Legislature(2009 - 2010)SENATE FINANCE 532
04/15/2010 01:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB424 | |
| HB369 | |
| HCR22 | |
| HB376 | |
| HB294 | |
| HB342 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 424 | ||
| = | HB 369 | ||
| = | HCR 22 | ||
| + | HB 294 | TELECONFERENCED | |
| + | HB 342 | TELECONFERENCED | |
| + | HB 376 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR HOUSE BILL NO. 369(FIN) am
"An Act relating to an in-state natural gas pipeline,
the office of in-state gasline project manager, and
the Joint In-State Gasline Development Team; requiring
the development of an in-state natural gas pipeline
plan, to be delivered to the legislature by July 1,
2011, that provides for a gasline that is operational
by December 31, 2015; directing the Joint In-State
Gasline Development Team to assume responsibilities
under sec. 19, ch. 14, SLA 2009; requiring expedited
review and action by state agencies or entities
relating to the in-state natural gas pipeline project;
and providing for an effective date."
2:24:43 PM
REPRESENTATIVE MIKE CHENAULT explained the house bill. He
explained HB 369 forms a Joint In-state Gasline Development
Team (JIGDT). The team includes the chief executive officer
of the Alaska Housing Finance Corporation (AHFC), the chief
executive of the Alaska Railroad, the commissioner of the
Department of Transportation and Public Facilities
(DOT/PF), the chief executive of the Alaska Natural Gas
Development Authority (ANGDA), and the in-state gasline
project coordinator. The legislation describes the duties
of the in-state gasline coordinator in statute and sets a
deadline of July 1, 2011. The project plan specifies design
and construction of the in-state gasline. The plan must
include specifics to coordinate and facilitate the
construction, ownership, operation, and management of the
pipeline. The development team must prepare plans and
designs necessary for construction. The route selected is
determined by the development team and must be economical
and provide gas to residents at a reasonable cost. He
continued that the legislation establishes an expedited
process for information access and cooperation among state
entities. The bill outlines the duties of the development
team yet allows for flexibility. The bill preauthorizes
ANGDA to issue bonds for gas related programs and projects.
2:28:39 PM
Representative Chenault stated that the bill allows the
best opportunity for access to in-state gas. He continued
that the Cook Inlet gas supply has dwindled and other
opportunities must be sought. The in-state use of natural
gas will provide additional employment opportunities. The
bill will allow Alaska to move forward and access a supply
for the next 100 years.
2:30:47 PM
Co-Chair Hoffman requested a sectional analysis following
questions by committee members.
Senator Thomas appreciated the intent of the legislation
although it does not address all of the pertinent energy
needs for Alaska. He appreciated the opportunity for
additional employment for Alaskans.
Senator Olson asked the approximate amount of the bond.
Representative Chenault responded $250 million is the ANGDA
portion of the bonding capacity.
Senator Olson asked how the legislation compliments the
other proposed in-state gasline projects such as Denali and
TransCanada. Representative Chenault responded that this
bill addresses in-state gas use. He maintained that Alaska
cannot wait for other projects knowing that the gas supply
for the Railbelt is dwindling.
2:34:42 PM
Senator Olson asked how other in-state gas line proposals
compare to that of HB 369. Representative Chenault
responded that the HB 369 instate gas line's development
team is given the freedom to determine the most economical
project.
SENATOR LESIL MCGUIRE, echoed the comments made by the
Speaker in respect to the in-state gas caucus. She
explained that energy needs were the focus. The broad
benefits of the in-state gas line were explored in an
effort to provide economic success for Alaska. She
clarified that the HB 369 project compliments the Alaska
Gasline Inducement Act (AGIA). She pointed out that with
shale discoveries in the lower 48, open season for AGIA may
not amount to the preconceived expectations. The Denali
Project and the TransCanada projects provide available
options. She explained that the intent of the legislation
is to create a team of Alaskans with an aggressive time
line and directive. December 15th is the first timeline.
She stated that the legislation requests that the team meet
with buyers and sellers of gas and provide a plan on July
1, 2011. Private sector partnership is an option. She
explained that the involvement of AHFC, The Alaska
Railroad, and ANGDA provide unique bonding authority
abilities. She stressed that the bill sponsors view the
pipeline as a "steel highway" that would provide an
opportunity for Alaska to progress into the next level of
economic development.
2:42:05 PM
Senator Huggins commended the partnership between Senator
McGuire and Representative Chenault.
Senator Ellis asked about ANGDA's role in HB 369. Senator
McGuire responded that ANGDA is a member of the in-state
gas caucus along with the Alaska Railroad, DOT/PF and an
in-state gas coordinator. She pointed out a merger drafted
in the last few pages of the bill formerly known as HB 44,
which expands ANGDA's authority to more closely reflect the
activities conducted today. The latter portion of the bill
gives ANGDA $250 million worth of bonding authority. The
legislature would review any issued bonds.
2:46:13 PM
TOM WRIGHT, STAFF, MIKE CHANAULT, presented a sectional
analysis.
COMMITTEE SUBSTITUTE FOR HOUSE BILL 369 (FIN)
"An Act relating to an in-state natural gas pipeline,
the office of in-state gasline project manager, the
Joint In-State Gasline Development Team; requiring the
development of an in-state natural gas pipeline plan,
to be delivered to the legislature by July 1, 2011,
that provides for a gasline that is operational by
December 31, 2015; directing the Joint In-State
Gasline Development Team to assume responsibilities
under sec. 19, ch. 14, SLA 2009; requiring expedited
review and action by state agencies or entities
relating to the in-state natural gas pipeline project;
and providing for an effective date."
(Changes in the House Finance version from the
Resources Committee Substitute are highlighted and
underlined.)
Section 1: Adds a new chapter, Chapter 34: In-State
natural Gas Pipeline, to AS 38, Public Land.
Sec. 38.34.010. In-state gasline project manager. (a)
Creates the position of in-state gasline project
manager within the governor's Office. This position
will continue until one year after commercial
operation of the in-state natural gas pipeline begins.
(b) The Governor appoints an individual to the
position of an in-state gasline manager and may be
removed at the Governor's discretion. (c) Describes
the duties of the in-state gasline project manager.
Sec. 38.34.020. Expedited review and action by state
agencies or entities. (a) States that any state agency
or entity conducting and taking action relating to the
in-state gasline shall be expedited. (b) A state
agency or entity may not include in any project
certificate, right of way, permit or other
authorization issued to a licensee a term or condition
that is not required by law if the in-state project
manager determines the term or condition would prevent
or impair the expeditious construction and operation
or expansion of the in-state gasline. (c) A state
agency or entity may not, unless required by law,
amend or abrogate any certificate, right of way,
permit or other authorization issued to a licensee if
the project manager determines the action would
prevent or impair the expeditious construction and
operation or expansion of the in-state gasline.
Sec. 38.34.030. Joint In-state Gasline Development
Team. (a) Establishes the Joint In-State Gasline
Development Team in the Governor's Office. The team
consists of the commissioner of the Department of
Transportation and Public Facilities or designee, the
chief executive officer of the Alaska Railroad
Corporation or designee, the chief executive officer
of the Alaska Natural Gas Development Authority, the
in-state gasline project manager and the chief
executive officer of the Alaska Housing Finance
Corporation. (b) Names the Alaska Housing Finance
Corporation's chief executive officer as chair. (c)
Allows the development team to hire staff, enter into
contracts and exercise other powers to carry out its
functions.
Sec. 38.34.040. Duties of the Development Team. (a)
Ensure a project plan for the development of an in-
state gasline is completed and delivered to the
legislature by July 1, 2011. The project plan must
specify and document how an in-state gasline can be
designed, financed, constructed and made operational
by December 31, 2015. (b) The Joint In-State Gasline
Development Team is to assume all executive authority
over and managerial responsibility for all activities
enumerated under sec. 19, ch. 14, SLA 2009, including
work previously completed, work in process, and work
for which money has been encumbered but that is not
completed on the effective date of this subsection.
(c) Describes specific plans that are to be included
within the project plan for an in-state gasline that
will serve Fairbanks, the southcentral region of the
state, and other communities whenever practicable,
connecting with or enhancing the existing gas pipeline
system, and reaching to tidewater. (d) The
development team's work product is to include an
analysis of alternative possible routes and select a
route that is consistent with the following
requirements: (1) is the most economical, (2) will
provide gas to residents at a reasonable cost, (3)
allows for connecting lines to serve industrial,
residential and utility customers along the entire
route and in other regions of the state that can be
served at commercially feasible rates, (4) uses state
land and existing state highway and railroad rights of
way to the maximum extent feasible, (5) uses existing
highway and railroad bridges, gravel pits equipment
yards and maintenance facilities and other existing
facilities and resources to the maximum extent
feasible. (e) With the intent that any project-related
assets acquired or developed be available for transfer
or sale to the entity best able to complete the
project, the development team is to: (1) prepare
plans and designs necessary for the construction of
the in-state gasline; (2) coordinate with entities
qualified to build, own and operate the gasline; (3)
identify, apply for and obtain rights-of-way and other
permits for the project route; (4) work with other
entities to promote gas supply and purchase contracts
required for the project to be commercially viable;
(5) prepare cost estimates for project design,
construction and operation to determine the project's
feasibility and the projected cost of natural gas to
consumers; (6) coordinate with and use, to the fullest
extent, possible existing work by other state agencies
and entities before contracting for new reports and
research and analysis; (7) determine regulatory
authority over the pipeline project and perform any
necessary compliance requirements; (8) identify and
apply for, or support extension of, existing permits
for export of Alaska natural gas if that export
improves project economics and will reduce the price
of natural gas to in-state consumers. (f) Any rights
to a gasline corridor obtained by a state agency under
eminent domain may be transferred to a private entity.
(g) Describes the various aspects of the in-state
gasline project the development team may consider.
Sec. 38.34.050. Cooperation and access to information.
(a) States the development team may have access to a
state entity's information to include confidential
information that may relate to the in-state gasline or
prove useful in planning, design, construction or
operation of the gasline. Confidential information
received by the Development Team shall be kept
confidential. (b) All state agencies are to cooperate
and give priority to requests for information from the
Development Team. The Development Team is to avoid
duplicating studies, plans, and designs that have
already been produced or otherwise obtained by state
entities.
Sec. 38.34.060. Conflicts of interest. (a) If a
member of the Development Team acquires, owns or
controls a direct or indirect interest in property, an
organization or business that might be affected by the
in-state gasline project or other matters under
consideration by the Development Team shall
immediately disclose the interest to the Development
Team. This disclosure is part of the public record
and shall be included in the minutes of the first
meeting of the Development Team held after the
disclosure. (b) Members of the development team are
subject to AS 39.50 (Public Official Disclosure) and
AS 39.52 (Alaska Executive Branch Ethics Act).
Sec. 38.34.099. Definitions. Defines the in-state
natural gas pipeline and the North Slope.
Section 2: Amends AS 39.25.110, Exempt service. Adds
the in-state gasline project manager to the exempt
service list.
Section 3: Immediate effective date.
2:53:13 PM
Senator Thomas asked about confidential information and the
team's administration of public notice where meetings are
concerned.
Mr. Wright responded that the team is not exempt from the
Open Meetings Act. The team is allowed executive session to
discuss finances or operations that might have a potential
effect on the state or during the discussion of
confidential information.
Co-Chair Hoffman mentioned three fiscal notes, one from the
governor's office for $350,700 in general funds to hire an
in-state gasline coordinator, one from DOT/PF for
$1,451,100 in general funds for right of way permitting,
and one from the DOR for $21,340,600 in general funds for
AHFC.
Mr. Wright pointed out that the fiscal note from DOT/PF
does not apply as the AHFC fiscal note incorporates all
state agencies.
2:55:56 PM
BARBARA TUCKNESS, DIRECTOR OF GOVERNOR AND LEGISLATIVE
AFFAIRS, TEAMSTERS UNION testified in support of HB 369.
She pointed out that the bill lacks a provision
guaranteeing that Alaskan citizens will be employed for
this project. She noted that the bill makes no mention of
training. She appreciated consideration of Alaskan workers
for the project.
Senator Ellis asked for a statement from Mr. Heinze
regarding his role in the project.
2:59:10 PM
HAROLD HEINZE, CEO, ALASKA NATURAL GAS AUTHORITY responded
that ANGDA supports the legislature's direction in HB 369.
He opined that the bill provides the guidance required by
the team. He emphasized that ANGDA is amenable to team
participation. He stated that he feels comfortable working
under the leadership of Dan Fauske.
Co-Chair Hoffman requested that Dan Fauske be allowed the
same opportunity to explain his role. He asked how the
position would affect his primary position with AHFC.
DAN FAUSKE, ALASKA HOUSING FINANCE CORPORATION, expressed
excitement about the project opportunity. He noted that
arrangements will be made to carry out his duties at AHFC.
He spoke to the capability of his staff at AHFC. He stated
that he looked forward to the partnerships and team
atmosphere.
Co-Chair Hoffman asked if the job will deter from his
weatherization and energy efficiency duties at AHFC. Mr.
Fauske stated no.
3:02:27 PM
JOHN BINKLY, CHAIRMAN, ALASKA RAILROAD ASSOCIATION echoed
the sentiments of Mr. Heinze and Mr. Fauske. He expressed
excitement regarding participation in the project and the
team.
Co-Chair Hoffman asked if he missed his work as a
legislator and chair of the Senate Finance Committee. Mr.
Binkly responded that he preferred the view from the other
side of the table.
HB 369 was HEARD and HELD in Committee for further
consideration.
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