Legislature(2007 - 2008)SENATE FINANCE 532

05/11/2007 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 6:00 pm --
+ HB 110 EXTEND REGULATORY COMMISSION OF ALASKA TELECONFERENCED
Moved CSHB 110(L&C) Out of Committee
+ HB 209 REGULATORY COMMISSION OF ALASKA TELECONFERENCED
Moved SCS CSHB 209(FIN) Out of Committee
+ HCR 8 RCA TASK FORCE TELECONFERENCED
Moved CSHCR 8(L&C) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                                                                                                                
     CS FOR HOUSE BILL NO. 177(FIN) am                                                                                          
     "An  Act  relating to  the  Alaska  Gasline Inducement  Act;                                                               
     providing inducements for the  construction of a natural gas                                                               
     pipeline  and shippers  that commit  to  use that  pipeline;                                                               
     establishing    the    Alaska   Gasline    Inducement    Act                                                               
     reimbursement   fund;  providing   for  an   Alaska  Gasline                                                               
     Inducement  Act coordinator;  making conforming  amendments;                                                               
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Stedman expressed that the  intent of this hearing is to                                                               
compare the  provisions of CS  HB 177(FIN)am, the  Alaska Gasline                                                               
Inducement Act  (AGIA) bill  which recently  passed the  House of                                                               
Representatives, to  its Senate  companion bill, CS  SB 104(FIN),                                                               
which recently passed  the Senate. To assist  in this comparison,                                                               
a copy  of CS HB 177(FIN)am  has been modified [copy  on file] to                                                               
highlight the  differences. The provisions that  differ are color                                                               
coded: the  House language  is identified  by blue  lettering and                                                               
the Senate language by red lettering.                                                                                           
                                                                                                                                
[NOTE: In  addition to  the color coding,  the House  language is                                                               
underlined  and the  Senate language  has  a strike-through  mark                                                               
across it.]                                                                                                                     
                                                                                                                                
Co-Chair  Stedman  informed the  Committee  that,  prior to  this                                                               
hearing,    his   office,    Senator    Huggins'   office,    and                                                               
representatives of  the Governor  Sarah Palin  Administration met                                                               
and  thoroughly reviewed  the bills.  The group  has developed  a                                                               
recommendation  as to  whether the  House or  Senate language  is                                                               
preferred in respect to each differing language matter.                                                                         
                                                                                                                                
Co-Chair Stedman identified the  first difference between the two                                                               
bills as  being in the  bill's title, page  1, line 3.  The House                                                               
language   "reimbursement"   is   preferred  to   the   "matching                                                               
contribution" language included in the Senate bill.                                                                             
                                                                                                                                
6:08:57 PM                                                                                                                    
                                                                                                                                
               Chapter 90. Alaska Gasline Inducement Act.                                                                       
                                                                                                                                
     Article 2. Alaska Gasline Inducement Act License.                                                                          
                                                                                                                                
Co-Chair  Stedman began  reviewing  the  differing provisions  in                                                               
sections of Chapter  90. Article 2, added to  Alaska Statute (AS)                                                               
43 by Section 1 of the bill.                                                                                                    
                                                                                                                                
               Section 43.90.110. Natural gas pipeline project                                                                  
          construction inducement., subsections (a)(1)(A) and                                                                   
          (a)(1)(B) (page 2 line 25 and line 30, respectively).                                                                 
                                                                                                                                
Co-Chair Stedman informed that the  preference in these instances                                                               
is  that the  House word  "reimbursements" be  utilized following                                                               
the word  "state's" rather than the  term "matching contribution"                                                               
as proposed by the Senate.                                                                                                      
                                                                                                                                
               Section 43.90.110. Nature gas pipeline project                                                                   
          construction inducement., subsection (a)(1)(C) (page                                                                  
          3, lines 4 through 6 and line 10)                                                                                     
                                                                                                                                
Co-Chair  Stedman  stated that  the  recommendation  is that  the                                                               
Senate  language  be  used.  Thus   the  language  "pursing  firm                                                               
transportation commitments in a  binding open season, to securing                                                               
financing for  the project,  or to"  would be  inserted following                                                               
"related  to" on  page  3,line 4.  The  phrase "lobbying  costs,"                                                               
would be  inserted following  "overhead costs,"  on page  3, line                                                               
10.                                                                                                                             
                                                                                                                                
6:09:25 PM                                                                                                                    
                                                                                                                                
               Section 43.90.130. Application requirements.,                                                                    
          subsection (9) (page 8 line 26)                                                                                       
                                                                                                                                
Co-Chair Stedman  voiced that the House  language "reimbursement"                                                               
is   recommended  over   the  Senate's   "matching  contribution"                                                               
language following the word "state's" on page 8 line 26.                                                                        
                                                                                                                                
6:10:04 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  announced  that  because  only  the  Committee                                                               
Members  had color  copies of  the  bill, he  would identify  the                                                               
House  language  as  that  which is  underlined  and  the  Senate                                                               
language as that which is struck-through with a line.                                                                           
                                                                                                                                
6:10:17 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  resumed his review of  language recommendations                                                               
in Article 2.                                                                                                                   
                                                                                                                                
               Section 43.90.130. Application requirements.,                                                                    
          subsection (17) (page 9, line 30)                                                                                     
                                                                                                                                
Co-Chair Stedman stated that the  recommendation is to retain the                                                               
House  language   "to  the  maximum  extent   permitted  by  law"                                                               
following "agreement"  on page 9  line 30. This language  was not                                                               
included in the Senate version of the bill.                                                                                     
                                                                                                                                
6:10:29 PM                                                                                                                    
                                                                                                                                
               Section 43.90.130. Application requirements.,                                                                    
          subsection (18) (Page 10 line 3)                                                                                      
                                                                                                                                
Co-Chair    Stedman   expressed    that   the    House   language                                                               
"reimbursement"   is   preferred   to  the   Senate's   "matching                                                               
contribution" following "state's" on page 10, line 3.                                                                           
                                                                                                                                
6:10:38 PM                                                                                                                    
                                                                                                                                
               Section 43.90.160. Notice, review, and comment.,                                                                 
          subsection (c) (page 11 lines 29 through 31)                                                                          
                                                                                                                                
Co-Chair Stedman  informed that the Senate  language is preferred                                                               
to that of  the House in this provision. The  language would read                                                               
"(c)  After the  commissioners  determine  that all  applications                                                               
that  have not  been rejected  are complete  under AS  43.90.140,                                                               
information provided by the applicants …".                                                                                      
                                                                                                                                
6:11:00 PM                                                                                                                    
                                                                                                                                
               Section 43.90.170. Application evaluation and                                                                    
          ranking. Subsection (b) (page 12 line 15)                                                                             
                                                                                                                                
Co-Chair Stedman expressed that  the Senate language is preferred                                                               
in  this  Section. Thus,  the  recommendation  is that  the  word                                                               
"six," would be inserted following "five," on page 12, line 15.                                                                 
                                                                                                                                
6:11:47 PM                                                                                                                    
                                                                                                                                
               Section 43.90.170. Application evaluation and                                                                    
          ranking. subsection (B)(5) (page 12 line 25)                                                                          
                                                                                                                                
Co-Chair   Stedman   communicated   that   the   House   language                                                               
"reimbursement"   is   preferred   to  the   Senate's   "matching                                                               
contribution" language  following the phrase "the  amount of the"                                                               
on page 12, line 25.                                                                                                            
                                                                                                                                
6:11:57 PM                                                                                                                    
                                                                                                                                
               Section 43.90.200. Certification by regulatory                                                                   
          authority and  project sanction., subsection  (e) (page                                                               
          15 line 30)                                                                                                           
                                                                                                                                
Co-Chair  Stedman communicated  that the  Senate reference  to AS                                                               
43.90.110 is preferred to the House reference of AS 43.90.100.                                                                  
                                                                                                                                
6:12:17 PM                                                                                                                    
                                                                                                                                
               Section 43.90.220. Records, reports, conditions,                                                                 
          and  audit  requirements.,  subsection  (d)(2)(page  17                                                               
          line 1)                                                                                                               
                                                                                                                                
Co-Chair  Stedman   stated  that  the  House   approach  to  this                                                               
subsection was  recommended. Thus, the Senate  language "when and                                                               
as issued" would not be included in the text.                                                                                   
                                                                                                                                
6:13:22 PM                                                                                                                    
                                                                                                                                
               Section 43.90.230. License violations; damages.,                                                                 
          subsection (c) (page 17 lines 29 and 30)                                                                              
                                                                                                                                
     and                                                                                                                        
                                                                                                                                
               Section 43. 90.230. License violations; damages.,                                                                
          subsection (e)(1)(page 18 line 11)                                                                                    
                                                                                                                                
Co-Chair Stedman stated that  the House language "reimbursements"                                                               
is  preferred to  the Senate's  "matching contribution"  verbiage                                                               
following the word "state" in both of these instances.                                                                          
                                                                                                                                
               Section 43.90.240. Abandonment of project.,                                                                      
          subsection (b) (page 18 lines 26 and 27)                                                                              
                                                                                                                                
Co-Chair Stedman specified that  the House language was preferred                                                               
in this  subsection. Thus,  the language would  read "(b)  If the                                                               
commissioners  or  the licensee  determine  that  the project  is                                                               
uneconomic and the other party  disagrees, the disagreement shall                                                               
be settled…".                                                                                                                   
                                                                                                                                
6:13:48 PM                                                                                                                    
                                                                                                                                
     Article 4. Miscellaneous Provisions.                                                                                       
                                                                                                                                
Co-Chair  Stedman  next  addressed the  language  recommendations                                                               
pertinent to Article  4 of Chapter 90, added to  AS 43 by Section                                                               
1 of the bill.                                                                                                                  
                                                                                                                                
               Section 43.90.400. Alaska Gasline Inducement Act                                                                 
          ….(page 25 lines 17 through 21)                                                                                       
                                                                                                                                
Co-Chair Stedman  stated that the House  language "reimbursement"                                                               
was preferred  to the  Senate's "matching  contribution" language                                                               
following the word "Act" on page 25,  line 17 and 19 and the word                                                               
"state's " on line 21.                                                                                                          
                                                                                                                                
               Section 43.90.400. Alaska Gasline Inducement Act                                                                 
          … .,subsection (c)(page 25 line 31)                                                                                   
                                                                                                                                
Co-Chair  Stedman   stated  that  the  House   language  was  the                                                               
preferred  choice  in  this section.  Thus  the  Senate  language                                                               
"matching contributions in the form of" would not be utilized.                                                                  
                                                                                                                                
6:14:49 PM                                                                                                                    
                                                                                                                                
               Section 43.90.400. Alaska Gasline Inducement Act                                                                 
          …. Subsection (c) (page 26 line 2)                                                                                    
                                                                                                                                
Co-Chair   Stedman   recommended    that   the   House   language                                                               
"reimbursement"  be utilized  instead of  the Senate's  "matching                                                               
contributions" language following the word  "as" on page 26, line                                                               
2.                                                                                                                              
                                                                                                                                
6:15:00 PM                                                                                                                    
                                                                                                                                
               Section 43.90.400. Alaska Gasline Inducement Act                                                                 
          … Subsection (d) (page 26 line 8)                                                                                     
                                                                                                                                
Co-Chair Stedman stated  that the recommendation is  to adopt the                                                               
House language "reimbursement" as  opposed to the Senate language                                                               
"contributions" following the word "for" on page 26, line 8.                                                                    
                                                                                                                                
6:15:22 PM                                                                                                                    
                                                                                                                                
     Article 5. General Provisions.                                                                                             
                                                                                                                                
Co-Chair  Stedman   noted  that  the   following  recommendations                                                               
pertain to  language in Article 5  of Chapter 90, added  to AS 43                                                               
by Section 1 of the bill.                                                                                                       
                                                                                                                                
               Section 43.90.900. Definitions., subsection (4)                                                                  
          (page 29 line 3 and line 4)                                                                                           
                                                                                                                                
Co-Chair  Stedman  stated that  the  recommendation  is that  the                                                               
Senate language  be considered  in two  areas of  this provision.                                                               
Thus,  the House  word "mean"  would  be replaced  with the  word                                                               
"means" on  page 29, line  3 and the  word ", and"  would replace                                                               
the word "or" following "Alaska" on page 29, line 4.                                                                            
                                                                                                                                
6:15:46 PM                                                                                                                    
                                                                                                                                
               Section 43.90.900. Definitions., subsection (17)                                                                 
          (page 30 line 13)                                                                                                     
                                                                                                                                
Co-Chair  Stedman  stated that  the  recommendation  is that  the                                                               
House language "a  similar process" would be  utilized as opposed                                                               
to the Senate language "similar procedures" on page 30, line 13.                                                                
                                                                                                                                
6:16:18 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman announced  that  this  concluded the  provision                                                               
comparisons  and recommendations.  He characterized  the majority                                                               
of the changes as "word-smithing".                                                                                              
                                                                                                                                
6:17:32 PM                                                                                                                    
                                                                                                                                
Senator Elton  asked whether the Department  of Revenue concurred                                                               
with the recommended language.                                                                                                  
                                                                                                                                
6:17:39 PM                                                                                                                    
                                                                                                                                
MARCIA   DAVIS,  Deputy   Commissioner,  Department   of  Revenue                                                               
answered in the affirmative.                                                                                                    
                                                                                                                                
AT EASE 6:17:54 PM / 6:20:02 PM                                                                                             
                                                                                                                                
Amendment  #1:  This  amendment   incorporates  the  entirety  of                                                               
recommendations reviewed by Co-Chair Stedman into the bill.                                                                     
                                                                                                                                
Co-Chair Stedman  moved the amendment  and objected  for purposes                                                               
of discussion.                                                                                                                  
                                                                                                                                
No   discussion  forthcoming,   Co-Chair   Stedman  removed   his                                                               
objection.                                                                                                                      
                                                                                                                                
Without further objection, Amendment #1 was ADOPTED.                                                                            
                                                                                                                                
AT EASE 6:20:46 PM / 6:21:07 PM                                                                                             
                                                                                                                                
Co-Chair  Hoffman moved  to  report the  bill,  as amended,  from                                                               
Committee.                                                                                                                      
                                                                                                                                
AT EASE 6:21:40 PM / 6:22:23 PM                                                                                             
                                                                                                                                
Co-Chair  Hoffman  amended his  motion  to  move with  the  bill,                                                               
previous fiscal notes  and a new Department  of Natural Resources                                                               
fiscal note dated May 11, 2007.                                                                                                 
                                                                                                                                
There being  no objection, CSC  CS HB 177(FIN) was  REPORTED from                                                               
Committee with previous  zero fiscal note #1  from the Department                                                               
of Administration;  previous zero fiscal note  #2 from Department                                                               
of Commerce,  Community and  Economic Development;  previous zero                                                               
fiscal note  #3 from  the Division  of Oil  & Gas,  Department of                                                               
Natural Resources;  previous $2,226,000  fiscal note #5  from the                                                               
Department of Revenue; previous $132,800  fiscal note #6 from the                                                               
Office  of the  Governor;  previous  $6,500,000 operating  budget                                                               
fiscal  note  #7  from  the Department  of  Labor  and  Workforce                                                               
Development; and  new $5,000,000 capital expenditure  fiscal note                                                               
from  the  Division  of  Oil   and  Gas,  Department  of  Natural                                                               
Resources, dated May 11, 2007.                                                                                                  
                                                                                                                                

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