02/24/2014 03:30 PM Senate RESOURCES

         SB 138-GAS PIPELINE; AGDC; OIL & GAS PROD. TAX                                                                     
                                                                                                                                
CHAIR GIESSEL  announced CSSB  138(RES), version  28-GS2806\N, to                                                               
be up  for consideration. She  said Amendment 6 was  adopted last                                                               
Friday and it corrects a drafting error  on page 3 that had to do                                                               
with numbering. She asked if there was further discussion.                                                                      
                                                                                                                                
3:33:24 PM                                                                                                                    
SENATOR DYSON joined the committee.                                                                                             
                                                                                                                                
SENATOR MICCICHE  reminded people that  the members will  keep an                                                               
eye  on this  bill  as  it moves  through  the other  committees,                                                               
especially the  Finance Committee. He  thanked the chair  for her                                                               
leadership.                                                                                                                     
                                                                                                                                
3:34:03 PM                                                                                                                    
SENATOR DYSON said  he made what some viewed  as critical remarks                                                               
last Friday about organized labor and  was visited by a number of                                                               
them afterwards.  He was told that  the unions that used  to have                                                               
an internal rule that said  they couldn't hire qualified Alaskans                                                               
as long  as people were  on the books in  the Lower 48,  but that                                                               
provision had gone  away. He was also assured  that virtually all                                                               
of the  construction unions in  this state are  very enthusiastic                                                               
about this  pipeline going forward  and they don't  believe there                                                               
will  be any  labor  problems or  anybody  excluded from  getting                                                               
work.                                                                                                                           
                                                                                                                                
SENATOR   BISHOP   echoed   Senator   Micciche's   comments   and                                                               
congratulated  the chair  on  doing  a good  job  of keeping  the                                                               
committee on task.                                                                                                              
                                                                                                                                
3:35:51 PM                                                                                                                    
SENATOR FAIRCLOUGH said  this is as close as they  have ever been                                                               
to a  natural gas pipeline in  terms of alignment and  getting an                                                               
equity share,  but Alaskans  need to  be willing  to take  on the                                                               
risks and  those need to be  understood as much as  possible. She                                                               
said  this is  just the  first step  should they  agree with  the                                                               
conditions  outlined in  the  project. What  is  before them  and                                                               
getting ready to exit from the  Resources Committee is at least a                                                               
partial understanding  and she wanted  it on the record  that she                                                               
would  be a  "no recommendation,"  because  she will  see SB  138                                                               
again in  the Finance  Committee and  wants to  really understand                                                               
the taxing issue.                                                                                                               
                                                                                                                                
She said they had had good  conversations about some of the risks                                                               
that are still out there and  some base lines that she would like                                                               
to see  incorporated into  this bill  when it's  pointing towards                                                               
royalty leases and the floor  and was wondering if other language                                                               
should  be considered  for the  "floor." She  wanted to  continue                                                               
keeping  an open  mind about  that percentage  knowing that  it's                                                               
related to  our equity share and  that that will put  more on the                                                               
table for  Alaskans as they  choose to analyze whether  the gross                                                               
tax is  equal to  what our  tolerance is for  the risk  on future                                                               
capital cash calls from the state.                                                                                              
                                                                                                                                
3:38:53 PM                                                                                                                    
CHAIR GIESSEL  said she looked at  this project as a  legacy that                                                               
can  be left  for generations  to come;  it's a  megaproject that                                                               
will provide  affordable energy for Alaskans  and the opportunity                                                               
to  transmit natural  gas all  over  the state.  The jobs  during                                                               
construction will  be tremendous  for all  Alaskans who  are fit,                                                               
willing,  and  ready  to  take   them.  They  have  talked  about                                                               
diversifying the  economy, and affordable  energy is  what brings                                                               
private  sector diversification  to an  economy -  like Iceland's                                                               
aluminum processing  industry that has transformed  that country,                                                               
because of  their low cost energy.  Alaska can do the  same thing                                                               
and this is an opportunity to do that.                                                                                          
                                                                                                                                
She said they  had looked at a  lot of details in  this bill, but                                                               
many other  elements, like  fiscal issues,  need a  further look.                                                               
They  heard a  lot  about  payment in  lieu  of  taxes for  local                                                               
municipalities  and concerns  expressed about  the creation  of a                                                               
subsidiary,  but  she  was  fully   confident  that  the  Finance                                                               
Committee would dig into those topics.                                                                                          
                                                                                                                                
3:40:57 PM                                                                                                                    
SENATOR DYSON  moved to report  CSSB 138, version  28-GS2806\N as                                                               
amended,   from  committee   with  attached   fiscal  notes   and                                                               
individual  recommendations. There  were no  objections and  CSSB
(RES) moved from the Senate Resources Standing Committee.