txt

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