SB 203-COOK INLET GAS STORAGE FACILITIES                                                                        
                                                                                                                                
4:08:02 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI announced that  the first order of business                                                               
to come before the committee was SB 203.                                                                                        
                                                                                                                                
SENATOR FRENCH  moved to adopt the  proposed committee substitute                                                               
(CS) for  SB 203, labeled  26-LS1114\T, as the  working document.                                                               
There being no objection, version T was before the committee.                                                                   
                                                                                                                                
SENATOR  FRENCH  said on  page  2,  lines  10-16, of  Version  T,                                                               
clarify that the Regulatory Commission  of Alaska (RCA) will only                                                               
regulate gas storage facilities that  apply for and receive a tax                                                               
credit. Version T also addresses  the Department of Revenue's two                                                               
concerns regarding double dipping. On  page 2, lines 24-26 ensure                                                               
that  a facility  receives only  one credit  at the  time of  the                                                               
first  purchase, construction  or  acquisition of  a gas  storage                                                               
facility. On page 2, line  29 now reads "an expenditure incurred"                                                               
which  is  more  familiar  and comfortable  language  than  "cash                                                               
expenditure  or   a  payment".   The  provision   requiring  pre-                                                               
authorization of  credit on  page 3, lines  18-26, of  Version P,                                                               
was completely  removed. A  taxpayer will  claim the  credit when                                                               
filing  their   return.  Finally,   the  provision   amending  AS                                                               
43.56.210(5) was removed from the bill.                                                                                         
                                                                                                                                
4:11:53 PM                                                                                                                    
KEVIN BANKS,  Director, Division  of Oil  and Gas,  Department of                                                               
Natural  Resources (DNR),  Anchorage, commented  that having  the                                                               
RCA oversee  a facility that receives  this tax credit is  a good                                                               
idea. DNR,  in dealing  with leasing  of new  storage facilities,                                                               
has  engaged the  applicants with  a proposal  that they  provide                                                               
third party  access in  exchange for  the right  to store  gas in                                                               
state oil  and gas  leases and  that the RCA's  fee will  be some                                                               
percentage of their cost of service.                                                                                            
                                                                                                                                
4:15:13 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI  asked if  the administration  supported or                                                               
opposed SB 203.                                                                                                                 
                                                                                                                                
MR. BANKS replied the administration is neutral.                                                                                
                                                                                                                                
CO-CHAIR WIELECHOWSKI  said SB 203 could  go a long way  to solve                                                               
some problems with  gas in Cook Inlet. He  thanked Senator French                                                               
and  noted  that   the  CS  was  before   the  committee  without                                                               
objection.                                                                                                                      
                                                                                                                                
SENATOR  FRENCH  moved  to  report   SB  203,  26-LS1114\T,  from                                                               
committee  with   individual  recommendations   and  accompanying                                                               
fiscal notes. There  being no objection CSSB  203(RES) moved from                                                               
the Senate Resources Standing Committee.