Legislature(2013 - 2014)HOUSE FINANCE 519
04/14/2014 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB287 | |
| SB138 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 138 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 287 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 138(FIN) am
"An Act relating to the purposes, powers, and duties
of the Alaska Gasline Development Corporation;
relating to an in-state natural gas pipeline, an
Alaska liquefied natural gas project, and associated
funds; requiring state agencies and other entities to
expedite reviews and actions related to natural gas
pipelines and projects; relating to the authorities
and duties of the commissioner of natural resources
relating to a North Slope natural gas project, oil and
gas and gas only leases, and royalty gas and other gas
received by the state including gas received as
payment for the production tax on gas; relating to the
tax on oil and gas production, on oil production, and
on gas production; relating to the duties of the
commissioner of revenue relating to a North Slope
natural gas project and gas received as payment for
tax; relating to confidential information and public
record status of information provided to or in the
custody of the Department of Natural Resources and the
Department of Revenue; relating to apportionment
factors of the Alaska Net Income Tax Act; amending the
definition of gross value at the 'point of production'
for gas for purposes of the oil and gas production
tax; clarifying that the exploration incentive credit,
the oil or gas producer education credit, and the film
production tax credit may not be taken against the gas
production tax paid in gas; relating to the oil or gas
producer education credit; requesting the governor to
establish an interim advisory board to advise the
governor on municipal involvement in a North Slope
natural gas project; relating to the development of a
plan by the Alaska Energy Authority for developing
infrastructure to deliver affordable energy to areas
of the state that will not have direct access to a
North Slope natural gas pipeline and a recommendation
of a funding source for energy infrastructure
development; establishing the Alaska affordable energy
fund; requiring the commissioner of revenue to develop
a plan and suggest legislation for municipalities,
regional corporations, and residents of the state to
acquire ownership interests in a North Slope natural
gas pipeline project; making conforming amendments;
and providing for an effective date."
9:56:26 AM
Co-Chair Austerman requested an understanding of the
state's responsibility regarding the gas pipeline and the
accompanying infrastructure. He noted that roads and
bridges would provide important components of the project.
He requested that Department of Transportation and Public
Facilities provide input regarding Article 10 of the Heads
of Agreement (HOA) and additional state support for the
Alaska Liquefied Natural Gas (LNG) project. He pointed to
Article 10.1 (c) "appropriations permitting for the
construction of necessary instate infrastructure [roads,
bridges] including drafting and introducing supporting
legislation." He asked if the HOA reflected that the state
would be responsible for all infrastructure and improvement
costs throughout the project. He interpreted the HOA to
read that the state would be responsible for construction
of all necessary infrastructures.
9:58:31 AM
PAT KEMP, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES introduced himself, Jeff Ottesen and
David Bloom.
JEFF OTTESEN, DIRECTOR, DIVISION OF PROGRAM DEVELOPMENT,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES provided
a historical background related to Alaska and pipeline
construction. He stated that the department was not yet
informed about the precise infrastructure needs required
for the gasline project. He knew the general route
established for the gas pipeline, but specifics had not
been determined. He compared the project to Trans-Alaska
Pipeline System (TAPS) and noted that current population
and traffic was triple that of the 1970s. He wished to
maintain safety standards and statistics on the Dalton
Highway.
10:02:36 AM
Mr. Ottesen commented that the natural gas pipeline would
be buried leading to additional earth work as compared to
TAPS. He mentioned the need to replace the Tanana River
Bridge as it presented a weak link between the Lower 48 and
Alaska. He stated that both a large and medium diameter
pipeline was proposed for the Parks Highway, which was
parallel to the Alaska Railroad. He expected that the
railroad would provide a major component of any logistics
plan. The Richardson, Alaskan and Haines highways would
have minimal improvements as well. He provided a handout
"Parks Highway Planned Construction Information - 2014"
(copy on file). He pointed out that many of the projects
addressed features that would prove helpful to the pipeline
construction such as 14 new passing lanes built on the
Parks Highway in the summer of 2014.
10:06:53 AM
Mr. Ottesen discussed maintenance expenses ineligible for
federal contribution. He expected the department to ask the
legislature for general funds for the relatively small
costs averaging $12-$15 million annually. He stated that
the department would provide more information when the
logistics plan was determined. Highways were blessed with a
dedicated source of federal funds that allowed for
adaptation to the possibility of new pipelines. The Federal
Aviation program was specific in its funding, which led the
department to spend funds in areas disconnected from
pipeline plans.
10:09:40 AM
DAVID BLOOM, P.E., GASLINE LIAISON, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, stated that he had
very little exposure to the project via the sponsors. He
mentioned a high-level overview provided to state and
federal agencies offered by the project sponsors in
February 2014. He mentioned another meeting in Fairbanks
related to the permits required for the summer 2014 field
season. He noted that upcoming information such as access
and egress points for the laydown yard, and safety lanes on
the highway would prove essential to the department. He
pointed out that airports and their service needs also
required consideration. He noted substantial improvements
to the Dalton and Parks Highways with approximately $120
million allocated to the Parks Highway maintenance for the
summer of 2014.
10:13:00 AM
Co-Chair Austerman asked if the state would be expected to
pay for the large module accommodation and road
maintenance.
Mr. Kemp replied that highways and roadways within the
right-of-way must accommodate legal or permit able loads.
He stated that the highway must be strong enough to
accommodate a permitted load. He believed that the
department was responsible for the majority of the work. He
stated that an intersection requiring an access road to the
pipeline should be assigned to the developer. A similar
arrangement was often embarked on with a large store
requiring an intersection. He explained that some portions
of the project allowed for federal participation, while
others did not. The department would request some help from
the legislature for those portions ineligible for federal
funding. He stated that the Parks Highway required repairs
whether the pipeline was constructed or not. He added that
the Parks Highway was not free of weight restrictions.
Understanding the Alaska Railroad's level of responsibility
would help the department to better understand theirs.
10:16:50 AM
Co-Chair Austerman asked if layout yards or pull-off areas
for larger modules would be constructed by and paid for by
the producers.
Commissioner Kemp replied that passing lanes would be an
improvement addressed by the department, while the pull-off
area for a module would be covered by the developer.
Co-Chair Austerman asked about the federal funds. He
expressed concern that the Dalton and Parks Highways could
use up the federal funds needed elsewhere in the state.
10:18:02 AM
Mr. Otteson replied that the many projects on the Parks and
Dalton Highways were underway despite the potential
pipeline. The work was prioritized because of the
connection to Prudhoe Bay. The revenue from the oil
resources fueled the Alaskan economy. He acknowledged the
tension between projects and provided an example of such
tension.
10:20:08 AM
Co-Chair Austerman agreed in reference to the importance of
the North Slope, but noted that the benefit extended to the
producers making the profit. He asked if any of the three
testifiers helped draft the language in the HOA.
Commissioner Kemp replied no.
10:21:09 AM
Vice-Chair Neuman asked Mr. Ottesen about each proposed
gasline. He wondered about Port Mackenzie as a staging area
for either pipeline.
10:22:01 AM
Mr. Otteson replied yes; he expected Port Mackenzie to be a
key staging area as part of the rail extension. Completing
the extension was an important component of the project.
10:22:34 AM
Representative Guttenberg noted the $800 million deferred
maintenance budget on the Dalton Highway. The state was
asked to fund the agreement in general terms. Massive
amounts of heavy-walled pipe would compromise the asphalt
and shoulders of the highway. He asked about the state's
obligation entering into the project.
10:23:51 AM
Commissioner Kemp replied that the information would become
available later. He questioned the deferred maintenance
quote offered by Representative Guttenberg. He wondered if
deferred maintenance was not confused with routine
maintenance. He agreed that the questions must be answered,
but stressed that the state's roadways were in better shape
than they were in the time of TAPS construction. He noted
the department's focus on safety in addition to
accommodation of the increased industry traffic.
10:25:02 AM
Representative Gara noted that Governors Murkowski and
Palin approached the legislature with infrastructure costs
during their gasline proposals dependent on the size of the
chosen pipeline. He recalled estimates of approximately $2
billion worth of infrastructure increases. The legislators
were able to incorporate the information into the Net
Present Value calculations.
Co-Chair Austerman concurred.
CSSB 138(FIN) am was HEARD and HELD in committee for
further consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Am 1 to Am 3 to HB 287.pdf |
HFIN 4/14/2014 8:30:00 AM |
HB 287 |
| HB 287 Replacement Amendment #2 GARA.pdf |
HFIN 4/14/2014 8:30:00 AM |
HB 287 |
| HB 287 Amendment #2 to Amendment #3 Austerman.pdf |
HFIN 4/14/2014 8:30:00 AM |
HB 287 |
| HB 287 New Fiscal Note CS FIN DNR.pdf |
HFIN 4/14/2014 8:30:00 AM |
HB 287 |
| SB 138 3 10 14 Responses to Senate Finance_February 27 Hearing- Signed.pdf |
HFIN 4/14/2014 8:30:00 AM |
SB 138 |
| SB 138 3.10.14 AS 38.05.180(i)-exploration-incentive-credits.pdf |
HFIN 4/14/2014 8:30:00 AM |
SB 138 |
| SB 138 3.11.14 Response to Sen Olson_Municipal Taxation.pdf |
HFIN 4/14/2014 8:30:00 AM |
SB 138 |
| SB 138 HFIN Weissler Comments 4-14-14.pdf |
HFIN 4/14/2014 8:30:00 AM |
SB 138 |