Legislature(2009 - 2010)BARNES 124

02/26/2010 01:00 PM RESOURCES


Download Mp3. <- Right click and save file as

Audio Topic
01:06:11 PM Start
01:06:22 PM HB369
02:59:37 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 369 IN-STATE PIPELINE MANAGER/TEAM/COMMITTEE TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
             HB 369-IN-STATE PIPELINE/ MANAGER/TEAM                                                                         
                                                                                                                                
1:06:22 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  announced that  the only  order of  business is                                                               
HOUSE BILL NO.  369, "An Act relating to an  in-state natural gas                                                               
pipeline,  the office  of in-state  gasline project  manager, the                                                               
Joint  In-State  Gasline  Development   Team,  and  the  In-State                                                               
Gasline  Steering  Committee;  and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
1:07:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MIKE  CHENAULT, Alaska State  Legislature, sponsor                                                               
of  HB  369,  paraphrased  from  the  following  written  sponsor                                                               
statement [original punctuation provided]:                                                                                      
                                                                                                                                
     House Bill 369 was introduced  as an effort to expedite                                                                    
     the process for an in-state  natural gas pipeline.  The                                                                    
     in-state gasline has been a  topic of discussion in the                                                                    
     Legislature  and the  Administration  for  a number  of                                                                    
     years.    Currently,  there   are  two  separate  state                                                                    
     entities, the Alaska  Natural Gas Development Authority                                                                    
     and  the in-state  gasline  coordinator,  working on  a                                                                    
     project.   House Bill 369  combines these  two entities                                                                    
     along with the Department  of Transportation and Public                                                                    
     Facilities  and  the  Alaska  Railroad  Corporation  to                                                                    
     create  a  Joint   In-state  Gasline  Development  Team                                                                    
     within  the Office  of the  Governor.   The Development                                                                    
     Team is to ensure  the in-state gasline is construction                                                                    
     ready by July 1, 2011 with  gas flowing by 2015.  It is                                                                    
     my hope the Development Team  will be able to focus the                                                                    
     state's   efforts  in   putting  a   construction  plan                                                                    
     together and leverage the best  ideas and data to get a                                                                    
     gasline built.                                                                                                             
                                                                                                                                
     The Department of  Transportation and Public Facilities                                                                    
     and the  Alaska Railroad  Corporation were  included as                                                                    
     members  of  the team  due  primarily  to their  having                                                                    
     existing  rights  of  way  which  could  speed  up  any                                                                    
     permitting  process that  may  need  to be  undertaken.                                                                    
     The  Alaska  Railroad   Corporation  also  has  bonding                                                                    
     ability  which  could  be  an  answer  in  financing  a                                                                    
     gasline.                                                                                                                   
                                                                                                                                
     The  Development Team  will cover  all  aspects of  the                                                                    
     line's  development   and  are   to  select   the  most                                                                    
     economically  sound  route  that will  deliver  gas  to                                                                    
     Alaskans,  plan permitting  and  construction by  using                                                                    
     existing rights  of way and  take any  action necessary                                                                    
     to get the project underway as soon as possible.                                                                           
                                                                                                                                
     House  bill  369  also   creates  an  In-state  Gasline                                                                    
     Steering    Committee    to    provide    advice    and                                                                    
     recommendations to the development  team.  Their duties                                                                    
     are  spelled  out  within the  legislation.    Proposed                                                                    
     members  of  the  Steering   Committee  come  from  the                                                                    
     private sector, municipalities,  state agencies and the                                                                    
     two presiding officers of the Legislature.                                                                                 
                                                                                                                                
     The bill  provides for an  expedited review  and action                                                                    
     process  and  the  sharing   of  information  that  may                                                                    
     already have  been accumulated or completed.   The bill                                                                    
     also   requires  that   state   agencies  or   entities                                                                    
     cooperate  with  and  give  priority  to  requests  for                                                                    
     information from the Development Team.                                                                                     
                                                                                                                                
1:12:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT added  that  an  in-state gasline  would                                                               
provide economic opportunities and  supply Alaskans' energy needs                                                               
for many  years.  It  is time for Alaska  to move forward  and an                                                               
in-state gasline gives the opportunity to  do just that.  He held                                                               
up a garden spade and quipped that he is shovel-ready.                                                                          
                                                                                                                                
CO-CHAIR NEUMAN,  in regard  to the 2015  deadline for  gas flow,                                                               
inquired whether specific measuring  sticks have been established                                                               
for dates along the way to ensure that that deadline is met.                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT responded  that such  a timeline  is not                                                               
available today, but the in-state  coordinator is working on that                                                               
process and the Alaska Natural  Gas Development Authority (ANGDA)                                                               
has  its own  timelines on  a project.   He  is pushing  for this                                                               
combined  group   to  come  out   with  that  information.     He                                                               
acknowledged that  this is  an aggressive  timeline for  having a                                                               
project by 2011.   However, he said this project  has been worked                                                               
on for years and it is time  to quit studying the project and put                                                               
together  the  information  that  has already  been  gathered  to                                                               
actually build a pipeline.                                                                                                      
                                                                                                                                
1:16:51 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN said  he is  of the  same opinion  about meshing                                                               
everything together.   He cautioned  that this timeline  could be                                                               
thrown  forward  or  back  depending  upon  a  sea  lift  or  gas                                                               
treatment  plant in  Prudhoe Bay  and that  right now,  while the                                                               
economy  is  slow,  would  be  a  good  time  to  start  ordering                                                               
materials.    He  asked  whether there  would  be  penalties  for                                                               
missing  the dates,  or  whether the  measurement  would be  done                                                               
through reports to the legislature.                                                                                             
                                                                                                                                
REPRESENTATIVE CHENAULT  concurred the  dates are  aggressive and                                                               
the timeline could change.   Some people say being aggressive can                                                               
increase the  costs, he related.   However, [as a  contractor] he                                                               
has never  worked on a construction  project that did not  have a                                                               
deadline, and  the sooner  a contractor  completes a  project the                                                               
more money in the contractor's pocket.                                                                                          
                                                                                                                                
CO-CHAIR NEUMAN added  he thinks the project could  come in under                                                               
cost  by  having the  aggressive  timeline  and starting  to  get                                                               
things built in the factory.                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT agreed.                                                                                                 
                                                                                                                                
1:19:48 PM                                                                                                                    
                                                                                                                                
TOM  WRIGHT, Staff,  Representative Mike  Chenault, Alaska  State                                                               
Legislature, provided  a sectional analysis  of HB 369.   He said                                                               
Section 1 would  add a new chapter, Chapter  34: In-State Natural                                                               
Gas Pipeline, and new sections to  AS 38, which deals with public                                                               
lands.   Sec. 38.34.010  would create  the position  and describe                                                               
the  duties  of  an  in-state  gasline  project  manager  who  is                                                               
appointed by  the governor.   There is  currently no  statute for                                                               
such  a manager,  so a  statutory provision  is necessary  to put                                                               
that  person into  the  position of  the  Joint In-state  Gasline                                                               
Development Team with certain duties.                                                                                           
                                                                                                                                
1:21:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  inquired  whether this  proposed  project                                                               
manager and the current  in-state gas project manager/coordinator                                                               
would work in parallel positions.                                                                                               
                                                                                                                                
MR.  WRIGHT replied  no, it  would be  the same  person and  that                                                               
would be  the person currently holding  the coordinator position.                                                               
He related  that Legislative Legal and  Research Services advised                                                               
that statutory  language is needed  because this person  would be                                                               
in  the administrative  branch.   This position  would be  filled                                                               
until one year after completion of the project, he added.                                                                       
                                                                                                                                
1:22:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  noted  that  page 2,  lines  9-12,  would                                                               
require written  monthly progress reports,  but that no  due date                                                               
for the  reports is specified  in the  language.  He  suggested a                                                               
due date be defined for the reports and added to the language.                                                                  
                                                                                                                                
MR. WRIGHT answered that the sponsor  would be willing to look at                                                               
such an amendment.                                                                                                              
                                                                                                                                
CO-CHAIR  JOHNSON  pointed out  that  there  are several  cleanup                                                               
amendments that will be presented.                                                                                              
                                                                                                                                
MR. WRIGHT reiterated that the  sponsor is amenable to looking at                                                               
language specifying a timeline for the reports.                                                                                 
                                                                                                                                
CO-CHAIR  JOHNSON noted  that Representative  Seaton's suggestion                                                               
is not included in any of the cleanup amendments.                                                                               
                                                                                                                                
MR.  WRIGHT, in  response to  Representative Seaton,  stated that                                                               
the  fifteenth  of the  month  following  the completion  of  the                                                               
previous  month's  activities  would   suffice  for  the  written                                                               
monthly report deadline.                                                                                                        
                                                                                                                                
1:24:40 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN,  in regard to  establishing the  project manager                                                               
within the governor's office, related  there is currently concern                                                               
among legislators,  including himself, that an  in-state pipeline                                                               
is being slow-tracked due to  fear of competition from the large-                                                               
diameter line  created through the Alaska  Gasline Inducement Act                                                               
(AGIA).   He said this concern  is caused by the  current project                                                               
manager  being housed  within the  Department of  Administration.                                                               
He  asked how  a manager  appointed by  the governor  and in  the                                                               
governor's office will stand alone and be separated from that.                                                                  
                                                                                                                                
MR. WRIGHT responded  that this is addressed  in further sections                                                               
of the  bill, but the  whole team would  be within the  office of                                                               
the governor.  To accomplish  what was wanted to be accomplished,                                                               
the  team had  to be  put under  the control  of a  state agency,                                                               
which  he will  explain  later  in the  sectional  analysis.   An                                                               
expedited  process is  only possible  by having  this development                                                               
team within the administration.                                                                                                 
                                                                                                                                
1:27:13 PM                                                                                                                    
                                                                                                                                
MR. WRIGHT  resumed his sectional analysis,  explaining that Sec.                                                               
38.34.020 would  provide for  an expedited  review and  action by                                                               
state agencies.   Any state  agency conducting and  taking action                                                               
relating to the  in-state gasline shall be expedited.   The state                                                               
agency may not include in  any project certificate, right-of-way,                                                               
permit  or other  authorization issued  to a  licensee a  term or                                                               
condition that  is not  required by law  if the  in-state project                                                               
manager determines the term or  condition would prevent or impair                                                               
the expeditious  construction and  operation or expansion  of the                                                               
in-state gasline.   A  state agency may  not, unless  required by                                                               
law, amend  or abrogate any certificate,  right-of-way, permit or                                                               
other authorization issued  to a licensee if  the project manager                                                               
determines  the action  would prevent  or impair  the expeditious                                                               
construction and operation or expansion of the in-state gasline.                                                                
                                                                                                                                
1:28:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON drew  attention to the language  on page 2,                                                               
line  17, "Notwithstanding  any contrary  provision of  law," and                                                               
line 19, "that is not required  by law".  He interpreted the line                                                               
17  language  as abrogating  the  provisions  of law  related  to                                                               
rights-of-way or  permits and asked  whether this is  the intent.                                                               
He suggested a clarification of  the language because it seems to                                                               
him that  it is saying  no other  law applies and  this provision                                                               
takes precedence over everything else.                                                                                          
                                                                                                                                
MR.  WRIGHT replied  the  intent is  that,  not withstanding  any                                                               
other law,  this is to  be followed.  He  said he thinks  this is                                                               
more  drafting  style  than  anything   else  and  suggested  the                                                               
question be  directed to  the bill  drafter, Ms.  Tam Cook.   The                                                               
intent is that agencies are  to cooperate and provide information                                                               
in an expedited manner to  the Joint In-state Gasline Development                                                               
Team unless something prohibits this,  such as a natural disaster                                                               
that takes an agency's time away from the gasline.                                                                              
                                                                                                                                
1:31:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  stated  that  unless he  is  reading  the                                                               
language wrong,  "Notwithstanding any contrary provision  of law"                                                               
provides that a right-of-way permit  is not needed as required by                                                               
other law because  this takes precedence over all other  law.  He                                                               
offered to ask Ms. Cook the question.                                                                                           
                                                                                                                                
MR. WRIGHT agreed it would be beneficial to ask Ms. Cook.                                                                       
                                                                                                                                
CO-CHAIR NEUMAN  said he  reads this language  as meaning  an in-                                                               
state gasline will become the number one priority for Alaska.                                                                   
                                                                                                                                
MR. WRIGHT  responded that  he is not  trying to  avoid answering                                                               
Representative  Seaton's   question;  sometimes   drafting  style                                                               
stymies him  as well.   He agreed  with Co-Chair Neuman  that the                                                               
intent is to plow forward.                                                                                                      
                                                                                                                                
1:33:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  said she  reads  page 2,  line 19,  as                                                               
meaning that the project manager  can require agencies to do what                                                               
the manager requests.                                                                                                           
                                                                                                                                
MR. WRIGHT replied yes.                                                                                                         
                                                                                                                                
REPRESENTATIVE  P.  WILSON added  that  she  is questioning  this                                                               
because  there   may  be  other   projects  that  are   going  on                                                               
simultaneously that may  be just as important to  someone else as                                                               
is the  gasline to the  project manager.  Therefore,  this sounds                                                               
to her like  the state is going to stop  everything else until an                                                               
in-state gasline is done.                                                                                                       
                                                                                                                                
MR. WRIGHT  answered yes, that  could happen  if it was  taken to                                                               
that  letter.   However,  common sense  will  likely prevail  and                                                               
there  are ample  state employees  working on  other things  that                                                               
will not be involved in this project.                                                                                           
                                                                                                                                
1:35:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON said there is a perception of slow rolling.                                                                    
                                                                                                                                
REPRESENTATIVE  P.  WILSON  argued  that  those  parts  of  state                                                               
government that are slowing things down should be fixed.                                                                        
                                                                                                                                
CO-CHAIR JOHNSON responded he is  unsure that can be done because                                                               
of the  separation of powers,  but that Representative  P. Wilson                                                               
has struck the nail on the head.                                                                                                
                                                                                                                                
1:37:17 PM                                                                                                                    
                                                                                                                                
MR.  WRIGHT  continued his  sectional  analysis.   He  said  Sec.                                                               
38.34.030 would establish the  Joint In-state Gasline Development                                                               
Team  within  the  governor's  office   for  the  reasons  stated                                                               
previously and  would name the Alaska  Railroad's chief executive                                                               
officer as the  chair.  The development team would  be allowed to                                                               
hire staff, enter  into contracts, and exercise  any other powers                                                               
it needs to carry out its functions.                                                                                            
                                                                                                                                
MR. WRIGHT explained that Sec.  38.34.040 describes the duties of                                                               
the  development team.   These  duties  would be  to ensure  that                                                               
construction  for an  in-state gasline  is ready  to commence  by                                                               
July 1,  2011 and  to take  any necessary  actions to  enable the                                                               
flow of  natural gas  by 2015.   The  team is  to select  a route                                                               
that:   runs from the North  Slope to tidewater that  is the most                                                               
economical, will provide gas to  the greatest number of residents                                                               
at a reasonable cost, uses  state land and existing state highway                                                               
and railroad rights  of way to the maximum  extent, uses existing                                                               
highway  and  railroad  bridges, gravel  pits,  equipment  yards,                                                               
maintenance  facilities,   and  other  existing   facilities  and                                                               
resources  to the  maximum extent  possible.   He noted  that the                                                               
sponsor  will  have an  amendment  that  addresses the  issue  of                                                               
providing  gas  to   the  greatest  number  of   residents  at  a                                                               
reasonable cost.   Team duties would  also be to:   identify land                                                               
or  rights of  ways that  must be  obtained for  construction and                                                               
operation of  the in-state gasline  and take necessary  action to                                                               
enable the  Department of Transportation  & Public  Facilities to                                                               
acquire those interests; prepare  plans and designs necessary for                                                               
the construction  of the in-state  gasline; identify  all permits                                                               
and  applications needed  to construct  the  gasline and  proceed                                                               
with  applications for  those permits  and licenses;  prepare and                                                               
update   estimates   of   construction   and   other   costs   of                                                               
construction; and take any necessary  action so that construction                                                               
may begin by July 1, 2011.                                                                                                      
                                                                                                                                
1:39:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  inquired whether the term  "economical" as                                                               
used on page  3, line 18, means the most  economical to build, or                                                               
to operate, or serves the most people for the least cost.                                                                       
                                                                                                                                
MR. WRIGHT replied the sponsor  is looking at the most economical                                                               
to construct.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON   asked  whether  the  sponsor   would  be                                                               
amenable to an amendment that clarifies this.                                                                                   
                                                                                                                                
MR. WRIGHT replied yes.                                                                                                         
                                                                                                                                
REPRESENTATIVE CHENAULT nodded his head yes.                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON added  that saying  the  most economical  would                                                               
also  lower  the tariffs  by  the  nature  of building  the  most                                                               
economical, but that the clarification would be appreciated.                                                                    
                                                                                                                                
1:40:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN asked  whether this  setup would  be a  separate                                                               
corporation like the Alaska Railroad.   He said he is asking this                                                               
in regard to  state procurement codes and  guidelines and whether                                                               
all of  this could be done  faster when the entity  is a separate                                                               
corporation.                                                                                                                    
                                                                                                                                
MR.  WRIGHT answered  that  page  3, line  8,  provides that  the                                                               
development team  may enter  into contracts;  they are  not under                                                               
the procurement  code.  In  further response, he  reiterated that                                                               
the team  would not be  under the  state procurement code.   [See                                                               
differing response of Ms. Tam Cook under 1:49:53 p.m.]                                                                          
                                                                                                                                
REPRESENTATIVE  P. WILSON  inquired whether  that means  the team                                                               
does not have to issue requests for proposals (RFPs).                                                                           
                                                                                                                                
MR. WRIGHT  responded that the  team would  not have to  do RFPs.                                                               
[See differing response of Ms. Tam Cook under 1:49:53 p.m.]                                                                     
                                                                                                                                
1:42:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  presumed the  authority there would  be to                                                               
do sole-source contracting dependent upon the project manager.                                                                  
                                                                                                                                
MR. WRIGHT  replied this  would be  under the  development team's                                                               
purview, not solely with the in-state gasline project manager.                                                                  
                                                                                                                                
CO-CHAIR JOHNSON clarified  it is not being said  that a pipeline                                                               
would  be built  as  a sole-source  project.   This  is just  the                                                               
developing of the team and some of the information.                                                                             
                                                                                                                                
MR. WRIGHT added  that this is to obtain the  information that is                                                               
needed  to construct  the gasline,  such as  engineering and  any                                                               
other actions necessary to get to the construction stage.                                                                       
                                                                                                                                
REPRESENTATIVE  P. WILSON  surmised that  what is  being said  is                                                               
that an in-state gasline project  would not be subject to jumping                                                               
through  as many  hoops as  a federal  project, which  would save                                                               
time and money.                                                                                                                 
                                                                                                                                
MR. WRIGHT answered yes, unless  the gasline goes through federal                                                               
land, which would be avoided at all cost.                                                                                       
                                                                                                                                
1:44:31 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON returned  to  Representative Seaton's  question                                                               
regarding Sec. 38.34.020.                                                                                                       
                                                                                                                                
REPRESENTATIVE SEATON reiterated his  previous question in regard                                                               
to  the  language  on  page  2,  line  17,  "Notwithstanding  any                                                               
contrary provision  of law," and  the language on line  19, "that                                                               
is not required by law".                                                                                                        
                                                                                                                                
TAM COOK, Director, Legislative  Legal Counsel, Legislative Legal                                                               
and  Research  Services,  Legislative Affairs  Agency,  responded                                                               
that  the state  agency would  be required  to continue  to apply                                                               
other law, but it could  not include additional requirements that                                                               
the agency  might believe particular to  this particular project.                                                               
This proposed  language is modeled  on AS 43.90.260(b),  which is                                                               
the language  that currently applies to  the in-state coordinator                                                               
under existing law.                                                                                                             
                                                                                                                                
1:46:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  understood Ms. Cook  to be saying  that if                                                               
the proposed  gasline project manager  determines that a  term or                                                               
condition would  prevent or delay  the building date  beyond July                                                               
1, 2011,  the state  agencies would still  have the  authority to                                                               
put in  all the  conditions that  they are  required to  do under                                                               
existing law.                                                                                                                   
                                                                                                                                
MS.  COOK replied  she believes  that is  correct.   The language                                                               
comes  directly out  of the  2007 Alaska  Gasline Inducement  Act                                                               
(AGIA), and it has not yet been construed as far as she knows.                                                                  
                                                                                                                                
REPRESENTATIVE  P. WILSON  reiterated  her  supposition that  the                                                               
language  on page  2, line  19,  would mean  the project  manager                                                               
could require agencies to do what the manager requests.                                                                         
                                                                                                                                
MS. COOK answered that that is  exactly what it would mean and it                                                               
would be  akin to the  powers that the Alaska  Gasline Inducement                                                               
Act attempts to give to the AGIA coordinator.                                                                                   
                                                                                                                                
1:48:46 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN inquired  whether the  current in-state  gasline                                                               
coordinator has that authority.                                                                                                 
                                                                                                                                
MS. COOK responded  yes, it is available in AS  43.90.260(b).  In                                                               
further response,  she said the  language in HB 369  is precisely                                                               
modeled  on  that,  except  the  name of  the  officer  has  been                                                               
changed.                                                                                                                        
                                                                                                                                
MS.  COOK,  in  response  to  Co-Chair  Johnson,  clarified  that                                                               
something new would  be created in that a similar  power would be                                                               
given  to this  new  state official.   The  existing  act is  not                                                               
appealed, amended,  or changed in  any way,  so there is  still a                                                               
similar power that is vested  under the Alaska Gasline Inducement                                                               
Act and its coordinator.                                                                                                        
                                                                                                                                
1:49:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  stated it  seems the  power that  would be                                                               
given to the gasline development  team under Sec. 38.34.040(b)(6)                                                               
on  page 4,  line  5, is  extremely  broad.   He  asked what  the                                                               
constraints would be on the team under this provision.                                                                          
                                                                                                                                
MS.  COOK replied  she believes  this power  is indeed  extremely                                                               
broad  and she  expects it  would be  circumscribed only  by laws                                                               
that precisely conflict.                                                                                                        
                                                                                                                                
REPRESENTATIVE  SEATON  inquired  whether the  breadth  would  go                                                               
beyond  the  permitting and  licenses  to  other aspects,  be  it                                                               
workforce   development,   procurement  codes,   or   sole-source                                                               
contracting.                                                                                                                    
                                                                                                                                
MS. COOK  answered that  even though it  is extremely  broad, she                                                               
does  not think  it  would  enable an  action  to  be taken  that                                                               
violates  an  existing  law.     For  example,  nothing  in  this                                                               
particular  legislation  exempts   this  particular  agency  from                                                               
requirements of the procurement code.                                                                                           
                                                                                                                                
CO-CHAIR JOHNSON corrected his  previous misunderstanding in this                                                               
regard,  and clarified  that according  to  Ms. Cook's  statement                                                               
everything  under HB  369  would be  subject  to the  procurement                                                               
code, RFPs, and basic laws.                                                                                                     
                                                                                                                                
1:53:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  referenced  Sec.  38.34.040(b)(6)  on                                                               
page  4, line  5,  and  posed a  scenario  in  which the  gasline                                                               
development team  determines that  the only way  construction can                                                               
begin on  July 1,  2011, is  if the  pipe is  ordered today.   He                                                               
asked whether it would be within the team's purview to do so.                                                                   
                                                                                                                                
MS.  COOK responded  she thinks  that the  team would  have broad                                                               
authority  to  enter  into  contracts within  the  scope  of  the                                                               
procurement code and  to solicit requests for  proposals and that                                                               
sort of thing,  but the team's ability to execute  these would be                                                               
subject  to appropriations  available  to them  for the  purpose.                                                               
There is the requirement that  appropriations be available to any                                                               
agency that enters into a contract.                                                                                             
                                                                                                                                
1:54:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  commented  that it  is  appealing  to                                                               
appoint someone  as pipeline  manager and telling  him or  her to                                                               
steam right through  and get it done.  He  presumed that the most                                                               
economical provision  on page 3,  line 18, would pertain  only to                                                               
the  construction cost  of the  gasline without  consideration of                                                               
other  costs such  as doing  the project  another way,  waiting a                                                               
year, state ownership, or a mainline contract.                                                                                  
                                                                                                                                
MS. COOK  replied that page  3, line  18, is a  subparagraph that                                                               
relates  to the  process of  selecting  a route  for an  in-state                                                               
natural gas pipeline,  so the proposed development  team would be                                                               
required to  select a  route that  is the  most economical.   The                                                               
team would be required to consider three other things as well.                                                                  
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  said  he  is  trying  to  see  if  it                                                               
excludes other things that may bring down the cost.                                                                             
                                                                                                                                
CO-CHAIR JOHNSON added he thinks what  is being dealt with is the                                                               
selection of  the most  economical route as  opposed to  the most                                                               
economical pipe or actually starting the construction.                                                                          
                                                                                                                                
1:56:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON surmised the  bill's proposed timeline would                                                               
have gas in Fairbanks four  years earlier than anything else that                                                               
is currently being looked at.                                                                                                   
                                                                                                                                
REPRESENTATIVE  CHENAULT   answered  that  he  feels   it  is  an                                                               
aggressive timeline  and the  state does not  have the  luxury to                                                               
wait  for  someone else  to  control  its  destiny.   In  further                                                               
response,  he said  he believes  the state  would be  buying pipe                                                               
considerably  earlier  than  would  be the  case  for  any  other                                                               
project that has been laid out thus far.                                                                                        
                                                                                                                                
REPRESENTATIVE OLSON  inquired what would  be done about  the 0.5                                                               
billion cubic feet per day (Bcf/d) limit.                                                                                       
                                                                                                                                
REPRESENTATIVE CHENAULT responded he does  not have the answer to                                                               
that  and it  may be  another question  the legislature  needs to                                                               
take up  at some  future time.   He offered  his belief  that the                                                               
current in-state  gas pipeline team  is looking at  three options                                                               
for  gas  flow  through  an  in-state line  -  250  million,  500                                                               
million, and 1 billion cubic feet of  gas per day.  The costs for                                                               
each option  are being  looked at,  including the  differences in                                                               
tariff rates.   In further response, he said he  is does not know                                                               
if this  could be fixed in  the House Finance Committee  as he is                                                               
no longer on that committee.                                                                                                    
                                                                                                                                
1:59:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  said if  the numbers shake  out that  the state                                                               
must look  at exceeding the  0.5 Bcf/d, then knowing  this sooner                                                               
would be  much better  than later  given the  cost will  be three                                                               
times greater.                                                                                                                  
                                                                                                                                
REPRESENTATIVE CHENAULT replied he wishes  the state had the need                                                               
for  0.5 Bcf/d  in Alaska  because that  would mean  Alaskans are                                                               
working and the economy is thriving.                                                                                            
                                                                                                                                
CO-CHAIR NEUMAN, in  regard to the 0.5 Bcf/d,  offered his belief                                                               
that if  the state were  to sell off  and no longer  be involved,                                                               
and industry wanted to have  throughput of more than 0.5 Bcf/day,                                                               
then it would not matter because  the state would not be involved                                                               
in that part.                                                                                                                   
                                                                                                                                
CO-CHAIR JOHNSON  answered that that  is debatable, but  it would                                                               
be a pleasant conversation to be having.                                                                                        
                                                                                                                                
2:01:18 PM                                                                                                                    
                                                                                                                                
MR.  WRIGHT  apologized  for misspeaking  about  the  procurement                                                               
question and  offered his appreciation  for the  clarification by                                                               
Ms. Cook.   He noted that the Joint  In-state Gasline Development                                                               
Team is to  report an outline of its plans  to the legislature by                                                               
July 1, 2011.   There is an appropriation question  that can only                                                               
be answered by the legislature,  depending upon what type of plan                                                               
the development team  derives.  Thus, the  legislature would have                                                               
final say  at some point  over how this  would be financed.   The                                                               
steering committee and  the team are being  tasked with providing                                                               
the legislature with answers to these questions.                                                                                
                                                                                                                                
MR.  WRIGHT  resumed  his  sectional  analysis.    He  said  Sec.                                                               
38.34.050  deals  with  cooperation and  access  to  information.                                                               
This section would  provide that the development  team has access                                                               
to   a  state   entity's   information,  including   confidential                                                               
information  that may  relate to  the in-state  gasline or  prove                                                               
useful  in planning,  design, construction,  or operation  of the                                                               
gasline;  the  development  team   must  keep  this  confidential                                                               
information confidential.   This section would  also provide that                                                               
all  state  agencies  are  to  cooperate  and  give  priority  to                                                               
requests   for    information   from   the    development   team.                                                               
Additionally,  the  development  team  is  to  avoid  duplicating                                                               
studies, plans,  and designs that  have already been  produced or                                                               
otherwise obtained by state entities.                                                                                           
                                                                                                                                
2:03:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  asked  whether  the  state  would  be  in                                                               
conflict  with  the  triple  damages  provision  [of  the  Alaska                                                               
Gasline Inducement  Act] should  an in-state gasline  be designed                                                               
with a capacity greater than 0.5 Bcf/d.                                                                                         
                                                                                                                                
REPRESENTATIVE CHENAULT  responded that  in regard  to economics,                                                               
the more gas  pushed through a line the cheaper  the tariffs.  He                                                               
said he does not  think the state has the answer  from any of the                                                               
studies  as to  whether crossing  over  that 0.5  Bcf/d gets  the                                                               
state into a legal  matter.  Unless it is a  very small line, any                                                               
gasline can  be pressured to  go above 0.5  Bcf/d.  These  may be                                                               
issues that have to be addressed in the future.                                                                                 
                                                                                                                                
2:05:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON, in  regard to  the provision  on page  4,                                                               
line 14, that state agencies  shall give priority to requests for                                                               
information from the  development team, said he  thinks this runs                                                               
directly  against  the  provision  to cooperate.    The  priority                                                               
language could  elevate the request above  the statutory language                                                               
in the  Alaska Gasline  Inducement Act  and could  possibly cause                                                               
legal damage to the state by going beyond the AGIA process.                                                                     
                                                                                                                                
REPRESENTATIVE  CHENAULT allowed  that Representative  Seaton may                                                               
be  right.    He  said  his understanding  is  that  the  state's                                                               
departments have  been given the  priority to assist on  the AGIA                                                               
project.    Therefore, his  argument  for  leaving this  priority                                                               
language  in the  bill  is that  as long  as  the Joint  In-state                                                               
Development Team gets  the same priority as the  AGIA process, he                                                               
does not believe  this would cross the legal line  of putting the                                                               
state  in  non-compliance   with  the  AGIA  process.     If  the                                                               
development team is  given more authority than is  given the AGIA                                                               
process, then he thinks the state would get into trouble.                                                                       
                                                                                                                                
2:08:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  said he is  raising this issue  given that                                                               
HB 369  would be  the later-passed law,  and if  the later-passed                                                               
law  requires that  its  provisions have  priority  he thinks  it                                                               
would  result   in  [elevating  the   priority  above   the  AGIA                                                               
language].   He requested  that the  sponsor consider  whether to                                                               
leave this language in the bill.                                                                                                
                                                                                                                                
CO-CHAIR JOHNSON  doubted that  giving an  equal priority  is the                                                               
same as  incentivizing.  He said  he thinks the treble  damage is                                                               
going to end  up in court regardless what other  kind of pipeline                                                               
is  built.   Cleanup of  the language  is up  to the  sponsor, he                                                               
added, but this is splitting hairs way down the road.                                                                           
                                                                                                                                
CO-CHAIR NEUMAN agreed with Co-Chair  Johnson.  He noted that the                                                               
administration  has  been looking  at  a  24-inch gasline,  which                                                               
optimally  carries about  1 Bcf/d.   He  offered his  belief that                                                               
AGIA  states  shipping, not  the  ability  to ship,  because  the                                                               
intent was not to further inhibit in the future.                                                                                
                                                                                                                                
REPRESENTATIVE CHENAULT  concurred and  said that, at  a minimum,                                                               
in-state gas should have the same priority as the other project.                                                                
                                                                                                                                
CO-CHAIR JOHNSON  said he  thinks HB 369  would set  up something                                                               
very  similar  to  the federal  government  pipeline  coordinator                                                               
whose job  it is  to cut  through all  the red  tape and  get the                                                               
process done expeditiously without inter-agency fighting.                                                                       
                                                                                                                                
REPRESENTATIVE P. WILSON urged this  be verified with Ms. Cook or                                                               
other legal counsel.                                                                                                            
                                                                                                                                
REPRESENTATIVE CHENAULT agreed to do so.                                                                                        
                                                                                                                                
2:11:25 PM                                                                                                                    
                                                                                                                                
MR. WRIGHT returned to his  sectional analysis and explained that                                                               
Sec. 38.34.060  deals with  conflicts of interest.   A  member of                                                               
the Joint In-state Development Team  would be required to make an                                                               
immediate disclosure if  he or she acquires, owns,  or controls a                                                               
direct  or indirect  interest in  property,  an organization,  or                                                               
business that might  be affected by the  in-state gasline project                                                               
or  other matters  under consideration  by the  development team.                                                               
This disclosure would  be part of the public record  and would be                                                               
included in the  minutes of the development  team's first meeting                                                               
after the disclosure has been made.                                                                                             
                                                                                                                                
MR.  WRIGHT  said Sec.  38.34.070  creates  the In-state  Gasline                                                               
Steering  Committee  within  the  governor's  office  to  provide                                                               
advice  to the  development team.   Members  would serve  without                                                               
compensation  but  would collect  per  diem  and travel  expenses                                                               
authorized for  boards and commissions.   The  steering committee                                                               
would select a chair and vice-chair from its membership.                                                                        
                                                                                                                                
2:12:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT,   in  response  to   Representative  P.                                                               
Wilson, stated  that the Alaska Permanent  Fund Corporation would                                                               
be included as one of a  number of different organizations on the                                                               
steering  committee  because  of   the  investing  and  financing                                                               
knowledge that  the fund would bring  to a project of  this size.                                                               
It is not  being said that the  fund should invest or  that it is                                                               
wanted for the fund to invest.   The fund has the state's biggest                                                               
pot of money and has done well on the state's investments.                                                                      
                                                                                                                                
CO-CHAIR  JOHNSON inquired  whether designating  a member  of the                                                               
legislature to an administrative branch is constitutional.                                                                      
                                                                                                                                
MR. WRIGHT responded that the sponsor  was advised of that by the                                                               
Legislative  Legal  and  Research  Services,  and  the  sponsor's                                                               
position is to fight it.                                                                                                        
                                                                                                                                
CO-CHAIR JOHNSON said he supports that.                                                                                         
                                                                                                                                
MR. WRIGHT  added this would  be part of the  steering committee,                                                               
which  provides  information  to   the  development  team.    The                                                               
development team is the one to  come up with the entire game plan                                                               
based on advice from steering committee members.                                                                                
                                                                                                                                
2:14:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON surmised  the corporation  referred to  on                                                               
page  5, lines  13-14, of  the bill  would be  a regional  Native                                                               
corporation.                                                                                                                    
                                                                                                                                
MR. WRIGHT replied correct.                                                                                                     
                                                                                                                                
REPRESENTATIVE   SEATON   presumed  the   nonprofit   corporation                                                               
referred  to on  page 5,  lines  15-16, of  the bill  would be  a                                                               
nonprofit formed under one of the regional corporations.                                                                        
                                                                                                                                
MR. WRIGHT answered correct.                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  asked whether tribal governments  would be                                                               
included in the steering committee.                                                                                             
                                                                                                                                
MR.  WRIGHT  responded  the  hope  is  that  these  regional  and                                                               
nonprofit corporations would represent those interests.                                                                         
                                                                                                                                
2:16:31 PM                                                                                                                    
                                                                                                                                
MR. WRIGHT,  in response  to Co-Chair Johnson,  said he  does not                                                               
believe  a village  corporation would  be considered  a nonprofit                                                               
corporation.   A  nonprofit corporation  would be  one of  the 13                                                               
original regional corporations and he  does not believe that goes                                                               
down to the village level.                                                                                                      
                                                                                                                                
CO-CHAIR JOHNSON offered  his belief that a nonprofit  could be a                                                               
nonprofit village  organization formed  by a  Native organization                                                               
under federal law.                                                                                                              
                                                                                                                                
MR. WRIGHT allowed that could be, as long as it is nonprofit.                                                                   
                                                                                                                                
REPRESENTATIVE GUTTENBERG  noted that  the Denali Borough  is not                                                               
listed as  a member of  the steering  committee.  He  pointed out                                                               
that the  steering committee  has an even  number of  members and                                                               
someone may want to address that it be made an odd number.                                                                      
                                                                                                                                
REPRESENTATIVE OLSON supposed that  the steering committee member                                                               
representing the  North Slope Borough  on page 5, line  23, would                                                               
be Inupiat.                                                                                                                     
                                                                                                                                
2:18:28 PM                                                                                                                    
                                                                                                                                
MR. WRIGHT commenced his sectional  analysis and stated that Sec.                                                               
38.34.090  deals  with conflicts  of  interest  for the  steering                                                               
committee  and  would  apply  the  same  provisions  as  for  the                                                               
development team.                                                                                                               
                                                                                                                                
MR.  WRIGHT  addressed Sec.  38.34.080,  which  provides for  the                                                               
steering  committee's  duties.    This  section  would  give  the                                                               
development team the  authority to assign specific  issues to the                                                               
steering   committee  and   the  committee   is  to   report  its                                                               
conclusions and recommendations to the development team.                                                                        
                                                                                                                                
2:19:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON,  in regard  to steering  committee members                                                               
representing  an   institution,  asked  whether  a   conflict  of                                                               
interest would be  based on the institution  being represented or                                                               
the individual personally.                                                                                                      
                                                                                                                                
MR.  WRIGHT replied  he reads  the bill  as meaning  individually                                                               
because, for  example, a municipality  might gain if  an in-state                                                               
gasline goes through.                                                                                                           
                                                                                                                                
CO-CHAIR JOHNSON  said a steering committee  member must disclose                                                               
a conflict but would not be excluded from participating.                                                                        
                                                                                                                                
REPRESENTATIVE SEATON agreed disclosure is appropriate.                                                                         
                                                                                                                                
2:21:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GUTTENBERG inquired  whether HB  369 tightens  or                                                               
loosens the disclosure of conflicts of interest.                                                                                
                                                                                                                                
MR. WRIGHT  allowed it  is loosened a  bit because  the financial                                                               
information disclosure  requirements that  are applied  to public                                                               
officials would not be required  of steering committee members as                                                               
otherwise no one would want to serve.   He added that a number of                                                               
people who  would be steering  committee members already  have to                                                               
file financial disclosure forms.                                                                                                
                                                                                                                                
REPRESENTATIVE CHENAULT  said the  pipeline coordinator  would be                                                               
giving the steering  committee a task that must  be reported back                                                               
with recommendations.   Steering  committee members would  not be                                                               
voting on  how the coordinator  moves the project  forward, which                                                               
is some of  the reasoning for lessening the  conflict of interest                                                               
requirements.                                                                                                                   
                                                                                                                                
2:23:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON referenced page  6, line 30, of the bill                                                               
and requested an explanation of AS 39.52.                                                                                       
                                                                                                                                
MR.  WRIGHT  responded that  AS  39.52  is the  Alaska  Executive                                                               
Branch Ethics Act,  and under HB 369 this act  would not apply to                                                               
a member of the steering committee.                                                                                             
                                                                                                                                
REPRESENTATIVE  P.   WILSON  surmised  that   steering  committee                                                               
members would  then not have to  abide by any of  the ethics that                                                               
are applied to legislators or the administration.                                                                               
                                                                                                                                
MR. WRIGHT  replied correct.   A steering committee  member would                                                               
have to disclose a conflict of  interest but would not be subject                                                               
to  financial disclosure  or the  other requirements  that public                                                               
officials must go  through.  In further response,  he pointed out                                                               
that  members of  the  development team  are  already subject  to                                                               
conflict  of interest  disclosure  [so  HB 369  does  not need  a                                                               
provision in this regard].                                                                                                      
                                                                                                                                
2:25:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON understood  that  under  Sec. 38.34.060  a                                                               
member of the Joint In-state  Gasline Development Team could have                                                               
a direct financial stake in what  is being decided by the team as                                                               
long as it is disclosed.                                                                                                        
                                                                                                                                
MR.  WRIGHT answered  that the  development team  individuals are                                                               
probably already  under the provisions  of AS 39.52,  although he                                                               
cannot say  for sure.   He agreed  that Representative  Seaton is                                                               
bringing up  a valid  point in  that the desire  is to  avoid any                                                               
conflict of interest.                                                                                                           
                                                                                                                                
REPRESENTATIVE SEATON  offered his  belief that  development team                                                               
members are  not exempt from  the Alaska Executive  Branch Ethics                                                               
Act, but it is good to point  out that the only provision is that                                                               
a financial conflict of interest must be disclosed.                                                                             
                                                                                                                                
MR. WRIGHT  responded that  members of  the development  team are                                                               
not  excluded  because  as  public officials  they  have  had  to                                                               
already file their financial information.                                                                                       
                                                                                                                                
2:27:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  pointed out  that the  project manager                                                               
would  be picked  by the  governor and  would therefore  be brand                                                               
new,  so  this  person  would   not  have  had  to  disclose  any                                                               
information.     Additionally,  the  project  manager   would  be                                                               
partially exempt under AS 39.25.120.                                                                                            
                                                                                                                                
MR. WRIGHT replied  that the sponsor has an amendment  to put the                                                               
project manager under exempt.                                                                                                   
                                                                                                                                
MR. WRIGHT concluded  his sectional analysis by  noting that Sec.                                                               
38.34.100  is  the  definitions section  in  which  the  in-state                                                               
natural gas pipeline and the North  Slope are defined.  Section 2                                                               
of the bill would amend  AS 39.25.120(c) to provide for partially                                                               
exempt  service   for  the  in-state  gasline   project  manager.                                                               
However,  the sponsor  has an  amendment  at the  request of  the                                                               
governor's  office  to  put the  manager  under  exempt  service.                                                               
Section 3 is the immediate effective date.                                                                                      
                                                                                                                                
2:28:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P.  WILSON  noted   that  the  administration  is                                                               
funneling  everything to  AGIA, and  that HB  369 would  have the                                                               
governor appoint  the in-state project  manager and others.   She                                                               
inquired  how  this bill  would  make  one  entity work  on  both                                                               
projects.                                                                                                                       
                                                                                                                                
REPRESENTATIVE CHENAULT answered he  hopes that the governor does                                                               
not have  to be made to  do this and  that this is a  project the                                                               
governor wants  to get on  board with.   There is  frustration in                                                               
regard to the  different entities that are working;  a date would                                                               
be added and authority would be  given to the manager - who would                                                               
not necessarily be  a different person - that is  similar to that                                                               
of the Alaska Railroad chief  executive officer.  He acknowledged                                                               
the governor  could select a  manager and give directions  to not                                                               
come back  to the legislature  with a completed project  by 2011.                                                               
However,  the   legislature  has   the  ability  to   affect  the                                                               
governor's  office and  budgets, as  well as  department budgets.                                                               
Unfortunately, the  legislature cannot do the  project itself and                                                               
must give the  authority to the administration  and a department.                                                               
He  said he  thinks the  current in-state  coordinator is  headed                                                               
down the right path, but he  believes there are other entities in                                                               
this  building and  departments across  the state  that feel  the                                                               
state should  be going in a  different direction.  This  is not a                                                               
sure-fire thing, but  it heads in the direction  of bringing back                                                               
a project that moves Alaska forward.                                                                                            
                                                                                                                                
2:33:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON surmised that  the bullet line envisioned by                                                               
Representative Chenault  would flow from  the north to  the south                                                               
and not from Cook Inlet upward.                                                                                                 
                                                                                                                                
REPRESENTATIVE CHENAULT  responded he wishes that  Cook Inlet had                                                               
the gas to  be able to ship  north to Fairbanks, but  such a fuel                                                               
supply has not  yet been found in  the inlet.  It  is known where                                                               
there is a minimum of 35  trillion cubic feet of gas; that supply                                                               
is 800  miles away  and it  is time for  the legislature  and the                                                               
governor  to get  on  board  with a  project  that puts  Alaskans                                                               
first, not others.                                                                                                              
                                                                                                                                
REPRESENTATIVE OLSON  commented that if  a similar bill  had been                                                               
before legislators three years ago,  the state would be about one                                                               
year away from gas.                                                                                                             
                                                                                                                                
REPRESENTATIVE CHENAULT agreed.                                                                                                 
                                                                                                                                
CO-CHAIR JOHNSON  said he shares  the sponsor's  frustrations and                                                               
he would  like nothing more than  a private entity coming  in and                                                               
saying that  this makes sense.   He said he thinks  the state has                                                               
signaled  that it  is closed  for business;  for example,  he has                                                               
talked  to companies  that drill  in  Cook Inlet  and that  build                                                               
pipelines and  both have said they  believe there is gas  in Cook                                                               
Inlet  but that  they are  not going  to do  business in  Alaska.                                                               
This  bill clearly  sends a  signal that  the state  is open  for                                                               
business.                                                                                                                       
                                                                                                                                
2:35:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN   moved  to  adopt  Amendment   1,  labeled  26-                                                               
LS1527\R.1,   Cook,  2/24/10,   written   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 1, line 13:                                                                                                           
           Delete "partially exempt service under AS                                                                            
     39.25.120"                                                                                                                 
          Insert "exempt service under AS 39.25.110"                                                                            
                                                                                                                                
     Page 7, line 6:                                                                                                            
          Delete "AS 39.25.120(c)"                                                                                              
          Insert "AS 39.25.110"                                                                                                 
                                                                                                                                
     Page 7, line 7:                                                                                                            
          Delete "(21)"                                                                                                         
          Insert "(43)"                                                                                                         
                                                                                                                                
REPRESENTATIVE OLSON objected for discussion purposes.                                                                          
                                                                                                                                
2:36:42 PM                                                                                                                    
                                                                                                                                
MR. WRIGHT  explained that Amendment  1 is at  the recommendation                                                               
of the  governor's office  because none of  the employees  in the                                                               
Office  of  the  Governor  are under  partially  exempt  service.                                                               
Amendment 1 would  change the partially exempt  service to exempt                                                               
service under AS 39.25.110.                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON noted  that exempt  service is  subject to                                                               
the Alaska Executive Branch Ethics Act.                                                                                         
                                                                                                                                
MR. WRIGHT replied correct.                                                                                                     
                                                                                                                                
CO-CHAIR  JOHNSON  added  that exempt  employees  "serve  at  the                                                               
pleasure."                                                                                                                      
                                                                                                                                
MR. WRIGHT answered correct.                                                                                                    
                                                                                                                                
REPRESENTATIVE  OLSON  removed his  objection.    There being  no                                                               
further objection, Amendment 1 was adopted.                                                                                     
                                                                                                                                
2:37:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN   moved  to  adopt  Amendment   2,  labeled  26-                                                               
LS1527\R.2,   Cook,  2/24/10,   written   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 6, line 3, following "Valdez":                                                                                        
          Insert ";                                                                                                             
               (Q)  an individual who represents the Denali                                                                     
     Borough"                                                                                                                   
                                                                                                                                
CO-CHAIR JOHNSON objected for purposes of explanation.                                                                          
                                                                                                                                
MR. WRIGHT allowed that during the  drafting of HB 369 the Denali                                                               
Borough  was  inadvertently left  out  of  the list  of  steering                                                               
committee members.  He apologized for this omission.                                                                            
                                                                                                                                
CO-CHAIR JOHNSON removed  his objection.  There  being no further                                                               
objection, Amendment 2 was adopted.                                                                                             
                                                                                                                                
2:38:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN   moved  to  adopt  Amendment   3,  labeled  26-                                                               
LS1527\R.3,   Cook,  2/24/10,   written   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 3, line 19:                                                                                                           
          Delete "the greatest number of"                                                                                       
                                                                                                                                
CO-CHAIR JOHNSON objected for purposes of explanation.                                                                          
                                                                                                                                
2:38:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT  explained  that  upon  looking  at  the                                                               
legislation it was determined that  by stating greatest number of                                                               
residents the  pipeline coordination  group was being  told which                                                               
route to run.   That is not what he  feels the legislature should                                                               
be involved with;  rather, there needs to be the  ability to look                                                               
at either project/either route and  a decision made on the facts.                                                               
He wants  it to  be clear  that it is  gas orientated,  not route                                                               
orientated.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG noted  that  residents  are people  as                                                               
compared  to utilities.   He  inquired whether  it could  include                                                               
utilities.                                                                                                                      
                                                                                                                                
REPRESENTATIVE CHENAULT responded that it  could, but it is known                                                               
that if  gas is to residents  of the state so  will the utilities                                                               
be.                                                                                                                             
                                                                                                                                
CO-CHAIR  JOHNSON   interjected  that  he  thinks   most  of  the                                                               
utilities in the state are cooperatives and represent residents.                                                                
                                                                                                                                
2:41:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN said  getting power  over to  Donlin Creek  Gold                                                               
Mine and the economies of scale  must be looked at in addition to                                                               
the greatest  number of  people.  The  project could  continue to                                                               
grow  from where  it is  today and  over to  western Alaska.   He                                                               
presumed  the sponsor's  intent is  to have  gas at  a reasonable                                                               
cost to the residents of the  state; for example, it would not be                                                               
for export of liquefied natural gas (LNG) to China.                                                                             
                                                                                                                                
REPRESENTATIVE CHENAULT replied that  all Alaska residents should                                                               
have the opportunity.   The hope is  - if the first  line is ever                                                               
constructed - that at a future  date it will effectively help all                                                               
Alaskans  across  the state,  but  certainly  not with  this  one                                                               
particular pipeline and certainly not  at the very beginning.  At                                                               
a  future  date  there  would  be  opportunities  for  additional                                                               
pipelines  or LNG  and other  options to  be able  to affect  the                                                               
energy  costs of  Alaskans.   He  does not  have  a problem  with                                                               
putting Alaskans  in there, but  he thinks residents  pretty much                                                               
covers the issue that needs to be covered.                                                                                      
                                                                                                                                
CO-CHAIR NEUMAN  said he does  not intend to offer  an amendment,                                                               
but only  wanted clarification from  the sponsor that  the intent                                                               
is residents of the state.                                                                                                      
                                                                                                                                
CO-CHAIR  JOHNSON  offered  his appreciation  for  this  language                                                               
because he thinks there is also  an opportunity for a pipeline to                                                               
have offtakes  for taking  high-value gas  and propanes  to other                                                               
parts of the state and he does  not wish to exclude the people in                                                               
those areas.   He removed his objection.  There  being no further                                                               
objection, Amendment 3 was adopted.                                                                                             
                                                                                                                                
2:44:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to  adopt  Conceptual Amendment  4,                                                               
stated as follows:                                                                                                              
                                                                                                                                
     Page 2, line 12:                                                                                                           
        Insert "Reports are due on the fifteenth of the                                                                         
     month following the month covered by the report."                                                                          
                                                                                                                                
CO-CHAIR  NEUMAN  objected.    He  said much  of  this  could  be                                                               
nitpicked  to death  and  he  feels a  date  is unnecessary;  for                                                               
example,  where  the  line  is  drawn if  the  fifteenth  of  the                                                               
following month falls on a weekend.                                                                                             
                                                                                                                                
REPRESENTATIVE SEATON argued  that a report due  date follows the                                                               
idea of  this bill  - it  sets a  deadline.   Without a  date the                                                               
monthly reports  could be  submitted six months  later.   The law                                                               
should be specific enough that  the people generating the reports                                                               
know when  they are due, whether  that due date is  the thirtieth                                                               
day of the month  following or some other date.   He said it does                                                               
not  matter  how many  days  it  is, there  just  needs  to be  a                                                               
timeline set for when they are due.                                                                                             
                                                                                                                                
2:47:37 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON  appreciated both  arguments,  but  said he  is                                                               
concerned about a date certain on the fifteenth.                                                                                
                                                                                                                                
REPRESENTATIVE SEATON withdrew Conceptual Amendment 4.                                                                          
                                                                                                                                
REPRESENTATIVE  SEATON moved  to  adopt  Conceptual Amendment  5,                                                               
stated as follows:                                                                                                              
                                                                                                                                
     [Page 2, line 12:]                                                                                                         
       [Insert] "Reports are due at the end of the month                                                                        
     following the month for which that report is covered."                                                                     
                                                                                                                                
CO-CHAIR  NEUMAN objected,  then  removed his  objection.   There                                                               
being no further objection, Conceptual Amendment 5 was adopted.                                                                 
                                                                                                                                
2:49:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to  adopt  Conceptual Amendment  6,                                                               
stated as follows:                                                                                                              
                                                                                                                                
     Page 3, line 18, after "economical":                                                                                       
          Insert "to construct"                                                                                                 
                                                                                                                                
CO-CHAIR NEUMAN objected.                                                                                                       
                                                                                                                                
REPRESENTATIVE SEATON noted that  the sponsor had previously said                                                               
this  amendment was  advisable and  inquired whether  the sponsor                                                               
still agrees.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  CHENAULT said  that is  the intent  so Conceptual                                                               
Amendment 2 would be acceptable.                                                                                                
                                                                                                                                
CO-CHAIR JOHNSON  clarified that this  is just picking  the route                                                               
and therefore he believes the amendment is appropriate.                                                                         
                                                                                                                                
CO-CHAIR NEUMAN contended the  amendment is unneeded wordsmithing                                                               
that could tie people's hands.  He maintained his objection.                                                                    
                                                                                                                                
A roll  call vote  was taken.   Representatives  Johnson, Seaton,                                                               
and  P.  Wilson  voted  in   favor  of  Conceptual  Amendment  6.                                                               
Representatives Neuman,  Guttenberg, and Olson voted  against it.                                                               
Therefore, Conceptual Amendment 6 failed by a vote of 3-3.                                                                      
                                                                                                                                
2:53:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to  adopt  Conceptual Amendment  7,                                                               
stated as follows:                                                                                                              
                                                                                                                                
     Page 4, lines 13-14:                                                                                                       
          Delete "and give priority to"                                                                                         
                                                                                                                                
CO-CHAIR NEUMAN objected.                                                                                                       
                                                                                                                                
REPRESENTATIVE SEATON expressed his  concern that including these                                                               
words in  the bill could run  afoul of other statutes.   Removing                                                               
the words  would get  around this  potential problem  while still                                                               
directing state agencies to cooperate.                                                                                          
                                                                                                                                
REPRESENTATIVE  P.  WILSON  commented that  she  questioned  this                                                               
language during  the sponsor's  testimony and  he assured  her at                                                               
the time that he  would check into it.  She  said she is hesitant                                                               
to do  something until the  sponsor does something  and therefore                                                               
her vote on adopting the amendment will be no.                                                                                  
                                                                                                                                
2:56:21 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN argued  that he thinks priority must  be given to                                                               
an in-state gasline and priority is  what Alaskans want.  He does                                                               
not think the  bill's current language gives  permission to break                                                               
the law of existing statute.                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON objected to  the amendment because he thinks                                                               
it will  cost time  and he does  not want to  be here  four years                                                               
from now trying to explain  to constituents why something has not                                                               
been started.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON said  there is  no intent  to slow  things                                                               
down;  rather, he  thinks it  avoids a  legal problem  that might                                                               
slow things  down.  He  withdrew Conceptual Amendment 7  with the                                                               
understanding that the sponsor plans  to check on this before the                                                               
bill's next hearing.                                                                                                            
                                                                                                                                
CO-CHAIR JOHNSON  held over HB 369  and said he will  open public                                                               
testimony when the bill is considered again on Monday, 3/1/10.                                                                  

Document Name Date/Time Subjects
HB 369.pdf HRES 2/26/2010 1:00:00 PM
HB 369
HB 369 Sponsor Statement.pdf HRES 2/26/2010 1:00:00 PM
HB 369
HB 369 Sectional Analysis.pdf HRES 2/26/2010 1:00:00 PM
HB 369
HB 369 Partially Exempt Service.pdf HRES 2/26/2010 1:00:00 PM
HB 369
HB 369 ADN Article 2.14.10.pdf HRES 2/26/2010 1:00:00 PM
HB 369
HB 369 Amend 1.pdf HRES 2/26/2010 1:00:00 PM
HB 369
HB 369 Amend 2.pdf HRES 2/26/2010 1:00:00 PM
HB 369
HB 369 Amend 3.pdf HRES 2/26/2010 1:00:00 PM
HB 369