Legislature(2003 - 2004)

2004-04-30 House Journal

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2004-04-30                     House Journal                      Page 3682
HB 364                                                                                            
The following was read the second time:                                                             
                                                                                                    
     SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 364                                                      
     "An Act establishing a moratorium on the issuance of state                                     
     shallow natural gas leases in the vicinity of Kachemak Bay, and                                
     precluding the commissioner of natural resources from reissuing                                
     or otherwise extending leases within the moratorium area if the                                
     leases fail to produce gas in paying quantities within the terms of                            
     the lease or if there is a breach of a term or condition of the lease;                         
     and providing for an effective date."                                                          

2004-04-30                     House Journal                      Page 3683
with the:                                                    Journal Page                           
                                                                                                    
 O&G RPT CS(O&G) NT 2DP 1NR 3AM                                      3205                           
 FN1: INDETERMINATE(DNR)                                             3206                           
 FIN REFERRAL REMOVED                                                3320                           
 RES RPT CS(O&G) NT 5NR 2AM                                          3518                           
 FN1: INDETERMINATE(DNR)                                             3519                           
                                                                                                    
Representative Coghill moved and asked unanimous consent that the                                   
following committee substitute be adopted in lieu of the original bill:                             
                                                                                                    
     CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO.                                                   
     364(O&G)                                                                                       
     "An Act prohibiting the issuance of state shallow natural gas                                  
     leases in the vicinity of Kachemak Bay, modifying the authority to                             
     extend certain shallow natural gas leases, and precluding the                                  
     director of the division of lands from reissuing or otherwise                                  
     extending shallow natural gas leases within the Kachemak Bay                                   
     area if there is a breach of a term or condition of the lease; and                             
     providing for an effective date."                                                              
                                                                                                    
There being no objection, it was so ordered.                                                        
                                                                                                    
                                                                                                    
Amendment No. 1 was offered by Representatives Kerttula and Croft:                                  
                                                                                                    
Page 1, lines 1 - 5 (title amendment):                                                              
 Delete all material and insert:                                                                    
"An Act establishing a moratorium on the issuance of state                                        
shallow natural gas leases in the vicinity of Kachemak Bay and                                    
within the Matanuska Susitna Borough, and directing the                                           
commissioner of natural resources to reacquire shallow natural                                    
gas leases on the Kenai Peninsula and the Matanuska Susitna                                       
Borough within the moratorium area; and providing for an                                          
effective date."                                                                                  
                                                                                                    
Page 1, line 7 through page 3, line 31:                                                             
 Delete all material and insert:                                                                    
   " * Section. 1.  AS 38.05.177(a) is amended to read:                                           
      "(a) The provisions of this section                                                           

2004-04-30                     House Journal                      Page 3684
       (1) apply to gas, whether methane associated with and                                        
     derived from coal deposits or otherwise, from a field if a part of                             
     the field is within 3,000 feet of the surface; and  (2)  do not apply                          
     to authorize lease of                                                                          
                (i) that is subject to an oil and gas exploration                                   
              license or lease issued under AS 38.05.131 - 38.05.134;                               
              or                                                                                    
                 (ii) that is leased under AS 38.05.180;                                           
           (B) the land (i) that is proposed to be subject to an oil                                
         and gas exploration license or lease issued under AS                                       
         38.05.131 - 38.05.134; or (ii) that is described in and part of a                          
         proposed oil and gas leasing program prepared under AS                                     
         38.05.180(b); however, the commissioner may waive the                                      
         limitations of this subparagraph;                                                          
           (C) the land that is held under a coal lease entered                                     
         into under AS 38.05.150, unless the applicant for a shallow                                
         natural gas lease is also the lessee under AS 38.05.150 of that                            
         land; [OR]                                                                                 
           (D) the valid existing selections of the Alaska Mental                                   
         Health Trust Authority made for the purpose of reconstituting                              
         the mental health trust established under the Alaska Mental                                
         Health Enabling Act, P.L. 84-830, 70 Stat. 709 (1956), that                                
         become subject to management under AS 38.05.801, or of                                     
         land that has been designated by law for or is subject to                                  
         designation for conveyance to the Alaska Mental Health Trust                               
         Authority; however, after consultation with the Alaska Mental                              
         Health Trust Authority, the commissioner may waive the                                     
         limitations of this subparagraph;                                                      
           (E) land and water within the Kenai Peninsula                                        
         Borough east of Cook Inlet and south of the north                                      
         boundary of Township 5 South, Seward Meridian; or                                      
           (F)  land within the Matanuska Susitna Borough.                                      
                                                                                                    
                                                                                                    
   * Sec. 2.  The uncodified law of the State of Alaska is amended by                             
adding a new section to read:                                                                       
 REACQUISITION OF CERTAIN SHALLOW NATURAL GAS                                                       
LEASES.  (a)  he commissioner of natural resources shall enter into                                 
negotiations to reacquire, by purchase in the name of the state, the title                          
to or accountable interests in shallow natural gas leases entered into                              

2004-04-30                     House Journal                      Page 3685
under AS 38.05.177 before the effective date of this Act within the                                 
boundaries described in (d) of this section.                                                        
 (b) In lieu of cash payment for a negotiated repurchase of a                                       
leasehold interest                                                                                  
described in (a) of this section, the commissioner of natural resources                             
may authorize a credit of the purchase price plus interest at the rate                              
prescribed in AS 09.30.070 to be granted to the seller, to be applied                               
against future lease bonus or rental payments, permit fees, royalties, or                           
oil and gas taxes that may become owing on new production from                                      
other leases or property held by the seller for oil and gas development,                            
including shallow natural gas development.  The commissioner may                                    
also negotiate to reimburse, in like manner by credit provision a                                   
reasonable amount to compensate the lessee for expenses and other                                   
costs incurred by the lessee.                                                                       
 (c) If the commissioner of natural resources is unable to negotiate                                
a satisfactory price for repurchase of a leasehold interest described in                            
(a) of this section, the commissioner may acquire a leasehold interest                              
described in (a) of this section through exercise of the power of                                   
eminent domain.                                                                                     
 (d) The provisions of this section apply to shallow natural gas                                    
leases issued under AS 38.05.177 before the effective date of this Act                              
on the land and water described in AS 38.05.177(a)(2)(E) and (F),                                   
added by sec. 2 of this Act.                                                                        
                                                                                                    
   * Sec. 3.  The uncodified law of the State of Alaska is amended by                             
adding a new section to read:                                                                       
 APPLICATION OF SECTION 1 TO LAND CURRENTLY                                                         
LEASED IN THE VICINITY OF KACHEMAK BAY  AND                                                         
WITHIN THE MATANUSKA SUSITNA BOROUGH FOR                                                            
SHALLOW NATURAL GAS EXPLORATION AND                                                                 
DEVELOPMENT.  The provisions of AS 38.05.177(a)(2)(E) and (F),                                      
added by sec. 2 of this Act, apply to prohibit the issuance or reissuance                           
of a lease under AS 38.05.177 entered into before the effective date of                             
this Act if the lease terminates because of the failure to extend the                               
lease under AS 38.05.177(d) or if the lease terminates by the operation                             
of AS 38.05.177(h).                                                                                 
                                                                                                    
   * Sec. 4.  This Act takes effect immediately under AS 01.10.070(c)."                           
                                                                                                    

2004-04-30                     House Journal                      Page 3686
Representative Kerttula moved and asked unanimous consent that                                      
Amendment No. 1 be adopted.                                                                         
                                                                                                    
Representative Seaton objected.                                                                     
                                                                                                    
Representative Kerttula moved and asked unanimous consent that she                                  
be allowed to abstain from voting on HB 364, HB 395, and HB 531                                     
because of a conflict of interest.  Objection was heard, and                                        
Representative Kerttula was required to vote.                                                       
                                                                                                    
Representative Croft placed a call of the House.                                                    
                                                                                                    
Representatives Meyer, Stepovich, Hawker, Chenault, and Seaton                                      
moved and asked unanimous consent that they be allowed to abstain                                   
from voting because of a conflict of interest.  Objection was heard, and                            
the members were required to vote.                                                                  
                                                                                                    
Representative Gruenberg declared a conflict of interest on HB 342                                  
(page 3676).                                                                                        
                                                                                                    
Representative Croft lifted the call.                                                               
                                                                                                    
The question being:  "Shall Amendment No. 1 be adopted?"  The roll                                  
was taken with the following result:                                                                
                                                                                                    
CSSSHB 364(O&G)                                                                                     
Second Reading                                                                                      
Amendment No. 1                                                                                     
                                                                                                    
YEAS:  11   NAYS:  26   EXCUSED:  2   ABSENT:  1                                                  
                                                                                                    
Yeas:  Berkowitz, Crawford, Croft, Gara, Gatto, Guttenberg, Harris,                                 
Kapsner, Kerttula, Kookesh, Stoltze                                                                 
                                                                                                    
Nays:  Anderson, Chenault, Coghill, Dahlstrom, Fate, Foster,                                        
Gruenberg, Hawker, Holm, Joule, Kohring, Kott, Lynn, Masek,                                         
McGuire, Meyer, Morgan, Moses, Ogg, Rokeberg, Samuels, Seaton,                                      
Stepovich, Williams, Wilson, Wolf                                                                   
                                                                                                    
Excused:  Cissna, Weyhrauch                                                                         
                                                                                                    
Absent:  Heinze                                                                                     
                                                                                                    
And so, Amendment No. 1 was not adopted.                                                            

2004-04-30                     House Journal                      Page 3687
Representative Coghill moved and asked unanimous consent that                                       
CSSSHB 364(O&G) be considered engrossed, advanced to third                                          
reading, and placed on final passage.  There being no objection, it was                             
so ordered.                                                                                         
                                                                                                    
CSSSHB 364(O&G) was read the third time.                                                            
                                                                                                    
                                                                                                    
The question being:  "Shall CSSSHB 364(O&G) pass the House?"                                        
The roll was taken with the following result:                                                       
                                                                                                    
CSSSHB 364(O&G)                                                                                     
Third Reading                                                                                       
Final Passage                                                                                       
                                                                                                    
YEAS:  33   NAYS:  3   EXCUSED:  2   ABSENT:  2                                                   
                                                                                                    
Yeas:  Anderson, Berkowitz, Chenault, Coghill, Crawford, Croft, Fate,                               
Foster, Gara, Gatto, Gruenberg, Guttenberg, Harris, Hawker, Holm,                                   
Joule, Kapsner, Kerttula, Kookesh, Kott, Lynn, Masek, Meyer,                                        
Morgan, Moses, Ogg, Rokeberg, Samuels, Seaton, Stoltze, Williams,                                   
Wilson, Wolf                                                                                        
                                                                                                    
Nays:  Dahlstrom, Kohring, McGuire                                                                  
                                                                                                    
Excused:  Cissna, Weyhrauch                                                                         
                                                                                                    
Absent:  Heinze, Stepovich                                                                          
                                                                                                    
Dahlstrom changed from "Yea" to "Nay".                                                              
                                                                                                    
And so, CSSSHB 364(O&G) passed the House.                                                           
                                                                                                    
Representative Coghill moved and asked unanimous consent that the                                   
roll call on the passage of the bill be considered the roll call on the                             
effective date clause.  There being no objection, it was so ordered.                                
                                                                                                    
CSSSHB 364(O&G) was referred to the Chief Clerk for engrossment.