Article VIII of Alaska's Constitution establishes the policy of the State "to encourage the settlement of its land and the development of its resources by making them available for maximum use consistent with the public interest."

That has been the guiding principle behind the Twenty-third Legislature's dramatic and fundamental changes to reform the permitting and litigation process, and create incentives in the area of resource development.

With several world-class mines, including the world's largest operating zinc mine, 25 percent of the nation's oil and more than 50 percent of the nation's seafood, Alaska's proven and unexplored natural resources are greater than any other state's.

But with a permitting system developed piecemeal over the 43 years since statehood, our state's process for approving resource development projects had become increasingly lengthy, disjointed and confusing to the public, agencies, and applicants.

Last year the Legislature passed measures to reform the Alaska Coastal Management Program, designate the Department of Natural Resources as the lead state agency in permitting projects, extend the period of time between renewals for oil discharge and contingency plans (C-plans), and implement the findings of the Air Permits Work Group.

This year the Legislature passed a bill that restores the authority of the Department of Natural Resources to enter into agreements for reimbursement of department costs incurred in assisting potential pipeline right-of-way lease applications in their preparation of an application under the Alaska Right-of-Way Leasing Act. It also appropriated $1.65 million to the Department of Revenue and the Alaska Natural Gas Development Authority for work related to bringing Alaska's natural gas to market.

The State is also beginning to reap the rewards of legislation passed last year revising the Alaska Stranded Gas Development Act to encourage more companies to apply. Under the Act, qualified sponsors must apply to negotiate a contract that defines the fiscal terms such as royalties, severance taxes, property taxes or payment in lieu of taxes.

The State has approved and is negotiating a joint application from the three major North Slope producers, Conoco-Phillips, BP and Exxon. It has also received an application from a major Canadian oil and gas transportation company, Enbridge Inc., to negotiate terms for building a natural gas pipeline from the North Slope to the Yukon border. Another application is anticipated from TransCanada Corporation, which signed a Memorandum of Understanding with the state on April 19, 2004.

The State has also formally agreed to help the Alaska Gasline Port Authority, a joint effort of the city of Valdez and the Fairbanks North Star Borough, facilitate development and construction of a pipeline that will commercialize stranded North Slope gas.

The State also continued to implement recommendations from the Joint Legislative Salmon Industry Task Force created in 2002 to address multiple challenges of the depressed commercial salmon industry. Recognizing the importance of independent fishermen to the future of the fishing industry, the Legislature passed a bill to help the growing sector of fishermen trying to develop new markets in value-added products. The bill reduces the Fisheries Business Tax on small direct marketing vessels from 5 percent to 3 percent, leveling their rate to that of shore processors and Bering Sea factory trawlers. It also taxes the products of small-boat fishermen on the same value as the prevailing grounds price on which other processors base their taxes.

Another bill would designate 12 seafood development regions and allow for the establishment of regional development associations that could vote to self-assess a seafood development tax to promote and market regional seafood products.

No longer enough to say the state of Alaska is "open and ready for business," the Twenty-third Alaska Legislature took major steps to change the way we do our State's business.

2004 Successful Legislation

HB 409 : Seine Vessel Length
Passed Legislature! Await Transmit to Gov.
Sponsored by Rep. Bill Williams
Requested by the Jnt. Salmon Industry Task Force Committee

An Act relating to the maximum length of salmon seine vessels; and providing for an effective date.

Version: CS HB 409 (FHS)
Contact: Tim Barry, 465-3424
Action: 05-06-04: Passed the Senate

This bill removes the statutory prohibition for the length of salmon seine vessels and leaves the authority to the Alaska Board of Fisheries and to allows the Board of Fish to regulate Seine fishing vessels in the same manner they do other types of vessels.

| Sponsor Statement |

HB 417 : Ak Natural Gas Dev. Authority Initiative
Passed Legislature! Await Transmit to Gov.
Sponsored by Rep. Mike Chenault

An Act amending the definition of 'project' in the Act establishing the Alaska Natural Gas Development Authority; and providing for an effective date.

Version: HB 417
Contact: Mike Chenault, 465-3779
Action: 05-08-04: Passed the Senate

Amends the definition of project to include all options for a terminus of the Alaska Natural Gas Pipeline. This specifically identifies Cook Inlet as a possible terminus.

| Sponsor Statement |

HB 419 : Regional Seafood Development Associations/ Tax
Passed Legislature! Await Transmit to Gov.
Sponsored by Rep. Dan Ogg
Requested by the Jnt. Salmon Industry Task Force Committee

An Act relating to regional seafood development associations and to regional seafood development taxes.

Version: SCS CS HB 419 (FIN)
Contact: Melissa Dover, 465-2487
Action: 05-09-04: Passed the Senate

House Bill 419, recommended by the Joint Legislative Salmon Industry Task Force, will allow fishermen to form regional seafood development associations to tax themselves, providing a stable funding source for marketing efforts. CS HB 419 (RES) clarifies that the first qualified organization to apply will be designated the regional seafood development association and more closely define the membership of the associations. Amended to require 30% of permit holders to attend before an election is valid. Then a majority of those attending constitutes a majority.

| Sponsor Statement |

HB 522 : Small Cruise Ship Discharges
Passed Legislature! Await Transmit to Gov.
Sponsored by the Hou. State Affairs Committee

An Act relating to discharges from small commercial passenger vessels; and providing for an effective date.

Version: HB 522
Contact: Linda Sylvester, 465-3744
Action: 05-07-04: Passed the Senate

HB 522 deals in terms of Best Management Practices or BMPs for small vessels that currently operate in Alaskan waters and allows for differing standards for small and large vessels. HB 522 also stipulates that new vessels constructed after January 1, 2004 be engineered to comply with the Compliance Program if they are to be used in Alaskan waters. This is an agreeable solution that will work for Alaska's environmental and business communities.

| Sponsor Statement |
| Sectional Analysis |

HB 524 : Waste Management/Disposal
Passed Legislature! Await Transmit to Gov.
Sponsored by the Hou. Rules Committee
Requested by Gov. Frank Murkowski

An Act relating to the protection of land and water from waste disposal; providing for the regulation of waste management; making conforming amendments; and providing for an effective date.

Version: SCS CS HB 524 (RES)
Contact: Mike Tibbles, 465-4021
Action: 05-02-04: Passed the Senate » Reconsideration Notice

This bill would change the existing statutory authority for a waste disposal permit program (AS 46.03.100) by reorganizing and supplementing it. That reorganized section would preserve the essential requirement to obtain authorization before conducting an operation that results in waste disposal. The bill would clarify that the proof of financial responsibility must cover managing and closing the facility to control or minimize the risk of release of unauthorized levels of pollutants to waters.

| Gov's Transmittal Letter |

HB 531 : Conventional & Nonconventional Gas Leases
Passed Legislature! Await Transmit to Gov.
Sponsored by the Hou. Resources Committee

An Act relating to natural gas exploration and development and to nonconventional gas, and amending the section under which shallow natural gas leases may be issued; and providing for an effective date.

Version: SCS CS HB 531 (FIN)
Contact: Eleanor Wolfe, 465-6585
Action: 05-09-04: Passed the Senate

Without HB 531, a subsequent gas development entity could immediately lease land relinquished by the original lessee. In addition, land not currently leased remains subject to current over-the-counter standards. This bill initiates a permanent solution to these problems. CS HB 531 (RES) scraps the separate leasing process for shallow natural gas leasing and treats leasing of that commodity under the conventional oil and gas leasing provisions. Repealed several non-conforming statutes and conformed to HB 524 (An Act relating to the protection of land and water from waste disposal; providing for the regulation of waste management). It has been brought forward in response to strong citizen interest in the Mat-Su Valley and on the Kenai Peninsula, with input from several public meetings held at one time or another by the Alaska Department of Natural Resources (DNR), and the Senate Resources Committee. Amended to add a section regarding miners the one time transfer of an application to a licenses and clarified bonding requirements.

| Sponsor Statement |

HB 545 : State Lease And Contract Extensions
Passed Senate!
Sponsored by the Hou. Rules Committee
Requested by Gov. Frank Murkowski

An Act relating to the extension under the State Procurement Code of terms for leases for real estate and certain terms for certain state contracts for goods and services; and providing for an effective date.

Version: CS HB 545 (L&C)
Contact: Mike Tibbles, 465-4021
Action: 05-10-04: Passed the Senate

This bill would make several changes to the State Procurement Code. Section one of the bill would authorize the state to negotiate lease rate reductions on existing leases in exchange for certain term extensions when favorable lease rates are available. Amended to increase the percentage the state can negotiate from 5% to 10%.

| Gov's Transmittal Letter |

HB 546 : Pollution Discharge & Waste Treatment/ Disposal
Passed Legislature! Await Transmit to Gov.
Sponsored by the Hou. Rules Committee
Requested by Gov. Frank Murkowski

An Act relating to regulation of the discharge of pollutants from timber-related activities under the National Pollutant Discharge Elimination System; relating to waste treatment and disposal permits; making conforming amendments; and providing for an effective date.

Version: CS HB 546 (JUD)
Contact: Mike Tibbles, 465-4021
Action: 05-06-04: Passed the Senate

This bill would amend some existing permit requirements related to application submittals, public notice and comment opportunities, the maximum term of permits, and the causes for termination or modification of an authorization.

| Gov's Transmittal Letter |

HB 556 : AIDEA Bond for Lynn Canal Port
Passed Legislature! Await Transmit to Gov.
Sponsored by the Hou. State Affairs Committee

An Act relating to a port development project at Lynn Canal, providing legislative approval for the Alaska Industrial Development and Export Authority to issue bonds or otherwise provide financing for the project; and providing for an effective date.

Version: CS HB 556 (FIN)
Contact: Linda Sylvester, 465-3744
Action: 05-05-04: (S)FIN » (S)RLS

An Act relating to a port development project at Lynn Canal, providing legislative approval for the Alaska Industrial Development and Export Authority to issue bonds or otherwise provide financing for the project; and providing for an effective date. Amended to limit funds for the project to bond sales. Amended to add specific language to specify the location of the project. (Slate Creek cove and Cascade Point on Lynn Canal).

| Sponsor Statement |

HJR 44 : Sea Otter Research/Endangered Species
Passed Legislature! Await Transmit to Gov.
Sponsored by the Hou. Resources Committee by Request

Relating to research into the decline of the Southwest Alaska population of the Northern Sea Otter in the western Gulf of Alaska.

Version: CS HJR 44 (RES) Am
Contact: Melissa Dover, 465-2487
Action: 05-08-04: Passed the Senate

HJR 44 requests that the United States Fish and Wildlife Service and the United States Congress provide $5,000,000 a year over the next five years to conduct research into the abundance of the Northern Sea Otter and the cause of the decline of the Southwest Alaska population of the Northern Sea Otter in the western Gulf of Alaska.

| Sponsor Statement |

SB 241 : Appropriations: Natural Gas Development Authority
Signed into Law! Chapter 14 SLA 04
Sponsored by Sen. Gene Therriault

An Act making an appropriation to the Alaska Natural Gas Development Authority; and providing for an effective date.

Version: CS SB 241(FIN) AM H
Contact: Joe Balash, 465-4797
Action: 04-13-04: Governor » Signed into Law

The Governor signed SB 241 into law April 13. SB 241 appropriates $1.65 million to the Department of Revenue for work related to bringing natural gas from the North Slope to market. The appropriation lapses June 30, 2005.

| Press Release |
| Fact Sheet | [PDF - 1 Page - 30 KB]

SB 264 : Repeal Pipeline Preapplication Deadline
Signed Into Law! Chapter 21 SLA 04
Sponsored by the Sen. Rules Committee
Requested by Gov. Frank Murkowski

An Act repealing the time limitation on the authority of 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 providing for an effective date.

Version: SB 264
Contact: Janet Burleson Baxter, 465-2400
Action: 04-23-04: Signed into law

Governor signed into law April 23. Restores the authority of the Department of Natural Resources to enter into agreements for reimbursement of department costs incurred in assisting potential pipeline right-of-way lease applications in their preparation of an application under the Alaska Right-of-Way Act.

| Gov's Transmittal Letter |

SB 265 : Oil & Gas Lease Sale Schedule/Notification
Signed into Law! Chapter 8 SLA 04
Sponsored by the Sen. Rules Committee
Requested by Gov. Frank Murkowski

An Act relating to the schedule of proposed oil and gas lease sales and to a related report to the legislature; and providing for an effective date.

Version: CS SB 265 (RES)
Contact: Janet Burleson-Baxter, 465-2400
Action: 03-17-04: Signed by Governor

The governor signed SB 265 into law March 17. It allows the commissioner of the Department of Natural Resources, upon notification of the Legislature, to amend at any time the sale schedule under the five-year oil and gas lease program, AS 38.05.180(b) and (c). It would also remove the current requirement that a proposed sale be on the schedule for two years before being held. Instead, a sale may not be held before the date in the amended five-year program. The amendments allow DNR to move up the earliest possible date for a proposed lease sale on the Alaska Peninsula, from 2007 under current law, to 2005.

| Gov's Transmittal Letter |

SB 266 : Bristol Bay Oil & Gas Lease Sale Closure
Signed Into Law! Chapter 9 SLA 04
Sponsored by the Sen. Rules Committee
Requested by Gov. Frank Murkowski

An Act approving an interim classification by the commissioner of natural resources closing certain land within the area of the proposed Bristol Bay (Alaska Peninsula) competitive oil and gas areawide lease sale to oil and gas exploration licensing and shallow natural gas leasing; and providing for an effective date.

Version: SB 266
Contact: Janet Burleson-Baxter, 465-2400
Action: 03-17-04: Signed by Governor

The governor signed SB 266 March 17. It approves a classification that closes certain land in the Bristol Bay area to oil and gas exploration licensing and shallow natural gas leasing so the land will remain available for a proposed competitive oil and gas sale. The bill precludes exploration licensing and gas leasing only in the competitive lease sale area, and ensures the state the maximum economic benefit through bonus bids, royalties and lease terms.

| Gov's Transmittal Letter |

SB 286 : Direct Marketing Fisheries Business
Signed Into Law! Chapter 147 SLA 04
Sponsored by Sen. Bert Stedman
Requested by the Jnt. Salmon Industry Task Force Committee

An Act relating to direct marketing fisheries businesses, to the fisheries business tax, and to liability for payment of taxes and assessments on the sale or transfer of fishery resources; and providing for an effective date.

Version: CS SB 286 (FIN)
Contact: Ian Fisk, 465-3873
Action: 07-03-04: Signed Into Law

SB 286 passed the House May 5 by a vote of 32 to 1. It reduces the Fisheries Business Tax on direct marketing vessels of 65 feet or less from 5 percent to 3 percent, leveling their rate to that of shore processors and Bering Sea factory trawlers. It also taxes the products of small-boat fishermen on the same value as the prevailing grounds price on which other processors base their taxes.

| Sponsor Statement |
| Fact Sheet | [PDF - 1 Page - 31 KB]

SB 348 : Approve Flint Hills Royalty Oil Sale
Signed into Law! Chapter 6 SLA 04
Sponsored by Sen. Gene Therriault

An Act approving the sale of royalty oil by the State of Alaska to Flint Hills Resources Alaska, LLC, and Flint Hills Resources, LLC; and providing for an effective date.

Version: CS SB 348 (FIN)
Contact: Joe Balash, 465-4797
Action: 03-10-04: Signed into Law

The governor signed SB 348 into law March 9. It grants legislative approval to a contract for the sale of state royalty oil to Flint Hills Resources. The terms of the contract will result in increased state revenues of $2.6 million to $8.4 million.

| Sponsor Statement |
| Fact Sheet | [PDF - 1 Page - 31 KB]

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