00 SENATE CS FOR CS FOR HOUSE BILL NO. 16(RES) 01 "An Act amending, for purposes of the Alaska Stranded Gas Development Act, the 02 standards applicable to determining whether a proposed new investment constitutes a 03 qualified project, the standards used to determine whether a person or group qualifies 04 as a project sponsor or project sponsor group, and the deadline for applications relating 05 to the development of contracts for payments in lieu of taxes and for royalty 06 adjustments that may be submitted for consideration, and modifying the conditions 07 bearing on the use of independent contractors to evaluate applications or to develop 08 contract terms; providing statements of intent for the Act relating to use of project labor 09 agreements and to reopening of contracts; and providing for an effective date." 10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 11 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 12 to read: 01 LEGISLATIVE INTENT. It is the intent of the legislature that 02 (1) in awarding contracts under the Alaska Stranded Gas Development Act, a 03 qualified sponsor or qualified sponsor group and contractors of the qualified sponsor or 04 qualified sponsor group may develop and enter into project labor agreements with appropriate 05 collective bargaining organizations for each project for which a contract is entered into; and 06 (2) each contract for payments in lieu of taxes and for royalty adjustments 07 entered into under the Alaska Stranded Gas Development Act contain a provision by which 08 the contract may be reopened by any party to the contract; the subject matter of the reopening 09 may be dealt with through the use of arbitration proceedings agreed on by the parties. 10 * Sec. 2. AS 43.82.100 is amended to read: 11 Sec. 43.82.100. Qualified project. Based on information available to the 12 commissioner, the commissioner may determine that a proposal for new investment is 13 a qualified project under this chapter [ONLY] if the project 14 (1) principally involves 15 (A) the transportation of North Slope natural gas by a 16 natural gas pipeline to one or more markets, together with any associated 17 processing or treatment; 18 (B) [IS A PROJECT FOR] the export of liquefied natural gas 19 from the state to one or more other states or countries; or 20 (C) any other technology that commercializes the shipment 21 of natural gas within the state or from the state to one or more other states 22 or countries; 23 (2) would produce at least 500,000,000,000 cubic feet of stranded gas 24 within 20 years from the commencement of commercial operations; and 25 (3) is capable, subject to applicable commercial regulation and 26 technical and economic considerations, of making gas available to meet the reasonably 27 foreseeable demand in this state for gas within the economic proximity of the project. 28 * Sec. 3. AS 43.82.110 is amended to read: 29 Sec. 43.82.110. Qualified sponsor or qualified sponsor group. The 30 commissioner may determine that a person or group is a qualified sponsor or qualified 31 sponsor group if the person or a member of the group 01 (1) intends to own an equity interest in a qualified project, intends to 02 commit gas that it owns to a qualified project, or holds the permits that the department 03 determines are essential to construct and operate a qualified project; and 04 (2) meets one or more of the following criteria: 05 (A) owns a working interest in at least 10 percent of the 06 stranded gas proposed to be developed by a qualified project; 07 (B) has the right to purchase at least 10 percent of the stranded 08 gas proposed to be developed by a qualified project; 09 (C) has the right to acquire, control, or market at least 10 10 percent of the stranded gas proposed to be developed by a qualified project; 11 (D) has a net worth equal to at least 10 [33] percent of the 12 estimated cost of constructing a qualified project; 13 (E) has an unused line of credit equal to at least 15 [25] percent 14 of the estimated cost of constructing a qualified project. 15 * Sec. 4. AS 43.82.170 is amended to read: 16 Sec. 43.82.170. Application deadline. The commissioner of revenue or the 17 commissioner of natural resources may not act on an application for a contract 18 submitted under AS 43.82.120 unless the application is received by the Department of 19 Revenue no later than March 31, 2005 [JUNE 30, 2001]. 20 * Sec. 5. AS 43.82.240(a) is amended to read: 21 (a) The commissioner may use independent contractors [AN 22 INDEPENDENT CONTRACTOR] to assist in the evaluation of an application or in 23 the development of contract terms under AS 43.82.200. The commissioner may 24 condition the development of a contract under AS 43.82.020 on an agreement by the 25 applicant to reimburse the state for the reasonable expenses of independent 26 contractors [AN INDEPENDENT CONTRACTOR] under this section. A 27 reimbursement of expenses that is required in an agreement authorized by this 28 subsection may not exceed $1,500,000 for each application. 29 * Sec. 6. This Act takes effect immediately under AS 01.10.070(c).