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.