05/06/2004 08:05 AM Senate FIN

                                                                                                                                
     HOUSE BILL NO. 417                                                                                                         
     "An Act amending the definition of 'project' in the Act                                                                    
     establishing the Alaska Natural Gas Development Authority; and                                                             
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
AT EASE 8:54 AM / 9:14 AM                                                                                                       
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated that this  legislation, HB 417, Version  23-                                                            
LS1494\A, would  change the responsibilities  of the Alaska  Natural                                                            
Gas  Development  Authority  (ANGDA) "to  include  a review  of  the                                                            
economic viability of a  gas line to tidewater at a point at or near                                                            
Cook Inlet."                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MIKE CHENAULT, the bill's sponsor,  stated that this                                                            
bill would allow ANGDA  to investigate the possibility of a gas line                                                            
route to tidewater  at a point at or near Cook Inlet.  He noted that                                                            
the citizens of  the State voted in support of providing  ANGDA with                                                            
the  authority to  investigate  the viability  of  developing a  gas                                                            
pipeline  from Prudhoe  Bay  south to  tidewater  on Prince  William                                                            
Sound. He stated that enlarging  that authority to encompass a route                                                            
to the Cook  Inlet area is important,  and he noted that  increasing                                                            
the scope of  the project would not  negatively affect the  original                                                            
routing evaluation, and would in fact, "enhance it."                                                                            
                                                                                                                                
HAROLD  HEINZE,  CEO,  Alaska  Natural  Gas Development   Authority,                                                            
testified via teleconference  from Anchorage in support of the bill.                                                            
He  attested that  this  legislation  would expand  the Authority's                                                             
authority  to analyze a direct  route to Cook  Inlet in addition  to                                                            
its original  charge of getting gas  to Cook Inlet via some  method.                                                            
Furthermore,    he   stated   that   the   Authority's    analytical                                                            
"feasibility"  study method  would allow this  study to be  added to                                                            
the  Authority's  mission  in  an  economically   sound  manner.  He                                                            
informed  the Committee that,  "regardless  of what happened  here,"                                                            
the Authority  would be  considering this  alternative, as  it would                                                            
fall within  the scope of its work  to consider direct and  indirect                                                            
routings.                                                                                                                       
                                                                                                                                
BILL POPP,  Kenai Peninsula Borough  Oil and Gas Liaison,  testified                                                            
via teleconference from  Kenai, and stated that the Borough supports                                                            
passage of this legislation  as it is believed that it would enhance                                                            
the responsibilities of  ANGDA as an entity of the State by allowing                                                            
ANGDA  "to perform  with due diligence"  by  investigating a  direct                                                            
route to  Cook Inlet in addition  of the line  to a point  on Prince                                                            
William Sound  and the Spur Line from  Glennallen to a Southcentral                                                             
Distribution   Grid.  He   declared  that   a  clear  and   detailed                                                            
explanation of routing  economics is important to the success of the                                                            
project. He stated that  the project is faced with numerous economic                                                            
obstacles  and that  expanding the  project would  be beneficial  in                                                            
finding the most viable  route to make this project "a realty if the                                                            
economics support it.                                                                                                           
                                                                                                                                
Senator Bunde  understood  that the project  "would fall within  the                                                            
parameters"  of ANGDA's  mission as  currently  established, and  as                                                            
such, no additional funding would not be required.                                                                              
                                                                                                                                
STEVER PORTER,  Deputy Commissioner,  Department of Revenue,  agreed                                                            
with Senator Bunde's comment.                                                                                                   
                                                                                                                                
Co-Chair  Green  moved  to  report  the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
There being  no objection, HB 417  was REPORTED from Committee  with                                                            
zero fiscal  note # 1, dated February  15, 2004 from the  Department                                                            
of Revenue.                                                                                                                     
                                                                                                                                
AT EASE 9:21 AM / 9:56 AM