CSHB 177(FIN): "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 reimbursement 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(FIN) 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 reimbursement fund; providing for an 04 Alaska Gasline Inducement Act coordinator; making conforming amendments; and 05 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 in the state; 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 to commit to ship 06 natural gas from the North Slope to a gas pipeline system for transportation to markets 07 in this state or elsewhere. 08 Article 2. Alaska Gasline Inducement Act License. 09 Sec. 43.90.100. Gas project. (a) The commissioners may award an Alaska 10 Gasline Inducement Act license as provided in this chapter. The person awarded a 11 license under this chapter is entitled to the inducement set out in AS 43.90.110. 12 (b) Nothing in this chapter precludes a person from pursuing a gas pipeline 13 independently from this chapter. 14 Sec. 43.90.110. Natural gas pipeline project construction inducement. (a) 15 Subject to the limitations of this chapter, a license issued under this chapter entitles the 16 licensee or its designated affiliate to receive 17 (1) subject to appropriation, state matching contributions in the form of 18 reimbursements in a total amount not to exceed $500,000,000, paid to the licensee 19 during the seven-year period immediately following the date the license is awarded; 20 the payment period may be extended by the commissioners under an amendment or 21 modification of the project plan under AS 43.90.210; a payment under this paragraph 22 shall be made according to the following: 23 (A) on or before the close of the first binding open season, the 24 state shall reimburse the licensee's qualified expenditures at the level specified 25 in the license; however, the state's reimbursements may not exceed 50 percent 26 of the qualified expenditures incurred before the close of the first binding open 27 season; 28 (B) after the close of the first binding open season, the state 29 shall reimburse the licensee's qualified expenditures at the level specified in 30 the license; however, the state's reimbursements may not exceed 90 percent of 31 the qualified expenditures incurred after the close of the first binding open
01 season; 02 (C) a qualified expenditure is a cost that is incurred after the 03 license is issued under this chapter by the licensee or the licensee's designated 04 affiliate, and is directly and reasonably related to obtaining a certificate of 05 public convenience and necessity from the Federal Energy Regulatory 06 Commission or the Regulatory Commission of Alaska, as appropriate, or 07 satisfying a requirement of an agency with jurisdiction over the project; in this 08 subparagraph, "qualified expenditures" does not include overhead costs, 09 litigation costs, the cost of an asset or work product acquired or developed by 10 the licensee before the license is issued, or civil or criminal penalties or fines; 11 and 12 (2) the benefit of an Alaska Gasline Inducement Act coordinator who 13 has the authority prescribed in AS 43.90.250. 14 (b) The commissioner of revenue in consultation with the commissioner of 15 natural resources shall adopt regulations for determining whether an expenditure is a 16 qualified expenditure for the purposes of (a) of this section. 17 Sec. 43.90.120. Request for applications for the license. (a) The 18 commissioners shall commence a public process to request applications for a license 19 under this chapter as soon as practicable after the effective date of this chapter. 20 (b) The commissioners may use independent contractors to assist them in 21 developing the request for applications and in evaluating applications received under 22 this chapter. 23 (c) The provisions of AS 36.30 do not apply to requests for applications under 24 this chapter. 25 Sec. 43.90.130. Application requirements. An application for a license must 26 be consistent with the terms of the request for applications under AS 43.90.120 and 27 must 28 (1) be filed by the deadline established by the commissioners in the 29 request for applications; 30 (2) provide a thorough description of a proposed natural gas pipeline 31 project for transporting natural gas from the North Slope to market, which description
01 may include multiple design proposals, including different design proposals for pipe 02 diameter, wall thickness, and transportation capacity, and which description shall 03 include 04 (A) the route proposed for the natural gas pipeline, which may 05 not be the route described in AS 38.35.017(b); 06 (B) the location of receipt and delivery points and the size and 07 design capacity of the proposed natural gas pipeline at the proposed receipt and 08 delivery points, except that this information is not required for in-state delivery 09 points unless the application proposes specific in-state delivery points; 10 (C) an analysis of the project's economic and technical 11 viability, including a description of all pipeline access and tariff terms the 12 applicant plans to offer; 13 (D) an economically and technically viable work plan, timeline, 14 and associated budget for developing and performing the proposed project, 15 including field work, environmental studies, design, and engineering, 16 implementing practices for controlling carbon emissions from natural gas 17 systems as established by the United States Environmental Protection Agency, 18 and complying with all applicable state, federal, and international regulatory 19 requirements that affect the proposed project; the applicant shall address the 20 following: 21 (i) if the proposed project involves a pipeline into or 22 through Canada, a thorough description of the applicant's plan to obtain 23 necessary rights-of-way and authorizations in Canada, a description of 24 the transportation services to be provided and a description of rate- 25 making methodologies the applicant will propose to the regulatory 26 agencies, and an estimate of rates and charges for all services; 27 (ii) if the proposed project involves marine 28 transportation of liquefied natural gas, a description of the marine 29 transportation services to be provided and a description of proposed 30 rate-making methodologies; an estimate of rates and charges for all 31 services by third parties; a detailed description of all proposed access
01 and tariff terms for liquefaction services or, if third parties would 02 perform liquefaction services, identification of the third parties and the 03 terms applicable to the liquefaction services; a complete description of 04 the marine segment of the project including the proposed ownership, 05 control, and cost of liquefied natural gas tankers, the management of 06 shipping services, liquefied natural gas export, destination, re- 07 gasification facilities, and pipeline facilities needed for transport to 08 market destinations, and the entity or entities that would be required to 09 obtain necessary export permits and licenses or a certificate of public 10 convenience and necessity from the Federal Energy Regulatory 11 Commission for the transportation of liquefied natural gas in interstate 12 commerce if United States markets are proposed; and all rights-of-way 13 or authorizations required from a foreign country; 14 (3) commit that if the proposed project is within the jurisdiction of the 15 Federal Energy Regulatory Commission, the applicant will 16 (A) conclude, by a date certain that is not later than 36 months 17 after the date the license is issued, a binding open season that is consistent with 18 the requirements of 18 C.F.R. Part 157, Subpart B (Open Seasons for Alaska 19 Natural Gas Transportation Projects) and 18 C.F.R. 157.30 - 157.39; 20 (B) apply for Federal Energy Regulatory Commission approval 21 to use the pre-filing procedures set out in 18 C.F.R. 157.21 by a date certain, 22 and use those procedures before filing an application for a certificate of public 23 convenience and necessity, except where the procedures are not required as a 24 result of sec. 5 of the President's Decision issued under 15 U.S.C. 719 et seq. 25 (Alaska Natural Gas Transportation Act of 1976); and 26 (C) apply for a Federal Energy Regulatory Commission 27 certificate of public convenience and necessity to authorize the construction 28 and operation of the proposed project described in this section by a date 29 certain; 30 (4) if the proposed project is within the jurisdiction of the Regulatory 31 Commission of Alaska, commit to
01 (A) conclude, by a date certain that is not later than 36 months 02 after the date the license is issued, a binding open season that is consistent with 03 the requirements of AS 42.06; and 04 (B) apply for a certificate of public convenience and necessity 05 to authorize the construction and operation of the proposed project by a date 06 certain; 07 (5) commit that after the first binding open season, the applicant will 08 assess the market demand for additional pipeline capacity at least every two years 09 through public nonbinding solicitations or similar means; 10 (6) commit to expand the proposed project in reasonable engineering 11 increments and on commercially reasonable terms that encourage exploration and 12 development of gas resources in this state; in this paragraph, 13 (A) "commercially reasonable terms" means that, subject to the 14 provisions of (7) of this section, revenue from transportation contracts covers 15 the cost of the expansion, including increased fuel costs and a reasonable 16 return on capital as authorized by the Federal Energy Regulatory Commission 17 or the Regulatory Commission of Alaska, as applicable, and there is no 18 impairment of the proposed project's ability to recover the costs of existing 19 facilities; 20 (B) "reasonable engineering increments" means the amount of 21 additional capacity that could be added by compression or a pipe addition 22 using a compressor size or pipe size, as applicable, that is substantially similar 23 to the original compressor size and pipe size; 24 (7) commit that the applicant 25 (A) will propose and support the recovery of mainline capacity 26 expansion costs, including fuel costs, from all mainline system users through 27 rolled-in rates as provided in (B) and (C) of this paragraph or through a 28 combination of incremental and rolled-in rates as provided in (D) of this 29 paragraph; 30 (B) will propose and support the recovery of mainline capacity 31 expansion costs, including fuel costs, from all mainline system users through
01 rolled-in rates; an applicant is obligated under this subparagraph only if the 02 rolled-in rates would increase the rates 03 (i) not described in (ii) of this subparagraph by not more 04 than 15 percent above the initial maximum recourse rates for capacity 05 acquired before commercial operations commence; in this sub- 06 subparagraph, "initial maximum recourse rates" means the highest cost- 07 based rates for any specific transportation service set by the Federal 08 Energy Regulatory Commission, the Regulatory Commission of 09 Alaska, or the National Energy Board of Canada, as appropriate, when 10 the pipeline commences commercial operations; 11 (ii) by not more than 15 percent above the negotiated 12 rate for pipeline capacity on the date of commencement of commercial 13 operations where the holder of the capacity is not an affiliate of the 14 owner of the pipeline project; for the purposes of this sub- 15 subparagraph, "negotiated rate" means the rate in a transportation 16 service agreement that provides for a rate that varies from the otherwise 17 applicable cost-based rate, or recourse rate, set out in a gas pipeline's 18 tariff approved by the Federal Energy Regulatory Commission, the 19 Regulatory Commission of Alaska, or the National Energy Board of 20 Canada, as appropriate; or 21 (iii) for capacity acquired in an expansion after 22 commercial operations commence, to a level that is not more than 115 23 percent of the volume-weighted average of all rates collected by the 24 project owner for pipeline capacity on the date commercial operations 25 commence; 26 (C) will, if recovery of mainline capacity expansion costs, 27 including fuel costs, through rolled-in rate treatment would increase the rates 28 for capacity described in (B) of this paragraph, propose and support the partial 29 roll-in of mainline expansion costs, including fuel costs, to the extent that rates 30 acquired before commercial operations commence do not exceed the levels 31 described in (B) of this paragraph;
01 (D) may, for the recovery of mainline capacity expansion costs, 02 including fuel costs, that, under rolled-in rate treatment, would result in rates 03 that exceed the level in (B) of this paragraph, propose and support the recovery 04 of those costs through any combination of incremental and rolled-in rates; 05 (E) will not enter into a negotiated rate agreement that would 06 preclude the applicant from collecting from any shipper, including a shipper 07 with a negotiated rate agreement, the rolled-in rates that are required to be 08 proposed and supported by the applicant under (B) of this paragraph or the 09 partial rolled-in rates that are required to be proposed and supported by the 10 applicant under (C) of this paragraph; 11 (8) state how the applicant proposes to deal with a North Slope gas 12 treatment plant, regardless of whether that plant is part of the applicant's proposal, and, 13 to the extent that the plant will be owned entirely or in part by the applicant, commit to 14 seek certificate authority from the Federal Energy Regulatory Commission if the 15 proposed project is engaged in interstate commerce, or from the Regulatory 16 Commission of Alaska if the project is not engaged in interstate commerce; for a 17 North Slope gas treatment plant that will be owned entirely or in part by the applicant, 18 for rate-making purposes, commit to value previously used assets that are part of the 19 gas treatment plant at net book value; describe the gas treatment plant, including its 20 design, engineering, construction, ownership, and plan of operation; the identity of any 21 third party that will participate in the ownership or operation of the gas treatment 22 plant; and the means by which the applicant will work to minimize the effect of the 23 costs of the facility on the tariff; 24 (9) propose a percentage and total dollar amount for the state's 25 reimbursement under AS 43.90.110(a)(1)(A) and (B) to be specified in the license; 26 (10) commit to propose and support rates for the proposed project and 27 for any North Slope gas treatment plant that the applicant may own, in whole or in 28 part, that are based on a capital structure for rate-making that consists of not less than 29 70 percent debt; 30 (11) describe the means for preventing and managing overruns in costs 31 of the proposed project, and the measures for minimizing the effects on tariffs from
01 any overruns; 02 (12) commit to provide a minimum of five delivery points of natural 03 gas in this state; 04 (13) commit to 05 (A) offer firm transportation service to delivery points in this 06 state as part of the tariff regardless of whether any shippers bid successfully in 07 a binding open season for firm transportation service to delivery points in this 08 state, and commit to offer distance-sensitive rates to delivery points in this 09 state consistent with 18 C.F.R. 157.34(c)(8); and 10 (B) offer distance-sensitive rates to delivery points in the state 11 consistent with 18 C.F.R. 157.34(c)(8); 12 (14) commit to establish a local headquarters in this state for the 13 proposed project; 14 (15) to the maximum extent permitted by law, commit to 15 (A) hire qualified residents from throughout the state for 16 management, engineering, construction, operations, maintenance, and other 17 positions on the proposed project; 18 (B) contract with businesses located in the state; 19 (C) establish hiring facilities or use existing hiring facilities in 20 the state; and 21 (D) use, as far as is practicable, the job centers and associated 22 services operated by the Department of Labor and Workforce Development 23 and an Internet-based labor exchange system operated by the state; 24 (16) waive the right to appeal the rejection of the application as 25 incomplete, the issuance of a license to another applicant, or the determination under 26 AS 43.90.180(b) that no application merits the issuance of a license; 27 (17) commit to negotiate, before construction, a project labor 28 agreement to expedite construction and labor stability for the project by qualified state 29 residents; 30 (18) commit that the state reimbursement received by a licensee may 31 not be included in the applicant's rate base, and shall be used as a credit against
01 licensee's cost of service; 02 (19) provide a detailed description of the applicant, all entities 03 participating with the applicant in the application and the project proposed by the 04 applicant, and persons the applicant intends to involve in the construction and 05 operation of the proposed project; the description must include the nature of the 06 affiliation for each person, the commitments by the person to the applicant, and other 07 information relevant to the commissioners' evaluation of the readiness and ability of 08 the applicant to complete the project presented in the application; 09 (20) demonstrate the readiness, financial resources, and technical 10 ability to perform the activities specified in the application by describing the 11 applicant's history of compliance with safety, health, and environmental requirements, 12 the ability to follow a detailed work plan and timeline, and the ability to operate within 13 an associated budget. 14 Sec. 43.90.140. Initial application review; additional information requests; 15 complete applications. (a) After the deadline established by the commissioners for 16 filing an application has passed, the commissioners shall open and review each 17 application to determine whether it is consistent with the terms of the request for 18 applications and meets the requirements of AS 43.90.130. The commissioners shall 19 reject as incomplete an application that does not meet the requirements of 20 AS 43.90.130. 21 (b) To evaluate whether an application should be rejected under (a) of this 22 section, the commissioners may request additional information relating to the 23 application. 24 (c) If, within the time specified by the commissioners, the applicant fails to 25 provide the additional information requested under (b) of this section, or submits 26 additional information that is not responsive, the application shall be rejected. 27 (d) For an application not rejected under this section, the commissioners shall 28 make a determination that the application, including any requested additional 29 information, is complete. 30 (e) Except as provided under AS 43.90.150, and after determining which 31 applications are complete, the commissioners shall make all applications available to
01 the legislature. 02 Sec. 43.90.150. Proprietary information and trade secrets. (a) At the 03 request of the applicant, information submitted under this chapter that the applicant 04 identifies and demonstrates is proprietary or is a trade secret is confidential and not 05 subject to public disclosure under AS 40.25. After a license is awarded, all 06 information submitted by the licensee, retained under this chapter, and not determined 07 by the commissioners to be a proprietary or trade secret, shall be made public. 08 (b) If the commissioners determine that the information submitted by the 09 applicant is not proprietary or is not a trade secret, the commissioners shall notify the 10 applicant and return the information at the request of the applicant. 11 Sec. 43.90.160. Notice, review, and comment. (a) The commissioners shall 12 publish notice and provide a 60-day period for public review and comment on all 13 applications determined complete under AS 43.90.140. Except as provided under 14 AS 43.90.150, all applications filed under this chapter shall be made public, including 15 applications rejected as incomplete under AS 43.90.140. 16 (b) Applications received under this chapter are not subject to public 17 disclosure under AS 40.25 until the commissioners publish notice under this section. 18 However, information that the commissioners have determined is proprietary or a 19 trade secret under AS 43.90.150 may not be made public even after the notice is 20 published under (a) of this section, except as otherwise provided in AS 43.90.150. If 21 information is proprietary or a trade secret and is held confidential under 22 AS 43.90.150, the applicant shall provide a summary of the confidential information 23 that is satisfactory to the commissioners, and the commissioners shall make the 24 summary of the information available to the public. 25 (c) After the commissioners determine that all applications that have not been 26 rejected are complete under AS 43.90.140, information provided by the applicants to 27 the commissioners under this chapter, including information determined by the 28 commissioners to be confidential under AS 43.90.150, shall be disclosed to the 29 legislative auditor, the fiscal analyst who serves as head of the legislative finance 30 division, members of the legislature, and their respective agents and contractors, on 31 request and after the individual making the request signs a confidentiality agreement
01 prepared by the commissioners. 02 Sec. 43.90.170. Application evaluation and ranking. (a) The commissioners 03 shall evaluate all applications determined to be complete under AS 43.90.140, 04 consider public comments received under AS 43.90.160(a), and rank each application 05 according to the net present value of the anticipated cash flow to the state from the 06 applicant's project proposal using the factors in (b) of this section and weighted by the 07 project's likelihood of success based on the commissioners' assessment of the factors 08 listed in (c) of this section. 09 (b) When evaluating the net present value of anticipated cash flow to the state 10 from the applicant's project proposal, the commissioners shall use an undiscounted 11 value and, at a minimum, discount rates of two, five, and eight percent, and consider 12 (1) how quickly the applicant proposes to begin construction of the 13 proposed project and how quickly the project will commence commercial operation; 14 (2) the net back value of the gas determined by the destination market 15 value of the gas and estimated transportation and treatment costs; 16 (3) the ability of the applicant to prevent or reduce project cost 17 overruns that would increase the tariff; 18 (4) the initial design capacity of the applicant's project and the extent 19 to which the design can accommodate low-cost expansion; 20 (5) the amount of the reimbursement by the state under 21 AS 43.90.110(a)(1)(A) and (B) proposed by the applicant under AS 43.90.130(9); 22 (6) economic value resulting from payments required to be made to the 23 state under the terms of the proposal; and 24 (7) other factors found by the commissioners to be relevant to the 25 evaluation of the net present value of the anticipated cash flow to the state. 26 (c) When evaluating the project's likelihood of success, the commissioners 27 shall consider 28 (1) the reasonableness, specificity, and feasibility of the applicant's 29 work plan, timeline, and budget required to be submitted under AS 43.90.130, 30 including the applicant's plan to manage cost overruns, insulate shippers from the 31 effect of cost overruns, and encourage shippers to participate in the first binding open
01 season; 02 (2) the financial resources of the applicant; 03 (3) the ability of the applicant to comply with the proposed 04 performance schedule; 05 (4) the applicant's organization, experience, accounting and operational 06 controls, technical skills or the ability to obtain them, and necessary equipment or the 07 ability to obtain the necessary equipment; 08 (5) the applicant's record of 09 (A) performance on projects not licensed under this chapter; 10 (B) integrity and good business ethics; and 11 (6) other evidence and factors found by the commissioners to be 12 relevant to the evaluation of the project's likelihood of success. 13 Sec. 43.90.180. Notice to the legislature of intent to issue license; denial of 14 license. (a) If, after consideration of public comments received under AS 43.90.160(a) 15 and evaluation of complete applications under AS 43.90.170, the commissioners 16 determine that an application proposes a project that will sufficiently maximize the 17 benefits to the people of this state and merits issuance of a license under this chapter, 18 the commissioners shall 19 (1) issue a determination, with written findings addressing the basis for 20 the determination; the determination becomes a final agency action on the effective 21 date of a bill approving the issuance of the license under AS 43.90.190; 22 (2) publish notice of intent to issue a license under this chapter with 23 written findings addressing the basis for the determination; and 24 (3) forward the notice under (2) of this subsection, along with the 25 findings, supporting documentation, and determination under (1) of this subsection, to 26 the presiding officer of each house of the legislature for action as provided in 27 AS 43.90.190. 28 (b) If, after evaluation of complete applications under AS 43.90.170, the 29 commissioners determine that no application sufficiently maximizes the benefits to the 30 people of this state and merits issuance of a license under this chapter, the 31 commissioners shall issue a written finding that addresses the basis for that
01 determination. 02 (c) The commissioners' determination under (b) of this section is a final 03 agency action. 04 Sec. 43.90.190. Legislative approval; issuance of license. (a) After the 05 presiding officer of each house of the legislature receives a determination from the 06 commissioners under AS 43.90.180, the rules committee of each house of the 07 legislature shall introduce a bill in the committee's respective chamber that provides 08 for the approval of the license proposed to be issued by the commissioners. 09 (b) If a bill approving the issuance of the license passes the legislature within 10 60 days after the last date a presiding officer receives a determination by the 11 commissioners under AS 43.90.180, the commissioners shall issue the license as soon 12 as practicable after the effective date of the Act approving the issuance of the license. 13 (c) Notwithstanding a legislative rule that prohibits the carryover of a bill after 14 the end of a special session or after the end of a regular session of a legislature, a bill 15 introduced under (a) of this section that is not passed or not withdrawn, defeated, 16 vetoed, or indefinitely postponed shall be carried over to any subsequent regular or 17 special legislative session convened during the 60-day period described in (b) of this 18 section in the same reading or status it was in at the time of adjournment. However, a 19 bill introduced under (a) of this section may not be carried over to the first regular 20 session of a legislature. 21 (d) If the legislature fails to approve the issuance of the license, the 22 commissioners 23 (1) may not issue the license that the legislature failed to approve; and 24 (2) may request new applications for a license under AS 43.90.120. 25 Sec. 43.90.200. Certification by regulatory authority and project sanction. 26 (a) A licensee that is awarded a certificate of public convenience and necessity from a 27 regulatory agency with jurisdiction over the project shall accept the certificate on or 28 before the date the order granting the certificate is no longer subject to judicial review. 29 (b) If the licensee has credit support sufficient to finance construction of the 30 project through ownership of rights to produce and market gas resources, firm 31 transportation commitments, or government financing, the licensee shall sanction the
01 project within one year after the effective date of the certificate of public convenience 02 and necessity issued by the regulatory agency with jurisdiction over the project. 03 (c) If the licensee does not have credit support sufficient to finance 04 construction of the project through ownership of rights to produce and market gas 05 resources, firm transportation commitments, or government financing, the licensee 06 shall sanction the project before the later of 07 (1) two years after the effective date of the certificate of public 08 convenience and necessity issued by the regulatory agency with jurisdiction over the 09 project; or 10 (2) five years after the close of the first binding open season of the 11 project. 12 (d) If the licensee fails to sanction the project as required under this section, 13 the licensee shall, upon request by the state, 14 (1) seek approval from the Federal Energy Regulatory Commission or 15 the Regulatory Commission of Alaska, as applicable, to abandon and transfer the 16 certificate to the state or the state's designee; and 17 (2) assign to the state or the state's designee all engineering designs, 18 contracts, permits, and other data related to the project that are acquired by the 19 licensee during the term of the license before the date of the abandonment or transfer. 20 (e) The transfer and assignments under (d) of this section as a result of failure 21 to comply with (a) or (b) of this section are at no cost to the state or the state's 22 designee. A transfer under (c) of this section shall be subject to the state's payment to 23 the licensee of the net amount of expenditures incurred and paid by the licensee that 24 are qualified expenditures for the purposes of AS 43.90.100. 25 (f) In this section, "effective date of the certificate of public convenience and 26 necessity" means the earlier of the date the order granting the certificate is no longer 27 subject to judicial review, or the date the licensee accepts the certificate. 28 Sec. 43.90.210. Amendment of or modification to the project plan. Subject 29 to the approval of the commissioners, a licensee may amend or modify its project plan 30 if the amendments or modifications improve the net present value of the project to the 31 state, are necessary because of an order or requirement by a regulatory agency with
01 jurisdiction over the project or by the Alaska Oil and Gas Conservation Commission, 02 or the amendment or modification is necessary because of changed circumstances 03 outside the licensee's control and not reasonably foreseeable before the license was 04 issued. An amendment or modification approved under this section must be consistent 05 with the requirements of AS 43.90.130 and, except for an amendment or modification 06 required because of an order or requirement of a regulatory agency with jurisdiction 07 over the project or by the Alaska Oil and Gas Conservation Commission, may not 08 substantially diminish the value of the project to the state or the project's likelihood of 09 success. 10 Sec. 43.90.220. Records, reports, conditions, and audit requirements. (a) A 11 licensee shall maintain complete and accurate records of all expenditures and 12 commitments of state money received under this chapter, including receipts and 13 records showing the payment or cost of purchased items and services, the names and 14 addresses of the sellers and service providers, and the dates of service or delivery. 15 (b) Upon reasonable notice, the commissioners may audit the records, books, 16 and files of the entity receiving the state money or making the expenditures and 17 commitments of money received from the state under this chapter. 18 (c) The commissioners may do the following with respect to information 19 relating to the project: conduct hearings or other investigative inquiries; compel the 20 attendance of witnesses and production of documents; and require the licensee to 21 furnish information in paper copy or electronic format. 22 (d) After a license has been issued and until commencement of commercial 23 operations of a natural gas pipeline, the licensee shall allow the commissioners to 24 (1) have a representative present at all meetings of the licensee's 25 governing body or bodies and equity holders that relate to the project; 26 (2) receive all relevant notices and information when and as sent to the 27 governing body or bodies and equity holders; 28 (3) enjoy the same access to information about the licensee as the 29 governing body members and equity owners receive; and 30 (4) receive relevant reports or information from the licensee that the 31 commissioners reasonably request.
01 (e) All proprietary information, privileged information, and trade secrets 02 received by the commissioners or their representative under (d) of this section are not 03 subject to public disclosure under AS 40.25. 04 (f) A licensee shall maintain the records and reports required under this 05 section for seven years from the date the licensee receives state money under this 06 chapter. 07 Sec. 43.90.230. License violations; damages. (a) A licensee is in violation of 08 the license if the commissioners determine that the licensee has 09 (1) requested and received money from the state under this chapter for 10 an expenditure that is not a qualified expenditure under AS 43.90.110; 11 (2) except as required to conform with a requirement of a regulatory 12 agency with jurisdiction over the project, substantially departed from the 13 specifications set out in the application without state approval of a project plan 14 amendment or modification under AS 43.90.210; 15 (3) violated any provision of this chapter or any other provision of 16 state or federal law material to the license; 17 (4) failed to accept a certificate as required under AS 43.90.200(a) or 18 failed to sanction the project as required under AS 43.90.200(b); or 19 (5) otherwise violated a material term of the license. 20 (b) The commissioners shall provide written notice to the licensee identifying 21 a license violation. The commissioners and the licensee have 90 days after the date the 22 notice is issued to resolve the violation informally. 23 (c) The commissioners may suspend disbursement of state reimbursements to 24 the licensee beginning on the date that the notice of violation issued under (b) of this 25 section is sent to the licensee. The commissioners may resume disbursement on the 26 date that the commissioners determine that the violation is cured. 27 (d) If the commissioners and the licensee are unable to resolve the violation 28 within the period described in (b) of this section, the commissioners shall notify the 29 licensee that the violation has not been cured and provide the licensee with an 30 opportunity to be heard. If, after notice and hearing, the commissioners determine that 31 the violation has not been cured, the commissioners shall issue a written decision that
01 is a final administrative action for purposes of appeal to the superior court in the state. 02 (e) If the determination issued under (d) of this section finds an unresolved 03 violation, the commissioners may impose one or more of the following remedies: 04 (1) discontinuation of state reimbursements under this chapter; 05 (2) recoupment of state money that the licensee has received under this 06 chapter to date, with interest, regardless of whether the licensee has expended or 07 committed that money; 08 (3) license revocation; 09 (4) assignment to the state or the state's designee of all engineering 10 designs, contracts, permits, and other data related to the project that are acquired by 11 the licensee during the term of the license; and 12 (5) any other remedies provided by law or in equity. 13 Sec. 43.90.240. Abandonment of project. (a) If the commissioners and the 14 licensee agree that the project is uneconomic, the project shall be abandoned, the 15 inducement provided for in AS 43.90.110 terminated, and, except for requirements 16 imposed on the licensee under (e) of this section and AS 43.90.220, the state and the 17 licensee no longer have an obligation under this chapter with respect to the license. 18 (b) If the commissioners or the licensee determine that the project is 19 uneconomic and the other party disagrees, the disagreement shall be settled by 20 arbitration administered by the American Arbitration Association under the 21 substantive and procedural laws of this state, and judgment on the award rendered by 22 the arbitrators may be entered in superior court in the state. In the event of arbitration, 23 each party shall select an arbitrator from the American Arbitration Association's 24 National Roster, and the two arbitrators shall appoint a third arbitrator from the 25 American Arbitration Association's National Roster who shall serve as the chair of the 26 three-member arbitration panel. If the arbitration panel determines that the project is 27 (1) uneconomic, the state and the licensee no longer have an obligation 28 under this chapter with respect to the license, except for requirements imposed on the 29 licensee under (e) of this section and AS 43.90.220; or 30 (2) not uneconomic, the obligations of the licensee and the state 31 continue as provided under this chapter and the license.
01 (c) The arbitration panel in (b) of this section shall make a determination that 02 the project is uneconomic only if the panel finds that the party claiming the project is 03 uneconomic has proven by a preponderance of the evidence that the 04 (1) project does not have credit support sufficient to finance 05 construction of the project through firm transportation commitments, government 06 assistance, or other external sources of financing; and 07 (2) predicted costs of transportation at a 100 percent load factor, when 08 deducted from predicted gas sales revenue using publicly available predictions of 09 future gas prices, would result in a producer rate of return that is below the rate 10 typically accepted by a prudent oil and gas exploration and production company for 11 incremental upstream investment that is required to produce and deliver gas to the 12 project. 13 (d) If the state makes a payment to the licensee under AS 43.90.440, the 14 license is considered abandoned, and the state and the licensee no longer have any 15 obligations under this chapter with respect to the license, except that the licensee must 16 comply with the 17 (1) requirements imposed on the licensee under AS 43.90.220 18 regarding state money received by the licensee before the license was considered 19 abandoned; and 20 (2) requirements of AS 43.90.440. 21 (e) If the commissioners and the licensee agree that the project is uneconomic 22 or an arbitration panel makes a final determination that the project is uneconomic, the 23 licensee shall, upon the state's request, transfer to the state or the state's designee all 24 engineering designs, contracts, permits, and other data related to the project that are 25 acquired by the licensee during the term of the license upon reimbursement by the 26 state of the net amount of expenditures incurred and paid by the licensee that are 27 qualified expenditures for the purposes of AS 43.90.110. 28 Sec. 43.90.250. Alaska Gasline Inducement Act coordinator. (a) There is 29 created in the Office of the Governor the position of Alaska Gasline Inducement Act 30 coordinator. Administrative support for the position shall be provided by the Office of 31 the Governor. The position shall continue until one year after commencement of
01 commercial operations of the project. 02 (b) The governor shall appoint a person to the position of Alaska Gasline 03 Inducement Act coordinator. The individual serving as the Alaska Gasline Inducement 04 Act coordinator may be removed from the position at the discretion of the governor. 05 Sec. 43.90.260. Expedited review and action by state agencies. (a) A review 06 conducted and action taken by a state agency relating to the project shall be expedited 07 in a manner consistent with the completion of the necessary approvals in accordance 08 with this chapter. 09 (b) Notwithstanding any contrary provision of law, a state agency may not 10 include in any project certificate, right-of-way, permit, or other authorization issued to 11 the licensee a term or condition that is not required by law if the coordinator 12 determines that the term or condition would prevent or impair in any significant 13 respect the expeditious construction and operation or expansion of the project. 14 (c) Unless required by law, a state agency may not add to, amend, or abrogate 15 any certificate, right-of-way, permit, or other authorization issued to a licensee if the 16 coordinator determines that the action would prevent or impair in any significant 17 respect the expeditious construction, operation, or expansion of the project. 18 Article 3. Resource Inducements. 19 Sec. 43.90.300. Qualification for resource inducements. (a) Notwithstanding 20 any contrary provision of law, a lessee or other person that demonstrates to the 21 satisfaction of the commissioners that the person has committed to acquire firm 22 transportation capacity in the first binding open season of the project is qualified to 23 receive the resource inducement set out in AS 43.90.310 and 43.90.320 for gas 24 produced on the North Slope and shipped in firm transportation capacity acquired in 25 the first binding open season of the project. The inducement in AS 43.90.310 is 26 contractual. 27 (b) A gas producer receiving a voucher under AS 43.90.330 is qualified to 28 receive the resource inducement in AS 43.90.310 and 43.90.320 for the gas shipped in 29 the firm transportation capacity described in the voucher for the period described in 30 AS 43.90.330. 31 Sec. 43.90.310. Royalty inducement. (a) Before the start of the first binding
01 open season to be conducted by the licensee, the commissioner of natural resources 02 shall adopt regulations that establish a method to determine the monthly value of the 03 state's royalty share of gas production and establish terms under which the state will 04 exercise its right to switch between taking its royalty in value or in kind for gas 05 committed for firm transportation in the first binding open season of the project or 06 shipped in the firm transportation capacity described in a voucher received by the gas 07 producer under AS 43.90.330. The regulations must 08 (1) minimize retroactive adjustments to the monthly value of the state's 09 royalty share of gas production; 10 (2) provide a method for establishing a fair market value for each 11 component of the state's royalty gas that is based on pricing data from reliable and 12 widely available industry trade publications and that uses appropriate adjustments to 13 reflect 14 (A) deductions for actual and reasonable transportation costs 15 for the state's royalty gas, including a reasonable share of the costs associated 16 with unused capacity commitments on gas pipelines from the North Slope to 17 the first destination market with reasonable market liquidity; 18 (B) location differentials between the destination markets 19 where North Slope gas could be sold; 20 (C) reasonable and actual costs for gas processing; in this 21 subparagraph, "gas processing" means post-production treatment of gas to 22 extract natural gas liquids; and 23 (D) deductions permitted under the 1980 Royalty Settlement 24 Agreement for Prudhoe Bay gas; and 25 (3) establish terms under which the state will exercise its authority to 26 switch between taking its royalty gas in value and in kind to ensure that the state's 27 actions do not unreasonably 28 (A) cause the lessee or other person to bear disproportionate 29 transportation costs with respect to the state's royalty gas; 30 (B) interfere with the lessee's or other person's long-term 31 marketing of its production.
01 (b) If a lessee or other person qualified for resource inducement under 02 AS 43.90.300 agrees under (c) of this section, the lessee or other person is entitled to 03 elect 04 (1) to calculate its gas royalty obligation under the regulations adopted 05 under (a) of this section for natural gas transported on a firm contract executed during 06 the project's first binding open season or under the methodology set out in the existing 07 leases from which the gas is produced, and 08 (A) upon the request of the lessee, the commissioner of natural 09 resources shall contractually amend the existing lease to effect the election 10 under this paragraph and incorporate as fixed contract terms the relevant 11 regulatory provisions; and 12 (B) the election under this paragraph remains in effect until 13 new regulations are adopted as a result of a review under (d) of this section, at 14 which time, a lessee or other person qualified under AS 43.90.300 may change 15 its election under this paragraph; upon the request of the lessee, the 16 commissioner of natural resources shall contractually amend the lease to 17 incorporate as fixed contract terms the relevant revised regulatory provisions; 18 (2) to enter into a contract with the state that amends the existing lease 19 terms by providing a mechanism that ensures that, when the state exercises its right to 20 switch between taking its royalty in value or in kind for gas committed for firm 21 transportation in the first binding open season of the project, the lessee or other person 22 does not bear disproportionate transportation costs with respect to the state's royalty 23 gas; and by modifying the required period of notice that the state must provide before 24 exercising the state's right to switch between taking its royalty in value or in kind for 25 gas committed for firm transportation in the first binding open season of the project. 26 (c) To claim the inducement under (b) of this section, a lessee or other person 27 qualified under AS 43.90.300 shall agree, on an application form provided by the 28 Department of Natural Resources, that the lessee or other person, and the lessee's or 29 other person's affiliates, successors, assigns, and agents will not protest or appeal a 30 filing by the licensee to roll in expansion costs of the mainline up to a level that is 31 required in AS 43.90.130(7) if the Federal Energy Regulatory Commission does not
01 have a rebuttable presumption in effect that rolled-in treatment applies to the cost of 02 the expansion of the project. The agreement not to protest may not preclude the lessee 03 or other person, or the lessee's or other person's affiliates, successors, assigns, and 04 agents from protesting a filing to roll in mainline expansion costs that licensee is not 05 required to propose and support under AS 43.90.130(7). 06 (d) The commissioner of natural resources shall provide for review of the 07 regulations adopted under (a) of this section at least every two years after the 08 commencement of commercial operations to determine whether the regulations 09 continue to meet the requirements of (a) of this section under current conditions, and 10 shall amend the regulations when the requirements are not being met. 11 (e) No provision of this chapter precludes the election set out in (b) of this 12 section, nor may the commissioner of natural resources assert any provision of any 13 existing lease or unit agreement as precluding the elections set out in (b) of this 14 section. 15 Sec. 43.90.320. Gas production tax exemption. (a) If a person qualified for 16 resource inducement under AS 43.90.300 agrees under (c) of this section, the person is 17 entitled to an annual exemption from the state's gas production tax in an amount equal 18 to the difference between the amount of the person's gas production tax obligation 19 calculated under the gas production tax in effect during that tax year and the amount of 20 the person's gas production tax obligation calculated under the gas production tax in 21 effect at the start of the first binding open season held under this chapter. If the 22 difference is less than zero, the gas production tax exemption is zero. 23 (b) The exemption under this section may be applied within 10 years 24 immediately following commencement of commercial operations and only applied to 25 production taxes that are levied on North Slope gas shipped through firm 26 transportation capacity the person acquired during the first binding open season or 27 shipped in the firm transportation capacity described in a voucher received by the gas 28 producer under AS 43.90.330. 29 (c) The person claiming the exemption under this section shall agree that the 30 person, and the person's affiliates, successors, assigns, and agents, will not protest or 31 appeal a filing by the licensee to roll in mainline expansion costs up to the level that
01 the licensee is required to propose and support under AS 43.90.130(7) if the Federal 02 Energy Regulatory Commission does not have a rebuttable presumption in effect that 03 rolled-in treatment applies to the cost of the expansion of the project. The agreement 04 required under this subsection may not preclude the person, or the person's affiliates, 05 successors, assigns, and agents, from protesting a filing to roll in mainline expansion 06 costs that the licensee is not required to propose and support under AS 43.90.130(7). 07 (d) In this section, "gas production tax" means the tax levied on the production 08 of gas under AS 43.55. 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 (d) A person that receives a voucher under this section and a gas producer that 29 receives resource inducements under a voucher shall agree that the person and the gas 30 producer and their respective affiliates, successors, assigns, or agents will not protest 31 or appeal a filing by the licensee to roll-in mainline expansion costs up to the level that
01 the licensee is required to propose and support under AS 43.90.130(7) if the Federal 02 Energy Regulatory Commission does not have a rebuttable presumption in effect that 03 rolled-in treatment applies to the cost of the expansion of the project. The agreement 04 required under this subsection may not preclude the person or gas producer or their 05 respective affiliates, successors, assigns, or agents from protesting a filing to roll-in 06 mainline expansion costs that the licensee is not required to propose and support under 07 AS 43.90.130(7). 08 Article 4. Miscellaneous Provisions. 09 Sec. 43.90.400. Alaska Gasline Inducement Act reimbursement fund; 10 disbursements; audits. (a) There is established in the general fund an Alaska Gasline 11 Inducement Act reimbursement fund. The fund consists of money appropriated to it by 12 the legislature for disbursement to pay the state's reimbursements under AS 43.90.110. 13 Money appropriated to the fund may be spent for the purposes of the fund without 14 further appropriation. Appropriations to the fund do not lapse under AS 37.25.010, but 15 remain in the fund for future disbursements. Nothing in this subsection creates a 16 dedicated fund. 17 (b) The Department of Revenue shall manage the fund, and may invest money 18 in the fund so as to yield competitive market rates as provided in AS 37.10.071. 19 Income earned on the fund shall be accounted for separately and may be appropriated 20 annually to the fund. 21 (c) The commissioners shall adopt regulations that provide for application to 22 receive reimbursements for qualified expenditures as provided under AS 43.90.110, 23 and that provide for periodic audits of the use of money disbursed as reimbursements 24 under this chapter. 25 (d) Within 10 days after the convening of each regular session of the 26 legislature, the commissioners shall submit to the legislature a report that lists all the 27 disbursements from the fund during the preceding fiscal year with a written 28 justification for each disbursement and the projected amount of money that will be 29 required for reimbursements in each of the next three fiscal years. 30 Sec. 43.90.410. Regulations. The commissioners may jointly adopt or amend 31 regulations for the purpose of implementing the provisions of this chapter. The
01 commissioner of revenue and the commissioner of natural resources may adopt or 02 amend regulations adopted under authority outside of this chapter as necessary to 03 implement the provisions of this chapter. 04 Sec. 43.90.420. Statute of limitations. A person may not bring a judicial 05 action challenging the constitutionality of this chapter or the constitutionality of a 06 license issued under this chapter unless the action is commenced in a court of the state 07 of competent jurisdiction within 90 days after the date that a license is issued. 08 Sec. 43.90.430. Interest. When a payment due to the state under this chapter 09 becomes delinquent, the payment bears interest at the rate applicable to a delinquent 10 tax under AS 43.05.225. 11 Sec. 43.90.440. Licensed project assurances. (a) Except as otherwise 12 provided in this chapter, the state grants a licensee assurances that the licensee has 13 exclusive enjoyment of the inducements provided under this chapter before the 14 commencement of commercial operations. If, before the commencement of 15 commercial operations, the state extends to another person preferential royalty or tax 16 treatment or grant of state money for the purpose of facilitating the construction of a 17 competing natural gas pipeline project in this state, and if the licensee is in compliance 18 with the requirements of the license and with the requirements of state and federal 19 statutes and regulations relevant to the project, the licensee is entitled to payment from 20 the state of an amount equal to three times the total amount of the expenditures 21 incurred and paid by the licensee that are qualified expenditures for the purposes of 22 AS 43.90.110 that the licensee incurred in developing the licensee's project before the 23 date that the state first extended preferential treatment to another person. The payment 24 under this subsection is subject to appropriation. Upon payment by the state of the 25 amount owed under this section, the licensee shall, at no additional cost to the state, 26 assign to the state or the state's designee all engineering designs, contracts, permits, 27 and other data related to the project that were acquired by the licensee during the term 28 of the license. The payment under this subsection is in full satisfaction of all claims 29 the licensee may bring in contract, tort, or other law related to the events that gave rise 30 to the payment. 31 (b) The review, processing, or facilitation of a permit, right-of-way, or
01 authorization by a state agency in connection with a competing natural gas pipeline 02 project does not create an obligation on the part of the state under this section. 03 (c) In this section, 04 (1) "competing natural gas pipeline project" means a project designed 05 to accommodate throughput of more than 500,000,000 cubic feet a day of North Slope 06 gas to market; 07 (2) "preferential royalty or tax treatment" does not include 08 (A) the state's exercise of its right to resolve disputes involving 09 royalties and taxes; or 10 (B) the state's exercise of its right to modify royalties as 11 authorized by law in effect on the effective date of this section. 12 Sec. 43.90.450. Assignments. (a) A licensee may transfer all or part of the 13 license, including the rights and obligations arising under the license, if, after 14 publishing notice of the proposed transfer, providing notice to the presiding officer of 15 each house of the legislature, and providing a period of not less than 30 days for public 16 review and comment, 17 (1) the transfer is approved in writing in advance by the 18 commissioners; and 19 (2) the transfer does not increase or diminish the obligations created by 20 the license or diminish the likelihood of success of the project or the net present value 21 of the license to the state. 22 (b) Notwithstanding the commissioners' approval of a transfer of all or part of 23 a license under (a) of this section, the transferor of the license remains subject to the 24 requirements of AS 43.90.220 regarding all state money received by the licensee 25 before the effective date of the transfer. 26 (c) A person may transfer that person's rights to the royalty inducement under 27 AS 43.90.310 and the gas production tax exemption under AS 43.90.320 only in 28 connection with a sale or merger that results in transfer of all the person's assets in the 29 North Slope along with the person's firm transportation capacity contracts in the 30 project. 31 (d) Except for the transfer of a voucher to a producer under AS 43.90.330(b),
01 a person receiving a voucher under AS 43.90.330 based on the person's acquisition of 02 firm transportation capacity in the first binding open season of the project may transfer 03 the voucher only if the transfer is in connection with the permanent assignment by the 04 person of 100 percent of the firm transportation capacity acquired in the first binding 05 open season of the project. 06 Sec. 43.90.460. Conflicting laws. Nothing in this chapter shall be construed to 07 repeal or abrogate the administrative, regulatory, or statutory procedures and functions 08 of state and federal law governing the development and oversight of a project. 09 Sec. 43.90.470. State pipeline employment development. The commissioner 10 of labor and workforce development shall develop a job training program that will 11 provide training for Alaskans in gas pipeline project management, construction, 12 operations, maintenance, and other gas pipeline-related positions. 13 Article 5. General Provisions. 14 Sec. 43.90.900. Definitions. In this chapter, unless the context otherwise 15 requires, 16 (1) "affiliate" means another person that controls, is controlled by, or is 17 under common control with a person, and includes a division that operates as a 18 functional unit; 19 (2) "Alaska Gasline Inducement Act coordinator" or "coordinator" 20 means the person appointed under AS 43.90.250; 21 (3) "applicant" means a person or group of persons that files an 22 application for a license; 23 (4) "certificate of public convenience and necessity" and "certificate" 24 means a certificate of public convenience and necessity issued by the Federal Energy 25 Regulatory Commission or the Regulatory Commission of Alaska or an amendment to 26 a certificate of public convenience and necessity issued by the Federal Energy 27 Regulatory Commission under 15 U.S.C. 719 et seq. (Alaska Natural Gas 28 Transportation Act of 1976); 29 (5) "commencement of commercial operations" means the first flow of 30 gas in the project that generates revenue to the owners; 31 (6) "commissioners" means the commissioner of revenue and the
01 commissioner of natural resources, acting jointly; 02 (7) "control" means the possession of ownership interest or authority 03 sufficient to, directly or indirectly, and whether acting alone or in conjunction with 04 others, direct or cause the direction of the management or policies of a company, and 05 is rebuttably presumed if the voting interest held is 10 percent or more; 06 (8) "equity holder" means the 07 (A) stockholders of a corporation; 08 (B) members of a limited liability company; 09 (C) partners of a partnership; 10 (D) joint venturers of a joint venture; 11 (E) members of a governmental authority and similar persons; 12 or 13 (F) holders of any other entity or person; 14 (9) "gas treatment plant" means a facility downstream of the point of 15 production that conditions gas and removes nonhydrocarbon substances from the gas 16 for the purpose of rendering the gas acceptable for tender and acceptance into a gas 17 pipeline system. 18 (10) "governing body" means a corporation's board of directors, a 19 limited liability company's managing members, a partnership's general partners, a joint 20 venturer's joint venturers, a governmental authority's board or council members, and 21 similar entities; 22 (11) "lease" means an oil and gas, or gas, lease issued by this state; 23 (12) "lessee" means a person that holds a working interest in an oil and 24 gas, or gas, lease issued by this state; 25 (13) "license" means a license issued under this chapter; 26 (14) "licensee" means the holder of a license issued under this chapter 27 and all affiliates, successors, assigns, and agents of the holder; 28 (15) "net present value" means the discounted value of a future stream 29 of cash flow; 30 (16) "North Slope" means that part of the state that lies north of 68 31 degrees North latitude;
01 (17) "open season" means the process that complies with 18 C.F.R. 02 Part 157, Subpart B (Open Seasons for Alaska Natural Gas Transportation Projects) or 03 a similar process for soliciting commitments for pipeline capacity under the 04 regulations, policies, rules, or precedent of the Regulatory Commission of Alaska; 05 (18) "point of production" has the meaning given in AS 43.55.900; 06 (19) "project" means a natural gas pipeline project authorized under a 07 license issued under this chapter; 08 (20) "proprietary," when used to describe information, means that the 09 information is treated by an applicant as confidential and the public disclosure of that 10 information would adversely affect the competitive position of the applicant or 11 materially diminish the commercial value of the information to the applicant; 12 (21) "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 (22) "sanction" means to make financial commitments to go forward 18 with the project as evidenced by entering into financial commitments of at least 19 $1,000,000,000 with third parties; 20 (23) "trade secret" has the meaning given in AS 45.50.940; 21 (24) "under common control with" has the meaning given "control" in 22 this section; 23 (25) "unit agreement" means an agreement executed by the working 24 interest owners and royalty owners creating the unit. 25 Sec. 43.90.990. Short title. This chapter may be cited as the Alaska Gasline 26 Inducement Act. 27 * Sec. 2. AS 36.30.850(b) is amended by adding a new paragraph to read: 28 (45) contracts for an arbitration panel to determine whether a project is 29 uneconomic under AS 43.90.240, and contracts for the development of application 30 provisions for licensure and for the evaluation of those applications under AS 43.90. 31 * Sec. 3. AS 38.05.020(b) is amended to read:
01 (b) The commissioner may 02 (1) establish reasonable procedures and adopt reasonable regulations 03 necessary to carry out this chapter and, whenever necessary, issue directives or orders 04 to the director to carry out specific functions and duties; regulations adopted by the 05 commissioner shall be adopted under AS 44.62 (Administrative Procedure Act); 06 orders by the commissioner classifying land, issued after January 3, 1959, are not 07 required to be adopted under AS 44.62 (Administrative Procedure Act); 08 (2) enter into agreements considered necessary to carry out the 09 purposes of this chapter, including agreements with federal and state agencies; 10 (3) review any order or action of the director; 11 (4) exercise the powers and do the acts necessary to carry out the 12 provisions and objectives of this chapter; 13 (5) notwithstanding the provisions of any other section of this chapter, 14 grant an extension of the time within which payments due on any exploration license, 15 lease, or sale of state land, minerals, or materials may be made, including payment of 16 rental and royalties, on a finding that compliance with the requirements is or was 17 prevented by reason of war, riots, or acts of God; 18 (6) classify tracts for agricultural uses; 19 (7) after consulting with the Board of Agriculture and Conservation 20 (AS 03.09.010), waive, postpone, or otherwise modify the development requirements 21 of a contract for the sale of agricultural land if 22 (A) the land is inaccessible by road; or 23 (B) transportation, marketing, and development costs render 24 the required development uneconomic; 25 (8) reconvey or relinquish land or an interest in land to the federal 26 government if 27 (A) the land is described in an amended application for an 28 allotment under 43 U.S.C. 1617; and 29 (B) the reconveyance or relinquishment is 30 (i) for the purposes provided in 43 U.S.C. 1617; and 31 (ii) in the best interests of the state;
01 (9) lead and coordinate all matters relating to the state's review and 02 authorization of resource development projects; 03 (10) exercise the powers and do the acts necessary to carry out the 04 provisions and objectives of AS 43.90 that relate to this chapter. 05 * Sec. 4. AS 39.25.110 is amended by adding a new paragraph to read: 06 (41) the Alaska Gasline Inducement Act coordinator appointed under 07 AS 43.90.250. 08 * Sec. 5. AS 40.25.120(a) is amended to read: 09 (a) Every person has a right to inspect a public record in the state, including 10 public records in recorders' offices, except 11 (1) records of vital statistics and adoption proceedings, which shall be 12 treated in the manner required by AS 18.50; 13 (2) records pertaining to juveniles unless disclosure is authorized by 14 law; 15 (3) medical and related public health records; 16 (4) records required to be kept confidential by a federal law or 17 regulation or by state law; 18 (5) to the extent the records are required to be kept confidential under 19 20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure 20 or retain federal assistance; 21 (6) records or information compiled for law enforcement purposes, but 22 only to the extent that the production of the law enforcement records or information 23 (A) could reasonably be expected to interfere with enforcement 24 proceedings; 25 (B) would deprive a person of a right to a fair trial or an 26 impartial adjudication; 27 (C) could reasonably be expected to constitute an unwarranted 28 invasion of the personal privacy of a suspect, defendant, victim, or witness; 29 (D) could reasonably be expected to disclose the identity of a 30 confidential source; 31 (E) would disclose confidential techniques and procedures for
01 law enforcement investigations or prosecutions; 02 (F) would disclose guidelines for law enforcement 03 investigations or prosecutions if the disclosure could reasonably be expected to 04 risk circumvention of the law; or 05 (G) could reasonably be expected to endanger the life or 06 physical safety of an individual; 07 (7) names, addresses, and other information identifying a person as a 08 participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the 09 advance college tuition savings program under AS 14.40.803 - 14.40.817; 10 (8) public records containing information that would disclose or might 11 lead to the disclosure of a component in the process used to execute or adopt an 12 electronic signature if the disclosure would or might cause the electronic signature to 13 cease being under the sole control of the person using it; 14 (9) reports submitted under AS 05.25.030 concerning certain 15 collisions, accidents, or other casualties involving boats; 16 (10) records or information pertaining to a plan, program, or 17 procedures for establishing, maintaining, or restoring security in the state, or to a 18 detailed description or evaluation of systems, facilities, or infrastructure in the state, 19 but only to the extent that the production of the records or information 20 (A) could reasonably be expected to interfere with the 21 implementation or enforcement of the security plan, program, or procedures; 22 (B) would disclose confidential guidelines for investigations or 23 enforcement and the disclosure could reasonably be expected to risk 24 circumvention of the law; or 25 (C) could reasonably be expected to endanger the life or 26 physical safety of an individual or to present a real and substantial risk to the 27 public health and welfare; 28 (11) the written notification regarding a proposed regulation provided 29 under AS 24.20.105 to the Department of Law and the affected state agency and 30 communications between the Legislative Affairs Agency, the Department of Law, and 31 the affected state agency under AS 24.20.105;
01 (12) records that are 02 (A) proprietary, privileged, or a trade secret in accordance 03 with AS 43.90.150 or 43.90.220(e); 04 (B) applications that are received under AS 43.90 until 05 notice is published under AS 43.90.160. 06 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 FIRST REQUEST FOR APPLICATIONS FOR THE LICENSE. It is the intent of the 09 legislature that the first request for applications for the license by the commissioners under 10 AS 43.90.120, as enacted in sec. 1 of this Act, be issued within 90 days after the effective date 11 of this Act. 12 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 EXPEDITED CONSIDERATION OF COURT CASES. It is the intent of the 15 legislature that the courts of the state, when considering a case related to the development and 16 construction of a natural gas pipeline under this Act or to the commitment of a shipper to 17 acquire firm transportation capacity during the first binding open season for a project 18 developed under this Act, expedite the resolution of the case by giving the case priority over 19 all other civil cases to the extent permitted under the Alaska Rules of Court. 20 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 SEVERABILITY. Under AS 01.10.030, if any provision of this Act, or the application 23 of it to any person or circumstance, is held invalid, the remainder of this Act and the 24 application to other persons or circumstances are not affected. 25 * Sec. 9. This Act takes effect immediately under AS 01.10.070(c).