03/28/2001 09:09 AM Senate FIN

SENATE BILL NO. 143                                                                                                             
"An Act  authorizing the  Department of Natural  Resources  to enter                                                            
into agreements  with a person or persons desiring  to own an oil or                                                            
natural gas  pipeline proposed to  be located on state land  for the                                                            
purposes of providing  for payment of the reasonable  costs incurred                                                            
in preparing for  activities before receipt of an  application under                                                            
the Alaska Right-of- Way  Leasing Act and for activities relating to                                                            
the processing  of an application under that Act;  and providing for                                                            
an effective date."                                                                                                             
                                                                                                                                
                                                                                                                                
Senator John  Torgerson, sponsor  of SB 143,  indicated that  SB 143                                                            
would allow them,  specifically for gas lines, to  collect the costs                                                            
that were determined  to be reimbursable  on pre-applications  or on                                                            
the work  that occurred before  the application  was submitted.   He                                                            
noted  that  the  Senate   Finance  Committee  struggled   with  the                                                            
supplemental  budget where  there was a $4  million request  and $10                                                            
million for  application costs  next year.   He pointed out  that SB
 would allow  the departments to start a memorandum  process with                                                            
applicants and start the reimbursement process immediately.                                                                     
                                                                                                                                
Co-Chair  Kelly wondered  if  Senator  Torgerson was  sunseting  the                                                            
bill.                                                                                                                           
                                                                                                                                
Senator  Torgerson replied  that there  was a sunset  clause  in the                                                            
bill for 2003.   He explained that  the thought process behind  that                                                            
was that there  would be an application  by the end of this  year or                                                            
the beginning  of next  year and  once the application  was  in they                                                            
would go  onto existing law.   He said that  they decided to  sunset                                                            
the bill so the  administration would not be able  to make deals all                                                            
the time, but if there  were not applications in and there was still                                                            
work to be done they would  extend the sunset date for a couple more                                                            
years.  He added that it would be an easy fix.                                                                                  
                                                                                                                                
Co-Chair  Kelly indicated  that during the  capital budget  overview                                                            
they did  come across the  request for $10  million and wondered  if                                                            
that was adequately covered.                                                                                                    
                                                                                                                                
Senator  Torgerson  responded  that  he  did look  through  the  $10                                                            
million request  and indicated  that there  were some expenses  that                                                            
would be  determined to not  be reimbursable.   He said that  he did                                                            
not agree with  the fiscal note, because they were  basically saying                                                            
that only $4  million of the $10 million  would be reimbursable  and                                                            
he felt that it would be higher.                                                                                                
                                                                                                                                
Senator Green  wondered if the department  could arbitrarily  charge                                                            
someone who  they thought  was going to apply.   She asked  if there                                                            
was any safeguard against an over-zealous implementation.                                                                       
                                                                                                                                
Co-Chair  Kelly pointed  out  that there  were other  statutes  that                                                            
determine what would be considered a reasonable cost.                                                                           
                                                                                                                                
Senator Torgerson  agreed that most of it would be  covered under an                                                            
agreement.   He  noted  that  they currently  have  regulations  and                                                            
statutes  that cover reimbursable  expenditures.   He said  that the                                                            
$3.9 million  discussed  in the  fiscal note  would be reimbursable                                                             
upon receiving an application.                                                                                                  
                                                                                                                                
Senator  Green  requested clarification   that the  applicant  would                                                            
trigger the process.                                                                                                            
                                                                                                                                
Senator Torgerson replied yes.                                                                                                  
                                                                                                                                
Co-Chair Kelly  requested clarification that the applicant  would be                                                            
paying fees  before actually receiving  the permit, whereas,  in the                                                            
past those fees would be paid after they received the permit.                                                                   
                                                                                                                                
Senator Torgerson replied,  "That's correct."  He explained that the                                                            
ones that were reimbursable  could be backed up in the beginning and                                                            
they would be reimbursed  sometime in the future.  He clarified that                                                            
SB  143   would  implement   it  now  instead   of  waiting   for  a                                                            
reimbursement.    He  referred  to  Senator   Green's  question  and                                                            
indicated  that SB 143 stated  that there  could not be any  charges                                                            
until  an actual agreement  was  signed; therefore,  they could  not                                                            
just send a bill.                                                                                                               
                                                                                                                                
Co-Chair  Donley  moved SB  143, 22-LS0667\J,  from  Committee  with                                                            
accompanying fiscal note and individual recommendations.                                                                        
                                                                                                                                
There was no objection and SB 143 was reported from Committee.