CS FOR SENATE BILL NO. 158(RES) "An Act directing the commissioner of revenue to prepare a report to the legislature relating to the state's participation in owning or financing a gas pipeline project; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. SENATOR JOHN TORGERSON, sponsor, relayed that in discussions relating to the construction of a natural gas pipeline in Alaska, the question has arisen as to whether the state should take an active ownership role in all or part of the pipeline or whether to offer other financial incentives. As a result of these discussions, he stated, this bill directs the commissioner or the Department of Revenue to prepare a report on this matter to the legislature by January 31, 2002. He elaborated this report would include a recommendation of whether the state should establish a state-owned public corporation; an entity similar to a port authority for the portion of the pipeline located in Alaska. If the recommendation is for state ownership, he noted the report would include recommendations on how it would be financed, either through general obligation bonds, revenue bonds, guaranteed debt, etc. This report, he continued, would also show the impact that ownership would have on the state's revenue and the ability to provide essential services and public services. In addition, the report would contain information on how Alaskans could purchase shares of the public corporation, if it were formed. Senator Torgerson pointed out the bill allows the department to enter into an agreement with a qualified, suitable firm to undertake this project. This contract, he said, would be exempt from the competitive bid requirements under legislative policy because of the limited time involved. Senator Torgerson stated the bill stipulates that the Department would provide to the House Resources and Senate Resources Committees, the data which the contractor would base its recommendations. He noted the contractor would give status reports to the Committees at least every 60 days. Senator Leman referenced the fiscal note and asked if the sponsor considered the $215,000 amount "reasonable". Senator Torgerson replied a similar report was done in 1982 at the approximately the same cost. Therefore, he surmised this amount is not extra-ordinary. Senator Wilken referenced the port authority between the North Slope Borough, the Fairbanks North Star Borough and the City of Valdez. He asked if this legislation would preclude the port authority from participating in ownership of a natural gas pipeline. Senator Torgerson answered it would not, since this bill only involves recommendations. He noted the port authority established between the three communities only has taxing authority on activities within in their boundaries, and much of the area a pipeline would cross would not be included. He qualified that if state-ownership were to occur, it was possible the port authority could be excluded. However, he stressed, the matter is still being debated with a large port authority discussed as one option. AT EASE 10:36AM/10:37AM Senator Wilken offered a motion to report CS SB 158 (RES) from Committee with fiscal note #1 from the Department of Revenue. There was no objection and CS SB 158 (RES) MOVED from Committee.