is awarded, all information submitted by the                                  
26       licensee under this chapter, and retained for the purposes of this chapter, shall be made                         
27       public.                                                                                                           
28            (b)  If the commissioners determine that the information submitted by the                                    
29       applicant is not proprietary or is not a trade secret, the commissioners shall notify the                         
30       applicant and return the information at the request of the applicant.                                             
31            (c)  In this section, "proprietary" means that the information is treated by the                             
01       applicant as confidential and the public disclosure of that information would adversely                           
02       affect the competitive position of the applicant, or materially diminish the commercial                           
03       value of the information to the applicant.                                                                        
04            Sec. 43.90.160. Notice, review, and comment. (a) The commissioners shall                                   
05       publish notice and provide a 60-day period for public review and comment on all                                   
06       applications determined complete under AS 43.90.140.                                                              
07            (b)  Applications received under this chapter are not subject to public                                      
08       disclosure under AS 40.25 until the commissioners publish notice under this section.                              
09       However, information that the commissioners have determined is confidential under                                 
10       AS 43.90.150 may not be made public even after the notice is published under (a) of                               
11       this section, except as provided in AS 43.90.150. If information is held confidential                             
12       under AS 43.90.150, the applicant shall provide a summary of the confidential                                     
13       information that is satisfactory to the commissioners, and the commissioners shall                                
14       make the summary of the confidential information available to the public.                                         
15            (c)  Information provided by an applicant to the commissioners under this                                    
16       chapter, including information determined by the commissioners to be confidential                                 
17       under AS 43.90.150, shall be disclosed to the legislative auditor, the fiscal analyst who                         
18       serves as head of the legislative finance division, agents and contractors of the                                 
19       legislative auditor and the fiscal analyst, and members of the legislature, on request                            
20       and after the individual making the request signs a confidentiality agreement prepared                            
21       by the commissioners.                                                                                             
22            Sec. 43.90.170. Application evaluation and ranking. (a) The commissioners                                  
23       shall evaluate all applications determined to be complete under AS 43.90.140,                                     
24       consider public comments received under AS 43.90.160(a), and rank each application                                
25       according to the net present value of the anticipated cash flow to the state from the                             
26       applicant's project proposal using the factors in (b) of this section and weighted by the                         
27       project's likelihood of success based on the commissioners' assessment of the factors                             
28       listed in (c) of this section.                                                                                    
29            (b)  When evaluating the net present value of anticipated cash flow to the state                             
30       from the applicant's project proposal, the commissioners shall use an undiscounted                                
31       value and, at a minimum, discount rates of two, five, and eight percent, and consider                             
01                 (1)  how quickly the applicant proposes to begin construction of the                                    
02       proposed project and how quickly the project will commence commercial operation;                                  
03                 (2)  the net back value of the gas determined by the destination market                                 
04       value of the gas and estimated transportation and treatment costs;                                                
05                 (3)  the ability of the applicant to prevent or reduce project cost                                     
06       overruns that would increase the tariff;                                                                          
07                 (4)  the initial design capacity of the applicant's project and the extent                              
08       to which the design can accommodate low-cost expansion;                                                           
09                 (5)  the amount of the matching contribution by the state under                                         
10       AS 43.90.110(a)(1)(A) and (B) proposed by the applicant under AS 43.90.130(9); and                                
11                 (6)  other factors found by the commissioners to be relevant to the                                     
12       evaluation of the net present value of the anticipated cash flow to the state, including                          
13       the value of state income tax or equivalent payment in lieu of tax and supplemental                               
14       profit-sharing to the state if contractually stipulated.                                                          
15            (c)  When evaluating the project's likelihood of success, the commissioners                                  
16       shall consider                                                                                                    
17                 (1)  the reasonableness, specificity, and feasibility of the applicant's                                
18       work plan, timeline, and budget required to be submitted under AS 43.90.130,                                      
19       including the applicant's plan to manage cost overruns, insulate shippers from the                                
20       effect of cost overruns, and encourage shippers to participate in the first binding open                          
21       season;                                                                                                           
22                 (2)  the financial resources of the applicant;                                                          
23                 (3)  the ability of the applicant to comply with the proposed                                           
24       performance schedule;                                                                                             
25                 (4)  the applicant's organization, experience, accounting and operational                               
26       controls, technical skills or the ability to obtain them, necessary equipment or the                              
27       ability to obtain the necessary equipment;                                                                        
28                 (5)  the applicant's record of                                                                          
29                      (A)  performance on projects not licensed under this chapter;                                      
30                      (B)  integrity and good business ethics; and                                                       
31                 (6)  other evidence and factors found by the commissioners to be                                        
01       relevant to the evaluation of the project's likelihood of success.                                                
02            (d)  In this section, "net present value" means the discounted value of a future                             
03       stream of cash flow.                                                                                              
04            Sec. 43.90.180. Notice to the legislature of intent to issue license; denial of                            
05       license. (a) If, after consideration of public comments received under AS 43.90.160(a)                          
06       and evaluation of complete applications under AS 43.90.170, the commissioners                                     
07       determine that an application proposes a project that will sufficiently maximize the                              
08       benefits to the people of this state and merits issuance of a license under this chapter,                         
09       the commissioners shall                                                                                           
10                 (1)  issue a determination, with written findings addressing the basis for                              
11       the determination; the determination becomes a final agency action in accordance with                             
12       AS 43.90.190;                                                                                                     
13                 (2)  publish notice of intent to issue a license under this chapter with                                
14       written findings addressing the basis for the determination; and                                                  
15                 (3)  submit the determination along with the findings, supporting                                       
16       documentation, and a copy of the notice published under (2) of this subsection to the                             
17       presiding officer of each house of the legislature for action as provided in                                      
18       AS 43.90.190.                                                                                                     
19            (b)  If, after the evaluation of complete applications under AS 43.90.170, the                               
20       commissioners determine that no application sufficiently maximizes the benefits to the                            
21       people of this state and merits issuance of a license under this chapter, the                                     
22       commissioners shall issue a written finding that addresses the basis for that                                     
23       determination.                                                                                                    
24            (c)  The commissioners' determination under this (b) of this section is a final                              
25       agency action.                                                                                                    
26            Sec. 43.90.190. Legislative approval; issuance of license. (a) After the                                   
27       presiding officer of each house of the legislature receives a determination from the                              
28       commissioners under AS 43.90.180, the rules committee of each house of the                                        
29       legislature shall introduce a bill in the committee's respective chamber that provides                            
30       for the approval of the license proposed to be issued by the commissioners.                                       
31            (b)  If a bill approving the issuance of the license passes the legislature within                           
01       90 days after the last date a presiding officer receives a determination by the                                   
02       commissioners under AS 43.90.180, the commissioners shall issue the license as soon                               
03       as practicable after the effective date of the Act approving the issuance of the license.                         
04            (c)  Notwithstanding a legislative rule that prohibits the carryover of a bill after                         
05       the end of a special session or after the end of a regular session of a legislature, a bill                       
06       introduced under (a) of this section that is not passed or not withdrawn, defeated,                               
07       vetoed, or indefinitely postponed shall be carried over to any subsequent regular or                              
08       special legislative session convened during the 90-day period described in (b) of this                            
09       section in the same reading or status it was in at the time of adjournment. However, a                            
10       bill introduced under (a) of this section may not be carried over to the first regular                            
11       session of a legislature.                                                                                         
12            (d)  If the legislature fails to approve the issuance of the license, the                                    
13       commissioners                                                                                                     
14                 (1)  may not issue the license that the legislature failed to approve; and                              
15                 (2)  may request new applications for a license under AS 43.90.120.                                     
16            Sec. 43.90.200. Certification by regulatory authority and project sanction.                                
17       (a) A licensee that is awarded a certificate or amended certificate of public                                     
18       convenience and necessity from a regulatory agency with jurisdiction over the project                             
19       shall accept the certificate or amended certificate when all rights of administrative                             
20       appeal relating to the certificate or amended certificate have expired.                                           
21            (b)  If the licensee has credit support sufficient to finance construction of the                            
22       project through ownership of rights to produce and market gas resources, firm                                     
23       transportation commitments, or government financing, the licensee shall sanction the                              
24       project within one year after the effective date of the certificate or amended certificate                        
25       of public convenience and necessity issued by the regulatory agency with jurisdiction                             
26       over the project.                                                                                                 
27            (c)  If the licensee does not have credit support sufficient to finance                                      
28       construction of the project through ownership of rights to produce and market gas                                 
29       resources, firm transportation commitments, or government financing, the licensee                                 
30       shall sanction the project within five years after the effective date of the certificate or                       
31       amended certificate of public convenience and necessity issued by the regulatory                                  
01       agency with jurisdiction over the project.                                                                        
02            (d)  If the licensee fails to sanction the project timely as required under this                             
03       section, the licensee shall, upon request by the state,                                                           
04                 (1)  seek approval from the Federal Energy Regulatory Commission or                                     
05       the Regulatory Commission of Alaska, as applicable, to abandon and transfer the                                   
06       certificate or amended certificate to the state or the state's designee; and                                      
07                 (2)  assign to the state or the state's designee all project data,                                      
08       engineering designs, contracts, permits, and other data related to the project that are                           
09       acquired by the licensee during the term of the license before the date of the                                    
10       abandonment or transfer.                                                                                          
11            (e)  The transfer of any certificate or amended certificate of public convenience                            
12       and necessity or transfer under (d) of this section as a result of failure to comply with                         
13       (a) or (b) of this section is at no cost to the state or the state's designee. A transfer                         
14       under (c) of this section is at 50 percent of the licensee's net cost.                                            
15            (f)  In this section, "effective date of the certificate or amended certificate"                             
16       means the date after which all rights of administrative appeal relating to the certificate                        
17       or amended certificate have expired.                                                                              
18            Sec. 43.90.210. Amendment of or modification to the project plan. Subject                                  
19       to the approval of the commissioners, a licensee may amend or modify its project plan                             
20       if the amendments or modifications improve the net present value of the project to the                            
21       state, are necessary because of an order issued by the Alaska Oil and Gas                                         
22       Conservation Commission, or are necessary as a result of changed circumstances                                    
23       outside the licensee's control and not reasonably foreseeable before the license was                              
24       issued. An amendment or modification approved under this section must be consistent                               
25       with the requirements in AS 43.90.130 and, except for an amendment or modification                                
26       required because of an order by the Alaska Oil and Gas Conservation Commission,                                   
27       may not diminish the net present value to the state of the project or the likelihood of                           
28       success for the project.                                                                                          
29            Sec. 43.90.220. Records, reports, conditions, and audit requirements. (a) A                                
30       licensee shall maintain complete and accurate records of all expenditures and                                     
31       commitments of state contributions received under this chapter, including receipts and                            
01       records showing the payment or cost of purchased items and services, the names and                                
02       addresses of the sellers and service providers, and the dates of service or delivery.                             
03            (b)  Upon reasonable notice, the commissioners may audit the records, books,                                 
04       and files of the entity receiving the state money or making the expenditures and                                  
05       commitments under this chapter.                                                                                   
06            (c)  With respect to information relating to the project, the commissioners may                              
07       conduct hearings or other investigative inquiries, compel the attendance of witnesses                             
08       and production of documents, and require the licensee to furnish information and                                  
09       documents relating to the project in hard copy or electronic format.                                              
10            (d)  After a license has been issued and until commencement of commercial                                    
11       operations, the licensee shall allow the commissioners to                                                         
12                 (1)  have a representative present at all meetings of the licensee's                                    
13       governing body and meetings of equity holders that relate to the project;                                         
14                 (2)  receive all relevant notices and information sent to the governing                                 
15       body and equity holders;                                                                                          
16                 (3)  enjoy the same access to information about the licensee as the                                     
17       governing body members and equity owners receive; and                                                             
18                 (4)  receive relevant reports or information from the licensee that the                                 
19       commissioners reasonably request.                                                                                 
20            (e)  A licensee shall maintain the records and reports required under this                                   
21       section for seven years from the date the licensee receives state money under this                                
22       chapter.                                                                                                          
23            Sec. 43.90.230. License violations; damages. (a) A licensee is in violation of                             
24       the license if the commissioners determine that the licensee has                                                  
25                 (1)  committed money received from the state under this chapter for an                                  
26       expenditure that is not a qualified expenditure under AS 43.90.110;                                               
27                 (2)  substantially departed from the specifications set out in the                                      
28       application without state approval of a project plan amendment or modification under                              
29       AS 43.90.210;                                                                                                     
30                 (3)  violated any provision of this chapter or any other provision of                                   
31       state or federal law material to the license; or                                                                  
01                 (4)  otherwise violated a material term of the license.                                                 
02            (b)  The commissioners shall provide written notice to the licensee identifying                              
03       a license violation. The commissioners and the licensee have 90 days after the date the                           
04       notice is issued to resolve the violation informally.                                                             
05            (c)  The commissioners may suspend disbursement of state matching                                            
06       contributions to the licensee beginning on the date that the notice of violation issued                           
07       under (b) of this section is sent to the licensee. The commissioners may resume                                   
08       disbursement on the date that the commissioners determine that the violation is cured.                            
09            (d)  If the commissioners and the licensee are unable to resolve the violation                               
10       within the time specified in (b) of this section, the commissioners shall provide the                             
11       licensee with notice that the violation has not been cured and provide the opportunity                            
12       for the licensee to be heard. If after notice and hearing the commissioners determine                             
13       that the violation has not been cured, the commissioners shall issue a written decision                           
14       that is a final administrative action for purposes of appeal to the superior court in the                         
15       state.                                                                                                            
16            (e)  If the determination issued under (d) of this section finds an unresolved                               
17       violation, the commissioners may impose one or more of the following remedies:                                    
18                 (1)  discontinuation of state matching contributions under this chapter;                                
19                 (2)  recoupment of state money that the licensee has received under this                                
20       chapter to date, with interest, regardless of whether the licensee has expended or                                
21       committed that money;                                                                                             
22                 (3)  license revocation;                                                                                
23                 (4)  assignment to the state or the state's designee of all project data,                               
24       engineering designs, contracts, permits, and other data relating to the project that are                          
25       acquired by the licensee during the term of the license; and                                                      
26                 (5)  any other remedies provided by law or in equity.                                                   
27            Sec. 43.90.240. Abandonment of project. (a) If the commissioners and the                                   
28       licensee agree that the project is uneconomic, the project shall be abandoned, the                                
29       inducement provided for in AS 43.90.110 terminated, and the state and the licensee no                             
30       longer have an obligation under this chapter with respect to the license except for                               
31       requirements imposed on the licensee under (e) of this section and AS 43.90.220.                                  
01            (b)  If the commissioners or the licensee determine the project is uneconomic                                
02       and the other party disagrees, the disagreement shall be settled by arbitration                                   
03       administered by the American Arbitration Association under the substantive and                                    
04       procedural laws of this state, and judgment on the award rendered by the arbitrators                              
05       may be entered in a superior court in the state. In the event of arbitration, each party                          
06       shall select an arbitrator from the American Arbitration Association's National Roster                            
07       and the two arbitrators shall appoint a third arbitrator from the American Arbitration                            
08       Association's National Roster who shall serve as the chair of the three-member                                    
09       arbitration panel. If the arbitration panel determines that the project is                                        
10                 (1)  uneconomic, the state and the licensee no longer have any                                          
11       obligation under this chapter with respect to the license, except for requirements                                
12       imposed on the licensee under (e) of this section and AS 43.90.220; or                                            
13                 (2)  not uneconomic, the obligations of the licensee and the state                                      
14       continue as provided under this chapter and the license.                                                          
15            (c)  The arbitration panel in (b) of this section shall make a determination that                            
16       the project is uneconomic only if the panel finds that the party claiming the project is                          
17       uneconomic has proven by a preponderance of the evidence that the                                                 
18                 (1)  project does not have credit support sufficient to finance                                         
19       construction of the project through firm transportation commitments, government                                   
20       assistance, or other sources of financing; and                                                                    
21                 (2)  predicted costs of transportation at a 100 percent load factor, when                               
22       deducted from predicted gas sales revenue using publicly available predictions of                                 
23       future gas prices, would result in a producer rate of return that is below the rate                               
24       accepted by a prudent oil and gas exploration and production company for incremental                              
25       upstream investment that is required to produce and deliver gas to the project.                                   
26            (d)  If the state makes a payment to the licensee under AS 43.90.440, the                                    
27       license is considered abandoned, and the state and the licensee no longer have any                                
28       obligations under this chapter with respect to the license, except that the licensee must                         
29       comply with the                                                                                                   
30                 (1)  requirements imposed on the licensee under AS 43.90.220                                            
31       regarding state money received by the licensee before the license was considered                                  
01       abandoned; and                                                                                                    
02                 (2)  requirements of AS 43.90.440.                                                                      
03            (e)  If the commissioners and the licensee agree that the project is uneconomic                              
04       or an arbitration panel makes a final determination that the project is uneconomic, the                           
05       licensee shall deliver to the state or the state's designee all engineering designs,                              
06       contracts, permits, and other data relating to the project that are acquired by the                               
07       licensee during the term of the license upon reimbursement by the state of 50 percent                             
08       of the net amount of expenditures incurred and paid by the licensee that are qualified                            
09       expenditures for the purposes of AS 43.90.110.                                                                    
10            Sec. 43.90.250. Alaska Gasline Inducement Act coordinator. (a) There is                                    
11       created in the office of the governor the position of Alaska Gasline Inducement Act                               
12       coordinator. Administrative support for the position shall be provided by the office of                           
13       the governor. The position shall continue until one year after commencement of                                    
14       commercial operations of the project.                                                                             
15            (b)  The governor shall appoint a person to the position of Alaska Gasline                                   
16       Inducement Act coordinator. The individual serving as the Alaska Gasline Inducement                               
17       Act coordinator may be removed from the position at the discretion of the governor.                               
18            (c)  The Alaska Gasline Inducement Act coordinator is entitled to receive an                                 
19       annual salary equal to Step A, Range 28, of the salary schedule set out in                                        
20       AS 39.27.011(a) for Juneau.                                                                                       
21            (d)  The Alaska Gasline Inducement Act coordinator shall, in conjunction with                                
22       the commissioners,                                                                                                
23                 (1)  coordinate expeditious performance of all activities by state                                      
24       agencies for the project;                                                                                         
25                 (2)  ensure compliance by state agencies with the provisions of this                                    
26       chapter; and                                                                                                      
27                 (3)  coordinate with the Office of the Federal Coordinator for Alaska                                   
28       Natural Gas Transportation Projects (29 U.S.C. 720d) for natural gas transportation                               
29       projects in the state.                                                                                            
30            Sec. 43.90.260. Expedited review and action by state agencies. (a) A review                                
31       conducted and action taken by a state agency relating to the project shall be expedited                           
01       in a manner consistent with the completion of the necessary approvals in accordance                               
02       with this chapter.                                                                                                
03            (b)  Notwithstanding any contrary provision of law, a state agency may not                                   
04       include in any project certificate, right-of-way, permit, or other authorization issued to                        
05       the licensee a term or condition that is not required by law if the coordinator                                   
06       determines that the term or condition would prevent or impair in any significant                                  
07       respect the expeditious construction and operation or expansion of the project.                                   
08            (c)  Unless required by law, a state agency may not add to, amend, or abrogate                               
09       a certificate, right-of-way, permit, or other authorization issued to a licensee if the                           
10       coordinator determines that the action would prevent or impair in any significant                                 
11       respect the expeditious construction, operation, or expansion of the project.                                     
12                      Article 3. Resource Inducement.                                                                  
13            Sec. 43.90.300. Qualification for resource inducement. (a) Notwithstanding                                 
14       any contrary provision of law, a lessee or other person that demonstrates to the                                  
15       satisfaction of the commissioners that the person has committed to acquire firm                                   
16       transportation capacity in the first binding open season of the project is qualified to                           
17       receive the resource inducement set out in AS 43.90.310 and 43.90.320 for gas                                     
18       produced on the North Slope and shipped in firm transportation capacity acquired in                               
19       the first binding open season of the project. The inducement in AS 43.90.310 is                                   
20       contractual.                                                                                                      
21            (b)  A gas producer receiving a voucher under AS 43.90.330 is qualified to                                   
22       receive the resource inducement in AS 43.90.310 and 43.90.320 for the gas shipped in                              
23       the firm transportation capacity described in the voucher for the period described in                             
24       AS 43.90.330.                                                                                                     
25            Sec. 43.90.310. Royalty inducement. (a) Before the start of the first binding                              
26       open season to be conducted by the licensee, the commissioner of natural resources                                
27       shall adopt regulations that provide a method to determine the monthly value of the                               
28       state's royalty share of gas production and provide terms under which the state will                              
29       exercise its right to switch between taking its royalty in value or in kind for gas                               
30       committed for firm transportation in the first binding open season of the project or                              
31       shipped in the firm transportation capacity described in a voucher received by the gas                            
01       producer under AS 43.90.330. The regulations must                                                                 
02                 (1)  minimize retroactive adjustments to the monthly value of the state's                               
03       royalty share of gas production;                                                                                  
04                 (2)  provide a method for establishing a fair market value for each                                     
05       component of the state's royalty gas that is based on pricing data from reliable and                              
06       widely available industry trade publications and that uses appropriate adjustments to                             
07       reflect                                                                                                           
08                      (A)  deductions for actual and reasonable transportation costs                                     
09            for the state's royalty gas, including a reasonable share of the costs associated                            
10            with unused capacity commitments on gas pipelines from the North Slope to                                    
11            the first destination market with reasonable market liquidity;                                               
12                      (B)  location differentials between the destination markets                                        
13            where North Slope gas could be sold;                                                                         
14                      (C)  reasonable and actual costs for gas processing; and                                           
15                      (D)  deductions permitted under the 1980 Royalty Settlement                                        
16            Agreement for Prudhoe Bay gas; and                                                                           
17                 (3)  establish terms under which the state will exercise its authority to                               
18       switch between taking its royalty gas in value and in kind to ensure that the state's                             
19       actions do not unreasonably                                                                                       
20                      (A)  cause the lessee or other person to bear disproportionate                                     
21            transportation costs with respect to the state's royalty gas;                                                
22                      (B)  interfere with the lessee's or other person's long-term                                       
23            marketing of its production.                                                                                 
24            (b)  If a lessee or other person qualified for resource inducement under                                     
25       AS 43.90.300 agrees under (c) of this section, the lessee or other person is entitled to                          
26       elect whether                                                                                                     
27                 (1)  to calculate its gas royalty obligation under the regulations adopted                              
28       under (a) of this section for natural gas transported on a firm contract negotiated                               
29       during the project's first binding open season or under the methodology set out in the                            
30       existing leases from which the gas is produced, and                                                               
31                      (A)  upon the request of the lessee, the commissioner of natural                                   
01            resources shall contractually amend the existing lease to effect the election                                
02            under this paragraph and incorporate as fixed contract terms the relevant                                    
03            revised regulatory provisions; and                                                                           
04                      (B)  the election under this subsection remains in effect until                                    
05            new regulations are adopted as a result of a review under (d) of this section, at                            
06            which time, a lessee or other person qualified under AS 43.90.300 may change                                 
07            its election under this paragraph; upon the request of the lessee, the                                       
08            commissioner of natural resources shall contractually amend the lease to                                     
09            incorporate as fixed contract terms the relevant revised regulatory provisions;                              
10            or                                                                                                           
11                 (2)  to enter into a contract with the state that amends the existing lease                             
12       terms by                                                                                                          
13                      (A)  extending the required period of notice that the state must                                   
14            provide before exercising the state's right to switch between taking its royalty                             
15            in value or in kind for gas committed for firm transportation in the first binding                           
16            open season of the project; or                                                                               
17                      (B)  eliminating the ability of the state to take its royalty in kind                              
18            for gas in the quantity and volume committed to the firm transportation                                      
19            capacity acquired during the first binding open season of the project, if the                                
20            person entitled to this election agrees to provide gas for in-state residential and                          
21            commercial uses at the delivery points described in the license at the same                                  
22            value as would be received by the state if the state receives its royalty in value                           
23            with the corresponding distance-sensitive transportation charges; if the lessee                              
24            or other person exercising this election fails to adequately supply the in-state                             
25            gas requirements, after reasonable notice, or if the contract effectively prevents                           
26            the state from exercising its rights with other lessees to switch between taking                             
27            its royalty in value or in kind because of various unit agreements among                                     
28            lessees, the election is considered to terminate, and the provisions of the                                  
29            original lease relating to the state's taking its royalty gas in kind or in value                            
30            apply.                                                                                                       
31            (c)  To claim the inducement under (b) of this section, a lessee or other                                    
01       qualified person shall agree, on an application form provided by the Department of                                
02       Natural Resources, that the lessee or person, and the lessee's or person's affiliates,                            
03       successors, assigns, and agents will not protest or appeal a filing by the licensee to roll                       
04       in expansion costs of the mainline up to a level that is required in AS 43.90.130(7).                             
05       The agreement not to protest may not preclude the lessee or other qualified person, or                            
06       the affiliates, successors, assigns, and agents of the lessee or other qualified person,                          
07       from protesting a filing to roll in mainline expansion costs that licensee is not required                        
08       to propose and support under AS 43.90.130(7).                                                                     
09            (d)  The commissioner of natural resources shall provide for review of the                                   
10       regulations adopted under (a) of this section at least every two years after the                                  
11       commencement of commercial operations to determine whether the regulations                                        
12       continue to minimize retroactive adjustments to the monthly value of the state's                                  
13       royalty share of gas production under current conditions; the commissioner shall                                  
14       amend the regulations when the requirement is not being met.                                                      
15            (e)  No provision of this chapter precludes the election set out in (b) of this                              
16       section, nor may the commissioner of natural resources assert any provision of any                                
17       existing lease or unit agreement as precluding the elections set out in (b) of this                               
18       section.                                                                                                          
19            Sec. 43.90.320. Gas production tax exemption. (a) If a person qualified for                                
20       resource inducement under AS 43.90.300 agrees under (c) of this section, the person is                            
21       entitled to an annual exemption from the state's gas production tax in an amount equal                            
22       to the difference between the amount of the person's gas production tax obligation                                
23       calculated under the gas production tax in effect during that tax year and the amount of                          
24       the person's gas production tax obligation calculated under the gas production tax in                             
25       effect at the start of the first binding open season held under this chapter. If the                              
26       difference is less than zero, the gas production tax exemption is zero.                                           
27            (b)  The exemption under this section may be applied within the 10 years                                     
28       immediately following commencement of commercial operations and only applied to                                   
29       production taxes that are levied on North Slope gas shipped through firm                                          
30       transportation capacity the person acquired during the first binding open season or                               
31       shipped in the firm transportation capacity described in a voucher received by the gas                            
01       producer under AS 43.90.330.                                                                                      
02            (c)  The person claiming the exemption under this section shall agree that the                               
03       person and the person's affiliates, successors, assigns, and agents will not protest or                           
04       appeal a filing by the licensee to roll in mainline expansion costs up to the level that                          
05       the licensee is required to propose and support under AS 43.90.130(7); the agreement                              
06       required under this subsection may not preclude the person or the person's affiliates,                            
07       successors, assigns, and agents, from protesting a filing to roll in mainline expansion                           
08       costs that the licensee is not required to propose and support under AS 43.90.130(7).                             
09            Sec. 43.90.330. Inducement vouchers. (a) A person that acquires firm                                       
10       transportation capacity in the first binding open season of the project, that does not                            
11       hold an oil and gas lease on the North Slope, and that is not an affiliate of a person that                       
12       holds an oil and gas lease on the North Slope, may apply to the commissioners for a                               
13       voucher under this section. A voucher issued by the commissioners must describe the                               
14       firm transportation capacity in the project to which the voucher is applicable.                                   
15            (b)  A voucher issued by the commissioners under this section entitles the                                   
16       holder of the voucher to the resource inducements in AS 43.90.310 and 43.90.320 for                               
17       gas shipped in the firm transportation capacity acquired by the person applying for the                           
18       voucher during the first binding open season of the project and described in the                                  
19       voucher. The voucher may be transferred to a gas producer that has a binding                                      
20       obligation to sell gas to the person transferring the voucher under a gas purchase                                
21       agreement.                                                                                                        
22            (c)  A gas producer holding a voucher may claim the resource inducements for                                 
23       gas shipped through the firm transportation capacity described in the voucher and only                            
24       on gas that is produced and delivered to the purchaser on the North Slope. A gas                                  
25       producer may claim the resource inducements under this subsection until the earlier of                            
26       the termination of the binding gas purchase agreement or the expiration of the                                    
27       inducements by operation of law.                                                                                  
28                     Article 4. Miscellaneous Provisions.                                                              
29            Sec. 43.90.400. Alaska Gasline Inducement Act matching contribution                                        
30       fund; disbursements; audits. (a) There is established in the general fund an Alaska                             
31       Gasline Inducement Act matching contribution fund. The fund consists of money                                     
01       appropriated to it by the legislature for disbursement to pay the state's matching                                
02       contributions under AS 43.90.110. Money appropriated to the fund may be spent for                                 
03       the purposes of the fund without further appropriation. Appropriations to the fund do                             
04       not lapse under AS 37.25.010, but remain in the fund for future disbursements.                                    
05       Nothing in this subsection creates a dedicated fund.                                                              
06            (b)  The Department of Revenue shall manage the fund, and may invest money                                   
07       in the fund so as to yield competitive market rates as provided in AS 37.10.071.                                  
08       Income earned on the fund shall be accounted for separately and may be appropriated                               
09       annually to the fund.                                                                                             
10            (c)  The commissioners shall adopt regulations that provide for application to                               
11       receive matching contributions for qualified expenditures as provided under                                       
12       AS 43.90.110, and that provide for periodic audits of the use of money disbursed as                               
13       matching contributions under this chapter.                                                                        
14            (d)  Within 10 days after the convening of each regular session of the                                       
15       legislature, the commissioners shall submit to the legislature a report that lists the                            
16       disbursements from the fund during the preceding fiscal year with a written                                       
17       justification for each disbursement and the projected amount of money that will be                                
18       required for contributions in each of the next three fiscal years.                                                
19            Sec. 43.90.410. Regulations. The commissioner of revenue may adopt                                         
20       regulations on behalf of the commissioners for the purpose of implementing the                                    
21       provisions of this chapter. The commissioner of revenue and the commissioner of                                   
22       natural resources may change regulations adopted under authority outside of this                                  
23       chapter as necessary to implement the provisions of this chapter.                                                 
24            Sec. 43.90.420. Statute of limitations. A person may not bring a judicial                                  
25       action challenging the constitutionality of this chapter or a license issued under this                           
26       chapter unless the action is commenced in a court of the state of competent                                       
27       jurisdiction within 90 days after the date that a license is issued.                                              
28            Sec. 43.90.430. Interest. When a payment due to the state under this chapter                               
29       becomes delinquent, the payment bears interest at the rate applicable to a delinquent                             
30       tax under AS 43.05.225.                                                                                           
31            Sec. 43.90.440. Licensed project assurances. (a) Except as otherwise                                     
01       provided in this chapter, the state grants a licensee assurances that the licensee has                            
02       exclusive enjoyment of the inducement provided under this chapter before the                                      
03       commencement of commercial operations. If, before the commencement of                                             
04       commercial operations, the state extends to another person preferential royalty or tax                            
05       treatment or grant of state money for the purpose of facilitating the construction of a                           
06       competing natural gas pipeline project in this state, and if the licensee is in compliance                        
07       with the requirements of the license and with the requirements of state and federal                               
08       statutes and regulations relevant to the project, the licensee is entitled to payment from                        
09       the state of an amount equal to three times the total amount of the expenditures                                  
10       incurred and paid by the licensee that are qualified expenditures for the purposes of                             
11       AS 43.90.110 that the licensee incurred in developing the licensee's project before the                           
12       date that the state first extended preferential treatment to another person. The payment                          
13       under this subsection is subject to appropriation. Upon payment by the state of the                               
14       amount owed under this section, the licensee shall, at no additional cost to the state,                           
15       assign to the state or the state's designee all engineering designs, contracts, permits,                          
16       and other data related to the project that were acquired by the licensee during the term                          
17       of the license.                                                                                                   
18            (b)  In this section,                                                                                        
19                 (1)  "competing natural gas pipeline project" means a project designed                                  
20       to accommodate throughput of more than 500,000,000 cubic feet a day of North Slope                                
21       gas to market;                                                                                                    
22                 (2)  "preferential royalty or tax treatment" does not include                                           
23                      (A)  the state's exercise of its right to resolve disputes involving                               
24            royalties and taxes;                                                                                         
25                      (B)  the state's exercise of its right to modify royalties as                                      
26            authorized by law in effect on the effective date of this section; or                                        
27                      (C)  the benefits of a large project permit coordinator authorized                                 
28            by a law in effect on the effective date of this section.                                                    
29            Sec. 43.90.450. Assignments. (a) A licensee may transfer all or part of the                                
30       license, including the rights and obligations arising under the license, if, after                                
31       publishing notice of the proposed transfer, providing notice to the presiding officer of                          
01       each house of the legislature, and providing a period not less than 30 days for public                            
02       review and comment,                                                                                               
03                 (1)  the transfer is approved in writing in advance by the                                              
04       commissioners; and                                                                                                
05                 (2)  the transfer does not increase or diminish the obligations created by                              
06       the license or diminish the likelihood of success of the project or the net present value                         
07       of the license to the state.                                                                                      
08            (b)  Notwithstanding the commissioners' approval of a transfer of all or part of                             
09       a license under (a) of this section, the transferor of the license remains subject to the                         
10       requirements of AS 43.90.220 regarding all state money received by the licensee                                   
11       before the effective date of the transfer.                                                                        
12            (c)  A person may transfer that person's rights to the royalty inducement under                              
13       AS 43.90.310 and the gas production tax exemptions under AS 43.90.320 only in                                     
14       connection with a sale or merger that results in transfer of all the person's assets in the                       
15       North Slope of this state, along with the person's firm transportation capacity contracts                         
16       in the project.                                                                                                   
17            (d)  Except for the transfer of a voucher to a producer under AS 43.90.330(b),                               
18       a person receiving a voucher under AS 43.90.330 based on the person's acquisition of                              
19       firm transportation capacity in the first binding open season of the project may transfer                         
20       the voucher only if the transfer is in connection with the permanent assignment by the                            
21       person of 100 percent of the firm transportation capacity acquired in the first binding                           
22       open season of the project.                                                                                     
23            Sec. 43.90.460. Conflicting laws. Nothing in this chapter shall be construed to                            
24       repeal or abrogate the administrative, regulatory, or statutory procedures and functions                          
25       of state and federal law governing the development and oversight of a project.                                    
26            Sec. 43.90.470. State pipeline employment development. The commissioner                                    
27       of labor and workforce development shall develop a job training program that will                                 
28       provide training for Alaskans in gas pipeline project management, construction,                                   
29       operations, maintenance, and other gas pipeline-related positions.                                                
30                       Article 5. General Provisions.                                                                  
31            Sec. 43.90.900. Definitions. In this chapter, unless the context otherwise                                 
01       requires,                                                                                                         
02                 (1)  "affiliate" means another person that controls, is controlled by, or is                            
03       under common control with a person and includes a division that operates as a                                     
04       functional unit;                                                                                                  
05                 (2)  "Alaska Gasline Inducement Act coordinator" and "coordinator"                                      
06       means the person appointed under AS 43.90.250;                                                                    
07                 (3)  "commencement of commercial operations" means the first flow of                                    
08       gas in the project that generates revenue to the owners;                                                          
09                 (4)  "commissioners" means the commissioner of revenue and the                                          
10       commissioner of natural resources;                                                                                
11                 (5)  "control" means the possession of ownership interest or authority                                  
12       sufficient to, directly or indirectly, and whether acting alone or in conjunction with                            
13       others, direct or cause the direction of the management or policies of a company, and                             
14       is rebuttably presumed if the voting interest held is 10 percent or more;                                         
15                 (6)  "equity holder" means the                                                                          
16                      (A)  stockholders of a corporation;                                                                
17                      (B)  members of a limited liability company;                                                       
18                      (C)  partners of a partnership;                                                                    
19                      (D)  joint venturers of a joint venture;                                                           
20                      (E)  members of a governmental authority and similar persons;                                      
21            or                                                                                                           
22                      (F)  holders of any other entity or person;                                                        
23                 (7)  "gas processing" means the treatment of gas downstream of the                                      
24       point of production to extract natural gas liquids;                                                               
25                 (8)  "governing body" means a corporation's board of directors, a                                       
26       limited liability company's managing members, a partnership's general partners, a joint                           
27       venturer's joint venturers, a governmental authority's board or council members, and                              
28       similar entities;                                                                                                 
29                 (9)  "lease" means an oil and gas or gas lease issued by this state;                                    
30                 (10)  "lessee" means a person that holds a working interest in an oil and                               
31       gas or gas lease issued by this state;                                                                            
01                 (11)  "license" means a license issued under this chapter;                                              
02                 (12)  "licensee" means the holder of a license issued under this chapter                                
03       and all affiliates, successors, assigns, and agents of the holder;                                                
04                 (13)  "North Slope" means that part of the state that lies North of 68                                  
05       degrees North latitude;                                                                                           
06                 (14)  "North Slope gas" means natural gas produced on the North                                         
07       Slope;                                                                                                            
08                 (15)  "open season" means the process that complies with 18 C.F.R.                                      
09       Part 157, Subpart B (Open Seasons for Alaska Natural Gas Transportation Projects);                                
10                 (16)  "project" means a natural gas pipeline project authorized under a                                 
11       license issued under this chapter;                                                                                
12                 (17)  "recourse rates" means cost-based rates with a minimum and                                        
13       maximum range that are approved by the Federal Energy Regulatory Commission, the                                  
14       Regulatory Commission of Alaska, or the National Energy Board of Canada, as                                       
15       appropriate, and set out in the pipeline's tariff; "recourse rates" includes only those                           
16       rates that the pipeline must make available to all shippers;                                                      
17                 (18)  "sanction" means financial commitments to go forward with the                                     
18       project as evidenced by entering into financial commitments of at least                                           
19       $1,000,000,000 with third parties;                                                                                
20                 (19)  "under common control with" has the meaning given "control" in                                    
21       this section;                                                                                                     
22                 (20)  "unit agreement" means an agreement executed by the working                                       
23       interest owners and royalty owners creating the unit.                                                             
24            Sec. 43.90.990. Short title. This chapter may be cited as the Alaska Gasline                               
25       Inducement Act.                                                                                                   
26    * Sec. 2. AS 36.30.850(b) is amended by adding a new paragraph to read:                                            
27                 (45)  contracts for an arbitration panel to determine whether a project is                              
28       uneconomic under AS 43.90.240, and contracts for the development of application                                   
29       provisions for licensure and for the evaluation of those applications under AS 43.90.                             
30    * Sec. 3. AS 39.25.110 is amended by adding a new paragraph to read:                                               
31                 (41)  the Alaska Gasline Inducement Act coordinator appointed under                                     
01       AS 43.90.250.                                                                                                     
02    * Sec. 4. AS 40.25.120(a) is amended to read:                                                                      
03            (a)  Every person has a right to inspect a public record in the state, including                             
04       public records in recorders' offices, except                                                                      
05                 (1)  records of vital statistics and adoption proceedings, which shall be                               
06       treated in the manner required by AS 18.50;                                                                       
07                 (2)  records pertaining to juveniles unless disclosure is authorized by                                 
08       law;                                                                                                              
09                 (3)  medical and related public health records;                                                         
10                 (4)  records required to be kept confidential by a federal law or                                       
11       regulation or by state law;                                                                                       
12                 (5)  to the extent the records are required to be kept confidential under                               
13       20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure                              
14       or retain federal assistance;                                                                                     
15                 (6)  records or information compiled for law enforcement purposes, but                                  
16       only to the extent that the production of the law enforcement records or information                              
17                      (A)  could reasonably be expected to interfere with enforcement                                    
18            proceedings;                                                                                                 
19                      (B)  would deprive a person of a right to a fair trial or an                                       
20            impartial adjudication;                                                                                      
21                      (C)  could reasonably be expected to constitute an unwarranted                                     
22            invasion of the personal privacy of a suspect, defendant, victim, or witness;                                
23                      (D)  could reasonably be expected to disclose the identity of a                                    
24            confidential source;                                                                                         
25                      (E)  would disclose confidential techniques and procedures for                                     
26            law enforcement investigations or prosecutions;                                                              
27                      (F)  would disclose guidelines for law enforcement                                                 
28            investigations or prosecutions if the disclosure could reasonably be expected to                             
29            risk circumvention of the law; or                                                                            
30                      (G)  could reasonably be expected to endanger the life or                                          
31            physical safety of an individual;                                                                            
01                 (7)  names, addresses, and other information identifying a person as a                                  
02       participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the                                
03       advance college tuition savings program under AS 14.40.803 - 14.40.817;                                           
04                 (8)  public records containing information that would disclose or might                                 
05       lead to the disclosure of a component in the process used to execute or adopt an                                  
06       electronic signature if the disclosure would or might cause the electronic signature to                           
07       cease being under the sole control of the person using it;                                                        
08                 (9)  reports submitted under AS 05.25.030 concerning certain                                            
09       collisions, accidents, or other casualties involving boats;                                                       
10                 (10)  records or information pertaining to a plan, program, or                                          
11       procedures for establishing, maintaining, or restoring security in the state, or to a                             
12       detailed description or evaluation of systems, facilities, or infrastructure in the state,                        
13       but only to the extent that the production of the records or information                                          
14                      (A)  could reasonably be expected to interfere with the                                            
15            implementation or enforcement of the security plan, program, or procedures;                                  
16                      (B)  would disclose confidential guidelines for investigations or                                  
17            enforcement and the disclosure could reasonably be expected to risk                                          
18            circumvention of the law; or                                                                                 
19                      (C)  could reasonably be expected to endanger the life or                                          
20            physical safety of an individual or to present a real and substantial risk to the                            
21            public health and welfare;                                                                                   
22                 (11)  the written notification regarding a proposed regulation provided                                 
23       under AS 24.20.105 to the Department of Law and the affected state agency and                                     
24       communications between the Legislative Affairs Agency, the Department of Law, and                                 
25       the affected state agency under AS 24.20.105;                                                                 
26                 (12)  records that are                                                                              
27                      (A)  proprietary or a trade secret in accordance with                                          
28            AS 43.90.150;                                                                                            
29                      (B)  applications that are received under AS 43.90.120 -                                       
30            43.90.140 until notice is published under AS 43.90.160.                                                  
31    * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to                          
01 read:                                                                                                                   
02       FIRST REQUEST FOR APPLICATIONS FOR THE LICENSE. It is the intent of the                                           
03 legislature that the first request for applications for the license by the commissioners under                          
04 AS 43.90.120, enacted by sec. 1 of this Act, be issued within 90 days after the effective date                          
05 of this Act.                                                                                                            
06    * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to                          
07 read:                                                                                                                   
08       EXPEDITED CONSIDERATION OF COURT CASES. It is the intent of the                                                   
09 legislature that the courts of the state, when considering a case related to the development and                        
10 construction of a natural gas pipeline under this Act or to the commitment of a shipper to                              
11 acquire firm transportation capacity during the first binding open season for a project                                 
12 developed under this Act, expedite the resolution of the case by giving the case priority over                          
13 all other civil cases to the extent permitted under the Alaska Rules of Court.                                        
14    * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to                          
15 read:                                                                                                                   
16       SEVERABILITY. Under AS 01.10.030, if any provision of this Act, or the application                                
17 of it to any person or circumstance, is held invalid, the remainder of this Act and the                                 
18 application to other persons or circumstances are not affected.                                                         
19    * Sec. 8. This Act takes effect immediately under AS 01.10.070(c).