Legislature(2009 - 2010)BUTROVICH 205

04/12/2010 03:30 PM Senate RESOURCES

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03:40:37 PM Start
03:41:40 PM HB369
04:53:11 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SCS CSHB 369(RES) Out of Committee
Scheduled But Not Heard
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 12, 2010                                                                                         
                           3:40 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Lesil McGuire, Co-Chair                                                                                                 
Senator Bill Wielechowski, Co-Chair                                                                                             
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Hollis French                                                                                                           
Senator Gary Stevens                                                                                                            
Senator Thomas Wagoner                                                                                                          
MEMBERS ABSENT                                                                                                                
Senator Bert Stedman                                                                                                            
COMMITTEE CALENDAR                                                                                                            
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 369(FIN) AM                                                                             
"An Act relating to an  in-state natural gas pipeline, the office                                                               
of  in-state  gasline project  manager,  and  the Joint  In-State                                                               
Gasline  Development Team;  requiring the  development of  an in-                                                               
state  natural  gas  pipeline  plan,   to  be  delivered  to  the                                                               
legislature by July 1, 2011, that  provides for a gasline that is                                                               
operational by  December 31, 2015;  directing the  Joint In-State                                                               
Gasline Development  Team to  assume responsibilities  under sec.                                                               
19, ch.  14, SLA 2009;  requiring expedited review and  action by                                                               
state agencies or  entities relating to the  in-state natural gas                                                               
pipeline project; and providing for an effective date."                                                                         
     - MOVED SCS CSHB 369(RES) OUT OF COMMITTEE                                                                                 
CS FOR HOUSE JOINT RESOLUTION NO. 45(FIN) am                                                                                    
Urging  the United  States Congress  not to  enact Cap  and Trade                                                               
     - SCHEDULED BUT NOT HEARD                                                                                                  
CS FOR HOUSE JOINT RESOLUTION NO. 49(RES)                                                                                       
Urging  the United  States  Congress  to enact  S.J.  Res. 26,  a                                                               
resolution  disapproving  the Environmental  Protection  Agency's                                                               
imposition  of  climate  regulations  that  would  harm  Alaska's                                                               
economy and the livelihoods of the state's citizens.                                                                            
     - SCHEDULED BUT NOT HEARD                                                                                                  
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 369                                                                                                                  
SHORT TITLE: IN-STATE PIPELINE/ MANAGER/TEAM                                                                                    
SPONSOR(s): REPRESENTATIVE(s) CHENAULT                                                                                          
02/23/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/23/10       (H)       RES, FIN                                                                                               
02/26/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/26/10       (H)       Heard & Held                                                                                           
02/26/10       (H)       MINUTE(RES)                                                                                            
03/01/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/01/10       (H)       Heard & Held                                                                                           
03/01/10       (H)       MINUTE(RES)                                                                                            
03/08/10       (H)       RES AT 6:00 PM BARNES 124                                                                              
03/08/10       (H)       Heard & Held                                                                                           
03/08/10       (H)       MINUTE(RES)                                                                                            
03/10/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/10/10       (H)       Moved CSHB 369(RES) Out of Committee                                                                   
03/10/10       (H)       MINUTE(RES)                                                                                            
03/11/10       (H)       RES RPT CS(RES) NT 4DP 1NR 1AM                                                                         
03/11/10       (H)       DP: OLSON, P.WILSON, JOHNSON, NEUMAN                                                                   
03/11/10       (H)       NR: SEATON                                                                                             
03/11/10       (H)       AM: KAWASAKI                                                                                           
03/15/10       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/15/10       (H)       Heard & Held                                                                                           
03/15/10       (H)       MINUTE(FIN)                                                                                            
03/22/10       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/22/10       (H)       Heard & Held                                                                                           
03/22/10       (H)       MINUTE(FIN)                                                                                            
03/23/10       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/23/10       (H)       Scheduled But Not Heard                                                                                
03/23/10       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/23/10       (H)       Moved CSHB 369(FIN) Out of Committee                                                                   
03/23/10       (H)       MINUTE(FIN)                                                                                            
03/24/10       (H)       FIN RPT CS(FIN) NT 10DP                                                                                
03/24/10       (H)       DP: THOMAS, GARA, DOOGAN, JOULE, KELLY,                                                                
                         AUSTERMAN, N.FOSTER, FAIRCLOUGH,                                                                       
03/24/10       (H)       STOLTZE, HAWKER                                                                                        
03/24/10       (H)       TRANSMITTED TO (S)                                                                                     
03/24/10       (H)       VERSION: CSHB 369(FIN) AM                                                                              
03/25/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/25/10       (S)       RES, FIN                                                                                               
04/01/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/01/10       (S)       Heard & Held                                                                                           
04/01/10       (S)       MINUTE(RES)                                                                                            
04/12/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
WITNESS REGISTER                                                                                                              
MIKE PAWLOWSKI                                                                                                                  
Staff to Senator McGuire                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Explained changes to HB 369.                                                                              
TOM WRIGHT                                                                                                                      
Staff to Representative Chenault                                                                                                
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on HB 369 for the sponsor.                                                                      
DAN FAUSKE, CEO and Executive Director                                                                                          
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported SCS CSHB 369(RES).                                                                              
JOHN BINKLEY, Chairman                                                                                                          
Alaska Railroad Corporation (ARRC)                                                                                              
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Supported SCS CSHB 369(RES).                                                                              
REPRESENTATIVE CHENAULT                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of HB 369.                                                                                        
HAROLD HEINZE, CEO                                                                                                              
Alaska Natural Gas Development Authority (ANGDA)                                                                                
POSITION STATEMENT: Supported SCS CSHB 369(RES).                                                                              
FRANK RICHARDS, Deputy Commissioner                                                                                             
Department of Transportation and Public Facilities                                                                              
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported SCS CSHB 369(RES).                                                                              
ACTION NARRATIVE                                                                                                              
3:40:37 PM                                                                                                                    
CO-CHAIR McGuire called the Senate Resources Standing Committee                                                               
meeting to order at 3:40 p.m. Present at the call to order were                                                                 
Senators  French, Stevens,  Huggins, and  McGuire. She  said that                                                               
HJR  45 and  HJR 49  had  been postponed  at the  request of  the                                                               
             HB 369-IN-STATE PIPELINE/ MANAGER/TEAM                                                                         
CO-CHAIR MCGUIRE  announced HB  369 to  be up  for consideration.                                                               
[CSHB 369(FIN) was before the committee].                                                                                       
3:41:40 PM                                                                                                                    
SENATOR GARY  STEVENS moved to  adopt SCS CSHB  369(RES), labeled                                                               
26-LS1527\W. There were no objections and it was so ordered.                                                                    
3:42:01 PM                                                                                                                    
MIKE PAWLOWSKI, aide to Senator  McGuire, explained that he would                                                               
start off in Section 1 and then  get back to the title. Section 1                                                               
incorporates  legislative findings  and purposes  and used  to be                                                               
found in  SB 287, sponsored  by Senator McGuire.  The integration                                                               
actually happens  on page 2, line  27, which gets to  the purpose                                                               
of the act which is found  in (b)(1) that gives general direction                                                               
to  the  Joint In-State  Gasline  Development  Team to  plan  and                                                               
develop the  construction of the  in-state natural  gas pipeline.                                                               
Language on  page 3,  line 1, directs  the executive  director of                                                               
the  Alaska Housing  Finance Corporation  (AHFC)  to oversee  all                                                               
aspects of the  project described within this  act. Originally it                                                               
was the CEO of the AHFC  and that didn't match with the statutes;                                                               
so now it's the executive director throughout the act.                                                                          
3:43:07 PM                                                                                                                    
Sections  2 and  3 are  new language  that came  from a  previous                                                               
version  of  SB 287,  the  key  being  in  Section 2  saying  the                                                               
authority of AHFC  is to create subsidiary  corporations to carry                                                               
out  the duties  of this  title. This  is an  important step  for                                                               
organizational changes.                                                                                                         
3:43:42 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI joined the committee.                                                                                     
3:43:49 PM                                                                                                                    
CO-CHAIR  MCGUIRE clarified  that  it's a  subsidiary  but it  is                                                               
under the Budget Act, so the legislature has accountability.                                                                    
3:44:04 PM                                                                                                                    
SENATOR WAGONER joined the committee.                                                                                           
MR. PAWLOWSKI  said the change  in Section  4 in AS  38.34.010 on                                                               
page 4, lines 2-12, established  the position of in-state gasline                                                               
project coordinator. In  the original bill the  position that was                                                               
created  was the  in-state gasline  project  manager tasked  with                                                               
actually not  only coordinating expedited  reviews, but  also the                                                               
permitting of the  project and moving it forward.  In the current                                                               
version that responsibility has been  split out away from what is                                                               
now  called  the  coordinator   position.  Section  AS  38.32.010                                                               
mirrors language  that was  created for  the AGIA  coordinator in                                                               
facilitating had  coordinating between  state agencies,  the idea                                                               
being to separate  to a degree the group that  is permitting from                                                               
the group  that is  working with the  agencies and  entities that                                                               
issue those permits.                                                                                                            
The charge for the in-state  gasline coordinator on page 4, lines                                                               
13 and  14, he said carries  out the provisions of  AS 38.34.020.                                                               
He  noted that  while the  CS moves  the actual  pipeline efforts                                                               
away from  the Office of  the Governor, the position  of in-state                                                               
gasline  coordinator is  maintained within  it in  recognition of                                                               
the new roll of the coordinator position.                                                                                       
3:45:51 PM                                                                                                                    
Language on page 4,  lines 30 and 31, through page  5, line 1, in                                                               
AS 38.34.030, establishes the  Joint In-state Gasline Development                                                               
Team within  the AHFC instead of  the Office of the  Governor. On                                                               
page  5, line  9,  the  CEO has  been  changed  to the  executive                                                               
director and  on line  4. The  in-state gasline  development team                                                               
was changed so that it is  the chairman of the board of directors                                                               
of  the  Alaska Railroad  Corporation  (ARRC)  or the  chairman's                                                               
designee rather than the CEO  of the Corporation (in the original                                                               
MR. PAWLOWSKI  explained that  on page 5,  line 15,  new language                                                               
says the  development team shall  also submit monthly  updates on                                                               
the  progress of  the in-state  natural gasline  project to  each                                                               
member of the legislature. This  consistent reporting back to the                                                               
legislature was  an important aspect  of SB 287 that  is included                                                               
in HB 369.                                                                                                                      
Under  duties of  the development  team on  page 5,  lines 20-22,                                                               
language  was inserted  about the  project  being compatible  not                                                               
competitive  with the  project described  in AS  41.41, which  is                                                               
ANGDA,  and  AS  43.90,  which  is AGIA.  An  amendment  to  this                                                               
language will come later.                                                                                                       
3:47:27 PM                                                                                                                    
He said that  language was added on page 8,  lines 8-20, to speed                                                               
up  delivery of  a right-of-way  to whatever  group is  trying to                                                               
build  a  pipeline  came  from   SB  287.  This  was  worked  out                                                               
extensively with the DNR to  maintain the type of public interest                                                               
issues related  to a  right-of-way in Title  38.35, but  to waive                                                               
some  of the  more  general applicable  statutes  like AS  38.05,                                                               
which  is   the  best  interest  finding.   Presumably  with  the                                                               
legislature making this decision they said  this is in this is in                                                               
the  state's  interest  and  therefore,  the  regular  permitting                                                               
process should go forward but this streamlines it a little bit.                                                                 
In  Section 5,  page 9,  lines  4-5, the  term "in-state  gasline                                                               
project  manager"  was  changed  to "coordinator"  and  puts  him                                                               
within  the exempt  service. Sections  6-8,  all on  page 9,  are                                                               
provisions  from HB  44 that  tighten  up and  clarify the  ANGDA                                                               
authority to  be able to  procure gas  from other regions  of the                                                               
state  and delivering  it to  other  regions rather  than such  a                                                               
specific  charge  they had  under  the  ballot initiative  as  it                                                               
passed. They  believe that  integrating the  bills with  ANGDA on                                                               
the  team really  allows them  to  bring that  expertise and  the                                                               
broader statewide vision to the in-state gas development team.                                                                  
MR. PAWLOWSKI  said another  substantive change  was on  page 10,                                                               
lines 6-29, and those are  transitional provisions, some of which                                                               
were taken out of SB  287; the specific transition provisions are                                                               
lines  10-18  and reflect  dates.  He  explained that  under  the                                                               
current Noah  Swenson work about  seeking letters of  intent from                                                               
buyers  and  sellers  by  February 15,  to  initiate  letters  of                                                               
interest from  private pipeline companies  by March 15,  2011 and                                                               
to  prepare  and  submit  to the  governor  and  the  legislature                                                               
legislation that  might be necessary  by December 15, so  that in                                                               
the bill as  originally intended the project team  is coming back                                                               
with a  plan by July 1,  2011, but knowing that  some legislation                                                               
might be  necessary to carry  it out,  they have asked  that they                                                               
come back on December 15  so that members having received monthly                                                               
updates are prepared  to actually work on  legislation that might                                                               
be necessary to move the project forward.                                                                                       
3:50:35 PM                                                                                                                    
The final substantive change was on  page 10, lines 26-29; in the                                                               
transition  language that  was originally  in HB  369 moving  the                                                               
current work  from the Office  of the  Governor to the  Joint In-                                                               
state  Gasline  development  team   they  have  added  clarifying                                                               
language saying that if the  AHFC creates a subsidiary to oversee                                                               
the gasline  project that  work will move  to the  subsidiary. It                                                               
goes  back  to  one  of  the  original  premises  of  SB  287  of                                                               
separation from what could be called the mother ship.                                                                           
CO-CHAIR  MCGUIRE asked  if intent  language for  looking at  the                                                               
benefits of  natural gas  for the entire  state rather  than just                                                               
the Railbelt had been developed.                                                                                                
MR. PAWLOWSKI  answered yes - on  page 6, subsection (d);  it was                                                               
original language from  HB 369 which took a  very broad statewide                                                               
view of an  in-state gas project. Also subsection (f)  on page 7,                                                               
lines 16-25,  is a  broad directive  to the  in-state development                                                               
group  to   consider,  for  instance,  propane   to  Yukon  River                                                               
Interior,  coastal communities  and transportation  gas to  other                                                               
locations in  the state. This  is the conforming changes  that HB
44 (being rolled into this) brought to the table.                                                                               
CO-CHAIR   WIELECHOWSKI  asked   if   this   bill  requires   the                                                               
construction of a natural gas pipeline.                                                                                         
MR. PAWLOWSKI  answered that he  would ask the sponsor  to answer                                                               
that question. He  thought it was preparing a plan  to deliver to                                                               
the legislature for a "go" decision.                                                                                            
3:53:08 PM                                                                                                                    
TOM WRIGHT, staff to Representative  Chenault, sponsor of HB 369,                                                               
answered no; it's to produce a project plan.                                                                                    
3:53:44 PM                                                                                                                    
CO-CHAIR  WIELECHOWSKI asked  if  the construction  of this  plan                                                               
come under the Executive Budget Act.                                                                                            
MR. WRIGHT answered yes.                                                                                                        
CO-CHAIR WIELECHOWSKI asked  if it would require  a project labor                                                               
agreement (PLA).                                                                                                                
MR. WRIGHT answered no; a PLA is not in this legislation.                                                                       
CO-CHAIR  WIELECHOWSKI  asked  if  PLAs are  required  under  the                                                               
Executive Budget Act.                                                                                                           
MR. WRIGHT answered that he didn't know.                                                                                        
SENATOR  HUGGINS said  on page  9, line  14, language  alludes to                                                               
ANGDA  operating   and  maintaining   the  pipeline   design  and                                                               
construction and  asked if that precluded  a private organization                                                               
from doing the same functions.                                                                                                  
MR. WRIGHT answered no.                                                                                                         
CO-CHAIR  MCGUIRE said  one of  the  things she  liked about  the                                                               
mergers of  the two  bills is delivering  the letters  of intent.                                                               
The idea would be that a private entity would be the builder.                                                                   
MR. PAWLOWSKI said the sponsor  had quite strong language on page                                                               
6,  line 18,  that says  the intent  is that  any project-related                                                               
assets acquired  or developed be  available for transfer  or sale                                                               
to the institute best able to complete the project.                                                                             
3:56:40 PM                                                                                                                    
DAN FAUSKE,  CEO and Executive  Director, Alaska  Housing Finance                                                               
Corporation  (AHFC),  said he  is  excited  about this  bill  and                                                               
bringing  forth  a  project  plan. He  said  he  shares  people's                                                               
frustration that  we seem to  get close and  have a whole  lot of                                                               
good ideas,  but don't  seem to  take the next  step. He  said he                                                               
served on  the AGIA team  under Governor  Palin and had  the view                                                               
that two projects are ongoing that  he hopes will continue in the                                                               
direction  they are  going. What  has changed  for Alaska  is the                                                               
evidence that  gas supplies are  running short and that  the vast                                                               
majority of  the population  of the state  could be  subjected to                                                               
some real  energy concerns.  He said  the intent  of the  bill is                                                               
clearly to not interfere with  those projects, but rather to look                                                               
at alternatives. He thinks things are solvable.                                                                                 
CO-CHAIR MCGUIRE  thanked him for  agreeing to head the  team and                                                               
said he  had done a great  job. She said the  legislature is here                                                               
to support his work, and that is the point of the updates.                                                                      
CO-CHAIR WIELECHOWSKI said it's a great  team and he has seen the                                                               
work Mr.  Fauske had done in  his community. How did  he envision                                                               
the  process working?  How  much time  will it  take  out of  his                                                               
position at AHFC?                                                                                                               
MR.  FAUSKE answered  that he  has had  this discussion  with his                                                               
board chairmen, and it is doable.  The way his mind works is that                                                               
he simplifies things.  Even though this is a  very complex issue,                                                               
he thought that  most of the work had probably  been done, but it                                                               
needs  to be  organized. It  will take  some time,  but AHFC  has                                                               
great staff and he wouldn't do  anything to harm that. People who                                                               
have been there  for many years will continue to  be in place. He                                                               
thought  that this  issue will  come together  quicker than  they                                                               
imagine, because the desire to get it moving has picked up.                                                                     
4:02:40 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI  wanted to know  how he would  organize his                                                               
time. Would he hire additional staff for AHFC?                                                                                  
MR. FAUSKE answered  that this project is a priority  and some of                                                               
the consultants are already on  board. Once they get it organized                                                               
it will come together pretty quickly.  He would not put this work                                                               
in a second position.                                                                                                           
CO-CHAIR  WIELECHOWSKI  said  he  wasn't implying  that,  but  he                                                               
wanted to know how the whole thing would "roll out."                                                                            
MR. FAUSKE  said he has already  met with his AHFC  staff and has                                                               
determined  there is  office space.  They are  looking at  six or                                                               
seven people and maybe some admin  staff. He likes to keep things                                                               
lean and mean. They would use  consultants but not house them. He                                                               
said "this is a short term project."                                                                                            
SENATOR HUGGINS encouraged him when  he brings them a solution to                                                               
the legislature to  bring a couple of  discards for consideration                                                               
and explain why  they didn't make the cut. They  expect him to be                                                               
a referee.                                                                                                                      
MR.  FAUSKE  said  he  anticipated  a  document  with  everything                                                               
explained and then an executive summary.                                                                                        
SENATOR  STEVENS   asked  him  to   talk  about   the  subsidiary                                                               
corporations that might be created under his direction.                                                                         
MR. FAUSKE answered  when he did the tobacco  bonds, they created                                                               
the Northern  Tobacco Securitization Appropriation, and  they are                                                               
set  up to  do  those.  They also  did  it  when the  legislature                                                               
transferred around  $300 million  for the Alaska  Permanent Fund.                                                               
They do  it so a stand-alone  legal entity will oversee  the work                                                               
under the  guise of AHFC. He  anticipated that the AHFC  board of                                                               
directors would  also oversee the  work of the subsidiary  in the                                                               
board meetings.                                                                                                                 
4:08:31 PM                                                                                                                    
JOHN  BINKLEY,  Chairman,  Alaska  Railroad  Corporation  (ARRC),                                                               
Fairbanks, expressed  thanks to  her and  Representative Chenault                                                               
for their  efforts in coming up  with a solution. He  pledged his                                                               
support to make this project successful.                                                                                        
4:09:46 PM                                                                                                                    
CO-CHAIR MCGUIRE  said the ARRC's  bonding authority is  there if                                                               
it  is  needed.  She  thanked  both of  them  for  putting  their                                                               
personal and  professional lives aside  to take this  project on.                                                               
On behalf of Resources Committee thanks for leadership.                                                                         
MR. FAUSKE  reiterated that this  is a  chance in a  lifetime for                                                               
him and  that he is  anxious to  get started with  something this                                                               
4:11:36 PM                                                                                                                    
REPRESENTATIVE CHENAULT,  sponsor of HB  369, said they  have put                                                               
together a  team that has Alaska's  future at heart and  they are                                                               
headed in  the right direction. He  thanked her for the  work she                                                               
and her staff have done on this project.                                                                                        
CO-CHAIR  MCGUIRE said  Alaskans are  looking for  signs for  the                                                               
REPRESENTATIVE CHENAULT said this is  Alaska's future and it is a                                                               
long-term fix.                                                                                                                  
4:15:10 PM                                                                                                                    
CO-CHAIR  MCGUIRE said  they are  trying to  find ways  that this                                                               
potential in-state  gasline would  benefit all  Alaskans, because                                                               
it's  very important  that one  part  of the  state doesn't  move                                                               
forward while other parts remain behind.                                                                                        
4:16:04 PM                                                                                                                    
HAROLD  HEINZE, CEO,  Alaska  Natural  Gas Development  Authority                                                               
(ANGDA),  said   that  he  was   excited  to  be  part   of  this                                                               
collaborative process. They have  created a framework for vetting                                                               
all the issues  so there is some discussion to  reference. He was                                                               
very pleased with having AHFC in command and control.                                                                           
4:18:50 PM                                                                                                                    
He wanted to  talk about how ANGDA fits into  the puzzle and then                                                               
lead  into HB  44. He  said the  ANGDA statute  created a  public                                                               
corporation  in the  state, and  that part  of the  definition is                                                               
extremely  important, because  they  have all  believed from  the                                                               
beginning that  that sooner or  later this project would  have to                                                               
move to the private sector. And  the test of the private sector's                                                               
willingness to do this or not  under commercial terms is a key to                                                               
understanding whether  it's a  good project  or whether  it makes                                                               
sense or not.  ANGDA has always believed the way  it would happen                                                               
is  in a  business  partnering  type approach  rather  than in  a                                                               
government  to  private  sector solicitation.  ANGDA  would  help                                                               
through the  process in  a more  partnering sort  of way,  and he                                                               
does see that opportunity in the future.                                                                                        
MR.  HEINZE said  he  was pleased  to  see that  HB  44 has  been                                                               
incorporated into HB 369. It is  critical to ANGDA that it passes                                                               
and he is a little more urgent  about it this year than last. The                                                               
reasons  are because  ANGDA  has  been trying  to  deal with  the                                                               
shorter term  issues that  face Alaska. If  these issues  are not                                                               
dealt with in the next months, a lot opportunities for the in-                                                                  
state will be  lost. So, he is looking for  positive ways for the                                                               
state  to intervene  to  help things  along;  in particular,  the                                                               
electric  utilities   face  tremendous   problems  in   terms  of                                                               
decisions they have  to make this summer - how  they are going to                                                               
get gas and where they are going.  He is pleased to see that some                                                               
contracts  have been  submitted  to the  RCA,  but next  winter's                                                               
deliverability issues have to be addressed.                                                                                     
He said  ANGDA has been  working very  hard on all  those issues.                                                               
The  clarifying language  is absolutely  essential so  that ANGDA                                                               
can  continue that  work. "Frankly,  because of  the need  I have                                                               
stuck my neck out," he said,  and he is probably beyond the exact                                                               
letter of  his authorities -  certainly as far as  issuing bonds.                                                               
If  the language  doesn't happen  he has  to rethink  what he  is                                                               
doing in Cook Inlet and probably back away.                                                                                     
The other  project that is  important to ANGDA, Mr.  Heinze said,                                                               
is the  North Slope  propane project  and that  impacts everybody                                                               
outside  the  Railbelt.  That  project  is  probably  within  his                                                               
authority,  but  at  best  it  will  be  commercially  challenged                                                               
project. For ANGDA to participate  financially in that, they need                                                               
clear authority and clear support  from the legislature. He urged                                                               
that  they   give  the   HB  44  compliments   of  HB   369  full                                                               
consideration,  because they  form  a  key piece  to  set up  the                                                               
decisions the legislature will face next  year as a result of the                                                               
work and plan that is brought back to them.                                                                                     
CO-CHAIR  WIELECHOWSKI  asked  how the  interaction  between  the                                                               
Joint  In-State Gasline  Development  Team and  ANGDA will  work;                                                               
specifically page 5, lines 18-25,  that says the in-state gasline                                                               
team shall produce  a project plan for the development  of an in-                                                               
state   natural  gas   pipeline  that   is  compatible   but  not                                                               
competitive  with  the project  described  and  authorized by  AS                                                               
41.41, the  ANGDA statute.  AS 41.41 says  ANGDA's purpose  is to                                                               
design  and  construct  a  pipeline  system.  Would  he  continue                                                               
developing his own pipeline system?                                                                                             
MR.  HEINZE   answered  that  he  understood   the  language  was                                                               
referring to the fact that the  focus of this bill and setting up                                                               
this  team  is  clearly  on  the  in-state  gas  delivery  system                                                               
basically North Slope  to Cook Inlet to Valdez,  something in the                                                               
range of a  24-inch diameter line. AS 41.41, when  it passed, had                                                               
a  part in  the uncodified  law  that specified  "a project  that                                                               
ANGDA was  to look at"  and they were told  to start doing.   But                                                               
that  didn't  happen because  of  a  number  of things,  lack  of                                                               
funding  being  one.  Basically,  that  was  a  2  bcf/d  project                                                               
delivering  gas to  Valdez  for  LNG and  a  spur  line off  that                                                               
project  delivering gas  into the  Cook Inlet  area. As  he reads                                                               
this statute, that is one of the  things that is on the table; it                                                               
may  or  may not  be  the  right thing.  It  also  puts the  AGIA                                                               
pipeline  on the  other side  of what  they are  working on.  The                                                               
intent is to recognize that all  these ideas have a high level of                                                               
4:27:39 PM                                                                                                                    
At ease for an unannounced fire drill.                                                                                          
4:44:52 PM                                                                                                                    
CO-CHAIR MCGUIRE called the meeting back to order at 4:44 p.m.                                                                  
FRANK    RICHARDS,    Deputy    Commissioner,    Department    of                                                               
Transportation  and Public  Facilities, said  the department  had                                                               
been working  with the former  in-state gasline team  under Harry                                                               
Noah  and now  under Bob  Swenson  and they  will continue  those                                                               
efforts. He said:                                                                                                               
     What the  department brings - Dan  Fauske had torpedoes                                                                    
     -  we  will  bring  our artillery.  We  are  owners  of                                                                    
     Howitzers  and so  we have  the  active ammunition  for                                                                    
     that. So  we are  ready to push  forward in  support of                                                                    
     Senator Huggins' desire for land-based armaments.                                                                          
CO-CHAIR MCGUIRE said they were  commenting during the fire drill                                                               
that  the  department  had already  started  collecting  data  in                                                               
recognizing the  accelerated timelines,  and she wanted  to thank                                                               
him  for  that  and  said   they  look  forward  to  the  DOTPF's                                                               
participation on the team.                                                                                                      
MR. RICHARDS said they have  applied for the right-of-way already                                                               
and will continue those efforts.                                                                                                
4:46:11 PM                                                                                                                    
CO-CHAIR MCGUIRE closed public testimony.                                                                                       
4:46:30 PM                                                                                                                    
CO-CHAIR MCGUIRE moved conceptual Amendment 1 as follows:                                                                       
                          Amendment 1                                                                                       
     Offered in the Senate by Senator McGuire                                                                                   
     To SCS CSHB 369(RES), 26-LS1527\W                                                                                          
      On page 5, line 20 following "natural gas pipeline"                                                                       
          that is  compatible but not  competitive with                                                                         
          the  project described  in and  authorized by                                                                         
          AS  41.41 or  the  project  described in  and                                                                         
          authorized by AS 43.90                                                                                                
     On page 2, following line 31, insert new subsection:                                                                       
          (2) to  give general  direction to  the Joint                                                                         
          In-State  Gasline Development  Team that,  to                                                                         
          the maximum extent  practicable, the plan for                                                                         
          development  of   an  in-state   natural  gas                                                                         
          pipeline  required  under   AS  43.34.040  is                                                                         
          compatible  but  not   competitive  with  the                                                                         
          projects described in AS  41.41 and AS 43.90;                                                                         
     Renumber accordingly.                                                                                                      
She objected for an explanation.                                                                                                
4:46:41 PM                                                                                                                    
MR.  PAWLOWSKI said  Amendment 1  addresses  earlier language  he                                                               
identified on  page 5,  lines 21-22, of  the current  version. He                                                               
said while  the intent of the  bill is to maintain  "bookends" in                                                               
between  ANGDA's and  AGIA's current  project abilities  there is                                                               
concern that  if this "compatible/competitive language  exists in                                                               
the codified  law it might take  options off the table  - in that                                                               
particularly the Alaska  Gasline Inducement Act has  the .5 bcf/d                                                               
sort  of cut  off point  for in-state  gas. The  idea is  that if                                                               
moving this  language to  the findings  and purpose  section into                                                               
the uncodified  law, as  this amendment does,  it still  gets the                                                               
same  point on  the table  that  they want  all projects  working                                                               
together to  move the state forward,  but also frees the  team to                                                               
consider every possible aspect.                                                                                                 
CO-CHAIR MCGUIRE  said this  came from the  Senate bill  that was                                                               
meant  to  respond to  the  Governor's  office. She  removed  her                                                               
objection  and finding  no further  objections,  Amendment 1  was                                                               
4:48:23 PM                                                                                                                    
CO-CHAIR MCGUIRE moved conceptual Amendment 2 as follows:                                                                       
                          Amendment 2                                                                                       
     Offered in the Senate by Senator McGuire                                                                                   
     To SCS CSHB 369(RES) ) 26-LS1527\W                                                                                         
       On page 4, line 14 following "agencies" insert "or                                                                       
She objected for an explanation.                                                                                                
MR. PAWLOWSKI  explained that throughout  the bill where  the in-                                                               
state gasline  coordinator's position is recognized,  the task is                                                               
to  coordinate   with  state  agencies   or  entities.   In  this                                                               
particular instance  on page 4,  line 14, "or entities"  was left                                                               
off after agencies.                                                                                                             
SENATOR FRENCH asked what the difference is.                                                                                    
MR. PAWLOWSKI replied that "entities"  are related to groups like                                                               
the ANGDA, the  AHFC, and ARRC; they're not  actually agencies of                                                               
the state, but rather instrumentalities underneath an agency.                                                                   
CO-CHAIR  MCGUIRE  removed  her  objection and  Amendment  2  was                                                               
4:49:29 PM                                                                                                                    
CO-CHAIR MCGUIRE moved conceptual Amendment 3 as follows:                                                                       
                          Amendment 3                                                                                       
     Offered in the Senate by Senator McGuire                                                                                   
     To SCS CSHB 369(RES) 26-LS1527\W                                                                                           
      On page 11, line 9, following "state agency" insert                                                                       
     "or entity"                                                                                                                
4:50:09 PM                                                                                                                    
CO-CHAIR MCGUIRE announced an at ease.                                                                                          
4:51:32 PM                                                                                                                    
CO-CHAIR MCGUIRE  called the  meeting back to  order at  4:51 and                                                               
withdrew  conceptual Amendment  3  and offered  a new  conceptual                                                               
Amendment  3, which  would  on  page 10,  line  24, after  "state                                                               
agency" insert  "or entity" clarifying  that any of  the permits,                                                               
studies in  progress, et cetera  will be transferred over  to the                                                               
AHFC subsidiary.  There were  no objections  and new  Amendment 3                                                               
was adopted.                                                                                                                    
CO-CHAIR MCGUIRE thanked Jack Chenoweth and Tam Cook who spent                                                                  
hours and hours drafting both of these bills.                                                                                   
4:52:49 PM                                                                                                                    
SENATOR HUGGINS moved  to report CS for HB 369,  as amended, from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note(s). There was no objection  and SCS CSHB 369(RES) moved from                                                               
the Senate Resources Standing Committee.                                                                                        
4:53:11 PM                                                                                                                    
CO-CHAIR MCGUIRE adjourned the meeting at 4:53 p.m.                                                                             

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