Legislature(2007 - 2008)CAPITOL 106

04/02/2007 08:30 AM OIL & GAS


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08:37:14 AM Start
08:39:39 AM HB177
10:58:44 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time & Location Change --
+= HB 177 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Heard & Held
HB 177-NATURAL GAS PIPELINE PROJECT                                                                                           
                                                                                                                                
8:39:39 AM                                                                                                                    
                                                                                                                                
CHAIR KOHRING announced that the  only order of business would be                                                               
HOUSE  BILL NO.  177,  "An  Act relating  to  the Alaska  Gasline                                                               
Inducement Act;  establishing the  Alaska Gasline  Inducement Act                                                               
matching  contribution  fund;  providing for  an  Alaska  Gasline                                                               
Inducement  Act coordinator;  making  conforming amendments;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
                                                                                                                                
CHAIR KOHRING  reminded the committee  that a motion  was pending                                                               
by  Representative Dahlstrom  to  adopt as  a  working draft  the                                                               
committee  substitute  (CS)  for HB  177,  25-GH1060\E,  Bullock,                                                               
3/30/07  [Version E].   Chair  Kohring and  Representative Doogan                                                               
had  objected  to the  motion.    Chair  Kohring then  asked  for                                                               
discussion of the motion to adopt Version E.                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN removed  his  objection.   There being  no                                                               
further objection, Version  E was before the committee  as a work                                                               
draft.   [The  prior objection  by Chair  Kohring was  treated as                                                               
withdrawn.]                                                                                                                     
                                                                                                                                
8:40:09 AM                                                                                                                    
                                                                                                                                
CHAIR KOHRING asked for amendments from the committee.                                                                          
                                                                                                                                
8:40:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN moved  Amendment 1, 25-GH1060\E.9, Bullock,                                                               
4/1/07, which read:                                                                                                             
                                                                                                                                
     Page 7, lines 27 - 28:                                                                                                     
          Delete "AS 43.90.110(1) and (2)"                                                                                      
          Insert "AS 43.90.110(a)(1)(A) and (B)"                                                                                
                                                                                                                                
     Page 9, line 19, following "or is":                                                                                        
          Insert "not"                                                                                                          
                                                                                                                                
     Page 10, line 27:                                                                                                          
          Delete "AS 43.90.110(1)(B)"                                                                                           
          Insert "AS 43.90.110(a)(1)(A) and (B)"                                                                                
          Delete "AS 43.90.140(9)"                                                                                              
          Insert "AS 43.90.130(9)"                                                                                              
                                                                                                                                
     Page 13, line 27:                                                                                                          
          Delete "like"                                                                                                         
                                                                                                                                
     Page 15, line 3:                                                                                                           
          Delete "written a"                                                                                                    
          Insert "a written"                                                                                                    
                                                                                                                                
     Page 15, line 24:                                                                                                          
          Delete "required"                                                                                                     
          Insert "acquired"                                                                                                     
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE  DOOGAN  said that  Amendment  1  is a  series  of                                                               
corrections to drafting errors.   He noted that these corrections                                                               
are required since a committee  substitute was not adopted by the                                                               
committee.                                                                                                                      
                                                                                                                                
8:41:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS removed his objection.                                                                                   
                                                                                                                                
CHAIR KOHRING announced that hearing no further objection,                                                                      
Amendment 1 was adopted.                                                                                                        
                                                                                                                                
8:41:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN moved Amendment 2, 25-GH1060\E.5, Bullock,                                                                
4/1/07, which read:                                                                                                             
                                                                                                                                
     Page 13, line 18:                                                                                                          
          Delete "licensee's net cost"                                                                                          
          Insert "net amount of expenditures incurred and                                                                       
      paid by the licensee that are qualified expenditures                                                                      
     for the purposes of AS 43.90.110"                                                                                          
                                                                                                                                
     Page 16, line 30:                                                                                                          
          Delete "licensee's net costs"                                                                                         
          Insert "net amount of expenditures incurred and                                                                       
      paid by the licensee that are qualified expenditures                                                                      
     for the purposes of AS 43.90.110"                                                                                          
                                                                                                                                
     Page 22, line 23:                                                                                                          
          Delete "reasonable costs"                                                                                             
          Insert "expenditures incurred and paid by the                                                                         
        licensee that are qualified expenditures for the                                                                        
     purposes of AS 43.90.110"                                                                                                  
                                                                                                                                
     Page 22, line 26, following "no":                                                                                          
          Insert "additional"                                                                                                   
                                                                                                                                
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE DOOGAN  explained that the purpose  of Amendment 2                                                               
is to ensure  that the reimbursements made under  the contract or                                                               
under the  terms of  abandonment are the  qualified costs  of the                                                               
licensee and not all costs.                                                                                                     
                                                                                                                                
8:42:24 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS removed his objection.                                                                                   
                                                                                                                                
8:42:36 AM                                                                                                                    
                                                                                                                                
CHAIR  KOHRING  announced  that  hearing  no  further  objection,                                                               
Amendment 2 was adopted.                                                                                                        
                                                                                                                                
8:42:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN moved  Amendment 3, 25-GH1060\E.6, Bullock,                                                               
4/1/07, which read:                                                                                                             
                                                                                                                                
     Page 15, line 7, following "licensee.":                                                                                    
          Insert "The commissioners may resume disbursement                                                                     
     on the date that the commissioners determine that the                                                                      
     license violation is cured."                                                                                               
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE DOOGAN explained that  Amendment 3 adds a sentence                                                               
indicating that the commissioners  may resume disbursement when a                                                               
license violation has been cured.                                                                                               
                                                                                                                                
8:43:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SAMUELS  asked  whether an  expiration  date  was                                                               
needed.   He  observed that  correction of  the violation  may be                                                               
delayed  by months  or years.   He  suggested that  this question                                                               
should be  reviewed in the  next committee, and then  removed his                                                               
objection.                                                                                                                      
                                                                                                                                
8:44:36 AM                                                                                                                    
                                                                                                                                
CHAIR  KOHRING  announced  that  hearing  no  further  objection,                                                               
Amendment 3 was adopted.                                                                                                        
                                                                                                                                
8:44:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN moved  Amendment 4, 25-GH1060\E.7, Bullock,                                                               
3/31/07, which read:                                                                                                            
                                                                                                                                
     Page 20, line 25:                                                                                                          
          Delete "conclusion"                                                                                                   
          Insert "start"                                                                                                        
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE DOOGAN  explained that  the change in  Amendment 4                                                               
provides for  the tax rate  to be  revealed prior to  open season                                                               
instead of at the conclusion of open season.                                                                                    
                                                                                                                                
8:45:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS removed his objection.                                                                                   
                                                                                                                                
8:45:50 AM                                                                                                                    
                                                                                                                                
CHAIR  KOHRING  announced  that  hearing  no  further  objection,                                                               
Amendment 4 was adopted.                                                                                                        
                                                                                                                                
8:45:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN moved  Amendment 5,  which read  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Sec 43.90.220(c)                                                                                                         
     After page 14, line 10                                                                                                   
     (c)      After  a license  has been  issued and  before                                                                    
     conclusion  of  operations  permitted  by  the  license                                                                
     [COMMENCEMENT  OF COMMERCIAL  OPERATIONS] the  licensee                                                                    
     shall allow the commissioners to                                                                                           
                                                                                                                                
     [continue remainder of section as in bill]                                                                                 
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE  DOOGAN informed  the committee  that Amendment  5                                                               
will  extend  the  term  of   the  state  representative  on  the                                                               
licensee's  governing board  to throughout  the operation  of the                                                               
pipeline.                                                                                                                       
                                                                                                                                
8:47:07 AM                                                                                                                    
                                                                                                                                
DON  BULLOCK, Attorney,  Legislative  Legal Counsel,  Legislative                                                               
Legal   and  Research   Services,  Legislative   Affairs  Agency,                                                               
informed the committee  that amendment 5 refers to  page 14, line                                                               
11, not line 10.                                                                                                                
                                                                                                                                
8:47:25 AM                                                                                                                    
                                                                                                                                
PATRICK  GALVIN,  Commissioner,   Department  of  Revenue  (DOR),                                                               
expressed  his  concern  about   how  to  define  "conclusion  of                                                               
operations  permitted by  the license."   He  asked whether  that                                                               
meant the entire length of operations of the pipeline.                                                                          
                                                                                                                                
8:48:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN answered yes.                                                                                             
                                                                                                                                
8:48:16 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN  suggested a wording change  from "permitted"                                                               
so that  the intent  would not  be the length  of time  under the                                                               
permit, but the duration of the operation of the project.                                                                       
                                                                                                                                
8:48:51 AM                                                                                                                    
                                                                                                                                
MR. BULLOCK  said that the issue  is the duration of  the license                                                               
itself.                                                                                                                         
                                                                                                                                
8:49:09 AM                                                                                                                    
                                                                                                                                
COMMISSIONER  GALVIN noted  that the  intent in  establishing the                                                               
term of the  license is that in  order to be able  to enforce the                                                               
expansion  provisions  that  deal  with  the  operations  of  the                                                               
pipeline,  the  term  of  the  license  does  extend  beyond  the                                                               
commencement  of commercial  operations.   The language  needs to                                                               
make a clear reference to "operations of the project."                                                                          
                                                                                                                                
8:50:07 AM                                                                                                                    
                                                                                                                                
MR. BULLOCK  suggested that conceptually  it will read,  "so long                                                               
as the terms of the license continue to apply."                                                                                 
                                                                                                                                
REPRESENTATIVE DOOGAN  asked Commissioner  Galvin whether  it was                                                               
the same.                                                                                                                       
                                                                                                                                
8:50:44 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN answered yes.                                                                                               
                                                                                                                                
8:50:51 AM                                                                                                                    
                                                                                                                                
MR. BULLOCK said:                                                                                                               
                                                                                                                                
     So  that  the amendment  would  read,  subject to  some                                                                    
     minor  editing, "After  a license  has been  issued and                                                                    
     before", then new  language, "and so long  as the terms                                                                    
     of the  license continue  to apply,"  and then  back to                                                                    
     the original language ...                                                                                                  
                                                                                                                                
8:51:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS removed his objection.                                                                                   
                                                                                                                                
8:52:01 AM                                                                                                                    
                                                                                                                                
CHAIR  KOHRING  announced  that  hearing  no  further  objection,                                                               
Amendment 5 was adopted, as amended.                                                                                            
                                                                                                                                
8:52:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN moved  Amendment 6,  which read  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Sec 43.90.200(e)                                                                                                         
     After page 13, line 20                                                                                                   
          (e)  The transfer of any certificate of public                                                                        
     convenience  and necessity  or  transfer  under (d)  of                                                                    
     this section  as the result  of failure to  comply with                                                                    
     (a), [OR] (b), or (c) of  this section is at no cost to                                                              
     the state or  the state's designee.   [A TRANSFER UNDER                                                                    
     (C) OF THIS SECTION IS AT THE LICENSEE'S NET COST.]                                                                        
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE DOOGAN  said that  Amendment 6 would  require that                                                               
if  the licensee  failed to  go  forward, the  material that  was                                                               
produced under  the terms  of the license  would transfer  to the                                                               
state at no cost to the state.                                                                                                  
                                                                                                                                
8:53:26 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS removed his objection.                                                                                   
                                                                                                                                
8:53:34 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN  advised the  committee that the  state wants                                                               
to  balance  the  state's  interest in  its  investment  and  the                                                               
interest  of a  commercially responsive  applicant that  fails to                                                               
get  commitments.  The  perception   that  the  state  will  gain                                                               
materials from  the failed applicant without  compensation may be                                                               
too great a risk for potential applicants to undertake.                                                                         
                                                                                                                                
8:55:01 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:55 a.m. to 8:57 a.m.                                                                       
                                                                                                                                
REPRESENTATIVE DOOGAN  noted that  Amendment 6 should  read "line                                                               
14", not "line 20."                                                                                                             
                                                                                                                                
CHAIR KOHRING  announced that the  amendments will  be identified                                                               
as  conceptual   amendments.    Hearing   no  objection   to  the                                                               
amendment, [Conceptual] Amendment 6 was adopted.                                                                                
                                                                                                                                
8:58:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN moved [Conceptual]  Amendment 7, which read                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
               Sec 43.90.210 Amendment of or modification                                                                     
     to the  project plan.   Subject to the approval  of the                                                                  
     commissioners  and  the  coordinator,  a  licensee  may                                                                    
     amend or modify  its project plan if  the amendments or                                                                    
     modifications  are necessary  as  a  result of  changed                                                                    
     circumstances  outside the  licensee's control  and not                                                                    
     reasonably foreseeable  before the license  was issued.                                                                    
     An  amendment  or   modification  approved  under  this                                                                    
     section must be consistent  with the requirements of AS                                                                    
     43.90.140 and  may not diminish  the net  present value                                                                
     to the state of the project.                                                                                               
                                                                                                                                
               Sec. 43.90.450 Assignments.  (a) A licensee                                                                    
     may transfer all or part  of the license, including the                                                                  
     rights and obligations arising under the license, if                                                                       
               (1) the transfer is approved in writing in                                                                       
     advance by the commissioners; and                                                                                          
               (2) the transfer does not increase or                                                                            
     diminish  the obligations  created  by  the license  or                                                                    
     diminish the  net present value  of the license  to the                                                                
     state.                                                                                                                     
                                                                                                                                
     [continue rest of Sec. 43.90.450 as in bill]                                                                               
                                                                                                                                
REPRESENTATIVE RAMRAS objected.                                                                                                 
                                                                                                                                
REPRESENTATIVE  DOOGAN   informed  the  committee  that   HB  177                                                               
establishes  assessment  criteria  that  are  essentially  a  net                                                               
present value  calculation and the  likelihood to succeed.   This                                                               
amendment   will  ensure   that  modifications,   amendments,  or                                                               
assignments do not change the  assessment under which the license                                                               
was awarded.                                                                                                                    
                                                                                                                                
8:59:38 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN told the committee  that the state recognizes                                                               
the substantive change in this amendment.   At the point when the                                                               
commissioners   are  making   determinations  on   amendments  or                                                               
assignments, the state will consider  all the values to the state                                                               
that may  be affected, not just  the economic effect.   The state                                                               
does not strongly  object, but Commissioner Galvin  said it would                                                               
prefer have broader discretion.                                                                                                 
                                                                                                                                
9:00:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS maintained his objection.                                                                                 
                                                                                                                                
A roll  call vote  was taken.   Representatives  Samuels, Doogan,                                                               
Olson, and  Kohring voted in  favor of [Conceptual]  Amendment 7.                                                               
Representatives  Ramras, Kawasaki,  and  Dahlstrom voted  against                                                               
it.   Therefore, [Conceptual] Amendment  7 was adopted by  a vote                                                               
of 4-3.                                                                                                                         
                                                                                                                                
9:01:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN moved [Conceptual]  Amendment 8, which read                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     Sec 43.90.130(7)                                                                                                         
     page 6, line 24                                                                                                          
     Delete "15 percent of"                                                                                                   
     Replace with "15 percent above"                                                                                          
                                                                                                                                
     Page 6, line 30                                                                                                          
     Delete  "15 percent of"                                                                                                  
     Replace with "15 percent above"                                                                                          
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE  DOOGAN relayed  that the  intent of  [Conceptual]                                                               
Amendment 8 is  to clarify that the 15 percent  rolled-in rate is                                                               
15 percent above the original rate.                                                                                             
                                                                                                                                
9:02:28 AM                                                                                                                    
                                                                                                                                
COMMISSIONER  GALVIN noted  that  the state  does  not object  to                                                               
[Conceptual]  Amendment 8;  however, the  administration will  be                                                               
submitting  additional amendments  to  this  language in  another                                                               
committee.                                                                                                                      
                                                                                                                                
9:02:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS removed his objection.                                                                                   
                                                                                                                                
9:03:04 AM                                                                                                                    
                                                                                                                                
CHAIR KOHRING announced that hearing no further objection,                                                                      
[Conceptual] Amendment 8 was adopted.                                                                                           
                                                                                                                                
REPRESENTATIVE DOOGAN stated that [Conceptual] Amendment 9 is                                                                   
delayed at this time.                                                                                                           
                                                                                                                                
9:03:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN moved [Conceptual] Amendment 10, 25-                                                                      
GH1060\E.2, Bullock, 3/31/07, which read:                                                                                       
                                                                                                                                
     Page 15, line 27, following "licensee":                                                                                    
          Insert "(1)"                                                                                                          
                                                                                                                                
     Page 15, line 29, following "revocation":                                                                                  
          Insert "; and                                                                                                         
               (2) shall deliver to the state all project                                                                       
     data,  engineering  designs, contracts,  rights-of-way,                                                                    
     and other work product of  the licensee that is related                                                                    
     to the licensed project."                                                                                                  
                                                                                                                                
     Page 16, following line 30:                                                                                                
          Insert a new subsection to read:                                                                                      
          "(e)  Notwithstanding (b)(2) of this section, if                                                                      
     the  arbitration  panel  makes  a  final  determination                                                                    
     under  (b) of  this  section that  the  project is  not                                                                    
     uneconomic and the                                                                                                         
               (1)  commissioners disagree with that                                                                            
     determination, the state may  terminate the license and                                                                    
     compensate the  licensee in the  amount equal  to three                                                                    
     times  the  total  of the  reasonable  costs  that  the                                                                    
     licensee  has  incurred  in developing  the  licensee's                                                                    
     project through  the date the commissioners  notify the                                                                    
     licensee of the termination; or                                                                                            
               (2)       licensee   disagrees    with   that                                                                    
     determination, the  state may terminate the  license at                                                                    
     the  request of  the licensee  and, if  the license  is                                                                    
     terminated,  the  state  shall  pay  the  licensee  the                                                                    
     actual  amount of  qualified expenditures  incurred and                                                                    
     paid by  the licensee through  the date the  license is                                                                    
     terminated  and  the  licensee shall  transfer  to  the                                                                    
     state   all   project    data,   engineering   designs,                                                                    
     contracts,  rights-of-way, and  other  work product  of                                                                    
     the licensee that is related to the licensed project."                                                                     
                                                                                                                                
REPRESENTATIVE RAMRAS objected.                                                                                                 
                                                                                                                                
REPRESENTATIVE  DOOGAN explained  that [Conceptual]  Amendment 10                                                               
is  an attempt  to clarify  the  sections in  the bill  regarding                                                               
abandonment.   Abandonment  can  be the  result  of an  arbiter's                                                               
decision or due  to other factors.  The  language in [Conceptual]                                                               
Amendment 10 gives the state  the right to terminate an agreement                                                               
with  an unwilling  partner  when  an arbiter  has  ruled in  the                                                               
state's favor.                                                                                                                  
                                                                                                                                
9:04:55 AM                                                                                                                    
                                                                                                                                
COMMISSION GALVIN  further explained that  [Conceptual] Amendment                                                               
10 has  two parts.   The first section of  [Conceptual] Amendment                                                               
10 [line  1 through line  9] pertains to the  violations section,                                                               
and adds language  requiring assignation of data.   The state, he                                                               
noted, feels [Conceptual] Amendment 10 is duplicative.                                                                          
                                                                                                                                
9:06:19 AM                                                                                                                    
                                                                                                                                
MR.  BULLOCK  opined  that  the  first  section  of  [Conceptual]                                                               
Amendment  10  involves a  structural  change  and applies  to  a                                                               
situation in  which the commissioners  have revoked  the license.                                                               
By this amendment, the licensee  may not reapply for the license.                                                               
In addition,  if a license  is revoked, the licensee  is required                                                               
to transfer existing property and data.                                                                                         
                                                                                                                                
9:07:46 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN  questioned whether the legislature  wants to                                                               
mandate the requirement that all of  the data will be assigned to                                                               
the state after a  license is revoked.  He noted  that HB 177, as                                                               
written,  allows the  commissioners to  revoke a  license without                                                               
requiring the transfer of the data.                                                                                             
                                                                                                                                
9:08:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN  asked why  the  state  would not  require                                                               
transfer of the data.                                                                                                           
                                                                                                                                
9:08:46 AM                                                                                                                    
                                                                                                                                
COMMISSION  GALVIN responded  that, although  the state  may want                                                               
the data, the  basis of the violation may not  warrant its claim.                                                               
He  explained  that  the  state and  the  applicant  are  sharing                                                               
potentially 50 percent of the cost  and the violation may come at                                                               
a  time when  it  is  inappropriate for  the  state  to take  100                                                               
percent of  the work product.   This amendment, he said,  may not                                                               
be considered a commercially reasonable  term by applicants.  The                                                               
state  is   trying  to  attract  companies   by  considering  the                                                               
protection of their interests.                                                                                                  
                                                                                                                                
9:11:24 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS expressed his belief  that if a company is                                                               
in default,  the state  would not  want to  pay, again,  for work                                                               
that has already been completed.                                                                                                
                                                                                                                                
9:12:02 AM                                                                                                                    
                                                                                                                                
COMMISSIONER  GALVIN  pointed  out  that  the  first  section  of                                                               
[Conceptual] Amendment  10 refers to  line 1 through line  9, and                                                               
pertains  to a  violation, not  abandonment of  the project.   He                                                               
repeated  his   concern  that   companies  will   interpret  this                                                               
amendment as giving the state the  right to take data at will and                                                               
not at the discretion of the commissioners.                                                                                     
                                                                                                                                
9:13:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS remarked:                                                                                                
                                                                                                                                
      So, explain to me then without it, they'll just tell                                                                      
        you "no."  You can request all you want to, and                                                                         
     they'll just not turn anything over to you.                                                                                
                                                                                                                                
9:13:52 AM                                                                                                                    
                                                                                                                                
COMMISSIONER  GALVIN responded  that the  language in  AGIA gives                                                               
the  commissioners the  authority to  impose remedies,  including                                                               
assignation to  the state of  all project data.   The distinction                                                               
is that,  if the commissioners  revoke the license,  the licensee                                                               
is automatically required to transfer the data.                                                                                 
                                                                                                                                
9:14:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM asked  Representative Doogan to consider                                                               
dividing [Conceptual] Amendment 10.                                                                                             
                                                                                                                                
REPRESENTATIVE DOOGAN said yes.                                                                                                 
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  suggested  [Conceptual]  Amendment  10                                                               
would include line 1 through line 9.                                                                                            
                                                                                                                                
9:15:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SAMUELS  requested   that  the   committee  hear                                                               
Commissioner Galvin's comments prior to dividing the amendment.                                                                 
                                                                                                                                
9:15:24 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN deferred the question to Antony Scott.                                                                      
                                                                                                                                
9:16:10 AM                                                                                                                    
                                                                                                                                
ANTONY SCOTT, Section Chief,  Commercial Section, Central Office,                                                               
Division of  Oil & Gas,  Department of Natural  Resources, opined                                                               
that generally,  if a project is  deemed to be uneconomic,  it is                                                               
not a  commercially reasonable or  normal procedure to  require a                                                               
company to release the product that it has developed.                                                                           
                                                                                                                                
9:17:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN expressed  his  opinion that  commercially                                                               
normal does  not describe a  situation in which one  partner pays                                                               
50 percent  of the  cost, yet  does not have  rights to  the work                                                               
product.   This amendment attempts  to make  a claim to  the work                                                               
product for which the state has  paid.   Otherwise, he added, the                                                               
state could be empty-handed.                                                                                                    
                                                                                                                                
9:18:30 AM                                                                                                                    
                                                                                                                                
COMMISSIONER   GALVIN   reiterated   that   AGIA   provides   the                                                               
opportunity to  obtain data under  different circumstances.   The                                                               
distinction  is that  events  may be  outside  of the  licensee's                                                               
control.   At  no point,  he  said, does  the state  have to  pay                                                               
twice, but will pay a reasonable  portion.  This will balance the                                                               
appearance that  the state can,  at any time, revoke  the license                                                               
and seize the work product without just payment.                                                                                
                                                                                                                                
9:21:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN pointed  out  that [Conceptual]  Amendment                                                               
10, line  21, states that "the  state shall pay the  licensee the                                                               
actual amount of qualified expenditures  incurred ... through the                                                               
date the  license is terminated."   This language,  he continued,                                                               
is simply to encompass all possible situations.                                                                                 
                                                                                                                                
9:22:03 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN clarified that  the discussion is moving from                                                               
the  violation  revocation  portion   of  the  amendment  to  the                                                               
abandonment  portion.    The first  part,  under  subsection  (e)                                                               
applies  to  the situation  in  which  the state  determines  the                                                               
project  to  be  uneconomic,  the  licensee  disagrees,  and  the                                                               
arbitration  panel  agrees with  the  licensee.   This  amendment                                                               
would  obligate the  state to  pay  three times  the damages  and                                                               
would establish a  demand price.  The  state, Commissioner Galvin                                                               
explained,  would   prefer  a  negotiated  withdrawal   from  the                                                               
arrangement.     Subsection (e)(2),  would be  enforced when  the                                                               
licensee  requests   termination  of   its  license,   the  state                                                               
disagrees  and the  state  is  upheld by  arbitration.   In  that                                                               
circumstance,  the licensee  is  obligated to  continue with  the                                                               
project  or will  be  in  violation of  its  lease, and  thereby,                                                               
subject  to remedies.    He  stressed that  the  state is  better                                                               
protected without the amendment.                                                                                                
                                                                                                                                
9:25:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS compared  HB 177 to a  request for proposal                                                               
(RFP).   Ultimately, he said,  we want to attract  applicants and                                                               
[Conceptual] Amendment  10 may be  too rigid to attract  the best                                                               
applicant.     He  maintained   his  objection   to  [Conceptual]                                                               
Amendment 10 and asked for  further clarification of the division                                                               
of the amendment.                                                                                                               
                                                                                                                                
9:28:21 AM                                                                                                                    
                                                                                                                                
MR.  BULLOCK  added   that  two  things  are   happening  in  the                                                               
amendment.   The  AGIA, he  explained,  was created  to induce  a                                                               
builder to build  the pipeline project.  The  state's interest is                                                               
expressed through the license and  even if the pipeline is deemed                                                               
uneconomic by the state, the  pipeline developer may continue the                                                               
project   unburdened  by   the  requirements   of  the   license.                                                               
Therefore, the  gas pipeline may  continue even when  the license                                                               
is abandoned.   In this case, the work product  is still of value                                                               
to the licensee and the  requirement of [Conceptual] Amendment 10                                                               
may impair an ongoing pipeline project.                                                                                         
                                                                                                                                
9:30:26 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SAMUELS  moved  that  the  committee  divide  the                                                               
question.  He  suggested [Conceptual] Amendment 10A  will be line                                                               
1 through 9.                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
CHAIR  KOHRING   announced  that  Representative   Dahlstrom  had                                                               
previously  made  a motion  to  designate  line  1 through  9  as                                                               
[Conceptual] Amendment  10A and to  designate line 10  through 24                                                               
as  [Conceptual]  Amendment  10B.     Chair  Kohring  called  for                                                               
discussion on [Conceptual] Amendment 10A.                                                                                       
                                                                                                                                
9:31:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SAMUELS  affirmed  that  he will  vote  "yes"  on                                                               
[Conceptual] Amendment 10A.    He remarked:                                                                                     
                                                                                                                                
     You don't ask for it, and  then they sell it ... so you                                                                    
     invested $25  million, they invested $25  million, they                                                                    
     got $50 million  out there, you didn't ask  for it back                                                                    
     ... for  whatever reason ...  And you don't know  ... I                                                                    
     would rather say going into  this that they're going to                                                                    
     deliver  this.   ...  I'm  going   to  vote   "yes",  I                                                                    
     understand  the  commissioner's  point.  ...  I'd  just                                                                    
     rather say here's the rule.                                                                                                
                                                                                                                                
COMMISSIONER   GALVIN  affirmed   that  Representative   Ramras's                                                               
interpretation  of  the  amendment   is  correct.    [Conceptual]                                                               
Amendment  10A is  favorable to  the state  and will  be seen  as                                                               
subjecting the  licensee to the discretion  of the commissioners.                                                               
He  said that  he  agreed with  Representative  Samuels that  the                                                               
administration  needs to  work on  how to  protect the  state and                                                               
also  acknowledge a  licensee's  interest.   Commissioner  Galvin                                                               
noted that he would prefer if this amendment is not adopted.                                                                    
                                                                                                                                
9:35:27 AM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representatives  Doogan, Kawasaki,                                                               
Olson, and Samuels voted in  favor of [Conceptual] Amendment 10A.                                                               
Representatives Ramras, Dahlstrom, and  Kohring voted against it.                                                               
Therefore, [Conceptual]  Amendment 10A was  adopted by a  vote of                                                               
4-3.                                                                                                                            
                                                                                                                                
9:36:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN expressed  his offense  at the  suggestion                                                               
that the  state will  pirate work  products during  this project.                                                               
In consideration  that this is  the committee of  first referral,                                                               
Representative Doogan withdrew [Conceptual] Amendment 10B.                                                                      
                                                                                                                                
9:37:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  commented that  the state  sometimes rules                                                               
by unintended consequences.                                                                                                     
                                                                                                                                
9:38:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS also commented that  he is troubled by the                                                               
three times damages set in the  bill.  In addition, he noted that                                                               
all  parties   will  have  different   standards  for   the  term                                                               
"uneconomic" and defining the term will be difficult.                                                                           
                                                                                                                                
9:38:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN  moved  [Conceptual] Amendment  11,  which                                                               
said [original punctuation provided]:                                                                                           
                                                                                                                                
     Sec 43.90.900                                                                                                            
     Add after page 23, line 7                                                                                                
                                                                                                                              
     (17)    "project  labor agreement"  means  a  completed                                                                    
     collective  bargaining agreement  between the  licensee                                                                    
     and  an  appropriate  Alaskan entity  setting  out  the                                                                    
     terms  and conditions  of  employment  on the  project,                                                                    
     including  wages  and  benefits, no  strike/no  lockout                                                                    
     provisions,    safety    rules,   dispute    resolution                                                                    
     procedures, and use of hiring facilities in Alaska.                                                                        
                                                                                                                                
     (renumber accordingly)                                                                                                     
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE  DOOGAN explained  that [Conceptual]  Amendment 11                                                               
attempts to  define "project  labor agreement"  as stated  in the                                                               
proposed  Committee Substitute,  page 8,  line 20.   He  observed                                                               
that the goals of a project  labor agreement are supported by the                                                               
committee and that the term is not legally defined in statute.                                                                  
                                                                                                                                
9:40:44 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS  agreed that a project  labor agreement is                                                               
needed  and is  currently  a  part of  AGIA.    He expressed  his                                                               
reluctance  to  limit the  language  describing  a project  labor                                                               
agreement without  sufficient knowledge  of the  ramifications of                                                               
[Conceptual] Amendment 11.  He maintained his objection.                                                                        
                                                                                                                                
9:42:12 AM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.  Representatives  Doogan and Kohring                                                               
voted  in favor  of [Conceptual]  Amendment 11.   Representatives                                                               
Kawasaki,  Olson, Dahlstrom,  Samuels, and  Ramras voted  against                                                               
it.  Therefore, [Conceptual] Amendment 11  failed by a vote of 2-                                                               
5.                                                                                                                              
                                                                                                                                
9:42:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN moved [Conceptual] Amendment 12, 25-                                                                      
GH1060\E.3, Bullock, 4/1/07, which read:                                                                                        
                                                                                                                                
     Page 1, line 4, following "coordinator;":                                                                                
          Insert "repealing the Alaska Stranded Gas                                                                           
     Development Act;"                                                                                                        
                                                                                                                                
     Page 27, following line 26:                                                                                                
          Insert new bill sections to read:                                                                                     
        "* Sec. 5. AS 44.37.011(a) is amended to read:                                                                      
          (a)  This section applies to administrative                                                                           
     appeals or petitions for  reconsideration of a decision                                                                    
     in  an administrative  appeal  to  the commissioner  of                                                                    
     natural  resources,  except  for  those  administrative                                                                    
     appeals   or   petitions   done  under   AS 38.35   [OR                                                                    
     AS 43.82]. If  a conflict  occurs between  this section                                                                    
     and other state  law existing at the  time of enactment                                                                    
     of  this  section,  the   provisions  of  this  section                                                                    
     control.                                                                                                                   
        *    Sec.   6.    AS 29.10.200(54),   29.10.200(55);                                                                  
     AS 29.45.810;   AS 29.46.010(b);   AS 36.30.850(b)(38);                                                                    
     AS 43.20.072(g),       43.20.073(g);      AS 43.82.010,                                                                    
     43.82.020, 43.82.100,  43.82.110, 43.82.120, 43.82.130,                                                                    
     43.82.140, 43.82.150,  43.82.160, 43.82.170, 43.82.180,                                                                    
     43.82.200, 43.82.210,  43.82.220, 43.82.230, 43.82.240,                                                                    
     43.82.250, 43.82.260,  43.82.270, 43.82.300, 43.82.310,                                                                    
     43.82.400, 43.82.410,  43.82.420, 43.82.430, 43.82.435,                                                                    
     43.82.440, 43.82.445,  43.82.500, 43.82.505, 43.82.510,                                                                    
     43.82.520, 43.82.600,  43.82.610, 43.82.620, 43.82.630,                                                                    
     43.82.640, 43.82.900,  43.82.990; secs.  1, 2,  and 10,                                                                    
     ch. 104,  SLA 1998;  and sec.  1, ch.  4, SLA  2003 are                                                                    
     repealed."                                                                                                                 
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE  DOOGAN informed  the committee  that [Conceptual]                                                               
Amendment  12 repeals  the Alaska  Stranded Gas  Development Act.                                                               
He  noted  that  testimony  from  the  industry  indicates  their                                                               
interest in  complying with the  Alaska Stranded  Gas Development                                                               
Act rather than AGIA.   Repeal of this act, Representative Doogan                                                               
said, will remove that option.                                                                                                  
                                                                                                                                
9:43:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SAMUELS  questioned  the  possibility  that  this                                                               
repeal will have unintended consequences  to the detriment of the                                                               
state.                                                                                                                          
                                                                                                                                
9:44:09 AM                                                                                                                    
                                                                                                                                
MR. BULLOCK  answered that he  has looked at other  references in                                                               
the statutes and  has concluded that all of  the related statutes                                                               
were  drafted uniquely.   He  expressed his  belief that,  to the                                                               
best of his research, there will be no repercussions.                                                                           
                                                                                                                                
9:45:43 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE SAMUELS maintained his objection.                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  expressed his concern that  repealing this                                                               
act  may  be  premature  and   that  he  will  vote  against  the                                                               
amendment.                                                                                                                      
                                                                                                                                
9:48:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM asked for a vote.                                                                                      
                                                                                                                                
REPRESENTATIVE DOOGAN withdrew [Conceptual] Amendment 12.                                                                       
                                                                                                                                
9:49:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN  moved   [Conceptual]  Amendment  13,  25-                                                               
GH1060\E.4, Bullock, 4/1/07, which read:                                                                                        
                                                                                                                                
     Page 9, lines 12 - 29:                                                                                                     
          Delete all material and insert:                                                                                       
          "Sec.    43.90.150.   Disclosure    of   submitted                                                                  
     information. Notwithstanding  AS 40.25, all information                                                                  
     submitted to  the commissioners  under this  chapter is                                                                    
     public  information; however,  the  information is  not                                                                    
     subject to disclosure  before the commissioners publish                                                                    
     the notice required under AS 43.90.160(a)."                                                                                
                                                                                                                                
     Page 9, line 30:                                                                                                           
          Delete "(a)"                                                                                                          
                                                                                                                                
     Page 10, line 1, following "AS 43.90.140":                                                                                 
          Insert "and all applications rejected by the                                                                          
     commissioners under AS 43.90.140(a) and (c)"                                                                               
                                                                                                                                
     Page 10, lines 2 - 9:                                                                                                      
          Delete all material.                                                                                                  
                                                                                                                                
     Page 27, lines 23 - 25:                                                                                                    
          Delete                                                                                                                
               "(A)  proprietary or a trade secret in                                                                       
     accordance with AS 43.90.150;                                                                                          
               (B)"                                                                                                         
          Insert "submitted to the commissioners under                                                                      
     AS 43.90 and"                                                                                                          
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE   DOOGAN   explained   to   the   committee   that                                                               
[Conceptual]  Amendment 13  changes  the proprietary  information                                                               
and trade secrets,  referenced in HB 177, to  indicate that there                                                               
will be no  proprietary information and trade secrets  as part of                                                               
the applications.  He said that  one reason for this change is to                                                               
eliminate  government   secrecy.    In  addition,   exclusion  of                                                               
proprietary information will prevent  proper public review of the                                                               
application and  will also prevent the  legislature from properly                                                               
evaluating the commissioners' award of the license.                                                                             
                                                                                                                                
9:52:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS expressed  his opposition  to [Conceptual]                                                               
Amendment  13.   He  observed  that there  is  already a  certain                                                               
amount of  rigidity in the  AGIA application process and  that he                                                               
is   comfortable   with   AGIA   without   requiring   additional                                                               
disclosures by the applicants.                                                                                                  
                                                                                                                                
9:53:59 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN spoke of the  intention of the administration                                                               
to  provide   an  open   and  transparent   application  process.                                                               
However, the  producers successfully  argued that they  need some                                                               
protection for their creative ideas  during the development phase                                                               
of the application.   The administration, he  said, was convinced                                                               
to try to better balance the  interests of all parties.  He noted                                                               
that the  Committee Substitute [CS]  will require  the successful                                                               
applicant to make all information  public.  The administration is                                                               
supportive  of a  provision to  allow the  legislature access  to                                                               
proprietary  information  in order  to  make  its review  of  the                                                               
successful  application.     However,  the  administration  feels                                                               
[Conceptual] Amendment 13 is damaging to the AGIA process.                                                                      
                                                                                                                                
9:57:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAMUELS remarked:                                                                                                
                                                                                                                                
     ...you'll come  forward with  a licensee,  and, extreme                                                                    
     examples, "Can't  tell [the legislature] why  we picked                                                                    
     them,  [because]  it's  all  proprietary."  ...  I  can                                                                    
     understand  that that  is true  proprietary information                                                                    
     ... How  do we balance  that when you come  forward and                                                                    
     say "We picked  the winner." ... and  for applicant "A"                                                                    
     and  "B"  there  is  no  proprietary  information,  but                                                                    
     applicant "C" is the one you picked? ...                                                                                   
                                                                                                                                
9:58:29 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN  assured the  committee that  the legislature                                                               
will have  the proprietary information  needed during  the review                                                               
of the successful  application.  In the end, the  public will see                                                               
all  of the  information.   He added  that rejected  applications                                                               
will not be  disclosed to the public unless a  challenge is filed                                                               
to protest the decision of the commissioners.                                                                                   
                                                                                                                                
10:00:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DOOGAN  expressed his  belief that the  public and                                                               
the  legislature  may not  be  able  to meaningfully  review  the                                                               
applications  for projects  that  do  not get  the  license.   He                                                               
reiterated that  an unsuccessful applicant  that does not  file a                                                               
protest will not reveal proprietary information.                                                                                
                                                                                                                                
10:01:33 AM                                                                                                                   
                                                                                                                                
COMMISSIONER GALVIN  stressed that  the legislature will  see all                                                               
of  the  information  from  all  of  the  applicants.    However,                                                               
proprietary   information  will   not  be   made  public   unless                                                               
contested.                                                                                                                      
                                                                                                                                
10:02:11 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DOOGAN withdrew [Conceptual] Amendment 13.                                                                       
                                                                                                                                
10:02:53 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DAHLSTROM called the committee's attention to CS                                                                 
Version E, page 9, line 19 and asked if the word "not" should be                                                                
deleted.                                                                                                                        
                                                                                                                                
10:03:40 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DOOGAN assured Representative Dahlstrom that the                                                                 
language in the CS was corrected by [Conceptual] Amendment 1.                                                                   
                                                                                                                                
10:03:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DOOGAN moved [Conceptual] Amendment 14, 25-                                                                      
GH1060\E.1, Bullock, 3/31/07, which read:                                                                                       
                                                                                                                                
     Page 18, line 10:                                                                                                          
          Delete "and 43.90.320"                                                                                                
                                                                                                                                
     Page 18, lines 12 - 13:                                                                                                    
          Delete "and 43.90.320 are"                                                                                            
          Insert "is"                                                                                                           
                                                                                                                                
     Page 18, line 14:                                                                                                          
          Delete "inducement."                                                                                                
          Insert "inducement; royalty credit. (a) A person                                                                    
     qualified  for resource  inducement under  AS 43.90.300                                                                    
     is  entitled to  a  credit of  10  percent against  the                                                                    
     person's  royalty obligation  to  the  state for  North                                                                    
     Slope gas shipped  through firm transportation capacity                                                                    
     the  person  acquired  during the  first  binding  open                                                                    
     season."                                                                                                                   
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 19, line 11, following "production":                                                                                  
          Insert "; and                                                                                                         
               (4)  the procedure for a person to take the                                                                      
     credit provided in (a) of this section"                                                                                    
                                                                                                                                
     Page 19, line 13:                                                                                                          
          Delete "(d)"                                                                                                          
          Insert "(e)"                                                                                                          
                                                                                                                                
     Page 19, line 16:                                                                                                          
          Delete "(a)"                                                                                                          
          Insert "(b)"                                                                                                          
                                                                                                                                
     Page 19, line 22:                                                                                                          
          Delete "(e)"                                                                                                          
          Insert "(f)"                                                                                                          
                                                                                                                                
     Page 19, line 31:                                                                                                          
          Delete "(c)"                                                                                                          
          Insert "(d)"                                                                                                          
                                                                                                                                
     Page 20, line 10:                                                                                                          
          Delete "(a)"                                                                                                          
          Insert "(b)"                                                                                                          
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "(c)"                                                                                                          
          Insert "(d)"                                                                                                          
                                                                                                                                
     Page 20, line 17:                                                                                                          
          Delete "(c)"                                                                                                          
          Insert "(d)"                                                                                                          
                                                                                                                                
     Page 20, line 19, through page 21, line 10:                                                                                
          Delete all material.                                                                                                  
                                                                                                                                
     Page 23, line 14:                                                                                                          
          Delete "and the gas production tax exemptions                                                                         
     under AS 43.90.320"                                                                                                        
                                                                                                                                
REPRESENTATIVE SAMUELS objected.                                                                                                
                                                                                                                                
REPRESENTATIVE  DOOGAN informed  the committee  that [Conceptual]                                                               
Amendment 14  is offered to  solve the constitutional  problem of                                                               
freezing  the  tax rate  by  moving  the inducements  to  royalty                                                               
regulation.   He  expressed his  hope that  subsequent committees                                                               
will consider  an amendment to  AGIA that  will be upheld  by the                                                               
Alaska Supreme  Court.  He  added that this inducement  is within                                                               
the legislature's power to grant.                                                                                               
                                                                                                                                
10:05:20 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   SAMUELS   acknowledged   the   value   of   this                                                               
discussion.   However, he  said he  felt that  the issue  has not                                                               
been thoroughly  researched and he will  not support [Conceptual]                                                               
Amendment 14.                                                                                                                   
                                                                                                                                
10:06:25 AM                                                                                                                   
                                                                                                                                
COMMISSIONER GALVIN  confirmed that the intent  of this amendment                                                               
has been discussed previously by  other committees.  The state is                                                               
considering  all  approaches  that   will  withstand  a  possible                                                               
constitutional  challenge  to  AGIA  and there  will  be  further                                                               
discussion in subsequent committees.                                                                                            
                                                                                                                                
10:07:26 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DAHLSTROM  asked whether the attorney  general was                                                               
invited to testify on this subject.                                                                                             
                                                                                                                                
10:08:00 AM                                                                                                                   
                                                                                                                                
CHAIR KOHRING observed that this issue will be addressed by the                                                                 
House Resources Standing Committee.                                                                                             
                                                                                                                                
10:08:22 AM                                                                                                                   
                                                                                                                                
COMMISSIONER  GALVIN recommended  that [Conceptual]  Amendment 14                                                               
be set aside for a later committee to address.                                                                                  
                                                                                                                                
10:08:54 AM                                                                                                                   
                                                                                                                                
MR.  BULLOCK explained  to the  committee  that the  constitution                                                               
says the  power to  tax cannot be  contracted away  or suspended.                                                               
Exceptions are  subject to Article 9,  section 4, and have  to be                                                               
made  by general  law.   He continued  to say  that if  the state                                                               
grants an exception,  the exception is then  subject to revision.                                                               
The intent  in the governor's bill  is to freeze the  tax rate by                                                               
ten  years  without  taking away  the  legislature's  ability  to                                                               
respond  to fiscal  needs.   He  further  explained that  royalty                                                               
leases are  contracts and are  not subject to Article  9, section                                                               
4.  A royalty credit or enactment  of a law to exempt some of the                                                               
gas  production  from  taxes  may be  an  inducement  that  would                                                               
withstand  a  possible  constitutional challenge.    Mr.  Bullock                                                               
opined that the state can not limit its taxing powers.                                                                          
                                                                                                                                
REPRESENTATIVE DOOGAN  stated that  this issue should  be flagged                                                               
for  the  next  committee  to ensure  that  there  is  additional                                                               
discussion  of  this  issue.     He  then  withdrew  [Conceptual]                                                               
Amendment 14.                                                                                                                   
                                                                                                                                
10:12:49 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SAMUELS  moved  [Conceptual]  Amendment  15,  25-                                                               
GH1060\E.8, Bullock, 4/1/07, which read:                                                                                        
                                                                                                                                
     Page 11, line 31:                                                                                                          
          Delete "chairs of the legislative standing                                                                            
     committees having jurisdiction over natural resources"                                                                     
          Insert "presiding officer of each house of the                                                                        
     legislature"                                                                                                               
                                                                                                                                
     Page 12, lines 11 - 14:                                                                                                    
          Delete "receiving a determination from the                                                                            
     commissioners  under AS 43.90.180,  the House  standing                                                                    
     committee  and  the  Senate standing  committee  having                                                                    
     jurisdiction over natural resources"                                                                                       
          Insert "the presiding officer of each house of                                                                        
     the  legislature  receives  a  determination  from  the                                                                    
     commissioners under  AS 43.90.180, the  rules committee                                                                    
     of each house of the legislature"                                                                                          
                                                                                                                                
     Page 12, line 14:                                                                                                          
          Delete "bill in their respective chambers"                                                                            
          Insert "resolution"                                                                                                   
                                                                                                                                
     Page 12, line 16:                                                                                                          
          Delete "bill"                                                                                                         
          Insert "resolution"                                                                                                   
          Delete "becomes law"                                                                                                  
          Insert "is approved by both houses of the                                                                             
     legislature  within 90  calendar  days  after the  last                                                                    
     date a presiding officer of  a house of the legislature                                                                    
     receives a  determination from the  commissioners under                                                                    
     AS 43.90.180"                                                                                                              
                                                                                                                                
     Page 12, lines 17 - 18:                                                                                                    
          Delete "effective date of the Act"                                                                                    
          Insert "date a resolution passes"                                                                                     
                                                                                                                                
CHAIR KOHRING objected.                                                                                                         
                                                                                                                                
REPRESENTATIVE  SAMUELS offered  an  amendment  to Amendment  15,                                                               
which  he  identified as  Conceptual  Amendment  15.   Conceptual                                                               
Amendment 15  deletes page  1, line  14 through  20, and  page 2,                                                               
line  1 through  5,  of the  amendment.   Representative  Samuels                                                               
explained   that   Conceptual    Amendment   15   instructs   the                                                               
commissioners  to deliver  their determination  to the  presiding                                                               
officer  in  each  body  of   the  legislature  and  removes  the                                                               
reference to the standing committees.                                                                                           
                                                                                                                                
10:14:20 AM                                                                                                                   
                                                                                                                                
MR. BULLOCK  further explained  that legislative  approval raises                                                               
the issue of  the separation of powers and  whether the executive                                                               
branch can  enter into a  contract without consultation  with the                                                               
legislature.   A  resolution passed  by the  legislature can  not                                                               
have a substantive effect on a party  not in the body.  Under the                                                               
original  bill,  the  commissioners   will  recommend  a  license                                                               
application to  the legislature and,  following no action  by the                                                               
legislature  within  30  days,   the  contract  will  be  issued.                                                               
Conceptual Amendment  15 requires the legislature  to take action                                                               
to  approve the  license.    Mr. Bullock  continued  to say  that                                                               
negative   action  by   the  legislature   kills  the   contract.                                                               
Disapproval of the contract by  the legislature would be required                                                               
to be by the  passage of a bill because of  the effect to parties                                                               
outside  of  the legislature.    Passage  of  a bill  would  also                                                               
protect the state against litigation  regarding the separation of                                                               
powers.                                                                                                                         
                                                                                                                                
10:17:10 AM                                                                                                                   
                                                                                                                                
CHAIR  KOHRING removed  his  objection to  the  amendment to  the                                                               
amendment,  and  to Conceptual  Amendment  15.   There  being  no                                                               
further  objection,  Conceptual  Amendment 15,  as  amended,  was                                                               
adopted.                                                                                                                        
                                                                                                                                
10:17:40 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SAMUELS  moved  [Conceptual] Amendment  16  which                                                               
read [original punctuation provided]:                                                                                           
                                                                                                                                
     Page 10, line 17, following "shall"                                                                                        
          Insert "use an undiscounted value and, at a                                                                           
     minimum,  discount   rates  of  two,  six,   and  eight                                                                    
     percent, and"                                                                                                              
                                                                                                                                
CHAIR KOHRING objected.                                                                                                         
                                                                                                                                
REPRESENTATIVE SAMUELS remarked:                                                                                                
                                                                                                                                
     ...I didn't want  an applicant to come  forward and say                                                                    
     the discount rate of seven was  used and that it used a                                                                    
     discount rate  of five, that it  could possibly change.                                                                    
     ... So, we're  trying to have some  continuity and said                                                                    
     that   you   must   use  an   undiscounted   cash   ...                                                                    
     undiscounted value which is just  total cash and then a                                                                    
     suite   of  two,   six,  and   eight  percent   on  all                                                                    
     applicants.                                                                                                                
                                                                                                                                
REPRESENTATIVE RAMRAS  asked whether  the amendment  conformed to                                                               
Version E.                                                                                                                      
                                                                                                                                
10:18:44 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SAMUELS said, "Yes, on page 10, line 17."                                                                        
                                                                                                                                
COMMISSIONER  GALVIN asked  for  copies of  the amendments  under                                                               
discussion.                                                                                                                     
                                                                                                                                
The committee took an at-ease from 10:19 to 10:25.                                                                              
                                                                                                                                
10:26:18 AM                                                                                                                   
                                                                                                                                
CHAIR  KOHRING removed  his objection  to [Conceptual]  Amendment                                                               
16.                                                                                                                             
                                                                                                                                
10:26:42 AM                                                                                                                   
                                                                                                                                
MR.  SCOTT opined  that  the high  end of  the  bracket of  eight                                                               
percent is well reasoned and  comports with the long-term rate of                                                               
return  earned by  the  Alaska Permanent  Fund  Corporation.   He                                                               
continued to explain that two percent  is a reasonable rate for a                                                               
low inflation  rate and  will use the  value of  today's dollars.                                                               
Mr.  Scott  said  that  "undiscounted cash"  is  not  a  relevant                                                               
measure of economic  value; therefore, a zero  discount rate does                                                               
not provide information  for an economic analysis.   He suggested                                                               
replacing six  percent with  five percent  as was  recommended by                                                               
the state's economic advisor.                                                                                                   
                                                                                                                                
10:28:58 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SAMUELS  offered  an  amendment  to  [Conceptual]                                                               
Amendment 16 that changes six percent to five percent.                                                                          
                                                                                                                                
10:29:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DAHLSTROM asked whether  eight percent remained in                                                               
[Conceptual] Amendment 16.                                                                                                      
                                                                                                                                
REPRESENTATIVE SAMUELS said, "Yes, two, five, and eight."                                                                       
                                                                                                                                
CHAIR KOHRING  removed his  objection and  [Conceptual] Amendment                                                               
16, as amended, was adopted.                                                                                                    
                                                                                                                                
10:30:01 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SAMUELS moved  [Conceptual]  Amendment 17,  which                                                               
read [original punctuation provided]:                                                                                           
                                                                                                                                
     Page 7, line 22, following "Commission"                                                                                    
          Insert "if the proposed project is engaged in                                                                         
     interstate commerce,"                                                                                                      
     Page 7, line 22, following "Alaska"                                                                                        
          Delete, ",as applicable"                                                                                              
          Insert, "if the project is not engaged in                                                                             
     interstate commerce"                                                                                                       
     Page 7, line 22, following "for"                                                                                           
          Delete, "any"                                                                                                         
          Insert, "a"                                                                                                           
     Page 7, line 24, following "value"                                                                                         
          Delete, "existing"                                                                                                    
          Insert, "previously owned"                                                                                            
     Page 7, line 25, following "value;"                                                                                        
          Insert, "describe the gas treatment plant,                                                                            
     including   its   design,  engineering,   construction,                                                                    
     ownership, and  plan of  operation; the  identify [sic]                                                                    
     of  any  third  party  that  will  participate  in  the                                                                    
     ownership or operation of the  gas treatment plant; and                                                                    
     the means by which the  applicant will work to minimize                                                                    
     the                                                                                                                        
     effect of the costs of the facility on the tariff;"                                                                        
                                                                                                                                
CHAIR KOHRING objected.                                                                                                         
                                                                                                                                
REPRESENTATIVE SAMUELS noted that  [Conceptual] Amendment 17 will                                                               
require a more  complete design of the gas treatment  plant to be                                                               
included in a  bid from a mid-stream entity.   He opined that the                                                               
gas treatment  plant is a large  part of the process  and the bid                                                               
should  include  a  more  complete  description  than  originally                                                               
required in the bill.                                                                                                           
                                                                                                                                
CHAIR  KOHRING  removed  his objection  and  hearing  no  further                                                               
objection, [Conceptual] Amendment 17 was adopted.                                                                               
                                                                                                                                
10:30:49 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SAMUELS moved  [Conceptual]  Amendment 18,  which                                                               
read [original punctuation provided]:                                                                                           
                                                                                                                                
     Page 11, line 4, following "cost overruns"                                                                                 
          Insert ", and encourage shippers to participate                                                                       
     in the first binding open season"                                                                                          
                                                                                                                                
                                                                                                                                
CHAIR KOHRING objected.                                                                                                         
                                                                                                                                
The committee took an at-ease from 10:31 to 10:32.                                                                              
                                                                                                                                
REPRESENTATIVE SAMUELS said that [Conceptual] Amendment 18                                                                      
pertains to the application evaluation.  He then remarked:                                                                      
                                                                                                                                
     ...part  of the  criteria  is that,  and  you can  read                                                                    
     there,    the    reasonableness,    specificity,    and                                                                    
     feasibility  of the  applicant's  work plan,  timeline,                                                                    
     and  budget required  to be  submitted under  the cite,                                                                    
     including the applicant's plan  to manage cost overruns                                                                    
     and  the  degree  to  which  to  applicant  intends  to                                                                    
     insulate shippers  from the  effects of  cost overruns,                                                                    
     and  encourage shippers  to  participate  in the  first                                                                    
     binding open  season.   So, how are  you going  to talk                                                                    
     people into giving you the  gas? ... You should be able                                                                    
     to, on the application process, articulate that.                                                                           
                                                                                                                                
CHAIR KOHRING removed his objection and hearing no further                                                                      
objection, [Conceptual] Amendment 18 was adopted.                                                                               
                                                                                                                                
10:32:48 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SAMUELS moved [Conceptual] Amendment 19, 25-                                                                     
GH1060\B.21, Bullock, 3/29/07, which read:                                                                                      
                                                                                                                                
     Page 15, line 14, following "43.90.140(7)":                                                                                
          Insert   "if   the   Federal   Energy   Regulatory                                                                    
     Commission  does  not  have a  policy  in  effect  that                                                                    
     presumes that rolled-in rates apply  to the recovery of                                                                    
     expansion costs for the project"                                                                                           
                                                                                                                                
     Page 16, line 17, following "43.90.140(7)":                                                                                
          Insert   "if   the   Federal   Energy   Regulatory                                                                    
     Commission  does  not  have a  policy  in  effect  that                                                                    
     presumes that rolled-in rates apply  to the recovery of                                                                    
     expansion costs for the project"                                                                                           
                                                                                                                                
CHAIR KOHRING objected.                                                                                                         
                                                                                                                                
REPRESENTATIVE  SAMUELS  informed  the   committee  that  HB  177                                                               
requires  that  the mid-stream  entity  must  testify before  the                                                               
Federal   Energy  Regulatory   Commission  (FERC)   to  get   the                                                               
inducement  of the  15 percent  on  the rolled-in  rates and  the                                                               
shippers must testify before FERC for the tax lock-in.  He then                                                                 
said:                                                                                                                           
                                                                                                                                
     Everybody is  going to testify,  if you  want something                                                                    
     from the bill,  you have to go before  FERC and testify                                                                    
     the same way.   The FERC can override all  that if they                                                                    
     so choose  to, but  you have to  testify the  same. ...                                                                    
     One of the pieces  of testimony from the administration                                                                    
     was that the  regulation could change.   The FERC right                                                                    
     now has  a rebuttable presumption of  rolled-in tariffs                                                                    
     and that  regulation could change.  ... As long  as the                                                                    
     rebuttable presumption  is at FERC, ...  you've got the                                                                    
     rebuttable  presumption, you  will have  the mid-stream                                                                    
     entity,  which must  defend  the  rolled-in tariff  and                                                                    
     then the  shippers can argue  their own  interests. ...                                                                    
     I'm reticent to, to not  adopt this, and lock the state                                                                    
     into a  policy which  we don't know  if we're  going to                                                                    
     like at  the end of  the day. ... It's  probably better                                                                    
     to allow  the FERC to  hear, as  long as they  have got                                                                    
     the  rebuttable  presumption  in there  ...  we  should                                                                    
     allow FERC  to at least  hear there might  be competing                                                                    
     views....                                                                                                                  
                                                                                                                                
10:35:33 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE RAMRAS asked if [the language] was on page 15,                                                                   
line 14.                                                                                                                        
                                                                                                                                
10:36:02 AM                                                                                                                   
                                                                                                                                
MR. BULLOCK said:                                                                                                               
                                                                                                                                
     The changes would  actually be on page 20,  and I think                                                                    
     it would  go in  to line  5, where  it talks  about the                                                                    
     agreement  not to  protest in  that part  of the  bill,                                                                    
     that's relating  to the royalty, and  the tax condition                                                                    
     is in the next page, on page 21.                                                                                           
                                                                                                                                
10:36:46 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DAHLSTROM clarified that [Conceptual] Amendment                                                                  
19 amends page 20, line 15, and page 21, line 6.                                                                                
                                                                                                                                
10:37:22 AM                                                                                                                   
                                                                                                                                
MR. BULLOCK remarked:                                                                                                           
                                                                                                                                
     It's  offered conceptually,  to  modify the  conditions                                                                    
     under which  the person that  receives the  royalty and                                                                    
     the  tax   inducement  can  or   can  not   protest  or                                                                    
     participate in the FERC proceedings.                                                                                       
                                                                                                                                
10:37:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SAMUELS  pointed out that  this does not  apply to                                                               
the mid-stream entity.   The mid-stream entity  still must defend                                                               
to the position that the state  requires in the legislation.  The                                                               
intent of the  amendment is that it will apply  to the shipper as                                                               
long as FERC has the rebuttable presumption.                                                                                    
                                                                                                                                
10:37:42 AM                                                                                                                   
                                                                                                                                
COMMISSIONER   GALVIN   expressed   the  state's   objection   to                                                               
[Conceptual] Amendment  19.  The  administration is  committed to                                                               
having rolled-in  rates apply  to the  expansion provisions.   He                                                               
noted that the state can object  to rolled-in rates if it desires                                                               
and can  waive that  provision.   The true  issue is  whether the                                                               
state will  preclude a party  from committing gas because  of the                                                               
obligation  to   not  oppose  rolled-in  rates   in  the  future.                                                               
Commissioner  Galvin stressed  that the  administration wants  an                                                               
attractive package that does not  set up obstacles for mid-stream                                                               
and up-stream  applicants.   In order for  the explorers  to have                                                               
confidence  that expansion  will take  place within  a reasonable                                                               
time, the state should not raise the prospect of a long drawn-                                                                  
out process at FERC, he said.                                                                                                   
                                                                                                                                
10:41:24 AM                                                                                                                   
                                                                                                                                
MR.  SCOTT recalled  the importance  of  certainty for  rolled-in                                                               
rates  on the  incentives that  explorers  face.   The state  has                                                               
indicated  that  having  certainty  of rolled-in  rates  makes  a                                                               
material  difference  in the  value  of  a hydrocarbon  prospect.                                                               
[Conceptual] Amendment 19 will  create significant uncertainty as                                                               
to the future rates and  would diminish the attractiveness of the                                                               
exploration  prospect.   Mr.  Scott pointed  out  that there  are                                                               
elements of  fiscal certainty  for different  parties in  HB 177.                                                               
The initial shippers receive fiscal  certainty with regard to tax                                                               
and royalty and  there is an element of fiscal  certainty for the                                                               
pipeline licensee.  He expressed  his belief that the creation of                                                               
certainty around the economics of exploration is very important.                                                                
                                                                                                                                
10:43:51 AM                                                                                                                   
                                                                                                                                
MR. BULLOCK added that the general  economic policy of AGIA is to                                                               
maximize  benefits to  the  state.   The  policy of  rolled-rates                                                               
keeps  the  rate low,  but  raises  the  risk that  the  original                                                               
shipper  will be  subject to  an increase  in rate.   The  policy                                                               
decision  to make,  he advised,  will be  rolled-in rates  versus                                                               
incremental rates.                                                                                                              
                                                                                                                                
10:44:47 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DOOGAN remarked:                                                                                                 
                                                                                                                                
     If our concern is that  the current producers might not                                                                    
     come to  the open season,  then we'd want to  vote with                                                                    
     Representative  Samuels, I  think,  because this  gives                                                                    
     them  more flexibility  in terms  of their  exposure to                                                                    
     higher rates for shipping their  gas after they've made                                                                    
     the commitment.   If our  concern is that  people won't                                                                    
     go out  and explore, then  we want to vote  against the                                                                    
     amendment because this gives  them, at least in theory,                                                                    
     ... the certainty  that ... they'd be able  to ship new                                                                    
     gas at  a rolled-in rate.  ... So, if it's  a balancing                                                                    
     act, I'd like to know a  little bit more about how come                                                                    
     you came down on the side of the explorers....                                                                             
                                                                                                                                
10:46:37 AM                                                                                                                   
                                                                                                                                
COMMISSIONER  GALVIN  agreed  that  AGIA  is  a  balance  between                                                               
different interests  and is  also an exercise  in judgment.   The                                                               
state  is   attempting  to  balance  the   relative  interest  of                                                               
explorers and  their risk  of an  initial shippers'  challenge to                                                               
rolled-in rates, with the amount  of disadvantage this represents                                                               
to  the  interests of  the  initial  shippers. He  expressed  his                                                               
belief  that the  economics of  the project  are such  that there                                                               
will  be a  successful open  season.   The DNR  is responding  to                                                               
structural concerns  about royalty and concerns  about changes in                                                               
the  production  tax, and  feels  that  these responses  will  be                                                               
sufficient  for  the  parties.    Certainty  for  the  explorers,                                                               
Commissioner Galvin  said, will overcome the  potential detriment                                                               
to open season.                                                                                                                 
                                                                                                                                
REPRESENTATIVE SAMUELS  said that  he would not  characterize the                                                               
amendment as an explorer versus  current producer question.  Over                                                               
time the mid-stream entity must back  up what is regulated by the                                                               
bill.  The FERC has the  presumption of rolled-in tariffs and the                                                               
state generally  agrees.   However, as  economics change  for the                                                               
entities, the  state can not deny  them the ability to  request a                                                               
change in  rates.  Representative  Samuels opined that,  in fact,                                                               
the state  may change  its stance  and all  parties will  have an                                                               
opportunity to appeal to FERC for its decisions.                                                                                
                                                                                                                                
10:52:08 AM                                                                                                                   
                                                                                                                                
COMMISSIONER  GALVIN responded  that  the state  can not  predict                                                               
what an entity's motivation will be  at the time of an expansion.                                                               
What is known,  he said, is that almost without  exception, it is                                                               
in  the state's  interest to  have rolled-in  rates.   The state,                                                               
therefore, wishes to bind an  entity that receives inducements to                                                               
make sure  that it  is consistent;  thereby recognizing  that the                                                               
entity may  have different motivations  at the time  the proposal                                                               
is submitted.   The bill provides  the state with the  ability to                                                               
change its stance on rolled-in  rate treatment, and the state can                                                               
release the applicant  from its obligation if necessary.   At the                                                               
outset,  however,  it is  in  the  state's  interest to  tie  the                                                               
requirement of rolled-in  rates to the value the  state puts into                                                               
the up-stream.                                                                                                                  
                                                                                                                                
10:53:59 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  RAMRAS expressed  his  empathy  with the  state's                                                               
point of  view.   However, he  said, there  are too  many unknown                                                               
variables and elasticity is needed.  He remarked:                                                                               
                                                                                                                                
     ...  I find  myself  appreciating  the elasticity  that                                                                    
     Representative Samuels  is advocating for,  even though                                                                    
     it  slows   the  process,  it   brings  FERC   back  in                                                                    
     incrementally.    It  affects  negatively  the  ensuing                                                                    
     expansions,  but I  like what  it does  to the  overall                                                                    
     architecture.  ...  When  I weigh  the  two  points  on                                                                    
     number 19, see the  administration's point of view, see                                                                    
     Representative  Samuels's point  of  view  and I  think                                                                    
     that  the  amendment   offers  elasticity  through  the                                                                    
     licensee phase, so I'm going  to be voting yes, for the                                                                    
     amendment.                                                                                                                 
                                                                                                                                
10:56:10 AM                                                                                                                   
                                                                                                                                
MR. BULLOCK reminded the committee  that FERC would be making the                                                               
decisions, and the  people making the arguments  before FERC will                                                               
include the initial shippers, the  state, the pipeline owner, and                                                               
the explorers.                                                                                                                  
                                                                                                                                
10:56:53 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE DOOGAN said:                                                                                                     
                                                                                                                                
     ... if  there's actually an incentive  that ... resides                                                                    
     in this language and our  primary concern is to get gas                                                                    
     at  the open  season and  our secondary  concern is  to                                                                    
     encourage  exploration, then  it seems  to me  that I'm                                                                    
     going  to vote  in favor  of the  amendment because  if                                                                    
     there is  an incentive  that resides there,  it resides                                                                    
     in the right place.                                                                                                        
                                                                                                                                
10:57:29 AM                                                                                                                   
                                                                                                                                
CHAIR KOHRING  withdrew his  objection to  [Conceptual] Amendment                                                               
19.                                                                                                                             
                                                                                                                                
REPRESENTATIVE DAHLSTROM objected.                                                                                              
                                                                                                                                
10:58:44 AM                                                                                                                   
                                                                                                                                
A roll  call vote  was taken.   Representatives  Samuels, Ramras,                                                               
Doogan,  Olson,  and  Kohring  voted  in  favor  of  [Conceptual]                                                               
Amendment  19.    Representatives Kawasaki  and  Dahlstrom  voted                                                               
against it.  Therefore, [Conceptual]  Amendment 19 was adopted by                                                               
a vote of 5-2.                                                                                                                  
                                                                                                                                
[HB 177 was held over.]                                                                                                         

Document Name Date/Time Subjects