Enrolled HB 177: 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.
00Enrolled HB 177 01 Relating to the Alaska Gasline Inducement Act; providing inducements for the construction of 02 a natural gas pipeline and shippers that commit to use that pipeline; establishing the Alaska 03 Gasline Inducement Act reimbursement fund; providing for an Alaska Gasline Inducement 04 Act coordinator; making conforming amendments; and providing for an effective date. 05 _______________ 06 * Section 1. AS 43 is amended by adding a new chapter to read: 07 Chapter 90. Alaska Gasline Inducement Act. 08 Article 1. Inducement to Construction of a Natural Gas Pipeline in This State. 09 Sec. 43.90.010. Purpose. The purpose of this chapter is to encourage 10 expedited construction of a natural gas pipeline that 11 (1) facilitates commercialization of North Slope gas resources in the 12 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 must 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, 08 regasification 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 prefiling 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 10 (B) offer distance-sensitive rates to delivery points in the state 11 consistent with 18 C.F.R. 157.34(c)(8); 12 (14) commit to establish a local headquarters in this state for the 13 proposed project; 14 (15) to the maximum extent permitted by law, commit to 15 (A) hire qualified residents from throughout the state for 16 management, engineering, construction, operations, maintenance, and other 17 positions on the proposed project; 18 (B) contract with businesses located in the state; 19 (C) establish hiring facilities or use existing hiring facilities in 20 the state; and 21 (D) use, as far as is practicable, the job centers and associated 22 services operated by the Department of Labor and Workforce Development 23 and an Internet-based labor exchange system operated by the state; 24 (16) waive the right to appeal the rejection of the application as 25 incomplete, the issuance of a license to another applicant, or the determination under 26 AS 43.90.180(b) that no application merits the issuance of a license; 27 (17) commit to negotiate, before construction, a project labor 28 agreement to the maximum extent permitted by law; in this paragraph, "project labor 29 agreement" means a comprehensive collective bargaining agreement between the 30 licensee or its agent and the appropriate labor representatives to ensure expedited 31 construction with labor stability for the project by qualified residents of the state;
01 (18) commit that the state reimbursement received by a licensee may 02 not be included in the applicant's rate base, and shall be used as a credit against the 03 licensee's cost of service; 04 (19) provide a detailed description of the applicant, all entities 05 participating with the applicant in the application and the project proposed by the 06 applicant, and persons the applicant intends to involve in the construction and 07 operation of the proposed project; the description must include the nature of the 08 affiliation for each person, the commitments by the person to the applicant, and other 09 information relevant to the commissioners' evaluation of the readiness and ability of 10 the applicant to complete the project presented in the application; 11 (20) demonstrate the readiness, financial resources, and technical 12 ability to perform the activities specified in the application by describing the 13 applicant's history of compliance with safety, health, and environmental requirements, 14 the ability to follow a detailed work plan and timeline, and the ability to operate within 15 an associated budget. 16 Sec. 43.90.140. Initial application review; additional information requests; 17 complete applications. (a) After the deadline established by the commissioners for 18 filing an application has passed, the commissioners shall open and review each 19 application to determine whether it is consistent with the terms of the request for 20 applications and meets the requirements of AS 43.90.130. The commissioners shall 21 reject as incomplete an application that does not meet the requirements of 22 AS 43.90.130. 23 (b) To evaluate whether an application should be rejected under (a) of this 24 section, the commissioners may request additional information relating to the 25 application. 26 (c) If, within the time specified by the commissioners, the applicant fails to 27 provide the additional information requested under (b) of this section, or submits 28 additional information that is not responsive, the application shall be rejected. 29 (d) For an application not rejected under this section, the commissioners shall 30 make a determination that the application, including any requested additional 31 information, is complete.
01 (e) Except as provided under AS 43.90.150, and after determining which 02 applications are complete, the commissioners shall make all applications available to 03 the legislature. 04 Sec. 43.90.150. Proprietary information and trade secrets. (a) At the 05 request of the applicant, information submitted under this chapter that the applicant 06 identifies and demonstrates is proprietary or is a trade secret is confidential and not 07 subject to public disclosure under AS 40.25. After a license is awarded, all 08 information submitted by the licensee, retained under this chapter, and not determined 09 by the commissioners to be a proprietary or trade secret shall be made public. 10 (b) If the commissioners determine that the information submitted by the 11 applicant is not proprietary or is not a trade secret, the commissioners shall notify the 12 applicant and return the information at the request of the applicant. 13 Sec. 43.90.160. Notice, review, and comment. (a) The commissioners shall 14 publish notice and provide a 60-day period for public review and comment on all 15 applications determined complete under AS 43.90.140. Except as provided under 16 AS 43.90.150, all applications filed under this chapter shall be made public, including 17 applications rejected as incomplete under AS 43.90.140. 18 (b) Applications received under this chapter are not subject to public 19 disclosure under AS 40.25 until the commissioners publish notice under this section. 20 However, information that the commissioners have determined is proprietary or a 21 trade secret under AS 43.90.150 may not be made public even after the notice is 22 published under (a) of this section, except as otherwise provided in AS 43.90.150. If 23 information is proprietary or a trade secret and is held confidential under 24 AS 43.90.150, the applicant shall provide a summary of the confidential information 25 that is satisfactory to the commissioners, and the commissioners shall make the 26 summary of the information available to the public. 27 (c) After the commissioners determine that the applications are complete 28 under AS 43.90.140, information provided by an applicant to the commissioners under 29 this chapter, including information determined by the commissioners to be 30 confidential under AS 43.90.150, shall be disclosed to the legislative auditor, the fiscal 31 analyst who serves as head of the legislative finance division, members of the
01 legislature, and their respective agents and contractors, on request and after the 02 individual making the request signs a confidentiality agreement prepared by the 03 commissioners. 04 Sec. 43.90.170. Application evaluation and ranking. (a) The commissioners 05 shall evaluate all applications determined to be complete under AS 43.90.140, 06 consider public comments received under AS 43.90.160(a), and rank each application 07 according to the net present value of the anticipated cash flow to the state from the 08 applicant's project proposal using the factors in (b) of this section and weighted by the 09 project's likelihood of success based on the commissioners' assessment of the factors 10 listed in (c) of this section. 11 (b) When evaluating the net present value of anticipated cash flow to the state 12 from the applicant's project proposal, the commissioners shall use an undiscounted 13 value and, at a minimum, discount rates of two, five, six, and eight percent, and 14 consider 15 (1) how quickly the applicant proposes to begin construction of the 16 proposed project and how quickly the project will commence commercial operation; 17 (2) the net back value of the gas determined by the destination market 18 value of the gas and estimated transportation and treatment costs; 19 (3) the ability of the applicant to prevent or reduce project cost 20 overruns that would increase the tariff; 21 (4) the initial design capacity of the applicant's project and the extent 22 to which the design can accommodate low-cost expansion; 23 (5) the amount of the reimbursement by the state under 24 AS 43.90.110(a)(1)(A) and (B) proposed by the applicant under AS 43.90.130(9); 25 (6) economic value resulting from payments required to be made to the 26 state under the terms of the proposal; and 27 (7) other factors found by the commissioners to be relevant to the 28 evaluation of the net present value of the anticipated cash flow to the state. 29 (c) When evaluating the project's likelihood of success, the commissioners 30 shall consider 31 (1) the reasonableness, specificity, and feasibility of the applicant's
01 work plan, timeline, and budget required to be submitted under AS 43.90.130, 02 including the applicant's plan to manage cost overruns, insulate shippers from the 03 effect of cost overruns, and encourage shippers to participate in the first binding open 04 season; 05 (2) the financial resources of the applicant; 06 (3) the ability of the applicant to comply with the proposed 07 performance schedule; 08 (4) the applicant's organization, experience, accounting and operational 09 controls, technical skills or the ability to obtain them, and necessary equipment or the 10 ability to obtain the necessary equipment; 11 (5) the applicant's record of 12 (A) performance on projects not licensed under this chapter; 13 (B) integrity and good business ethics; and 14 (6) other evidence and factors found by the commissioners to be 15 relevant to the evaluation of the project's likelihood of success. 16 Sec. 43.90.180. Notice to the legislature of intent to issue license; denial of 17 license. (a) If, after consideration of public comments received under AS 43.90.160(a) 18 and evaluation of complete applications under AS 43.90.170, the commissioners 19 determine that an application proposes a project that will sufficiently maximize the 20 benefits to the people of this state and merits issuance of a license under this chapter, 21 the commissioners shall 22 (1) issue a determination, with written findings addressing the basis for 23 the determination; the determination becomes a final agency action on the effective 24 date of a bill approving the issuance of the license under AS 43.90.190; 25 (2) publish notice of intent to issue a license under this chapter with 26 written findings addressing the basis for the determination; and 27 (3) forward the notice under (2) of this subsection, along with the 28 findings, supporting documentation, and determination under (1) of this subsection, to 29 the presiding officer of each house of the legislature for action as provided in 30 AS 43.90.190. 31 (b) If, after evaluation of complete applications under AS 43.90.170, the
01 commissioners determine that no application sufficiently maximizes the benefits to the 02 people of this state and merits issuance of a license under this chapter, the 03 commissioners shall issue a written finding that addresses the basis for that 04 determination. 05 (c) The commissioners' determination under (b) of this section is a final 06 agency action. 07 Sec. 43.90.190. Legislative approval; issuance of license. (a) After the 08 presiding officer of each house of the legislature receives a determination from the 09 commissioners under AS 43.90.180, the rules committee of each house of the 10 legislature shall introduce a bill in the committee's respective chamber that provides 11 for the approval of the license proposed to be issued by the commissioners. 12 (b) If a bill approving the issuance of the license passes the legislature within 13 60 days after the last date a presiding officer receives a determination by the 14 commissioners under AS 43.90.180, the commissioners shall issue the license as soon 15 as practicable after the effective date of the Act approving the issuance of the license. 16 (c) Notwithstanding a legislative rule that prohibits the carryover of a bill after 17 the end of a special session or after the end of a regular session of a legislature, a bill 18 introduced under (a) of this section that is not passed or not withdrawn, defeated, 19 vetoed, or indefinitely postponed shall be carried over to any subsequent regular or 20 special legislative session convened during the 60-day period described in (b) of this 21 section in the same reading or status it was in at the time of adjournment. However, a 22 bill introduced under (a) of this section may not be carried over to the first regular 23 session of a legislature. 24 (d) If the legislature fails to approve the issuance of the license, the 25 commissioners 26 (1) may not issue the license that the legislature failed to approve; and 27 (2) may request new applications for a license under AS 43.90.120. 28 Sec. 43.90.200. Certification by regulatory authority and project sanction. 29 (a) A licensee that is awarded a certificate of public convenience and necessity from a 30 regulatory agency with jurisdiction over the project shall accept the certificate on or 31 before the date the order granting the certificate is no longer subject to judicial review.
01 (b) If the licensee has credit support sufficient to finance construction of the 02 project through ownership of rights to produce and market gas resources, firm 03 transportation commitments, or government financing, the licensee shall sanction the 04 project within one year after the effective date of the certificate of public convenience 05 and necessity issued by the regulatory agency with jurisdiction over the project. 06 (c) If the licensee does not have credit support sufficient to finance 07 construction of the project through ownership of rights to produce and market gas 08 resources, firm transportation commitments, or government financing, the licensee 09 shall sanction the project before the later of 10 (1) two years after the effective date of the certificate of public 11 convenience and necessity issued by the regulatory agency with jurisdiction over the 12 project; or 13 (2) five years after the close of the first binding open season of the 14 project. 15 (d) If the licensee fails to sanction the project as required under this section, 16 the licensee shall, upon request by the state, 17 (1) seek approval from the Federal Energy Regulatory Commission or 18 the Regulatory Commission of Alaska, as applicable, to abandon and transfer the 19 certificate to the state or the state's designee; and 20 (2) assign to the state or the state's designee all engineering designs, 21 contracts, permits, and other data related to the project that are acquired by the 22 licensee during the term of the license before the date of the abandonment or transfer. 23 (e) The transfer and assignments under (d) of this section as a result of failure 24 to comply with (a) or (b) of this section are at no cost to the state or the state's 25 designee. A transfer under (c) of this section shall be subject to the state's payment to 26 the licensee of the net amount of expenditures incurred and paid by the licensee that 27 are qualified expenditures for the purposes of AS 43.90.110. 28 (f) In this section, "effective date of the certificate of public convenience and 29 necessity" means the earlier of the date the order granting the certificate is no longer 30 subject to judicial review, or the date the licensee accepts the certificate. 31 Sec. 43.90.210. Amendment of or modification to the project plan. Subject
01 to the approval of the commissioners, a licensee may amend or modify its project plan 02 if the amendment or modification improves the net present value of the project to the 03 state, is necessary because of an order or requirement by a regulatory agency with 04 jurisdiction over the project or by the Alaska Oil and Gas Conservation Commission, 05 or is necessary because of changed circumstances outside the licensee's control and 06 not reasonably foreseeable before the license was issued. An amendment or 07 modification approved under this section must be consistent with the requirements of 08 AS 43.90.130 and, except for an amendment or modification required because of an 09 order or requirement of a regulatory agency with jurisdiction over the project or by the 10 Alaska Oil and Gas Conservation Commission, may not substantially diminish the 11 value of the project to the state or the project's likelihood of success. 12 Sec. 43.90.220. Records, reports, conditions, and audit requirements. (a) A 13 licensee shall maintain complete and accurate records of all expenditures and 14 commitments of state money received under this chapter, including receipts and 15 records showing the payment or cost of purchased items and services, the names and 16 addresses of the sellers and service providers, and the dates of service or delivery. 17 (b) Upon reasonable notice, the commissioners may audit the records, books, 18 and files of the entity receiving the state money or making the expenditures and 19 commitments of money received from the state under this chapter. 20 (c) The commissioners may do the following with respect to information 21 relating to the project: conduct hearings or other investigative inquiries; compel the 22 attendance of witnesses and production of documents; and require the licensee to 23 furnish information in paper copy or electronic format. 24 (d) After a license has been issued and until commencement of commercial 25 operations of a natural gas pipeline, the licensee shall allow the commissioners to 26 (1) have a representative present at all meetings of the licensee's 27 governing body or bodies and equity holders that relate to the project; 28 (2) receive all relevant notices and information when and as sent to the 29 governing body or bodies and equity holders; 30 (3) enjoy the same access to information about the licensee as the 31 governing body members and equity owners receive; and
01 (4) receive relevant reports or information from the licensee that the 02 commissioners reasonably request. 03 (e) All proprietary information, privileged information, and trade secrets 04 received by the commissioners or their representative under (d) of this section are not 05 subject to public disclosure under AS 40.25. 06 (f) A licensee shall maintain the records and reports required under this 07 section for seven years from the date the licensee receives state money under this 08 chapter. 09 Sec. 43.90.230. License violations; damages. (a) A licensee is in violation of 10 the license if the commissioners determine that the licensee has 11 (1) requested and received money from the state under this chapter for 12 an expenditure that is not a qualified expenditure under AS 43.90.110; 13 (2) except as required to conform with a requirement of a regulatory 14 agency with jurisdiction over the project, substantially departed from the 15 specifications set out in the application without state approval of a project plan 16 amendment or modification under AS 43.90.210; 17 (3) violated any provision of this chapter or any other provision of 18 state or federal law material to the license; 19 (4) failed to accept a certificate as required under AS 43.90.200(a) or 20 failed to sanction the project as required under AS 43.90.200(b); or 21 (5) otherwise violated a material term of the license. 22 (b) The commissioners shall provide written notice to the licensee identifying 23 a license violation. The commissioners and the licensee have 90 days after the date the 24 notice is issued to resolve the violation informally. 25 (c) The commissioners may suspend disbursement of state reimbursements to 26 the licensee beginning on the date that the notice of violation issued under (b) of this 27 section is sent to the licensee. The commissioners may resume disbursement on the 28 date that the commissioners determine that the violation is cured. 29 (d) If the commissioners and the licensee are unable to resolve the violation 30 within the period described in (b) of this section, the commissioners shall notify the 31 licensee that the violation has not been cured and provide the licensee with an
01 opportunity to be heard. If, after notice and hearing, the commissioners determine that 02 the violation has not been cured, the commissioners shall issue a written decision that 03 is a final administrative action for purposes of appeal to the superior court in the state. 04 (e) If the determination issued under (d) of this section finds an unresolved 05 violation, the commissioners may impose one or more of the following remedies: 06 (1) discontinuation of state reimbursements under this chapter; 07 (2) recoupment of state money that the licensee has received under this 08 chapter to date, with interest, regardless of whether the licensee has expended or 09 committed that money; 10 (3) license revocation; 11 (4) assignment to the state or the state's designee of all engineering 12 designs, contracts, permits, and other data related to the project that are acquired by 13 the licensee during the term of the license; and 14 (5) any other remedies provided by law or in equity. 15 Sec. 43.90.240. Abandonment of project. (a) If the commissioners and the 16 licensee agree that the project is uneconomic, the project shall be abandoned, the 17 inducement provided for in AS 43.90.110 shall be terminated, and, except for 18 requirements imposed on the licensee under (e) of this section and AS 43.90.220, the 19 state and the licensee no longer have an obligation under this chapter with respect to 20 the license. 21 (b) If the commissioners or the licensee determines that the project is 22 uneconomic and the other party disagrees, the disagreement shall be settled by 23 arbitration administered by the American Arbitration Association under the 24 substantive and procedural laws of this state, and judgment on the award rendered by 25 the arbitrators may be entered in superior court in the state. In the event of arbitration, 26 each party shall select an arbitrator from the American Arbitration Association's 27 National Roster, and the two arbitrators shall appoint a third arbitrator from the 28 American Arbitration Association's National Roster who shall serve as the chair of the 29 three-member arbitration panel. If the arbitration panel determines that the project is 30 (1) uneconomic, the state and the licensee no longer have an obligation 31 under this chapter with respect to the license, except for requirements imposed on the
01 licensee under (e) of this section and AS 43.90.220; or 02 (2) not uneconomic, the obligations of the licensee and the state 03 continue as provided under this chapter and the license. 04 (c) The arbitration panel in (b) of this section shall make a determination that 05 the project is uneconomic only if the panel finds that the party claiming the project is 06 uneconomic has proven by a preponderance of the evidence that the 07 (1) project does not have credit support sufficient to finance 08 construction of the project through firm transportation commitments, government 09 assistance, or other external sources of financing; and 10 (2) predicted costs of transportation at a 100 percent load factor, when 11 deducted from predicted gas sales revenue using publicly available predictions of 12 future gas prices, would result in a producer rate of return that is below the rate 13 typically accepted by a prudent oil and gas exploration and production company for 14 incremental upstream investment that is required to produce and deliver gas to the 15 project. 16 (d) If the state makes a payment to the licensee under AS 43.90.440, the 17 license is considered abandoned, and the state and the licensee no longer have any 18 obligations under this chapter with respect to the license, except that the licensee must 19 comply with the 20 (1) requirements imposed on the licensee under AS 43.90.220 21 regarding state money received by the licensee before the license was considered 22 abandoned; and 23 (2) requirements of AS 43.90.440. 24 (e) If the commissioners and the licensee agree that the project is uneconomic 25 or an arbitration panel makes a final determination that the project is uneconomic, the 26 licensee shall, upon the state's request, transfer to the state or the state's designee all 27 engineering designs, contracts, permits, and other data related to the project that are 28 acquired by the licensee during the term of the license upon reimbursement by the 29 state of the net amount of expenditures incurred and paid by the licensee that are 30 qualified expenditures for the purposes of AS 43.90.110. 31 Sec. 43.90.250. Alaska Gasline Inducement Act coordinator. (a) There is
01 created in the Office of the Governor the position of Alaska Gasline Inducement Act 02 coordinator. Administrative support for the position shall be provided by the Office of 03 the Governor. The position shall continue until one year after commencement of 04 commercial operations of the project. 05 (b) The governor shall appoint a person to the position of Alaska Gasline 06 Inducement Act coordinator. The individual serving as the Alaska Gasline Inducement 07 Act coordinator may be removed from the position at the discretion of the governor. 08 Sec. 43.90.260. Expedited review and action by state agencies. (a) A review 09 conducted and action taken by a state agency relating to the project shall be expedited 10 in a manner consistent with the completion of the necessary approvals in accordance 11 with this chapter. 12 (b) Notwithstanding any contrary provision of law, a state agency may not 13 include in any project certificate, right-of-way, permit, or other authorization issued to 14 the licensee a term or condition that is not required by law if the coordinator 15 determines that the term or condition would prevent or impair in any significant 16 respect the expeditious construction and operation or expansion of the project. 17 (c) Unless required by law, a state agency may not add to, amend, or abrogate 18 any certificate, right-of-way, permit, or other authorization issued to a licensee if the 19 coordinator determines that the action would prevent or impair in any significant 20 respect the expeditious construction, operation, or expansion of the project. 21 Article 3. Resource Inducements. 22 Sec. 43.90.300. Qualification for resource inducements. (a) Notwithstanding 23 any contrary provision of law, a lessee or other person that demonstrates to the 24 satisfaction of the commissioners that the person has committed to acquire firm 25 transportation capacity in the first binding open season of the project is qualified to 26 receive the resource inducement set out in AS 43.90.310 and 43.90.320 for gas 27 produced on the North Slope and shipped in firm transportation capacity acquired in 28 the first binding open season of the project. The inducement in AS 43.90.310 is 29 contractual. 30 (b) A gas producer receiving a voucher under AS 43.90.330 is qualified to 31 receive the resource inducement in AS 43.90.310 and 43.90.320 for the gas shipped in
01 the firm transportation capacity described in the voucher for the period described in 02 AS 43.90.330. 03 Sec. 43.90.310. Royalty inducement. (a) Before the start of the first binding 04 open season to be conducted by the licensee, the commissioner of natural resources 05 shall adopt regulations that establish a method to determine the monthly value of the 06 state's royalty share of gas production and establish terms under which the state will 07 exercise its right to switch between taking its royalty in value or in kind for gas 08 committed for firm transportation in the first binding open season of the project or 09 shipped in the firm transportation capacity described in a voucher received by the gas 10 producer under AS 43.90.330. The regulations must 11 (1) minimize retroactive adjustments to the monthly value of the state's 12 royalty share of gas production; 13 (2) provide a method for establishing a fair market value for each 14 component of the state's royalty gas that is based on pricing data from reliable and 15 widely available industry trade publications and that uses appropriate adjustments to 16 reflect 17 (A) deductions for actual and reasonable transportation costs 18 for the state's royalty gas, including a reasonable share of the costs associated 19 with unused capacity commitments on gas pipelines from the North Slope to 20 the first destination market with reasonable market liquidity; 21 (B) location differentials between the destination markets 22 where North Slope gas could be sold; 23 (C) reasonable and actual costs for gas processing; in this 24 subparagraph, "gas processing" means post-production treatment of gas to 25 extract natural gas liquids; and 26 (D) deductions permitted under the 1980 Royalty Settlement 27 Agreement for Prudhoe Bay gas; and 28 (3) establish terms under which the state will exercise its authority to 29 switch between taking its royalty gas in value and in kind to ensure that the state's 30 actions do not unreasonably 31 (A) cause the lessee or other person to bear disproportionate
01 transportation costs with respect to the state's royalty gas; 02 (B) interfere with the lessee's or other person's long-term 03 marketing of its production. 04 (b) If a lessee or other person qualified for a resource inducement under 05 AS 43.90.300 agrees under (c) of this section, the lessee or other person is entitled to 06 elect 07 (1) to calculate its gas royalty obligation under the regulations adopted 08 under (a) of this section for natural gas transported on a firm contract executed during 09 the project's first binding open season or under the methodology set out in the existing 10 leases from which the gas is produced, and 11 (A) upon the request of the lessee, the commissioner of natural 12 resources shall contractually amend the existing lease to effect the election 13 under this paragraph and incorporate as fixed contract terms the relevant 14 regulatory provisions; and 15 (B) the election under this paragraph remains in effect until 16 new regulations are adopted as a result of a review under (d) of this section, at 17 which time, a lessee or other person qualified under AS 43.90.300 may change 18 its election under this paragraph; upon the request of the lessee, the 19 commissioner of natural resources shall contractually amend the lease to 20 incorporate as fixed contract terms the relevant revised regulatory provisions; 21 (2) to enter into a contract with the state that amends the existing lease 22 terms by providing a mechanism that ensures that, when the state exercises its right to 23 switch between taking its royalty in value or in kind for gas committed for firm 24 transportation in the first binding open season of the project, the lessee or other person 25 does not bear disproportionate transportation costs with respect to the state's royalty 26 gas; and by modifying the required period of notice that the state must provide before 27 exercising the state's right to switch between taking its royalty in value or in kind for 28 gas committed for firm transportation in the first binding open season of the project. 29 (c) To claim the inducement under (b) of this section, a lessee or other person 30 qualified under AS 43.90.300 shall agree, on an application form provided by the 31 Department of Natural Resources, that the lessee or other person, and the lessee's or
01 other person's affiliates, successors, assigns, and agents, will not protest or appeal a 02 filing by the licensee to roll in expansion costs of the mainline up to a level that is 03 required in AS 43.90.130(7) if the Federal Energy Regulatory Commission does not 04 have a rebuttable presumption in effect that rolled-in treatment applies to the cost of 05 the expansion of the project. The agreement not to protest may not preclude the lessee 06 or other person, or the lessee's or other person's affiliates, successors, assigns, and 07 agents, from protesting a filing to roll in mainline expansion costs that the licensee is 08 not required to propose and support under AS 43.90.130(7). 09 (d) The commissioner of natural resources shall provide for review of the 10 regulations adopted under (a) of this section at least every two years after the 11 commencement of commercial operations to determine whether the regulations 12 continue to meet the requirements of (a) of this section under current conditions, and 13 shall amend the regulations when the requirements are not being met. 14 (e) No provision of this chapter precludes the election set out in (b) of this 15 section, nor may the commissioner of natural resources assert any provision of any 16 existing lease or unit agreement as precluding the elections set out in (b) of this 17 section. 18 Sec. 43.90.320. Gas production tax exemption. (a) If a person qualified for a 19 resource inducement under AS 43.90.300 agrees under (c) of this section, the person is 20 entitled to an annual exemption from the state's gas production tax in an amount equal 21 to the difference between the amount of the person's gas production tax obligation 22 calculated under the gas production tax in effect during that tax year and the amount of 23 the person's gas production tax obligation calculated under the gas production tax in 24 effect at the start of the first binding open season held under this chapter. If the 25 difference is less than zero, the gas production tax exemption is zero. 26 (b) The exemption under this section may be applied within 10 years 27 immediately following commencement of commercial operations and only applied to 28 production taxes that are levied on North Slope gas shipped through firm 29 transportation capacity the person acquired during the first binding open season or 30 shipped in the firm transportation capacity described in a voucher received by the gas 31 producer under AS 43.90.330.
01 (c) The person claiming the exemption under this section shall agree that the 02 person, and the person's affiliates, successors, assigns, and agents, will not protest or 03 appeal a filing by the licensee to roll in mainline expansion costs up to the level that 04 the licensee is required to propose and support under AS 43.90.130(7) if the Federal 05 Energy Regulatory Commission does not have a rebuttable presumption in effect that 06 rolled-in treatment applies to the cost of the expansion of the project. The agreement 07 required under this subsection may not preclude the person, or the person's affiliates, 08 successors, assigns, and agents, from protesting a filing to roll in mainline expansion 09 costs that the licensee is not required to propose and support under AS 43.90.130(7). 10 (d) In this section, "gas production tax" means the tax levied on the production 11 of gas under AS 43.55. 12 Sec. 43.90.330. Inducement vouchers. (a) A person that acquires firm 13 transportation capacity in the first binding open season of the project, that does not 14 hold an oil and gas lease on the North Slope, and that is not an affiliate of a person that 15 holds an oil and gas lease on the North Slope may apply to the commissioners for a 16 voucher under this section. A voucher issued by the commissioners must describe the 17 firm transportation capacity in the project to which the voucher is applicable. 18 (b) A voucher issued by the commissioners under this section entitles the 19 holder of the voucher to the resource inducements in AS 43.90.310 and 43.90.320 for 20 gas shipped in the firm transportation capacity acquired by the person applying for the 21 voucher during the first binding open season of the project and described in the 22 voucher. The voucher may be transferred to a gas producer that has a binding 23 obligation to sell gas to the person transferring the voucher under a gas purchase 24 agreement. 25 (c) A gas producer holding a voucher may claim the resource inducements for 26 gas shipped through the firm transportation capacity described in the voucher and only 27 on gas that is produced and delivered to the purchaser on the North Slope. A gas 28 producer may claim the resource inducements under this subsection until the earlier of 29 the termination of the binding gas purchase agreement or the expiration of the 30 inducements by operation of law. 31 (d) A person that receives a voucher under this section and a gas producer that
01 receives resource inducements under a voucher shall agree that the person and the gas 02 producer and their respective affiliates, successors, assigns, or agents will not protest 03 or appeal a filing by the licensee to roll in mainline expansion costs up to the level that 04 the licensee is required to propose and support under AS 43.90.130(7) if the Federal 05 Energy Regulatory Commission does not have a rebuttable presumption in effect that 06 rolled-in treatment applies to the cost of the expansion of the project. The agreement 07 required under this subsection may not preclude the person or gas producer or their 08 respective affiliates, successors, assigns, or agents from protesting a filing to roll in 09 mainline expansion costs that the licensee is not required to propose and support under 10 AS 43.90.130(7). 11 Article 4. Miscellaneous Provisions. 12 Sec. 43.90.400. Alaska Gasline Inducement Act reimbursement fund; 13 disbursements; audits. (a) There is established in the general fund an Alaska Gasline 14 Inducement Act reimbursement fund. The fund consists of money appropriated to it by 15 the legislature for disbursement to pay the state's reimbursements under AS 43.90.110. 16 Money appropriated to the fund may be spent for the purposes of the fund without 17 further appropriation. Appropriations to the fund do not lapse under AS 37.25.010, but 18 remain in the fund for future disbursements. Nothing in this subsection creates a 19 dedicated fund. 20 (b) The Department of Revenue shall manage the fund, and may invest money 21 in the fund so as to yield competitive market rates as provided in AS 37.10.071. 22 Income earned on the fund shall be accounted for separately and may be appropriated 23 annually to the fund. 24 (c) The commissioners shall adopt regulations that provide for application to 25 receive reimbursements for qualified expenditures as provided under AS 43.90.110, 26 and that provide for periodic audits of the use of money disbursed as reimbursements 27 under this chapter. 28 (d) Within 10 days after the convening of each regular session of the 29 legislature, the commissioners shall submit to the legislature a report that lists all the 30 disbursements from the fund during the preceding fiscal year with a written 31 justification for each disbursement and the projected amount of money that will be
01 required for reimbursements in each of the next three fiscal years. 02 Sec. 43.90.410. Regulations. The commissioners may jointly adopt or amend 03 regulations for the purpose of implementing the provisions of this chapter. The 04 commissioner of revenue and the commissioner of natural resources may adopt or 05 amend regulations adopted under authority outside of this chapter as necessary to 06 implement the provisions of this chapter. 07 Sec. 43.90.420. Statute of limitations. A person may not bring a judicial 08 action challenging the constitutionality of this chapter or the constitutionality of a 09 license issued under this chapter unless the action is commenced in a court of the state 10 of competent jurisdiction within 90 days after the date that a license is issued. 11 Sec. 43.90.430. Interest. When a payment due to the state under this chapter 12 becomes delinquent, the payment bears interest at the rate applicable to a delinquent 13 tax under AS 43.05.225. 14 Sec. 43.90.440. Licensed project assurances. (a) Except as otherwise 15 provided in this chapter, the state grants a licensee assurances that the licensee has 16 exclusive enjoyment of the inducements provided under this chapter before the 17 commencement of commercial operations. If, before the commencement of 18 commercial operations, the state extends to another person preferential royalty or tax 19 treatment or grant of state money for the purpose of facilitating the construction of a 20 competing natural gas pipeline project in this state, and if the licensee is in compliance 21 with the requirements of the license and with the requirements of state and federal 22 statutes and regulations relevant to the project, the licensee is entitled to payment from 23 the state of an amount equal to three times the total amount of the expenditures 24 incurred and paid by the licensee that are qualified expenditures for the purposes of 25 AS 43.90.110 that the licensee incurred in developing the licensee's project before the 26 date that the state first extended preferential treatment to another person. The payment 27 under this subsection is subject to appropriation. Upon payment by the state of the 28 amount owed under this section, the licensee shall, at no additional cost to the state, 29 assign to the state or the state's designee all engineering designs, contracts, permits, 30 and other data related to the project that were acquired by the licensee during the term 31 of the license. The payment under this subsection is in full satisfaction of all claims
01 the licensee may bring in contract, tort, or other law related to the events that gave rise 02 to the payment. 03 (b) The review, processing, or facilitation of a permit, right-of-way, or 04 authorization by a state agency in connection with a competing natural gas pipeline 05 project does not create an obligation on the part of the state under this section. 06 (c) In this section, 07 (1) "competing natural gas pipeline project" means a project designed 08 to accommodate throughput of more than 500,000,000 cubic feet a day of North Slope 09 gas to market; 10 (2) "preferential royalty or tax treatment" does not include 11 (A) the state's exercise of its right to resolve disputes involving 12 royalties and taxes; or 13 (B) the state's exercise of its right to modify royalties as 14 authorized by law in effect on the effective date of this section. 15 Sec. 43.90.450. Assignments. (a) A licensee may transfer all or part of the 16 license, including the rights and obligations arising under the license, if, after 17 publishing notice of the proposed transfer, providing notice to the presiding officer of 18 each house of the legislature, and providing a period of not less than 30 days for public 19 review and comment, 20 (1) the transfer is approved in writing in advance by the 21 commissioners; and 22 (2) the transfer does not increase or diminish the obligations created by 23 the license or diminish the likelihood of success of the project or the net present value 24 of the license to the state. 25 (b) Notwithstanding the commissioners' approval of a transfer of all or part of 26 a license under (a) of this section, the transferor of the license remains subject to the 27 requirements of AS 43.90.220 regarding all state money received by the licensee 28 before the effective date of the transfer. 29 (c) A person may transfer that person's rights to the royalty inducement under 30 AS 43.90.310 and the gas production tax exemption under AS 43.90.320 only in 31 connection with a sale or merger that results in transfer of all the person's assets in the
01 North Slope along with the person's firm transportation capacity contracts in the 02 project. 03 (d) Except for the transfer of a voucher to a producer under AS 43.90.330(b), 04 a person receiving a voucher under AS 43.90.330 based on the person's acquisition of 05 firm transportation capacity in the first binding open season of the project may transfer 06 the voucher only if the transfer is in connection with the permanent assignment by the 07 person of 100 percent of the firm transportation capacity acquired in the first binding 08 open season of the project. 09 Sec. 43.90.460. Conflicting laws. Nothing in this chapter shall be construed to 10 repeal or abrogate the administrative, regulatory, or statutory procedures and functions 11 of state and federal law governing the development and oversight of a project. 12 Sec. 43.90.470. State pipeline employment development. The commissioner 13 of labor and workforce development shall develop a job training program that will 14 provide training for Alaskans in gas pipeline project management, construction, 15 operations, maintenance, and other gas pipeline-related positions. 16 Article 5. General Provisions. 17 Sec. 43.90.900. Definitions. In this chapter, unless the context otherwise 18 requires, 19 (1) "affiliate" means another person that controls, is controlled by, or is 20 under common control with a person, and includes a division that operates as a 21 functional unit; 22 (2) "Alaska Gasline Inducement Act coordinator" or "coordinator" 23 means the person appointed under AS 43.90.250; 24 (3) "applicant" means a person or group of persons that files an 25 application for a license; 26 (4) "certificate of public convenience and necessity" and "certificate" 27 mean a certificate of public convenience and necessity issued by the Federal Energy 28 Regulatory Commission or the Regulatory Commission of Alaska and an amendment 29 to a certificate of public convenience and necessity issued by the Federal Energy 30 Regulatory Commission under 15 U.S.C. 719 et seq. (Alaska Natural Gas 31 Transportation Act of 1976);
01 (5) "commencement of commercial operations" means the first flow of 02 gas in the project that generates revenue to the owners; 03 (6) "commissioners" means the commissioner of revenue and the 04 commissioner of natural resources, acting jointly; 05 (7) "control" means the possession of ownership interest or authority 06 sufficient to, directly or indirectly, and whether acting alone or in conjunction with 07 others, direct or cause the direction of the management or policies of a company, and 08 is rebuttably presumed if the voting interest held is 10 percent or more; 09 (8) "equity holder" means the 10 (A) stockholders of a corporation; 11 (B) members of a limited liability company; 12 (C) partners of a partnership; 13 (D) joint venturers of a joint venture; 14 (E) members of a governmental authority and similar persons; 15 or 16 (F) holders of any other entity or person; 17 (9) "gas treatment plant" means a facility downstream of the point of 18 production that conditions gas and removes nonhydrocarbon substances from the gas 19 for the purpose of rendering the gas acceptable for tender and acceptance into a gas 20 pipeline system; 21 (10) "governing body" means a corporation's board of directors, a 22 limited liability company's managing members, a partnership's general partners, a joint 23 venturer's joint venturers, a governmental authority's board or council members, and 24 similar entities; 25 (11) "lease" means an oil and gas, or gas, lease issued by this state; 26 (12) "lessee" means a person that holds a working interest in an oil and 27 gas, or gas, lease issued by this state; 28 (13) "license" means a license issued under this chapter; 29 (14) "licensee" means the holder of a license issued under this chapter 30 and all affiliates, successors, assigns, and agents of the holder; 31 (15) "net present value" means the discounted value of a future stream
01 of cash flow; 02 (16) "North Slope" means that part of the state that lies north of 68 03 degrees North latitude; 04 (17) "open season" means the process that complies with 18 C.F.R. 05 Part 157, Subpart B (Open Seasons for Alaska Natural Gas Transportation Projects) or 06 a similar process for soliciting commitments for pipeline capacity under the 07 regulations, policies, rules, or precedent of the Regulatory Commission of Alaska; 08 (18) "point of production" has the meaning given in AS 43.55.900; 09 (19) "project" means a natural gas pipeline project authorized under a 10 license issued under this chapter; 11 (20) "proprietary," when used to describe information, means that the 12 information is treated by an applicant as confidential and the public disclosure of that 13 information would adversely affect the competitive position of the applicant or 14 materially diminish the commercial value of the information to the applicant; 15 (21) "recourse rates" means cost-based rates with a minimum and 16 maximum range that are approved by the Federal Energy Regulatory Commission, the 17 Regulatory Commission of Alaska, or the National Energy Board of Canada, as 18 appropriate, and set out in the pipeline's tariff; "recourse rates" includes only those 19 rates that the pipeline must make available to all shippers; 20 (22) "sanction" means to make financial commitments to go forward 21 with the project as evidenced by entering into financial commitments of at least 22 $1,000,000,000 with third parties; 23 (23) "trade secret" has the meaning given in AS 45.50.940; 24 (24) "under common control with" has the meaning given "control" in 25 this section; 26 (25) "unit agreement" means an agreement executed by the working 27 interest owners and royalty owners creating the unit. 28 Sec. 43.90.990. Short title. This chapter may be cited as the Alaska Gasline 29 Inducement Act. 30 * Sec. 2. AS 36.30.850(b) is amended by adding a new paragraph to read: 31 (45) contracts for an arbitration panel to determine whether a project is
01 uneconomic under AS 43.90.240, and contracts for the development of application 02 provisions for licensure and for the evaluation of those applications under AS 43.90. 03 * Sec. 3. AS 38.05.020(b) is amended to read: 04 (b) The commissioner may 05 (1) establish reasonable procedures and adopt reasonable regulations 06 necessary to carry out this chapter and, whenever necessary, issue directives or orders 07 to the director to carry out specific functions and duties; regulations adopted by the 08 commissioner shall be adopted under AS 44.62 (Administrative Procedure Act); 09 orders by the commissioner classifying land, issued after January 3, 1959, are not 10 required to be adopted under AS 44.62 (Administrative Procedure Act); 11 (2) enter into agreements considered necessary to carry out the 12 purposes of this chapter, including agreements with federal and state agencies; 13 (3) review any order or action of the director; 14 (4) exercise the powers and do the acts necessary to carry out the 15 provisions and objectives of this chapter; 16 (5) notwithstanding the provisions of any other section of this chapter, 17 grant an extension of the time within which payments due on any exploration license, 18 lease, or sale of state land, minerals, or materials may be made, including payment of 19 rental and royalties, on a finding that compliance with the requirements is or was 20 prevented by reason of war, riots, or acts of God; 21 (6) classify tracts for agricultural uses; 22 (7) after consulting with the Board of Agriculture and Conservation 23 (AS 03.09.010), waive, postpone, or otherwise modify the development requirements 24 of a contract for the sale of agricultural land if 25 (A) the land is inaccessible by road; or 26 (B) transportation, marketing, and development costs render 27 the required development uneconomic; 28 (8) reconvey or relinquish land or an interest in land to the federal 29 government if 30 (A) the land is described in an amended application for an 31 allotment under 43 U.S.C. 1617; and
01 (B) the reconveyance or relinquishment is 02 (i) for the purposes provided in 43 U.S.C. 1617; and 03 (ii) in the best interests of the state; 04 (9) lead and coordinate all matters relating to the state's review and 05 authorization of resource development projects; 06 (10) exercise the powers and do the acts necessary to carry out the 07 provisions and objectives of AS 43.90 that relate to this chapter. 08 * Sec. 4. AS 39.25.110 is amended by adding a new paragraph to read: 09 (41) the Alaska Gasline Inducement Act coordinator appointed under 10 AS 43.90.250. 11 * Sec. 5. AS 40.25.120(a) is amended to read: 12 (a) Every person has a right to inspect a public record in the state, including 13 public records in recorders' offices, except 14 (1) records of vital statistics and adoption proceedings, which shall be 15 treated in the manner required by AS 18.50; 16 (2) records pertaining to juveniles unless disclosure is authorized by 17 law; 18 (3) medical and related public health records; 19 (4) records required to be kept confidential by a federal law or 20 regulation or by state law; 21 (5) to the extent the records are required to be kept confidential under 22 20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure 23 or retain federal assistance; 24 (6) records or information compiled for law enforcement purposes, but 25 only to the extent that the production of the law enforcement records or information 26 (A) could reasonably be expected to interfere with enforcement 27 proceedings; 28 (B) would deprive a person of a right to a fair trial or an 29 impartial adjudication; 30 (C) could reasonably be expected to constitute an unwarranted 31 invasion of the personal privacy of a suspect, defendant, victim, or witness;
01 (D) could reasonably be expected to disclose the identity of a 02 confidential source; 03 (E) would disclose confidential techniques and procedures for 04 law enforcement investigations or prosecutions; 05 (F) would disclose guidelines for law enforcement 06 investigations or prosecutions if the disclosure could reasonably be expected to 07 risk circumvention of the law; or 08 (G) could reasonably be expected to endanger the life or 09 physical safety of an individual; 10 (7) names, addresses, and other information identifying a person as a 11 participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the 12 advance college tuition savings program under AS 14.40.803 - 14.40.817; 13 (8) public records containing information that would disclose or might 14 lead to the disclosure of a component in the process used to execute or adopt an 15 electronic signature if the disclosure would or might cause the electronic signature to 16 cease being under the sole control of the person using it; 17 (9) reports submitted under AS 05.25.030 concerning certain 18 collisions, accidents, or other casualties involving boats; 19 (10) records or information pertaining to a plan, program, or 20 procedures for establishing, maintaining, or restoring security in the state, or to a 21 detailed description or evaluation of systems, facilities, or infrastructure in the state, 22 but only to the extent that the production of the records or information 23 (A) could reasonably be expected to interfere with the 24 implementation or enforcement of the security plan, program, or procedures; 25 (B) would disclose confidential guidelines for investigations or 26 enforcement and the disclosure could reasonably be expected to risk 27 circumvention of the law; or 28 (C) could reasonably be expected to endanger the life or 29 physical safety of an individual or to present a real and substantial risk to the 30 public health and welfare; 31 (11) the written notification regarding a proposed regulation provided
01 under AS 24.20.105 to the Department of Law and the affected state agency and 02 communications between the Legislative Affairs Agency, the Department of Law, and 03 the affected state agency under AS 24.20.105; 04 (12) records that are 05 (A) proprietary, privileged, or a trade secret in accordance 06 with AS 43.90.150 or 43.90.220(e); 07 (B) applications that are received under AS 43.90 until 08 notice is published under AS 43.90.160. 09 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 FIRST REQUEST FOR APPLICATIONS FOR THE LICENSE. It is the intent of the 12 legislature that the first request for applications for the license by the commissioners under 13 AS 43.90.120, as enacted in sec. 1 of this Act, be issued within 90 days after the effective date 14 of this Act. 15 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 EXPEDITED CONSIDERATION OF COURT CASES. It is the intent of the 18 legislature that the courts of the state, when considering a case related to the development and 19 construction of a natural gas pipeline under this Act or to the commitment of a shipper to 20 acquire firm transportation capacity during the first binding open season for a project 21 developed under this Act, expedite the resolution of the case by giving the case priority over 22 all other civil cases to the extent permitted under the Alaska Rules of Court. 23 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 SEVERABILITY. Under AS 01.10.030, if any provision of this Act, or the application 26 of it to any person or circumstance, is held invalid, the remainder of this Act and the 27 application to other persons or circumstances are not affected. 28 * Sec. 9. This Act takes effect immediately under AS 01.10.070(c).