Legislature(2001 - 2002)

2001-01-08 Senate Journal

Full Journal pdf

2001-01-08                     Senate Journal                      Page 0016
SB 17                                                                                             
SENATE BILL NO. 17 BY THE SENATE RULES COMMITTEE                                                    
BY REQUEST OF THE GOVERNOR, entitled:                                                               
          "An Act amending the application deadline, and the                                        
          standards applicable to determining whether a                                             
          proposed new investment constitutes a qualified                                           
          project, for purposes of the Alaska Stranded Gas                                          
          Development Act; and providing for an effective                                           
was read the first time and referred to the Transportation, Resources                               
and Finance Committees.                                                                             
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Natural Resources.                                          
Governor's transmittal letter dated January 8:                                                      
Dear President Halford:                                                                             
Alaska must ensure that our fiscal regime is an incentive to the                                    
commercialization of our natural gas, not an impediment.  To provide                                
the State with the appropriate tools to achieve this goal I am                                      
transmitting this bill to amend the Alaska Stranded Gas Development                                 
Act to allow any potentially successful natural gas project to take                                 
advantage of the provisions of that Act.                                                            
The Alaska Stranded Gas Development Act (Act) allows the                                            
commissioner of the Department of Revenue to negotiate a contract                                   
for payments in lieu of taxes for a certain type of project that will                               

2001-01-08                     Senate Journal                      Page 0017
develop the enormous natural gas resources of Alaska's North Slope.                                 
The potential benefits of the current program are limited to liquefied                              
natural gas ("LNG") projects. Developments in the international                                     
natural gas marketplace - particularly the recent energy price increases                            
in North America - suggest that other projects may be viable in                                     
advance of the type of LNG project the Act was initially designed to                                
support.  This bill would expand the scope of the Act to cover other                                
forms of gas development, such as a natural gas pipeline through                                    
Canada along the Alaska Highway or an in-state gas-to-liquids facility.                             
Although this Act, with the amendments I propose, grants certain                                    
authorities to executive agencies, any proposed changes to tax policy                               
would require legislative ratification.                                                             
The only other change proposed by this bill is to extend the application                            
deadline for this program for a limited time.                                                       
I urge your prompt and favorable action on this measure.                                            
                             Tony Knowles