Legislature(2013 - 2014)SENATE FINANCE 532

04/02/2013 09:00 AM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 63 CONTRACTS FOR PREPARATION OF BALLOTS TELECONFERENCED
Moved CSSB 63(STA) Out of Committee
+ SB 13 KNIK ARM BRIDGE AND TOLL AUTHORITY TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 86 APPROVE FLINT HILLS ROYALTY OIL SALE TELECONFERENCED
Moved SB 86 Out of Committee
+= SB 59 OIL & GAS EXPLORATION/DEVELOPMENT AREAS TELECONFERENCED
Heard & Held
                   SENATE FINANCE COMMITTEE                                                                                     
                         April 2, 2013                                                                                          
                           9:05 a.m.                                                                                            
                                                                                                                                
                                                                                                                                
9:05:57 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair   Meyer  called   the  Senate  Finance   Committee   meeting                                                           
to order at 9:05 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Joe   Balash,   Deputy    Commissioner,    Department    of   Natural                                                           
Resources;    Daniel   Sullivan,    Commissioner,     Department   of                                                           
Natural   Resources;    William   Barron,   Director,   Division   of                                                           
Oil   and   Gas,    Department    of   Natural    Resources;    James                                                           
Sullivan,    Southeast    Alaska    Conservation    Council;    Laura                                                           
Pierre,   Staff,   Senator    Anna  Fairclough;    Senator    Charlie                                                           
Huggins;     Michael     Foster,     Chairman,      KABATA;     David                                                           
Livingstone, Managing Director, CITI Corp;                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Wend  Woolf,  Division   of  Oil  and  Gas,  Department   of  Natural                                                           
Resources; Jack Roderick, Self, Anchorage;                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 86       APPROVE FLINT HILLS ROYALTY OIL SALE                                                                                
                                                                                                                                
            SB  86  was  REPORTED   out  of  committee   with  a  "do                                                           
            pass"   recommendation      and   with    a   "do   pass"                                                           
            recommendation     and   with    previously    published                                                            
            fiscal note: FN2 (DNR).                                                                                             
                                                                                                                                
SB 59       OIL & GAS EXPLORATION/DEVELOPMENT AREAS                                                                             
                                                                                                                                
            SB 59  was  HEARD  and  HELD  in committee   for  further                                                           
            consideration.                                                                                                      
                                                                                                                                
SB 63       CONTRACTS FOR PREPARATION OF BALLOTS                                                                                
                                                                                                                                
            SB 63  (STA)  was  REPORTED   out  of  committee   with  a                                                          
            "do   pass"   recommendation     and   with   previously                                                            
            published fiscal note: FN 1 (GOV).                                                                                  
                                                                                                                                
SB 13       KNIK ARM BRIDGE AND TOLL AUTHORITY                                                                                  
                                                                                                                                
            SB 13  was  HEARD  and  HELD  in committee   for  further                                                           
            consideration.                                                                                                      
                                                                                                                                
SENATE BILL NO. 86                                                                                                              
"An  Act  approving   and  ratifying  the  sale  of  royalty   oil by                                                           
the  State  of  Alaska   to  Flint  Hills  Resources   Alaska,   LLC;                                                           
and providing for an effective date."                                                                                           
                                                                                                                                
9:06:47 AM                                                                                                                    
                                                                                                                                
Senator   Olson  noted  that   there  were  two  refineries   in  the                                                           
Fairbanks    area.  He   wondered   if   the  smaller   of   the  two                                                           
refineries had established a position on the legislation.                                                                       
                                                                                                                                
9:07:40 AM                                                                                                                    
                                                                                                                                
JOE   BALASH,   DEPUTY    COMMISSIONER,    DEPARTMENT    OF   NATURAL                                                           
RESOURCES,    replied   that  zero   negative   comments    had  been                                                           
offered during public comment on the contract terms.                                                                            
                                                                                                                                
9:08:44 AM                                                                                                                    
                                                                                                                                
Senator  Olson   inquired  if  there  was  any known   opposition  to                                                           
the legislation.                                                                                                                
                                                                                                                                
Mr.  Balash   restated   that  no  opposition    had  been   recorded                                                           
during the public comment period.                                                                                               
                                                                                                                                
9:09:07 AM                                                                                                                    
                                                                                                                                
Co-Chair   Kelly  MOVED  to  report  SB  86  out  of committee   with                                                           
individual    recommendations     and   the   accompanying     fiscal                                                           
note. There being no OBJECTION, it was so ordered.                                                                              
                                                                                                                                
SB  86   was  REPORTED    out  of   committee   with   a  "do   pass"                                                           
recommendation    and with  a  "do  pass"  recommendation   and  with                                                           
previously published fiscal note: FN2 (DNR).                                                                                    
                                                                                                                                
9:09:36 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:10:52 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 59                                                                                                              
"An  Act  relating   to  approval   for  oil  and  gas  or  gas  only                                                           
exploration    and  development    in  a   geographical    area;  and                                                           
providing for an effective date."                                                                                               
                                                                                                                                
9:11:14 AM                                                                                                                    
                                                                                                                                
DANIEL    SULLIVAN,     COMMISSIONER,     DEPARTMENT    OF    NATURAL                                                           
RESOURCES,    provided   an   overview   of   the  legislation.    He                                                           
believed   that  the issue  of  permitting   reform  and  the  effort                                                           
to  modernize   the   permitting   process   was  critical   for  the                                                           
future  of  the  state,   as  well  as  the  issue  of  Trans-Alaska                                                            
Pipeline    System    (TAPS)     throughput.    He    related    that                                                           
Department   of  Natural  Resources   (DNR)  had  been  focused  on  a                                                          
four  part  plan  to  help  turn  around   TAPS  throughput:   making                                                           
the  state  more   competitive;   incentivizing    and  facilitating                                                            
the   next   phases   of   North   Slope   development;    promoting                                                            
Alaska's   resources;   and  making   the  permitting    system  more                                                           
efficient,   timely,   and  certain.   He shared   that  discussions                                                            
with   the   oil   industry    had    highlighted    the   need   for                                                           
permitting   reform  within  the  state.   He stated  that  the  bill                                                           
aimed  to  provide  a  statutory   change  to  the  Division   of Oil                                                           
and  Gas  so  that  it  could  provide   public  notice   of oil  and                                                           
gas  exploration    and   development   phases   across   geographic                                                            
areas  without   regard  to  lease  boundaries.    He believed   that                                                           
this   would  allow   a  comprehensive    review   of  oil   and  gas                                                           
activities   before   exploration    or  development   began,   while                                                           
protecting   the   public  interest   with   public   notice  and  an                                                           
opportunity   to  comment   during  review   phases.   Additionally,                                                            
the  project   approval   process   would   be  streamlined   by  the                                                           
elimination    of  redundant    elements.    He  offered    that  DNR                                                           
could  achieve   permitting   reform  while  still  maintaining   the                                                           
highest   standards  in  environmental    protection.   He addressed                                                            
several  issues   that  were  raise  in prior   committee  hearings.                                                            
He  thought   that   the  changes   proposed   by   the  legislation                                                            
would   provide   the   opportunity    for   public   input   at  the                                                           
beginning   of   each  phase   of   exploration   and   development,                                                            
which    was   the   time   when    such   input    would   be   most                                                           
meaningful.   He  said  that  DNR  had  been  working   closely  with                                                           
the   North   Slope   Borough    on  integrating    the   permitting                                                            
processes    and   information    exchange.    He  added   that   the                                                           
permitting   process   would  present   an  initial   plan  and  that                                                           
the   public   would  have   significant    input   at  that   stage;                                                           
laying    out   parameters     of   exploration     and   mitigation                                                            
measures.                                                                                                                       
                                                                                                                                
9:15:52 AM                                                                                                                    
                                                                                                                                
Commissioner   Sullivan   relayed   that  is  was  legally  possible                                                            
that   the  department    already    had  statutory    authority   to                                                           
approve    the   exploration    and   development;    however,    the                                                           
department   decided   to  come  directly   to  the  legislature    to                                                          
seek  direct  authority   to  stave  off  questions  of  legality  in                                                           
the  future.    He  pointed   to  a  recent  ruling   by  the  Alaska                                                           
Supreme  Court  in  the  case  of Red  Oil  v. Sullivan   and  stated                                                           
that  he  would  be glad  to  answer  questions   regarding   how DNR                                                           
viewed   the  ruling,  as  well   as its   effect  on  the  bill;   he                                                          
offered   that  the   preliminary   analysis    indicated   that  the                                                           
ruling would not affect the legislation.                                                                                        
                                                                                                                                
9:18:57 AM                                                                                                                    
                                                                                                                                
Co-Chair   Meyer  stated  that  he  was unfamiliar   with  the  court                                                           
ruling and requested further explanation.                                                                                       
                                                                                                                                
Commissioner    Sullivan    responded    that   there   had   been   a                                                          
Superior   Court  ruling  dictating   that  DNR was  required   to do                                                           
a  best   interest    finding   at   each  stage   of   a  project's                                                            
development.    He stated   that  the  ruling   would  add  years  to                                                           
the  permitting   process   of  undertaking   resource   development                                                            
in  the  state.   He  concluded   that  the  group   of  people  that                                                           
bought  the  case  forward   was  against  any  development    in the                                                           
state.   He   related   that   the  Supreme    Court   reversed   the                                                           
Superior   Court's   decision   with  the  caveat  the   DNR  examine                                                           
cumulative   impacts   with   regard  to  the   development   of  oil                                                           
and  gas  areas.  He shared   that  the plaintiffs   had  wanted  DNR                                                           
to  do   a  full   National    Environmental    Policy   Act   (NEPA)                                                           
review  of  cumulative   environmental    impact;   DNR  argued  that                                                           
such  a  formal  review   was  not  necessary.   The  Supreme   Court                                                           
agreed  that  a  less  formal,  "hard  look"  should  be  taken.  The                                                           
Supreme  Court   had left  the  details  of  how  the  review  should                                                           
be  conducted   in  the  power   of  the  legislature.    He  thought                                                           
the  bill  was  consistent  with  the  court  ruling;   however,  DNR                                                           
was still attempting to clarify the ruling.                                                                                     
                                                                                                                                
9:24:27 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer noted that he had a copy of the ruling.                                                                          
                                                                                                                                
9:24:36 AM                                                                                                                    
                                                                                                                                
Co-Chair   Kelly   asked   which   section   of  the   Alaska   State                                                           
Constitution     dictated    that    DNR   had    to   perform    the                                                           
cumulative impact study.                                                                                                        
                                                                                                                                
Commissioner   Sullivan   responded   that  language  that  spoke   to                                                          
the cumulative impact requirement held in Article 8.                                                                            
                                                                                                                                
9:27:03 AM                                                                                                                    
                                                                                                                                
Senator   Hoffman  pointed   to  page  1,  lines   7,  8,  and  9.  He                                                          
queried   the  language   on  line  7,  "without   regard   to  lease                                                           
boundaries."   He  wondered   what  would  be  accomplished    by the                                                           
10  year   retroactivity    of  the  leasing   program.     He  noted                                                           
that  the  people  of  Bristol   Bay had  similar   concerns   as the                                                           
people  on  the  North   Slope  because  of  the  value   of the  Red                                                           
Salmon  fishery.   He  asked  if  DNR  had  talked  with  the  people                                                           
of Bristol Bay about the legislation.                                                                                           
                                                                                                                                
Commissioner    Sullivan   replied   no.  He   said  that   the  bill                                                           
would  largely   impact  the  North  Slope.   He said  that  DNR  had                                                           
focused   on  the  North  Slope  for  community   outreach   and  had                                                           
not  briefed  the  people  of  Bristol  Bay.  He  stressed  that  the                                                           
bill  would   only  affect  areas   where  there  were   current  oil                                                           
and  gas  lease   sales   in  the  state.   He  noted  that   another                                                           
area that could be impacted was Cook Inlet.                                                                                     
                                                                                                                                
9:30:18 AM                                                                                                                    
                                                                                                                                
WILLIAM    BARRON,    DIRECTOR,    DIVISION    OF    OIL   AND   GAS,                                                           
DEPARTMENT     OF    NATURAL    RESOURCES,     offered    that    the                                                           
presentation would provide answers the Senator's questions.                                                                     
                                                                                                                                
9:30:57 AM                                                                                                                    
Mr.   Barron   related   that  the   division   was   attempting   to                                                           
approach   all   projects   in  a  more   holistic   manner   through                                                           
program management rather than isolated project management.                                                                     
                                                                                                                                
9:32:59 AM                                                                                                                    
                                                                                                                                
WENDY  WOOLF,  DIVISION   OF  OIL AND  GAS,  DEPARTMENT   OF  NATURAL                                                           
RESOURCES   (via   teleconference),     stated   that  SB   59  would                                                           
allow  the   Division   of Oil   and  Gas  to  look  at  exploration                                                            
holistically    in  a geographic    area.  She  directed   committee                                                            
attention    to   the   presentation,     "   SB  59:   Oil    &  Gas                                                           
Exploration     and   Development     Approval     By   Geographical                                                            
Area"(copy on file).                                                                                                            
                                                                                                                                
9:33:31 AM                                                                                                                    
                                                                                                                                
Ms.  Woolf   discussed   Slide   2,  which   illustrated    the  five                                                           
areas   that  the   department   offered   area-wide    oil  and  gas                                                           
lease   sales:    Beaufort    Sea,   North    Slope,    North   Slope                                                           
Foothills,    Cook  Inlet,   and   Alaska   Peninsula.   She   stated                                                           
that   there   was  not   an  area   in  the   Bristol   Bay   Region                                                           
currently   under   discussion   and  that   the  closest   would  be                                                           
the Alaska Peninsula.                                                                                                           
                                                                                                                                
9:34:20 AM                                                                                                                    
                                                                                                                                
Ms.   Woolf   stated    that   SB   59  would    make   a  statutory                                                            
requirement   to  provide   public  notice  at  the  beginning   of  a                                                          
multi-stage    project   and  clarified    that   DNR  would   review                                                           
each  phase  across  a  geographic   area,  rather  than  conducting                                                            
finite   reviews  for  each   individual   project.   She  said  that                                                           
this  would  bring  certainty   to the  public   and to  industry  as                                                           
to   the   type   of   activities    that    could   occur   in   the                                                           
geographic area.                                                                                                                
                                                                                                                                
9:35:17 AM                                                                                                                    
                                                                                                                                
Ms. Woolf spoke to Slide 4:                                                                                                     
                                                                                                                                
      What does SB 59 do?                                                                                                     
      •It clarifies the Department of Natural Resources can                                                                     
       authorize oil and gas exploration and development                                                                        
      activities within a geographical area.                                                                                    
                                                                                                                                
      •It preserves public notice and review at the                                                                             
       beginning of an exploration or development phase.                                                                        
      •It ensures certainty when an approval has been                                                                           
      granted for exploration or development activities.                                                                        
                                                                                                                              
      What does SB 59 do? How does this benefit the public?                                                                   
      •It allows the public to comprehensively evaluate oil                                                                     
      and gas activities within a geographical area.                                                                            
                                                                                                                                
      •It provides an opportunity for input at the beginning                                                                    
      of an exploration or development phase.                                                                                   
                                                                                                                                
      •It safeguards environmental concerns through special                                                                     
      stipulations and conditions.                                                                                              
      How does this benefit industry?                                                                                         
      •It allows a project to be planned within approved                                                                        
      parameters and conditions.                                                                                                
                                                                                                                                
      •It provides certainty that plans of operations                                                                           
      meeting those defined criteria can proceed.                                                                               
                                                                                                                                
      •It ensures predictable project approvals for                                                                             
      subsequent exploration or development activity.                                                                           
                                                                                                                                
9:36:35 AM                                                                                                                    
                                                                                                                                
Ms. Woolf Spoke to slide 5 titled "Oil and Gas Lease Sale                                                                       
Process":                                                                                                                       
                                                                                                                                
      •Proposed Areawide Oil and Gas Lease Sale                                                                               
                                                                                                                                
            Public Notice and Opportunity to Comment Evaluate                                                                   
            Statutory Criteria Develop Mitigation Measures                                                                      
                                                                                                                                
      •Final Finding of the Director to Lease Oil and Gas Exploration Phase                                                                                                
                                                                                                                                
           Public Notice and Opportunity to Comment                                                                             
                                                                                                                                
      •Development Phase                                                                                                      
                                                                                                                                
           Public Notice and Opportunity to Comment                                                                             
                                                                                                                                
      •Transportation (Pipelines)                                                                                             
                                                                                                                                
           Public Notice and Opportunity to Comment                                                                             
                                                                                                                                
9:38:11 AM                                                                                                                    
                                                                                                                                
Ms. Woolf spoke to slide 6 titled "Life of an Oil and Gas                                                                       
Lease":                                                                                                                         
                                                                                                                                
      Year 0                                                                                                                    
      •Final Finding of the Director - Areawide Oil and Gas                                                                     
      Lease Sale                                                                                                                
      •Lease Issued (10-Year Term)                                                                                              
                                                                                                                                
      Year 3                                                                                                                    
      •Initial  Exploration   -  Seismic  Program  (multiple                                                                    
      leases)                                                                                                                   
      •Public  Notice  and  Comment  Period  (30  day  public                                                                 
      notice)                                                                                                                 
                                                                                                                                
      Year 5                                                                                                                    
      •Lease Plan of Operations - Exploration Well                                                                              
      •Public  Notice  and  Comment  Period  (30  day  public                                                                 
      notice)                                                                                                                 
                                                                                                                                
      Year 6                                                                                                                    
      •Lease Plan of Operations - Exploration Well                                                                              
      •Public  Notice  and  Comment  Period  (30  day  public                                                                 
      notice)                                                                                                                 
                                                                                                                                
      Year 7                                                                                                                    
      •Lease Plan of Development - Conceptual Development                                                                       
      Plan                                                                                                                      
                                                                                                                                
      Year 8                                                                                                                    
      •Lease Plan of Operations - Initial Development Plans                                                                     
      •Public  Notice  and  Comment  Period  (30  day  public                                                                 
      notice)                                                                                                                 
      •Lease Plan of Operations - Modified Development Plans                                                                    
      •Public  Notice  and  Comment  Period  (30  day  public                                                                 
      notice)                                                                                                                 
      •Pipeline  Application   (AS  38.05.850   or AS  38.35)                                                                   
      •Public  Notice  and  Comment  Period  (30  day  public                                                                 
      notice)                                                                                                                 
                                                                                                                                
      Year  10                                                                                                                  
      •Production                                                                                                               
      •Lease Plan of Operations - Additional Development                                                                        
      Plans                                                                                                                     
      •Public  Notice  and  Comment  Period  (30  day  public                                                                 
      notice)                                                                                                                 
                                                                                                                                
9:41:57 AM                                                                                                                    
Ms.  Woolf  continued   to Slide  7,  "Example   Geographical   Areas                                                           
for  Exploration   Activities."    She  related  that  the  types  of                                                           
activities    under   discussion    were   ice   roads,   ice   pads,                                                           
portable   developing    equipment,   off-road    vehicle   use,  and                                                           
temporary    housing.   She   said   that  the   geographical    area                                                           
would   be  defined   as   including   all  or   a  portion   of  the                                                           
statewide   lease   depending   on   the  type   of  activity   being                                                           
considered.   She  shared   that  the  development   of  the  western                                                           
North   Slope    would   be   looked   at   differently    than   the                                                           
development    of  the  area   encompassing   Prudhoe.    She  stated                                                           
that  exploration    activities   could  also   be examined   in  the                                                           
undeveloped    shale  areas   so  that  the  public   could   provide                                                           
input before development began.                                                                                                 
                                                                                                                                
Ms.  Woolf   discussed   Slide   8,  "Example   Geographical    Areas                                                           
for  Development    Activities."    She   stated  that   development                                                            
involved   more  specific    activities   which  would   focus   on  a                                                          
small  group  of  leases.   She  relayed  that  the  decision   would                                                           
address   the development    across  an  entire  areas  so  that  the                                                           
public    could   address    the   entire    area   that   could   be                                                           
affected.      She   added   that   small   additions    to   already                                                           
existing   larger   developments    would   be  subject    to  public                                                           
comment.    She    stressed    that   all    of   the   areas    were                                                           
hypothetical.                                                                                                                   
                                                                                                                                
9:46:10 AM                                                                                                                    
                                                                                                                                
Ms.  Woolf  addressed   Slide  9,  "Life  of  an Oil  and  Gas  Lease                                                           
under SB 59":                                                                                                                   
                                                                                                                                
      Year 0                                                                                                                    
      •Final Finding of the Director - Areawide Oil and Gas                                                                     
      Lease Sale                                                                                                                
      •Lease Issued (10-Year Term)                                                                                              
                                                                                                                                
      Lessee develops exploration plans                                                                                         
      Year 3                                                                                                                    
      •Initial Exploration - Seismic Program (multiple                                                                          
      leases)                                                                                                                   
      •Public Notice and Comment Period (30 day public                                                                          
      notice)                                                                                                                   
                                                                                                                                
      Year 5                                                                                                                    
      •Lease Plan of Operations - Exploration Well                                                                              
      •Public Notice and Comment Period (30 day public                                                                          
      notice)                                                                                                                   
                                                                                                                                
      Year 6                                                                                                                    
      •Lease Plan of Operations - Exploration Well                                                                              
            Exploration Phase Public Notice & Comment Period                                                                    
            (30 day public notice)                                                                                              
            Saves 60 to 90 days for each project in the                                                                         
            geographical area                                                                                                   
                                                                                                                                
      Discovery - Lessee formulates development plan                                                                            
                                                                                                                                
      Year 7                                                                                                                    
      •Lease Plan of Development - Conceptual Development                                                                       
      Plan                                                                                                                      
                                                                                                                                
      Year 8                                                                                                                    
      •Lease Plan of Operations - Initial Development Plans                                                                     
      •Public Notice and Comment Period (30 day public                                                                          
      notice)                                                                                                                   
      •Lease Plan of Operations - Modified Development Plans                                                                    
      •Public Notice and Comment Period (30 day public                                                                          
      notice)                                                                                                                   
      •Pipeline Application (AS 38.05.850 or AS 38.35)                                                                          
      •Public Notice and Comment Period (30-60 day public                                                                       
      notice)                                                                                                                   
                                                                                                                                
      Year 10                                                                                                                   
      •Production                                                                                                               
      •Lease Plan of Operations - Additional Development                                                                        
      Plans                                                                                                                     
            Development Phase Public Notice & Comment Period                                                                    
            (30 day public notice)                                                                                              
            Saves 60 to 90 days for each project in the                                                                         
            geographical area                                                                                                   
                                                                                                                                
9:50:55 AM                                                                                                                    
                                                                                                                                
Ms. Woolf spoke to Slide 10, "Results":                                                                                         
                                                                                                                                
      Exploration Phase Public Notice & Comment Period                                                                          
                                                                                                                                
            •SB 59 provides for a comprehensive review before                                                                   
            exploration or development.                                                                                         
                                                                                                                                
            •SB 59 preserves public participation in the                                                                        
            process.                                                                                                            
                                                                                                                                
            •SB 59 allows stipulations to be approved before                                                                    
            a company develops site specific plans for                                                                          
            exploration or development activities.                                                                              
            Development Phase Public Notice & Comment Period                                                                    
                                                                                                                                
Ms.  Woolf  reiterated   that  the  bill  would   give  all  parties;                                                           
public,   state,   federal,   local   agencies    and  industry   and                                                           
opportunity   to  review   and  evaluate   oil  and  gas  activities                                                            
holistically    and  across  a  defined   area,  which   would  bring                                                           
certainty   as  to how  state  lands   were  developed   for oil  and                                                           
gas.   She   explained    that   the   division    would   define    a                                                          
geographical    area  for  exploration    and  then  prepare   public                                                           
notice.   She  relayed   that  the   public  notice   would   include                                                           
the   type    of   exploration     activities    and   any    special                                                           
stipulations,    and  following   public  comment,   the  plan  would                                                           
be  approved.   Once   the  exploration   phase   was  approved   the                                                           
division   could  proceed   to approve   the  substantive   plans  of                                                           
operation     for    exploration     activities     that    were   in                                                           
compliance   with  the  specified   conditions   in the  exploration                                                            
phase   approval,    without    additional    public    notice.   She                                                           
shared   that  all   the  individual    plans  of   operation   could                                                           
proceed   without  public   notice,   but  they  would   have  agency                                                           
review   and   department    approval.   She   explained    that  the                                                           
development phase would follow similar suit.                                                                                    
                                                                                                                                
9:53:15 AM                                                                                                                    
                                                                                                                                
Co-Chair   Kelly   noted   that   the  lease   plan   slides   showed                                                           
approximately    10 years   from  exploration   to  development.   He                                                           
wondered if the legislation would speed up the process.                                                                         
                                                                                                                                
Mr.  Barron  responded   that  it  could  take  from  1  year  on up.                                                           
He  stated   that   the  drilling   seasons    on  the  North   Slope                                                           
could  be  accelerated.   He  explained  that  the  bill  would  work                                                           
across  3x3  leases   and  that  the  leases   were  limited  in  the                                                           
primary   term  for  up  to  10 years.   He  hoped  that  activities                                                            
could  be  done  concurrently    between  two  different   companies                                                            
in   the    same   geographic     area.   He    thought    that   the                                                           
legislation    would   save   time   for   every   company    working                                                           
within the specific geographic area.                                                                                            
                                                                                                                                
9:55:03 AM                                                                                                                    
                                                                                                                                
Commissioner    Sullivan    interjected     that   when   there   was                                                           
public  notice   and  comment  the  companies   would  need  to  have                                                           
time  to  respond,   which   could  take   some  time.   He  stressed                                                           
that DNR was attempting to make the development more                                                                            
strategic   by   minimizing   the   public   comment   opportunities                                                            
after the initial permitting requirements were met.                                                                             
                                                                                                                                
9:56:10 AM                                                                                                                    
                                                                                                                                
Mr.   Barron   replied   that   the   division   hoped   to   develop                                                           
projects in a 5 to 7 year period, rather than 10 years.                                                                         
                                                                                                                                
9:56:47 AM                                                                                                                    
                                                                                                                                
Senator   Bishop  surmised   that   the  statutes   already   allowed                                                           
for  industry   and  the department    to work  together,   but  that                                                           
the  bill  was  expected  to  offer  more  certainty   for industry.                                                            
He  understood    that  the  goal   was  to  maximize   the   state's                                                           
assets,  while   still  maintaining   due  diligence  to  the  public                                                           
process  and  the  environment.   He  discussed   his  experience  on                                                           
the  North  Slope   and  stressed  that   time  was  of  the  essence                                                           
when it came to the work being done in the area.                                                                                
                                                                                                                                
Commissioner    Sullivan    agreed,    but   added   that    bringing                                                           
certainty   to  the process   at  the  outset  would  help  with  the                                                           
investment   climate.   He  offered   that  the  timelines   and  the                                                           
uncertainty   were  limited   to  the  winter  season  for  the  most                                                           
part   and  that  if   you  compared   Alaska   to  Texas   or  North                                                           
Dakota,   it  was  a  disadvantage.    He  offered   that   the  bill                                                           
would   the  provide   DNR  with  clear   authorization    and  would                                                           
help in the issue.                                                                                                              
                                                                                                                                
10:00:31 AM                                                                                                                   
                                                                                                                                
Co-Chair   Kelly  noted  the  state   got "slammed"   with   lawsuits                                                           
every   time  it  tried   to  anything    development   related.   He                                                           
thought   that   the  courts   had  rejected   direction    from  the                                                           
legislature.     He   reiterated    for    the   record    that   the                                                           
committee   was  trying  to collapse   the  timeframe   that  it took                                                           
to  get  projects  to  meet  completion.   He  expressed   a lack  of                                                           
respect   for the  court   system  and  opined  that  judges   wanted                                                           
to  be legislators.    He contended   that  it  was  not  the  job  of                                                          
the courts to set public policy.                                                                                                
                                                                                                                                
Commissioner    Sullivan    suggested   that   the   intent   of  the                                                           
legislation    was   to  define   how   to   expedite   the   leasing                                                           
process,   which  the   courts  had  stated   was  in  the  realm  of                                                           
the  legislature.   He  said  the department   would  not  allow  the                                                           
REDOIL case to hinder resource development in the state.                                                                        
                                                                                                                                
10:02:56 AM                                                                                                                   
Senator   Hoffman    requested   a  clarification     regarding   the                                                           
approval   of the  oil  and gas  or  gas only  leases   the up  to  10                                                          
years prior.                                                                                                                    
                                                                                                                                
Mr.  Barron  replied   that  the  intent   of the  10  years   was to                                                           
provide   a   period   of  time   that   the   director   could   not                                                           
exceeded.    He  added   that   there  was   a  10   year  statutory                                                            
primary lease term.                                                                                                             
                                                                                                                                
10:04:03 AM                                                                                                                   
                                                                                                                                
Senator   Hoffman   pointed   to   page  2  of   the  bill   and  the                                                           
immediate   effective   date;   however,   the  fiscal   note  had   a                                                          
different   date.  He  inquired   why  there   was  a specific   date                                                           
in the analysis but not in the legislation.                                                                                     
                                                                                                                                
Ms.  Barron  replied   that  the  intent   of  the  fiscal  note  was                                                           
to  give  the   department   the  proper   resources   to  establish                                                            
the program and regulations.                                                                                                    
                                                                                                                                
10:05:00 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:09:40 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Meyer OPENED public testimony.                                                                                         
                                                                                                                                
10:10:07 AM                                                                                                                   
                                                                                                                                
JAMES   SULLIVAN,    SOUTHEAST    ALASKA    CONSERVATION     COUNCIL,                                                           
expressed   concern  with  the  legislation.   He  acknowledged   the                                                           
at  an  exploration    stage  the  intent   was  that   the  land  be                                                           
explored;   however   the  council   had  problems    with  only  one                                                           
comment   period   at  the  development   stage.   He  offered   that                                                           
the   council    had   an   issue   with   the    redefining    of   a                                                          
geographic   area,   particularly    multi-use   areas.   He  pointed                                                           
out  that  anytime  there  was  a  planned  development   that  would                                                           
affect   the  people  living   in  the  area,  there   should   be an                                                           
appropriate    notice  and   access   to  adequate   information   on                                                           
the  project.   He  stated   that  in  Cook  Inlet   the  public  the                                                           
possible   effects    of  a   particular    project   could   not  be                                                           
projected   into   the  future.   He   stressed   that  plans   could                                                           
change   and   contended    that   once   a  company    reached   the                                                           
development    stage    it   would   be   impossible     to   predict                                                           
possible   disasters.    He  understood   that   efficiency   was  an                                                           
important   part   of  the  permitting    process,   but   felt  that                                                           
bill  created  uncertainty,    and put  the  onus  on the  public  to                                                           
speculate   what   could  happen.   He  added  that   the  state  was                                                           
planning   to move   into  shale  development   and  that  DNR  might                                                           
have   to   make   changes    to   its   permitting     process.   He                                                           
concluded   that  the bill  did  not  represent   the  best  approach                                                           
for the state.                                                                                                                  
                                                                                                                                
10:14:53  AM                                                                                                                  
                                                                                                                                
JACK    RODERICK,    SELF,    ANCHORAGE     (via   teleconference),                                                             
expressed support for SB 59.                                                                                                    
                                                                                                                                
10:15:32  AM                                                                                                                  
                                                                                                                                
Co-Chair Meyer CLOSED the public testimony.                                                                                     
                                                                                                                                
10:15:42  AM                                                                                                                  
                                                                                                                                
Co-Chair   Meyer   discussed   the  fiscal   note  attached   to  the                                                           
bill.                                                                                                                           
                                                                                                                                
10:16:17  AM                                                                                                                  
                                                                                                                                
SB   59   was   HEARD   and   HELD    in   committee    for   further                                                           
consideration.                                                                                                                  
                                                                                                                                
AT EASE                                                                                                                         
                                                                                                                                
10:19:22  AM                                                                                                                  
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 63                                                                                                              
"An   Act   relating   to   contracts    for   the  preparation    of                                                           
election ballots."                                                                                                              
                                                                                                                                
10:20:01  AM                                                                                                                  
                                                                                                                                
Vice-Chair    Fairclough   MOVED   to  ADOPT   CS  SB  63(STA),   28-                                                           
LS0459/C as a working document.                                                                                                 
                                                                                                                                
Co-Chair Meyer OBJECTED for the purpose of discussion.                                                                          
                                                                                                                                
10:20:18  AM                                                                                                                  
                                                                                                                                
LAURA  PIERRE,   STAFF,  SENATOR  ANNA  FAIRCLOUGH,    introduced  SB                                                           
63.   She  explained    that  the   legislation    would  bring   the                                                           
preparation    of  ballots   under  the   state  procurement    code.                                                           
She  stated  that  the  intent   was to  allow  for  competition   in                                                           
the  process,   and  that  there   could  be  cost   savings  to  the                                                           
state.                                                                                                                          
                                                                                                                                
10:20:49 AM                                                                                                                   
                                                                                                                                
Ms. Pierre related the changes in the legislation:                                                                              
                                                                                                                                
       Title: Title changed to include reference to the                                                                       
      state procurement code.                                                                                                   
      * Section 1: Removed language in subsection (3) "may                                                                    
      contract for the preparation of the ballots on a                                                                          
      regional basis if necessary," and inserted the                                                                            
      language, "contract for the preparation of ballots                                                                        
      under AS 36.30 (State Procurement Code).                                                                                  
      *Section 2: Replaced all of section 2 with a new                                                                        
      section 2 which removes the reference to preparation                                                                      
      of ballots in AS 36.30850(b)                                                                                              
                                                                                                                                
Co-Chair Meyer WITHDREW his OBJECTION.                                                                                          
                                                                                                                                
Co-Chair Meyer OPENED public testimony.                                                                                         
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
                                                                                                                                
10:23:20 AM                                                                                                                   
                                                                                                                                
Vice-Chair    Fairclough     stated   that    the   intent   of   the                                                           
legislation    was   to  provide   opportunities     to  all   Alaska                                                           
printers and to move away from a sole source contract.                                                                          
                                                                                                                                
10:24:10 AM                                                                                                                   
                                                                                                                                
Co-Chair   Kelly  MOVED  to  REPORT  SB  63  out  of committee   with                                                           
individual    recommendations     and   the   accompanying     fiscal                                                           
note(s).                                                                                                                        
                                                                                                                                
SB  63 (STA)   was REPORTED   out  of  committee   with  a "do  pass"                                                           
recommendation    and  with   previously   published   fiscal   note:                                                           
FN 1 (GOV).                                                                                                                     
                                                                                                                                
10:24:39 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:29:45 AM                                                                                                                   
RECONVENE                                                                                                                       
                                                                                                                                
SENATE BILL NO. 13                                                                                                              
"An  Act  relating   to  bonds  of  the  Knik  Arm  Bridge  and  Toll                                                           
Authority;    relating   to   reserve   funds   of   the  authority;                                                            
relating   to  taxes   and  assessments   on   a person   that   is  a                                                          
party  to  an  agreement   with  the  authority;   and  establishing                                                            
the Knik Arm Crossing fund."                                                                                                    
                                                                                                                                
SENATOR   CHARLIE   HUGGINS,   introduced   Mr.  David   Livingstone                                                            
from  Citigroup.    He  stated  that   the  Knik  Arm  Crossing   was                                                           
the    only     strategic     pieces    of    infrastructure      for                                                           
transportation    currently   being   discussed   in  the  state.   He                                                          
said   that  the   estimates   for   widening   and   improving   the                                                           
Glenn  Highway   were  approximately   $3  billion.  He  opined  that                                                           
approximately    20,000  people   were  traveling   from  the  Mat-Su                                                           
to  Anchorage   daily   between   the  hours   of  4am  and  9am.  He                                                           
added  that  there  were  three  highway   safety  corridors   on the                                                           
way  from  Anchorage   to  Mat-Su,  which  was  symptomatic    of the                                                           
population   growth.   He  relayed   that  records   indicated   that                                                           
in  2012  Knick-Goose   Bay  Road  (KGB)  was  more  dangerous   than                                                           
driving   south   out  of   Anchorage,   and   that  the   road  from                                                           
Wasilla  to  Palmer  was  equally   dangerous.  He  said  that  users                                                           
of  KGB  Road  heading  toward   the Port   of Anchorage   had  grown                                                           
by  50   percent   in  the  last  10  years.   He pointed   out  that                                                           
there   were  a  significant   number   of  people   that  would  use                                                           
the access immediately in order to get into Anchorage.                                                                          
                                                                                                                                
10:36:23 AM                                                                                                                   
                                                                                                                                
Senator Huggins related the sponsor statement:                                                                                  
                                                                                                                                
      Senate   Bill  13  amends   the  Knik   Arm  Bridge   and  Toll                                                           
      Authority's     enabling    statute    to    provide    for    a                                                          
      successful    procurement    for   the   Knik   Ann    Crossing                                                           
      project  and  to  generate   the  best  value  for  the  state.                                                           
      The   Knik   Arm   Crossing    will   significantly     enhance                                                           
      Alaska's    public     infrastructure     and    further    the                                                           
      movement   of  goods   and   people   throughout   our   state.                                                           
      Passing  this  legislation   this  session   is  important  for                                                           
      moving  the  Knik   Arm  Crossing   toward  a  bridge   opening                                                           
      in 2015.                                                                                                                  
                                                                                                                                
      This  bill,  written   in  consultation    with  the  Knik  Arm                                                           
      Bridge    and   Toll    Authority     (KABATA),    which    was                                                           
      established     in   2003   by    the   Alaska    Legislature,                                                            
      accomplishes   many   items  deemed  necessary   for   securing                                                           
      a successful public-private partnership, including:                                                                       
      >   Increases   KABATA's    bonding    authority    from   $500                                                           
      million to $600 million:                                                                                                  
            •  The  $600   million   number   represents    the  same                                                           
            amount authorized under Private Activity Bonds                                                                      
            (PABs) allocation from FHWA.                                                                                        
            • Lowers   the  cost  of capital   for  the  project  and                                                           
           ultimately lowers the cost to end users.                                                                             
            •  Private   partner   is  the  borrower    of  any  PABs                                                           
            issued.                                                                                                             
                                                                                                                                
      > Clarifies   that   the  bridge  and  associated   facilities                                                            
      are exempt from state and local taxes;                                                                                    
            •   Like   any   other    transportation     project   in                                                           
            Alaska,  the  roads  and  bridges   are  not  subject  to                                                           
            property taxation.                                                                                                  
            •  Any  private   facilities    developed   outside   the                                                           
            crossing will be taxable.                                                                                           
            • Property   tax  exemption   reduces  the  availability                                                            
            payment and reduces the toll.                                                                                       
                                                                                                                                
      > Establishes a project reserve fund:                                                                                     
            •    Provides      backstop      for     toll     revenue                                                           
            fluctuations.                                                                                                       
            • Enhances   the   credit  worthiness    of  the  project                                                           
            and reduces project costs                                                                                           
            • Will be repaid over the life of the project.                                                                      
            •  Keeps   the  tolls   affordable    to  the  traveling                                                            
            public                                                                                                              
                                                                                                                                
      All  of the  above  language   clarifications    and additions                                                            
      lower    the    capital     costs    of    this    much-needed                                                            
      infrastructure     project   and   deliver    benefits    in   a                                                          
      timely efficient manner.                                                                                                  
                                                                                                                                
      SB  13 is  a  companion   bill  to  House  Bill  23,  which  is                                                           
      sponsored by Representative Mark Neuman.                                                                                  
                                                                                                                                
Senator  Huggins   urged  the  committee  to  link  the  bill  to its                                                           
House   counterpart   quickly.   He  stated   that  there   was  $500                                                           
million  available   to  the  project  through   the  Transportation                                                            
Finance   and   Innovation    Act  (TIFIA),    but   that  time   was                                                           
limited.                                                                                                                        
                                                                                                                                
10:37:58 AM                                                                                                                   
                                                                                                                                
Co-Chair   Meyer  noted   that  public   testimony   would  be  taken                                                           
on  the House  companion   bill,  HB  23,  once  it was  received  by                                                           
the committee.                                                                                                                  
                                                                                                                                
10:39:59 AM                                                                                                                   
                                                                                                                                
MICHAEL   FOSTER,   CHAIRMAN,   KABATA,   began  a  presentation    on                                                          
SB  13  titled   "Knik   Arm  Crossing."   He   discussed   Slide  2,                                                           
"Historic   and  Projected   Population   Trend  1985  to  2035."  He                                                           
stated   that,   according   census   numbers,    between   1985  and                                                           
2010  the  population   of  Anchorage   grew  by 28   percent;   Mat-                                                           
Su  by  140    percent,   and   the  South   Central   area  by  44.5                                                           
percent.    He  relayed    that   there   were   several   different                                                            
models   under  discussion   using   numbers   from  the  Department                                                            
of  Labor   (DOL),  ISER   and  KABATA;   if  all  the  models   were                                                           
examined   and   corrected   to   the  2010   actual   census   data,                                                           
there  was  only  a 1   percent  difference   between   the ISER  and                                                           
KABATA   models.    He   said   that   most   of   the   growth   was                                                           
occurring   in Eagle  River   and North  of  Mat-Su.  He  noted  that                                                           
44    percent   of  the  total  growth   in  Anchorage   was  in  the                                                           
Eagle  River   area  because  the  bowl   area  was  running  out  of                                                           
land causing the population to move northward.                                                                                  
                                                                                                                                
10:43:04 AM                                                                                                                   
                                                                                                                                
Mr.  Foster  spoke  to  slide  3, "Glenn   Highway  AADT  Counts  (no                                                           
bridges)."   He  shared   that  in  1985   traffic  at   the  Eklutna                                                           
Bridge  was  approximately    16,000,  and  increased   to 30,000  in                                                           
2010.   He  contended   that  by  2035  the   traffic  number   would                                                           
increase   to  65,000  at  that  point  on  the  Glenn   Highway.  He                                                           
pointed  out  that  in  1985,  at the  point  south  of  Eagle  River                                                           
that  was  the  combination   of all  the  northbound   traffic  into                                                           
Anchorage,   traffic  measured   approximately    33,000;  53,000  in                                                           
2010,  and  was  projected   to  increase  to  110,000   by 2035.  He                                                           
pointed   out   that  the   highlighted   two   lane  road   and  the                                                           
slide  carried   62   percent   of  the  traffic  on  the  four  lane                                                           
highway.                                                                                                                        
                                                                                                                                
Mr.  Foster   continued    to  Slide   4,  "Knik-Fairview     Fastest                                                           
Growing Area":                                                                                                                  
                                                                                                                                
      •Knik-Fairview 2012 population estimate 16,126                                                                            
            -Larger than the incorporated areas of Palmer and                                                                   
            Wasilla combined                                                                                                    
            -If incorporated, would be fourth largest city in                                                                   
            the state                                                                                                           
                                                                                                                                
      •Knik-Goose Bay Road traffic statistics:                                                                                  
                                                                                                                                
      2000 AADT - 12,590                                                                                                        
                                                                                                                                
      2010 AADT - 18,308                                                                                                        
                                                                                                                                
      Increase 5,718                                                                                                            
                                                                                                                                
       percent 45.4 percent                                                                                                     
                                                                                                                                
10:47:23 AM                                                                                                                   
                                                                                                                                
Mr.   Foster   stressed    the   importance    of   TIFIA   for   the                                                           
project.   He  explained   that  the  developer   would  be  able  to                                                           
access  federal   dollars,  at  low  interest,  and  would  not  have                                                           
to  make  a  payment   on  the  loan  until  five   years  after  the                                                           
bridge   opened.   He   quoted   at  letter   from   Bryan   Butcher,                                                           
Commissioner, Department Of Revenue:                                                                                            
                                                                                                                                
      "Finally,   you asked   about  my confidence   in  the  revenue                                                           
      projections   and  financial   analysis   provided   by  KABATA                                                           
      in  its  March   1 TIFIA   letter   of  interest.   KABATA  has                                                           
      retained   CITI,  one  of  the  largest  and  most  successful                                                            
      financial   services  firm  in  the  world,  especially   as it                                                           
      relates    to  government     financing    of   infrastructure                                                            
      projects,    to  develop    its   financial   models.    KABATA                                                           
      retained  Wilbur   Smith,  a firm  that  has  advised   on many                                                           
      successful   projects  to  do  its traffic   and  toll  models.                                                           
      I  am   confident    that   the   revenue    projections    and                                                           
      financial    analysis   are   objective    and   done   to  the                                                           
      highest  of  professional   standards.   This  is  the  type of                                                           
      work  that   will   be  accepted   and   relied  upon   by  the                                                           
      institutional    investors    that   may   be   interested   in                                                           
      financing this project."                                                                                                  
                                                                                                                                
10:49:19 AM                                                                                                                   
                                                                                                                                
Mr. Foster addressed Slide 5, "What Happens Without the                                                                         
Bridge?":                                                                                                                       
                                                                                                                                
      •State   has   to   accommodate    transportation    needs   to                                                           
      maintain existing level of service:                                                                                       
            -6 lane improvements on Glenn Highway from Eagle                                                                    
            River to Wasilla                                                                                                    
            -8 lane improvements on Glenn Highway from South                                                                    
            Eagle River to 5th Avenue                                                                                           
            -Parks Wasilla Bypass                                                                                               
            -Network improvements in Palmer/Wasilla corridor                                                                    
                                                                                                                                
      •§billion total cost with no toll revenue *                                                                            
                                                                                                                                
      * Estimate per 2008 Statewide LRTP prepared by ADOT&PF                                                                    
                                                                                                                                
10:49:58 AM                                                                                                                   
                                                                                                                                
Co-Chair   Kelly   required   a  brief  explanation    of  the  TIFIA                                                           
program.                                                                                                                        
                                                                                                                                
Mr.  Foster   replied   that  TIFIA   was  a  federal  loan   program                                                           
that   provided   Federal   credit   assistance    in  the   form  of                                                           
direct  loans,   loan  guarantees,   and  standby   lines  of  credit                                                           
to  finance  surface   transportation    projects   of  national  and                                                           
regional    significance.    TIFIA   credit    assistance    provides                                                           
improved    access   to   capital   markets,    flexible   repayment                                                            
terms,   and  potentially   more   favorable   interest   rates  than                                                           
can   be   found   in   private   capital    markets    for   similar                                                           
instruments.    TIFIA  can  help  advance   qualified,   large-scale                                                            
projects    that   otherwise    might   be   delayed    or   deferred                                                           
because  of  size,  complexity,   or  uncertainty   over  the  timing                                                           
of   revenues.     Many   surface    transportation     projects     -                                                          
highway,   transit,   railroad,    intermodal   freight,    and  port                                                           
access   -   are   eligible   for   assistance.    Each   dollar   of                                                           
Federal   funds    can  provide    up   to  $10   in   TIFIA   credit                                                           
assistance     -    and    leverage     $30     in    transportation                                                            
infrastructure     investment.     He   noted    that   there    were                                                           
currently   letters   of interest   from  18  different   states  and                                                           
that  the  Alaska   project  was  in  the  "hold   mode."  He  shared                                                           
that   the   program    was   still    being   developed    and   the                                                           
application   process   had yet  to  be completed.   He  stated  that                                                           
the   program    was   waiting   for   the   legislation    to   move                                                           
forward,   which  would  signify   the  state's  commitment    in the                                                           
project,   before   inviting   Alaska   into   the  pre-application                                                             
process.   He noted  that  the  state  had  applied  to  the  program                                                           
before   and  had  been  turned   down.  He  believed   that  if  the                                                           
legislation    passed   the  state   would   be  invited    into  the                                                           
program.                                                                                                                        
                                                                                                                                
10:53:58 AM                                                                                                                   
                                                                                                                                
Senator   Olson   wondered   why  letters   of   interest   had  been                                                           
sent out before the financial modeling had been completed.                                                                      
                                                                                                                                
Ms. Foster replied that that had had several financial                                                                          
models and that at the time TIFIA had a small financial                                                                         
capacity.                                                                                                                       
                                                                                                                                
10:55:24 AM                                                                                                                   
                                                                                                                                
Senator Olson asked about other TIFIA loans that had been                                                                       
granted in the United States.                                                                                                   
                                                                                                                                
Mr. Foster referred the question to Mr. Livingston.                                                                             
                                                                                                                                
10:56:09 AM                                                                                                                   
                                                                                                                                
DAVID LIVINGSTONE, MANAGING DIRECTOR, CITI CORP, introduced                                                                     
the presentation, "Knik Arm Crossing: Finance Briefing." He                                                                     
spoke to Slide 1, "Public-Private Partnership Approach":                                                                        
                                                                                                                                
                                                                                                                                
      to build and operate the Crossing                                                                                         
            -  Alaska   legislature    authorized    and  encouraged                                                            
            use of P3 for project delivery under AS 19.75.111                                                                   
                                                                                                                                
                                                                                                                                
      have been used successfully in the US for:                                                                                
            -   East   End    Bridge    (over    Ohio   River    near                                                           
            Louisville, KY)                                                                                                     
            - Presidio Parkway (San Francisco)                                                                                  
            - I-595 (Fort Lauderdale)                                                                                           
            - Denver Eagle "Fastracks"                                                                                          
            - Port of Miami Tunnel                                                                                              
                                                                                                                                
                                                                                                                                
      deliver    and    operate     major    projects     worldwide,                                                            
      including                                                                                                                 
      in the UK, US, Germany, France, Italy, Spain,                                                                             
      Portugal, Australia, Canada, Chile and Brazil                                                                             
            - Concept   is  so  well   proven  that   in  Canada  any                                                           
            project   over   $100M    using   federal    funds   must                                                           
            analyze  use  of  P3  and  justify   why  P3  should  NOT                                                           
            be used                                                                                                             
            -  US  road  P3's   have  come   in  23  percent   to  42                                                           
            percent   lower    than   the   owner's   capital    cost                                                           
            estimate1   KABATA's   proposed  P3  approach   has  been                                                           
            tested  in  numerous   projects  in  the  US  and  around                                                           
            the world.                                                                                                          
                                                                                                                                
      (1) For East End Bridge, Presidio Parkway and I-595,                                                                      
      the most recent three availability fee P3's.                                                                              
                                                                                                                                
10:58:17 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough requested and all-in cost on the                                                                          
previous P3 projects and projected traffic counts for the                                                                       
bridges.                                                                                                                        
                                                                                                                                
Mr. Livingstone replied that he would try to find the                                                                           
information.                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough asked if the projects were of a                                                                           
similar magnitude as KABATA.                                                                                                    
                                                                                                                                
Mr. Livingstone replied that the East End Bridge was almost                                                                     
identical in size to KABATA in terms of cost.                                                                                   
                                                                                                                                
10:59:44 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone addressed Slide 2, "Procurement Status":                                                                        
                                                                                                                                
      Procurement is in process with firm bids expected in                                                                      
      2013.                                                                                                                     
                                                                                                                                
                                                                                                                                
      partner with the following international consortia                                                                        
      competing for the Crossing:                                                                                               
            -   Alaska    Infrastructure      Access    Partners     -                                                        
            Infrared  Capital   Partners;   Bouygues;   Colaska;  URS                                                           
            Alaska;  Moffatt   &  Nichol;  USKH;   R&M  Consultants;                                                            
            Macquarie Capital                                                                                                   
            -   Cook    Inlet    Passage    Partners    -    Meridiam                                                         
            Infrastructure;      Kiewit;    Manson     Construction;                                                            
            Transfield     Services;      Parsons     Transportation                                                            
            Group;  Golder  Associates;   Dowl  HKM;  Dan  Brown  and                                                           
            Associates;      BMT    Fleet     Technologies;      KPMG                                                           
            Corporate Finance                                                                                                   
            -  North   Star   Mobility    Group   -   Hochtief;   ACS                                                         
            Infrastructure     Development;     Iridium;     Flatiron                                                           
            Constructors;   Dragados;   Traylor   Bros.;  HNTB;  CH2M                                                           
            Hill  Engineers;    Alaska   Interstate    Construction;                                                            
            Arcadis;    Kodiak     Map;    Hart    Crowser;     Earth                                                           
            Mechanics;   Bittner-Shen;    Denali   Drilling;    Gregg                                                           
            Drilling                                                                                                            
                                                                                                                                
                                                                                                                                
      and the three firms shown were short listed by KABATA                                                                     
                                                                                                                                
                                                                                                                                
      firms and industry leaders in US and worldwide P3s                                                                        
                                                                                                                                
 Mr. Livingstone stated that the firm selection would be                                                                        
based on which firm would offer the lowest availability                                                                         
payments.                                                                                                                       
                                                                                                                                
11:01:42 AM                                                                                                                   
                                                                                                                                
Mr.    Livingstone     spoke    to   Slide    3,    "Structure    for                                                           
Availability    Fee  P3   Deal",   which  was   a  flow  chart   that                                                           
illustrated    that   private    partner   provided    single   point                                                           
responsibility     for   design,    construction,    financing    and                                                           
long-term operation and maintenance, all for a pre-                                                                             
determined annual availability fee.                                                                                             
                                                                                                                                
11:02:50 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone spoke to Slide 4, "Risk Sharing":                                                                               
                                                                                                                                
      The following summarizes the key risk sharing, where                                                                      
      the private partner takes risks under its control and                                                                     
      KABATA assuming risks of uncontrollable events.                                                                           
                                                                                                                                
  Risk                                     Party Taking Risk                                                                    
      Design deficiencies                      Private Partner                                                                  
      Construction cost                             Private Partner                                                             
      Design/construction integration          Private Partner                                                                  
      Construction schedule                    Private Partner                                                                  
                                                                                                                                
      KABATA discretionary change orders/KABATA acts                                                                            
                                                    KABATA                                                                      
                                                                                                                                
      All other design/construction change orders                                                                               
                                                    Private Partner                                                             
                                                                                                                                
      Specific conditions/events outside private partner control (see                                                           
      page 6)                                  KABATA                                                                           
                                                                                                                                
      Debt service                                  Private Partner                                                             
      O&M cost (for 35 years)                       Private Partner                                                             
                                                                                                                                
      Needed renewal capital expenditures (for 35 years)                                                                        
                                                    Private Partner                                                             
                                                                                                                                
      Future expansions                        KABATA    /     Private                                                          
      Partner                                                                                                                   
                                                                                                                                
      Toll collection cost (for 35 years)                                                                                       
                                                    Private Partner                                                             
      Toll revenue                                  KABATA                                                                      
      Availability payment                                                                                                      
                                                    KABATA/Project                                                              
                Reserve/State Moral Obligation                                                                                  
11:04:04 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone spoke to Slide 5, "Availability  Payment":                                                                      
                                                                                                                                
      Private   partner  bears   risk  that  its  costs   exceed  the                                                           
      availability fee.                                                                                                         
                                                                                                                                
                                                                                                                                
      private    partner    to   the   extent    the   Crossing     is                                                          
      "available" to traffic                                                                                                    
            - No  availability    payments  owed   until  project  is                                                           
            opened for service                                                                                                  
            - To  the  extent  the  private  partner  does  not  keep                                                           
            lanes  open,  or  does  not  operate   and  maintain  the                                                           
            Crossing   to   detailed    operating   standards,    the                                                           
            availability payment is reduced                                                                                     
                                                                                                                                
                                                                                                                                
      the concession is signed and includes components for:                                                                     
            -  Recovery   of  capital   (debt   and  equity),   which                                                           
            are fixed and not subject to escalation                                                                             
            -  Operation,   maintenance    and  repair,    which  are                                                           
            fixed, but subject to inflation escalation                                                                          
            -  Tolling   services,    which   are   fixed   fees  per                                                           
            collected     toll,    but    subject     to   inflation                                                            
            escalation                                                                                                          
                                                                                                                                
11:04:59 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone addressed slide 6 titled "Events Outside                                                                        
Private Partner Control":                                                                                                       
                                                                                                                                
      While   KABATA   has   assumed    designated    uncontrollable                                                            
      circumstances risks, steps have been taken to mitigate                                                                    
      those risks to KABATA.                                                                                                    
                                                                                                                                
      • KABATA   retains  certain  other   risks  related  to  KABATA                                                           
      changes   or  acts   in  its   control   and,   listed   below,                                                           
      items out of the control of the private partner                                                                           
                                                                                                                                
      · KABATA Retained Risks Outside of Private Partner                                                                        
         Control                                                                                                                
      · Mitigation                                                                                                            
      Discovery of unforeseen subsurface conditions,                                                                          
      hazardous   waste,   archeological     resources,   endangered                                                            
      species                                                                                                                   
      Extensive      subsurface       investigation       completed,                                                          
      including      borings      in     the     Knik     Arm     and                                                         
      historical/archeological     surveys   along   the  bridge  and                                                         
      roadway alignment                                                                                                       
                                                                                                                                
      Delays in receipt of certain major permits or right of                                                                    
       way acquisition; costs of changes in state law or                                                                        
      permit conditions                                                                                                         
      Major   permits   and  right   of  way  should   be  completed                                                          
      prior to private partner selection                                                                                      
                                                                                                                                
      Delays by utilities                                                                                                       
      There  are   not  many  utilities   along   right  of  way  and                                                         
      they are known and mapped                                                                                               
      Utility  memoranda   of  understanding,   should   be  executed                                                         
      prior to private partner selection                                                                                      
                                                                                                                                
       Force majeure events, including earthquakes, war,                                                                        
      terrorism, fires, floods                                                                                                  
      The Crossing is required to be designed to withstand                                                                    
      earthquakes, fires and floods                                                                                           
      The  private    partner   is   required   to   carry  casualty                                                          
      insurance                                                                                                               
      If  an   event   is  catastrophic,     it  is   likely   to  be                                                         
      covered   in  part   by  FHWA,   FEMA  and/or   other   federal                                                         
      disaster aid                                                                                                            
                                                                                                                                
11:05:55 AM                                                                                                                   
                                                                                                                                
Senator Bishop inquired if bedrock had been found as a                                                                          
result of the soil testing.                                                                                                     
                                                                                                                                
Mr. Foster responded that consolidated glacial till had                                                                         
been found.                                                                                                                     
                                                                                                                                
11:06:22 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone addressed Slide 7, "Proposed Legislation":                                                                      
                                                                                                                                
      Passage  of  SB13  (or  HB23)  is  condition   to  the  project                                                           
      proceeding   under   the   "availability    fee"  P3   approach                                                           
      and   obtaining   a   low  cost   TIFIA   loan   from   the  US                                                           
      Department of Transportation.                                                                                             
                                                                                                                                
            -  Ability   to   establish   a   Project   Reserve   and                                                           
            subject it to a trust arrangement                                                                                   
            - Toll  revenues   collected   by KABATA   are deposited                                                            
            into the Project Reserve                                                                                            
            -  KABATA's   availability    payment    obligation   and                                                           
            KABATA expenses are paid from the Project Reserve                                                                   
            - The  KABATA   chair  must   annually   certify  to  the                                                           
            Governor    and   Legislature    the    status   of   the                                                           
            Project   Reserve   and  amounts   needed,   if  any,  to                                                           
            restore it to its minimum requirement                                                                               
            - By  the  time the  Crossing   opens  for  traffic,  the                                                           
            project reserve is expected to be funded by State                                                                   
            appropriations    totaling    $150    million,   with    a                                                          
            "down payment" this year                                                                                            
                                                                                                                                
                                                                                                                                
      percent   of the  estimated   average   availability    payment                                                           
      over  next   three  years  plus   (2)  120  percent   of  prior                                                           
      year   KABATA    expenses    minus   (3)   prior    year   toll                                                           
      revenues                                                                                                                  
            -  Provides    liquidity    to   KABATA   to   make   the                                                           
            availability       payments      and     fund      KABATA                                                           
            administrative   costs   given  the  annual  legislative                                                            
            schedule   (appropriations     can   normally    only  be                                                           
            made during the 90 day session)                                                                                     
                                                                                                                                
11:07:25 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone discussed Slide 8, "Purpose of State                                                                            
Financial Backstop":                                                                                                            
                                                                                                                                
      The  private   partner   is  investing   nearly  $800   million                                                           
      of its  funds  to  build  the  Crossing  and  needs  assurance                                                            
      that   KABATA   and  the   State   can  pay   if  the   private                                                           
      partner meets its obligations.                                                                                            
                                                                                                                                
      · Request                                                                                                                 
      · Key Purpose                                                                                                           
                                                                                                                                
      Funding   shortfalls   if  availability   payments   and  other                                                           
      expenses exceed toll revenues                                                                                             
      •  Provides   funding   for  early   year  projected    revenue                                                         
      shortfalls during traffic ramp up on bridge                                                                             
      • Under  base  case  projections   there   are minimal   future                                                         
      need for State support                                                                                                  
                                                                                                                                
      Funding "pinhole" risks                                                                                                   
      •  Provides    funding   for   "pinhole"   risks   assumed   by                                                         
      KABATA                                                                                                                  
      •  Pinhole   risks   proposed   to   be  backstopped    by  the                                                         
      State   include:    (1)   termination    costs,    should   the                                                         
      concession   be   terminated   prior   to   its  maturity   for                                                         
      KABATA  fault  or  convenience   ; and  (2)  compensation   for                                                         
      specific    conditions/events     outside    private    partner                                                         
      control                                                                                                                 
                                                                                                                                
                                                                                                                                
11:08:44 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone spoke to slide 9 titled: Assumptions                                                                            
Provided by Team of Experts":                                                                                                   
                                                                                                                                
      The   financial   projections     are  based    on  a   set  of                                                           
      assumptions   carefully   prepared  by  a team  of  experts  in                                                           
      their respective fields.                                                                                                  
                                                                                                                                
      •   As   KABATA's    financial     advisor,    Citigroup    has                                                           
      prepared  financial   projections   to  show  how  the  project                                                           
      will  perform   under  a  set  of  assumptions   developed   by                                                           
      national experts in their respective fields:                                                                              
                                                                                                                                
      (The  following   information   is  ordered:  the  assumption,                                                            
      the firm, and the credentials.)                                                                                           
                                                                                                                                
      Construction Cost                                                                                                         
      HDR1                                                                                                                      
      Fifth-ranked    engineering   firm   for  highway    design  in                                                           
      the US                                                                                                                    
                                                                                                                                
      Traffic and Revenue                                                                                                       
      CDM Smith                                                                                                                 
      Foremost   Traffic    and   Revenue   consultant    with   more                                                           
       studies supporting financings than any other firm                                                                        
                                                                                                                                
      Operations and Maintenance                                                                                                
      HDR/PND                                                                                                                   
      Fifth-ranked    engineering   firm   for  highway    design  in                                                           
      the  US  and   one  of  the   top  Alaskan   road  and   bridge                                                           
      engineers                                                                                                                 
                                                                                                                                
      Toll Collection                                                                                                           
      CDM Smith                                                                                                                 
      Leading  toll  system   advisor  to  toll  and  transportation                                                            
      agencies                                                                                                                  
                                                                                                                                
      Renewal Capital Expenditures                                                                                              
      CDM Smith2                                                                                                                
      Substantial    experience     in   inspecting    bridges    and                                                           
      developing      capital      maintenance      programs      for                                                           
      transportation agencies in the US.                                                                                        
                                                                                                                                
      Debt and Equity                                                                                                           
      Citigroup                                                                                                                 
      One   of   the    world's    largest    banks    and   the   #1                                                           
      underwriter of US toll road bonds                                                                                         
                                                                                                                                
      (1)  HDR  was  assisted   by  PND,  Armeni,   William  Ott  and                                                           
      DCS  for  bridge   design   and  Hydro-Ram   and  IHC   Merwede                                                           
      for piling                                                                                                                
      (2) CDM Smith was assisted by PND                                                                                         
                                                                                                                                
11:09:46 AM                                                                                                                   
                                                                                                                                
Mr.   Livingstone    addressed    Slide    10,   "KABATA   Projected                                                            
Obligations   and  Toll  Revenues."   He stated   that  in the  early                                                           
years,  revenue   would  be insufficient    to cover  costs,   but in                                                           
the   later   part   the   project   would   generate    significant                                                            
revenue for the state.                                                                                                          
                                                                                                                                
11:10:59 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone discussed Slide 11, "Sensitivities"                                                                             
                                                                                                                                
      Sensitivities     prepared     to   determine     upside    and                                                           
      downside   impact   of   the   project   on  KABATA    and  the                                                           
      State.                                                                                                                    
                                                                                                                                
                                                                                                                                
            - Base case - Most likely traffic and revenue                                                                       
            projection                                                                                                          
            - Upside   and  downside   sensitivities   at  5  percent                                                           
            (aggressive    upside),    25   percent   (upside),    75                                                           
            percent    (downside)     and    95   percent     (severe                                                           
            downside) probabilities that traffic will exceed                                                                    
                                                                                                                                
            - Initial Crossing:                                                                                                 
                                                                                                                                
                 four lane foundation                                                                                           
                                                                                                                                
                 to avoid future neighborhood disruption                                                                        
            - Future Expansions:                                                                                                
                                                                                                                                
                 initial    configuration    (estimated   20301   for                                                           
                 base case)                                                                                                     
                                                                                                                                
                 Point   MacKenzie   Road   upgrade   to  four  lanes                                                           
                (estimated 20251 for base case)                                                                                 
                                                                                                                                
                 controlled    by KABATA   and  the  State  based  on                                                           
                 traffic, congestion and funding availability                                                                   
                                                                                                                                
       (1) Based on traffic capacity analysis by CDM Smith                                                                      
      and HDR.                                                                                                                  
                                                                                                                                
11:12:30 AM                                                                                                                   
                                                                                                                                
Mr.  Livingstone    discussed    Slide  12,   "Revenue   Sensitivity                                                            
Results   from  Monte   Carlo  Simulations,"    which  charted   that                                                           
Citi  analyzed   the Crossing's   revenues   under  five  cases,  the                                                           
base    case   previously     described    and   four    alternative                                                            
probability   cases   at  higher  and  lower   traffic   and  revenue                                                           
volumes.    The    severe    downside,     downside,    upside    and                                                           
aggressive   upside  cases  represent   95   percent,   75   percent,                                                           
25   percent   and  5   percent   probabilities    that  traffic  and                                                           
toll  revenues   will  be  greater,   respectively.   For  instance,                                                            
under   the  severe   downside,   95    percent  probability    case,                                                           
there  is  only  a  5   percent   probability   that  toll   revenues                                                           
will be below the projection.                                                                                                   
                                                                                                                                
11:12:59 AM                                                                                                                   
                                                                                                                                
Mr.  Livingstone    addressed   Slide   13,  "Project   Cost/Benefit                                                            
to  State."    He  explained   that   the   slide  illustrated    the                                                           
expected   appropriations    that   would  be   expected   under  the                                                           
various   scenarios.   Slide   13  charted   cumulative    costs  and                                                           
financial    return   to  the   state  and   the   funding   of,  and                                                           
release   from,  project  reserve   over  45  years.  He  noted  that                                                           
the  grey   line  on  the   slide  represented    the  $150   million                                                           
initial  funding   of the  reserve.   He said  that  there  would  be                                                           
no  request  for  future   appropriations    until  2025.  The  slide                                                           
listed   dates   that  expansions    could  occur   under   the  base                                                           
case;   under   the   sensitivities,     the   expansions    occurred                                                           
earlier   (upside  cases)   or  later  (downside   cases)   based  on                                                           
when  traffic   levels  warranted   expansion.    Additionally,   the                                                           
severe   downside,    downside,    base,   upside   and   aggressive                                                            
upside  represented    95   percent,   75   percent,   50    percent,                                                           
25   percent   and  5   percent   probabilities    that  traffic  and                                                           
toll  revenues   would  be greater,   respectively.    For instance,                                                            
under   the  severe   downside,   95    percent  probability    case,                                                           
there  was  only  a  5   percent  probability   that  toll   revenues                                                           
would be below the projection.                                                                                                  
                                                                                                                                
11:14:32 AM                                                                                                                   
                                                                                                                                
Senator Olson inquired the date of the projects final year.                                                                     
                                                                                                                                
Mr. Livingstone replied 2060.                                                                                                   
                                                                                                                                
11:14:49 AM                                                                                                                   
                                                                                                                                
Mr.  Livingstone    spoke  to  Slide   14,  "Sensitivity   Results,"                                                            
which  was  the   numeric  information    charted  on  the   previous                                                           
slide.   Essentially,    under  the   base  case,   over   45  years,                                                           
ongoing   appropriations   of  $37  million   were  required,   while                                                           
the   Knik   Arm   Crossing   would   generate    $2.3   billion   of                                                           
revenues to fund transportation in the state.                                                                                   
                                                                                                                                
11:16:09 AM                                                                                                                   
                                                                                                                                
Mr.    Livingstone      discussed      Slide    15     "Conservative                                                            
Assumptions Used in the Financial Analysis":                                                                                    
                                                                                                                                
      Citigroup's analysis uses conservative, reasonable                                                                        
      assumptions.                                                                                                              
                                                                                                                                
                                                                                                                                
      current market                                                                                                            
           - 1.5 percent higher for tax-exempt PABs                                                                             
            - 1.1 percent higher for TIFIA loan                                                                                 
            - Using current market interest rates eliminates                                                                    
            any State reserve replenishment in other than the                                                                   
            95 percent probability, severe downside scenario                                                                    
                                                                                                                                
            percent probability scenario from $627 million to                                                                   
            $113 million                                                                                                        
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
      if state is paying under "moral obligation" pledge                                                                        
            - If KABATA did not move forward with the                                                                           
            expansions, under the severe downside case, State                                                                   
            reserve  replenishment    drops  from   $627  million  to                                                           
            $113   million,    but   the   Crossing   would    become                                                           
            congested                                                                                                           
                                                                                                                                
                                                                                                                                
      modeled                                                                                                                   
                                                                                                                                
                                                                                                                                
            - Recent   Federal   Highways   reauthorization    allows                                                           
            up  to  49  percent   TIFIA  and   lower  interest   rate                                                           
            for rural projects                                                                                                  
                                                                                                                                
            considered rural                                                                                                    
                                                                                                                                
                                                                                                                                
      the public or the resulting economic development                                                                          
                                                                                                                                
                                                                                                                                
      asset unencumbered                                                                                                        
                                                                                                                                
Mr. Livingstone believed that all of the assumptions used                                                                       
in the presentation were very conservative.                                                                                     
                                                                                                                                
11:18:33 AM                                                                                                                   
                                                                                                                                
Mr. Livingstone spoke to Slides 16 and 17, " Analysis of                                                                        
Financial Impact of Legislation on State":                                                                                      
                                                                                                                                
      State's   appropriation     pledge   is   a  backup    to  toll                                                           
      revenues   and  would  only  be  triggered   if toll   revenues                                                           
      are insufficient to pay costs.                                                                                            
                                                                                                                                
                                                                                                                                
      is a "double barreled" credit                                                                                             
            - Payable   FIRST  from  toll  revenues  in  the  Project                                                           
            Reserve   as  the  intended   primary   source   of  debt                                                           
            repayment                                                                                                           
            - Payable   SECOND   from  the  appropriated    funds   in                                                          
            the  Project    Reserve,    initially   equal    to  $150                                                           
            million,    and   a   commitment    to   seek   a   state                                                           
            appropriation   if  the  Project   Reserve   falls  short                                                           
            of minimum requirement                                                                                              
                                                                                                                                
            base case financial projections                                                                                     
                                                                                                                                
                                                                                                                                
      support feature used by the Alaska Bond Bank and                                                                          
      AIDEA  which   have  good   records   of  debt  repayment   and                                                           
      have been credit neutral to the State's own bond                                                                          
      rating                                                                                                                    
                                                                                                                                
      has    been    carefully    crafted     as   back-up     credit                                                           
      protection   that  should  be  viewed   as credit   neutral  to                                                           
      the  State's  own  bond  rating  because  of  the  strength  of                                                           
      the  overall   project  plan   and  strength   of  the  primary                                                           
      security                                                                                                                  
                                                                                                                                
      The  proposed   legislation   should   be  credit   neutral   to                                                          
      the State, given the minimal projected need for                                                                           
      appropriations    and  the   importance   of  the   project  to                                                           
      the State.                                                                                                                
                                                                                                                                
                                                                                                                                
      the credit, is likely to be used sparingly                                                                                
            - No  availability    payments  due  until   the  Project                                                           
            is  completed    and  available    for   service,   which                                                           
            removes   the   construction    risks   (State    is  not                                                           
            taking  on  construction    cost   overrun  or   schedule                                                           
            risk)                                                                                                               
                                                                                                                                
            State   are   $36   million;    other   shortfalls    are                                                           
            covered  by  the   Project  Reserve   without   the  need                                                           
            for further appropriations                                                                                          
                                                                                                                                
            probability   of  exceeding,"   first   Project   Reserve                                                           
            replenishment    by  State  is   in  2025  ($9  million)                                                            
            and maximum annual payment is $38 million in 2043                                                                   
                                                                                                                                
                                                                                                                                
            -  Infrastructure     projects,    like   the  Knik   Arm                                                           
            Crossing,    fill    an   essential    need    and   spur                                                           
            economic development                                                                                                
                                                                                                                                
11:19:03 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer noted that the committee would adjourn for                                                                       
floor session and continue the discussion during the                                                                            
afternoon meeting.                                                                                                              
                                                                                                                                
11:19:45 AM                                                                                                                   
                                                                                                                                
SB 13 was HEARD and HELD in committee for further                                                                               
consideration.                                                                                                                  
                                                                                                                                
11:19:48 AM                                                                                                                   
ADJOURNMENT                                                                                                                   
The meeting was adjourned at 11:19 a.m.                                                                                         

Document Name Date/Time Subjects
CSSB 63(STA) Explanation of Changes.pdf SFIN 4/2/2013 9:00:00 AM
SB 63
CSSB 63(STA) Sectional Analysis.pdf SFIN 4/2/2013 9:00:00 AM
SB 63
CSSB 63(STA) Sponsor Statement.pdf SFIN 4/2/2013 9:00:00 AM
SB 63
SB63 ADVANCE PRINTING.PDF SFIN 4/2/2013 9:00:00 AM
SB 63
SB63 AT PUBLISHING.PDF SFIN 4/2/2013 9:00:00 AM
SB 63
SB63 Letter of Support State Chamber.pdf SFIN 4/2/2013 9:00:00 AM
SB 63
SB63 SERVICE BUSI PRINT.PDF SFIN 4/2/2013 9:00:00 AM
SB 63
SB63 TECHNI PRINT.PDF SFIN 4/2/2013 9:00:00 AM
SB 63
KGB - Parks MVA rates.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 Cap Bud FY 2014 $10M.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 CH to SFIN hearing req 3.26.13.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 CH to USDOT re TIFIA 12.17.12.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 KABATA myths.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 KABATA summary of Legislation.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 Letters of Support.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 Mat Su Economic Trends.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 MSB PtMac Townsite Reso 13-007.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 NealFriedassembly2013 MSB 3.19.13.pdf SFIN 4/2/2013 9:00:00 AM
SB 3
SB 13
SB 13 Neil Fried 3.25.13 Frontiersman.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 Pt Mac Townsite map.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 Sectional Analysis.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 Sectional Version A.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 Slides for bill packet.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 sponsor statement version A.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 TIFIA importance.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 13 Citi Presentation KABATA Finance Committee 3-30-13 FINAL2.pdf SFIN 4/2/2013 9:00:00 AM
SB 13
SB 59 Weissler SFIN Testimony .pdf SFIN 4/2/2013 9:00:00 AM
SB 59
SB 13 Response to Citi Presentation KABATA Finance Committee.pdf SFIN 4/2/2013 9:00:00 AM
SB 13