Legislature(2003 - 2004)
2004-04-30 House Journal
Full Journal pdf2004-04-30 House Journal Page 3682 HB 364 The following was read the second time: SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 364 "An Act establishing a moratorium on the issuance of state shallow natural gas leases in the vicinity of Kachemak Bay, and precluding the commissioner of natural resources from reissuing or otherwise extending leases within the moratorium area if the leases fail to produce gas in paying quantities within the terms of the lease or if there is a breach of a term or condition of the lease; and providing for an effective date." 2004-04-30 House Journal Page 3683 with the: Journal Page O&G RPT CS(O&G) NT 2DP 1NR 3AM 3205 FN1: INDETERMINATE(DNR) 3206 FIN REFERRAL REMOVED 3320 RES RPT CS(O&G) NT 5NR 2AM 3518 FN1: INDETERMINATE(DNR) 3519 Representative Coghill moved and asked unanimous consent that the following committee substitute be adopted in lieu of the original bill: CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 364(O&G) "An Act prohibiting the issuance of state shallow natural gas leases in the vicinity of Kachemak Bay, modifying the authority to extend certain shallow natural gas leases, and precluding the director of the division of lands from reissuing or otherwise extending shallow natural gas leases within the Kachemak Bay area if there is a breach of a term or condition of the lease; and providing for an effective date." There being no objection, it was so ordered. Amendment No. 1 was offered by Representatives Kerttula and Croft: Page 1, lines 1 - 5 (title amendment): Delete all material and insert: "An Act establishing a moratorium on the issuance of state shallow natural gas leases in the vicinity of Kachemak Bay and within the Matanuska Susitna Borough, and directing the commissioner of natural resources to reacquire shallow natural gas leases on the Kenai Peninsula and the Matanuska Susitna Borough within the moratorium area; and providing for an effective date." Page 1, line 7 through page 3, line 31: Delete all material and insert: " * Section. 1. AS 38.05.177(a) is amended to read: "(a) The provisions of this section 2004-04-30 House Journal Page 3684 (1) apply to gas, whether methane associated with and derived from coal deposits or otherwise, from a field if a part of the field is within 3,000 feet of the surface; and (2) do not apply to authorize lease of (i) that is subject to an oil and gas exploration license or lease issued under AS 38.05.131 - 38.05.134; or (ii) that is leased under AS 38.05.180; (B) the land (i) that is proposed to be subject to an oil and gas exploration license or lease issued under AS 38.05.131 - 38.05.134; or (ii) that is described in and part of a proposed oil and gas leasing program prepared under AS 38.05.180(b); however, the commissioner may waive the limitations of this subparagraph; (C) the land that is held under a coal lease entered into under AS 38.05.150, unless the applicant for a shallow natural gas lease is also the lessee under AS 38.05.150 of that land; [OR] (D) the valid existing selections of the Alaska Mental Health Trust Authority made for the purpose of reconstituting the mental health trust established under the Alaska Mental Health Enabling Act, P.L. 84-830, 70 Stat. 709 (1956), that become subject to management under AS 38.05.801, or of land that has been designated by law for or is subject to designation for conveyance to the Alaska Mental Health Trust Authority; however, after consultation with the Alaska Mental Health Trust Authority, the commissioner may waive the limitations of this subparagraph; (E) land and water within the Kenai Peninsula Borough east of Cook Inlet and south of the north boundary of Township 5 South, Seward Meridian; or (F) land within the Matanuska Susitna Borough. * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to read: REACQUISITION OF CERTAIN SHALLOW NATURAL GAS LEASES. (a) he commissioner of natural resources shall enter into negotiations to reacquire, by purchase in the name of the state, the title to or accountable interests in shallow natural gas leases entered into 2004-04-30 House Journal Page 3685 under AS 38.05.177 before the effective date of this Act within the boundaries described in (d) of this section. (b) In lieu of cash payment for a negotiated repurchase of a leasehold interest described in (a) of this section, the commissioner of natural resources may authorize a credit of the purchase price plus interest at the rate prescribed in AS 09.30.070 to be granted to the seller, to be applied against future lease bonus or rental payments, permit fees, royalties, or oil and gas taxes that may become owing on new production from other leases or property held by the seller for oil and gas development, including shallow natural gas development. The commissioner may also negotiate to reimburse, in like manner by credit provision a reasonable amount to compensate the lessee for expenses and other costs incurred by the lessee. (c) If the commissioner of natural resources is unable to negotiate a satisfactory price for repurchase of a leasehold interest described in (a) of this section, the commissioner may acquire a leasehold interest described in (a) of this section through exercise of the power of eminent domain. (d) The provisions of this section apply to shallow natural gas leases issued under AS 38.05.177 before the effective date of this Act on the land and water described in AS 38.05.177(a)(2)(E) and (F), added by sec. 2 of this Act. * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to read: APPLICATION OF SECTION 1 TO LAND CURRENTLY LEASED IN THE VICINITY OF KACHEMAK BAY AND WITHIN THE MATANUSKA SUSITNA BOROUGH FOR SHALLOW NATURAL GAS EXPLORATION AND DEVELOPMENT. The provisions of AS 38.05.177(a)(2)(E) and (F), added by sec. 2 of this Act, apply to prohibit the issuance or reissuance of a lease under AS 38.05.177 entered into before the effective date of this Act if the lease terminates because of the failure to extend the lease under AS 38.05.177(d) or if the lease terminates by the operation of AS 38.05.177(h). * Sec. 4. This Act takes effect immediately under AS 01.10.070(c)." 2004-04-30 House Journal Page 3686 Representative Kerttula moved and asked unanimous consent that Amendment No. 1 be adopted. Representative Seaton objected. Representative Kerttula moved and asked unanimous consent that she be allowed to abstain from voting on HB 364, HB 395, and HB 531 because of a conflict of interest. Objection was heard, and Representative Kerttula was required to vote. Representative Croft placed a call of the House. Representatives Meyer, Stepovich, Hawker, Chenault, and Seaton moved and asked unanimous consent that they be allowed to abstain from voting because of a conflict of interest. Objection was heard, and the members were required to vote. Representative Gruenberg declared a conflict of interest on HB 342 (page 3676). Representative Croft lifted the call. The question being: "Shall Amendment No. 1 be adopted?" The roll was taken with the following result: CSSSHB 364(O&G) Second Reading Amendment No. 1 YEAS: 11 NAYS: 26 EXCUSED: 2 ABSENT: 1 Yeas: Berkowitz, Crawford, Croft, Gara, Gatto, Guttenberg, Harris, Kapsner, Kerttula, Kookesh, Stoltze Nays: Anderson, Chenault, Coghill, Dahlstrom, Fate, Foster, Gruenberg, Hawker, Holm, Joule, Kohring, Kott, Lynn, Masek, McGuire, Meyer, Morgan, Moses, Ogg, Rokeberg, Samuels, Seaton, Stepovich, Williams, Wilson, Wolf Excused: Cissna, Weyhrauch Absent: Heinze And so, Amendment No. 1 was not adopted. 2004-04-30 House Journal Page 3687 Representative Coghill moved and asked unanimous consent that CSSSHB 364(O&G) be considered engrossed, advanced to third reading, and placed on final passage. There being no objection, it was so ordered. CSSSHB 364(O&G) was read the third time. The question being: "Shall CSSSHB 364(O&G) pass the House?" The roll was taken with the following result: CSSSHB 364(O&G) Third Reading Final Passage YEAS: 33 NAYS: 3 EXCUSED: 2 ABSENT: 2 Yeas: Anderson, Berkowitz, Chenault, Coghill, Crawford, Croft, Fate, Foster, Gara, Gatto, Gruenberg, Guttenberg, Harris, Hawker, Holm, Joule, Kapsner, Kerttula, Kookesh, Kott, Lynn, Masek, Meyer, Morgan, Moses, Ogg, Rokeberg, Samuels, Seaton, Stoltze, Williams, Wilson, Wolf Nays: Dahlstrom, Kohring, McGuire Excused: Cissna, Weyhrauch Absent: Heinze, Stepovich Dahlstrom changed from "Yea" to "Nay". And so, CSSSHB 364(O&G) passed the House. Representative Coghill moved and asked unanimous consent that the roll call on the passage of the bill be considered the roll call on the effective date clause. There being no objection, it was so ordered. CSSSHB 364(O&G) was referred to the Chief Clerk for engrossment.