Legislature(2003 - 2004)
03/04/2004 01:43 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HOUSE BILL NO. 296
An Act making an appropriation for the operation of the
Alaska Natural Gas Development Authority; and providing
for an effective date.
REPRESENTATIVE ERIC CROFT explained that HB 296 is identical
to Senator Therriault's bill [SB 241]. It would appropriate
$2.15 million to the Alaska Natural Gas Development
Authority (ANGDA) so that the authority can proceed with its
work. He expressed frustration that neither the legislature
nor the administration has shown support for the authority
and has taken six months to appoint the board and fund the
authority. The authority received some funding in November
2003, a year after it was established, but it is still
awaiting significant funding to implement the will of the
Alaska voters.
Co-Chair Williams stated his intention to hear and hold the
bill today.
STEVE PORTER, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE,
acknowledged that the issue concerns the plans of the
Department of Revenue and ANGDA for the funding requested in
this legislation. He noted that Harold Heinze, the Chief
Executive Officer of ANGDA, has provided substantial
information to the committee on ANGDA's budget needs and
concerns.
Mr. Porter pointed out that the Department of Revenue has
compiled a 3-page list of items requiring funding over the
next eighteen months to meet the requirements of the
Stranded Gas Act, and to allow ANGDA to proceed (copy on
file.) The department is currently responding to three
stranded gas applications, and supporting ANGDA as well as
energy legislation. He explained that the department is
cooperating with the Canadian government on pipeline issues.
He gave a breakdown, explaining that the broad projection in
FY 04 and FY 05 with the producers is about $2.6 million,
with MidAmerican at about $450 thousand, the Port Authority,
if the application is approved, at about $700 thousand, and
ANGDA at about $450 thousand. Mr. Porter said that the
energy bill in FY 04- FY 05 could take as much as $1
million. The total request is $3.48 million.
Mr. Porter stated that some these projected costs may not
actually have to be spent because of potential negotiated
agreements, but he said that the department needs nearly all
of the $3 million that it has recommended.
Mr. Porter informed the committee that although ANGDA is
earmarked for only $450 thousand, some of the benefit ANGDA
will receive is through contracts the department is
negotiating on the Stranded Gas Development Act. There is
about $200 thousand spread through different groups, with
ANGDA receiving substantially more benefit than $450
thousand. He said the $450 thousand is attributable to ANGDA
and it cannot benefit the Stranded Gas Development Act
negotiations.
TAPE HFC 04 - 44, Side B
Representative Croft questioned the infrastructure support
for ANGDA in the department's proposal. Mr. Porter replied
that it is in operating budget for the Department of
Revenue, which includes a line item for ANDGDA allocated to
the CEO and staff. The money in HB 296 would go to
contractors and additional support. Representative Croft
asked the amount. Mr. Porter replied that the details are
being worked out, but he thought it would be between $150
and $274 thousand.
Vice-Chair Meyer stated that he is co-sponsoring HB 296 in
order to keep all avenues open for development of a gas
pipeline. He asked if MidAmerica will meet their contract
deadline by March 12 and expressed concern about getting
ANGDA funded sooner if MidAmerica does not meet the
deadline.
Mr. Porter replied that there is always the possibility of
reaching agreement by March 12 if the details can be
negotiated. For ANGDA to be strong and viable, the funding
is needed quickly in order to execute contracts.
In response to a question by Representative Croft, Mr.
Porter clarified that he never told the ANGDA board that it
wouldn't get any funding if it didn't support the $3 million
request. He admitted making statements to the board that
the best way to get funding for ANGDA and the Stranded Gas
Act is the vehicle the Department of Revenue put before
them.
Representative Croft argued that a number of board members
have told him that they heard from Mr. Porter that this was
only way they would get significant funding. Mr. Porter
replied he would clarify it with the ANGDA board in open
session during their March 15 meeting.
Representative Hawker asked the sponsor if the $2.15 million
is consistent with the lapse date of 2009. Representative
Croft replied no, that most of the money would need to be
spent soon, and he chose 2009 as the expected date that
construction would begin. He offered to shorten it if
Representative Hawker would like.
Representative Hawker asked Co-Chair Williams to arrange
public testimony from the ANGDA board because he is hearing
conflicting perceptions. Co-Chair Williams affirmed that it
could be arranged.
In response to a question by Representative Croft, Co-Chair
Williams clarified that more committee work would be done on
the bill to keep the numbers but change the language.
Representative Joule asked Mr. Porter if ANGDA participated
in the budget. Mr. Porter responded that Mr. Heinze had not
seen this report. He said that because Mr. Heinze's budget
does not include research costs for the Stranded Gas Act
negotiations, the numbers would not necessarily match.
Representative Croft expressed continuing concern that only
a small portion of the $3 million would reach ANGDA. He
stated that only $450 thousand is not good administrative
efficiency, and not what he intended in sponsoring the bill.
His intention was that ANGDA receive the entire $2.15
appropriation. He expressed support for the separate
structure of the board to make decisions independent of
political administrations or the legislature.
Co-Chair Williams commented that Representative Croft has
not had direct discussion with the ANGDA board on a day-to-
day basis.
HB 296 was heard and HELD in Committee for further
consideration.
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