00 CS FOR HOUSE BILL NO. 215(JUD) am 01 "An Act relating to the judicial review of a right-of-way lease or the development or 02 construction of an oil or gas pipeline on state land; and relating to the lease of a right-of- 03 way by the Alaska Housing Finance Corporation for a gas pipeline transportation 04 corridor." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 38.34.050(c) is amended to read: 07 (c) Notwithstanding any contrary provision of law, the Department of Natural 08 Resources shall grant the Alaska Housing Finance Corporation a right-of-way lease 09 under AS 38.35 for the gas pipeline transportation corridor if 10 (1) the corporation submits a complete right-of-way lease application 11 under AS 38.35.050; 12 (2) the lease application is made the subject of notice and other 13 reasonable and appropriate publication requirements under AS 38.35.070; and 14 (3) except for the covenants in AS 38.35.120(a)(1), (2), and (5), the 01 corporation agrees to be bound by the right-of-way lease covenants set out in 02 AS 38.35.120; notwithstanding AS 38.35.120(b), a right-of-way lease subject to 03 this paragraph is valid and of legal effect. 04 * Sec. 2. AS 38.35.100(d) is amended to read: 05 (d) The commissioner shall include in a conditional lease each requirement 06 and condition of the covenants established under AS 38.35.120, except for covenants 07 that do not apply to a lease entered into under AS 38.34.050(c). The commissioner 08 may also require that the lessee agree to additional conditions that the commissioner 09 finds to be in the public interest. In place of the covenant established under 10 AS 38.35.120(a)(9), the commissioner shall require the lessee to agree that it will not 11 transfer, assign, pledge, or dispose of in any manner, directly or indirectly, its interest 12 in a conditional right-of-way lease or a pipeline subject to the conditional lease, unless 13 the commissioner, after considering the public interest and issuing written findings to 14 substantiate a decision to allow the transfer, authorizes the transfer. The commissioner 15 shall also require the lessee to agree not to allow the transfer of control of the lessee 16 without the approval of the commissioner; as used in this subsection, "transfer of 17 control of the lessee" means the transfer of 30 percent or more, in the aggregate, of 18 ownership interest in the lessee in one or more transactions to one or more persons by 19 one or more persons. 20 * Sec. 3. AS 38.35.120(a) is amended to read: 21 (a) Except as provided in AS 38.34.050(c), a [A] noncompetitive lease of 22 state land for a right-of-way for an oil or natural gas pipeline valued at $1,000,000 or 23 more may be granted only upon the condition that the lessee expressly covenants in 24 the lease, in consideration of the rights acquired by it under the lease, that 25 (1) it assumes the status of and will perform all of its functions 26 undertaken under the lease as a common carrier and will accept, convey, and transport 27 without discrimination crude oil or natural gas, depending on the kind of pipeline 28 involved, delivered to it for transportation from fields in the vicinity of the pipeline 29 subject to the lease throughout its route both on state land obtained under the lease and 30 on the other land; it will accept, convey, and transport crude oil or natural gas without 31 unjust or unreasonable discrimination in favor of one producer or person, including 01 itself, as against another but will take the crude oil or natural gas, depending on the 02 kind of pipeline involved, delivered or offered, without unreasonable discrimination, 03 that the Regulatory Commission of Alaska shall, after a full hearing with due notice to 04 the interested parties and a proper finding of facts, determine to be reasonable in the 05 performance of its duties as a common carrier; however, a lessee that owns or operates 06 a natural gas pipeline 07 (A) subject to regulation either under the Natural Gas Act (15 08 U.S.C. 717 et seq.) of the United States or by the state or political subdivisions 09 with respect to rates and charges for the sale of natural gas, is, to the extent of 10 that regulation, exempt from the common carrier requirement in this 11 paragraph; 12 (B) that is a North Slope natural gas pipeline (i) is required to 13 operate as a common carrier only with respect to the intrastate transportation of 14 North Slope natural gas, as that term is defined in AS 42.06.630, and (ii) is not 15 required to operate as a common carrier as to a liquefied natural gas facility or 16 a marine terminal facility associated with the pipeline, and is not otherwise 17 required to perform its functions under the lease as a common carrier; for 18 purposes of this subparagraph, "North Slope natural gas pipeline" means all the 19 facilities of a total system of pipe, whether owned or operated under a contract, 20 agreement, or lease, used by a carrier for transportation of North Slope natural 21 gas, as defined by AS 42.06.630, for delivery, for storage, or for further 22 transportation, and including all pipe, pump, or compressor stations, station 23 equipment, tanks, valves, access roads, bridges, airfields, terminals and 24 terminal facilities, including docks and tanker loading facilities, operations 25 control centers for both the upstream part of the pipeline and the terminal, 26 tanker ballast treatment facilities, fire protection system, communication 27 system, and all other facilities used or necessary for an integral line of pipe, 28 taken as a whole, to carry out transportation, including an extension or 29 enlargement of the line; 30 (2) it will interchange crude oil or natural gas, depending on the kind 31 of pipeline involved, with each like common carrier and provide connections and 01 facilities for the interchange of crude oil or natural gas at every locality reached by 02 both pipelines when the necessity exists, subject to rates and regulations made by the 03 appropriate state or federal regulatory agency; 04 (3) it will maintain and preserve books, accounts, and records and will 05 make those reports that the state may prescribe by regulation or law as necessary and 06 appropriate for purposes of administration of this chapter; 07 (4) it will accord at all reasonable times to the state and its authorized 08 agents and auditors the right of access to its property and records, of inspection of its 09 property, and of examination and copying of records; 10 (5) it will provide connections, as determined by the Regulatory 11 Commission of Alaska under AS 42.06.340, to facilities on the pipeline subject to the 12 lease, both on state land and other land in the state, for the purpose of delivering crude 13 oil or natural gas, depending on the kind of pipeline involved, to persons (including 14 the state and its political subdivisions) contracting for the purchase at wholesale of 15 crude oil or natural gas transported by the pipeline when required by the public 16 interest; 17 (6) it shall, notwithstanding any other provision, provide connections 18 and interchange facilities at state expense at such places the state considers necessary 19 if the state determines to take a portion of its royalty or taxes in oil or natural gas; 20 (7) it will construct and operate the pipeline in accordance with 21 applicable state laws and lawful regulations and orders of the Regulatory Commission 22 of Alaska; 23 (8) it will, at its own expense, during the term of the lease, 24 (A) maintain the leasehold and pipeline in good repair; 25 (B) promptly repair or remedy any damage to the leasehold; 26 (C) promptly compensate for any damage to or destruction of 27 property for which the lessee is liable resulting from damage to or destruction 28 of the leasehold or pipeline; 29 (9) it will not transfer, assign, or dispose of in any manner, directly or 30 indirectly, or by transfer of control of the carrier corporation, its interest in a right-of- 31 way lease, or any rights under the lease or any pipeline subject to the lease to any 01 person other than another owner of the pipeline (including subsidiaries, parents, and 02 affiliates of the owners), except to the extent that the commissioner, after 03 consideration of the protection of the public interest (including whether the proposed 04 transferee is fit, willing, and able to perform the transportation or other acts proposed 05 in a manner that will reasonably protect the lives, property, and general welfare of the 06 people of Alaska), authorizes; the commissioner shall not unreasonably withhold 07 consent to the transfer, assignment, or disposal; 08 (10) it will file with the commissioner a written appointment of a 09 named permanent resident of the state to be its registered agent in the state and to 10 receive service of notices, regulations, decisions, and orders of the commissioner; if it 11 fails to appoint an agent for service, service may be made by posting a copy in the 12 office of the commissioner, filing a copy in the office of the lieutenant governor, and 13 mailing a copy to the lessee's last known address; 14 (11) the applicable law of this state will be used in resolving questions 15 of interpretation of the lease; 16 (12) the granting of the right-of-way lease is subject to the express 17 condition that the exercise of the rights and privileges granted under the lease will not 18 unduly interfere with the management, administration, or disposal by the state of the 19 land affected by the lease, and that the lessee agrees and consents to the occupancy 20 and use by the state, its grantees, permittees, or other lessees of any part of the right- 21 of-way not actually occupied or required by the pipeline for the full and safe 22 utilization of the pipeline, for necessary operations incident to land management, 23 administration, or disposal; 24 (13) it will be liable to the state for damages or injury incurred by the 25 state caused by the construction, operation, or maintenance of the pipeline and it will 26 indemnify the state for the liabilities or damages; 27 (14) it will procure and furnish liability and property damage insurance 28 from a company licensed to do business in the state or furnish other security or 29 undertaking upon the terms and conditions the commissioner considers necessary if 30 the commissioner finds that the net assets of the lessee are insufficient to protect the 31 public from damage for which the lessee may be liable arising out of the construction 01 or operation of the pipeline. 02 * Sec. 4. AS 38.35.120(b) is amended to read: 03 (b) Except as provided in AS 38.34.050(c), for [FOR] a right-of-way lease 04 granted under this chapter for an oil or natural gas pipeline valued at $1,000,000 or 05 more to be valid and of legal effect, it must contain the terms required to be inserted 06 under the provisions of AS 38.35.110 - 38.35.140. Except as provided in 07 AS 38.34.050(c), an [AN] oil or natural gas pipeline right-of-way lease granted under 08 this chapter that does not contain the required terms is null and void and without legal 09 effect and does not vest any interest in state land or any authority in the carrier granted 10 the lease. 11 * Sec. 5. AS 38.35.200(a) is amended to read: 12 (a) A person that is a [AN APPLICANT OR] competing applicant or that [A 13 PERSON WHO] has a direct financial interest affected by the lease of a right-of-way 14 under this chapter that [WHO] raises an objection [OBJECTIONS] within the later 15 of 60 days after the effective date of this Act or [OF] the publication of notice under 16 AS 38.35.070 and a person that is an applicant are the only persons with standing to 17 seek judicial review of a decision of the commissioner under AS 38.35.100 or an 18 action described in (c) of this section, except that the limitations in (c) of this 19 section do not apply to an applicant appealing an action or decision described in 20 (c) of this section. 21 * Sec. 6. AS 38.35.200(b) is amended by adding new subsections to read: 22 (c) Except as provided for an applicant under (a) of this section, 23 notwithstanding any contrary provision of law, an action or decision of the 24 commissioner or other state officer or agency concerning the issuance or approval of a 25 necessary right-of-way, permit, lease, certificate, license, or other authorization for the 26 development, construction, or initial operation of a natural gas pipeline that uses a 27 right-of-way subject to this chapter may not be subject to judicial review, except that a 28 claim alleging the invalidity of this section must brought within 60 days after the 29 effective date of this Act, and a claim alleging that an action will deny rights under the 30 Constitution of the State of Alaska must be brought within 60 days following the date 31 of that action. A claim that is not filed within the limitations established in this 01 subsection is barred. A complaint under this subsection must be filed in superior court, 02 and the superior court has exclusive jurisdiction. Notwithstanding AS 22.10.020(c), 03 except in conjunction with a final judgment on a claim filed under this subsection, the 04 superior court may not grant injunctive relief, including a temporary restraining order, 05 preliminary injunction, permanent injunction, or stay against the issuance of a right-of- 06 way, permit, lease, certificate, license, or other authorization. In this section, "natural 07 gas pipeline" has the meaning given in AS 42.06.630. 08 (d) An appeal of a permitting decision by the Department of Environmental 09 Conservation under AS 46.03 or AS 46.14 that is made under authority delegated to 10 the Department of Environmental Conservation by the United States Environmental 11 Protection Agency is not 12 (1) subject to the limitation in (a)(2) of this section; 13 (2) included in the actions or decisions described in (c) of this section. 14 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 REVISOR'S INSTRUCTION. The revisor of statutes shall change the catch line of 17 AS 38.35.200 from "Judicial review of decisions of commissioner on application" to "Judicial 18 review."