Legislature(2003 - 2004)

01/28/2004 03:35 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         SB 264-REPEAL PIPELINE PREAPPLICATION DEADLINE                                                                     
                                                                                                                              
CHAIR SCOTT OGAN announced SB 264 to be up for consideration.                                                                   
                                                                                                                                
MS. MARTY RUTHERFORD, Deputy  Commissioner, Department of Natural                                                               
Resources (DNR), said  the purpose of this bill is  to repeal the                                                               
sunset date  in AS 38.35.145(c),  the statute that allows  DNR to                                                               
enter  into agreements  with perspective  lessees to  recover the                                                               
cost  for  preliminary  work on  a  pipeline  right-of-way  lease                                                               
application.  That  provision ended  on  December  31, 2003.  She                                                               
explained:                                                                                                                      
                                                                                                                                
      As a little background, Mr. Chairman, pipeline right-                                                                     
     of-way  lease  applicants  must  submit  very  detailed                                                                    
     applications  that require  a  lot  of engineering  and                                                                    
     design  work. To  do that,  applicants  expend a  great                                                                    
     deal of resources - just  to complete that application.                                                                    
     The applicants  have found and  told us that  it's very                                                                    
     useful   to  have   agencies  involved   in  the   pre-                                                                    
     application so  that they are aware  of both permitting                                                                    
     issues at an early  stage and detailed information that                                                                    
     we can provide them  prior to getting their application                                                                    
     complete.  We've also  found that  agency participation                                                                    
     during the  pre-application phase expedites  the review                                                                    
     and approval of the project ultimately.                                                                                    
                                                                                                                                
     This  ability to  enter  into reimbursement  agreements                                                                    
     has been  used most  recently for  pre-application work                                                                    
     on  the Pt.  Thompson project  before that  project was                                                                    
     delayed and  the Kenai Kachemak pipeline  extension. It                                                                    
     might be  useful for you to  hear some of the  types of                                                                    
     assistance provided  at this  stage. They  include such                                                                    
     things as identification  and explanation of applicable                                                                    
     state law  and the  regulatory requirements as  well as                                                                    
     an    explanation    of   the    regulatory    process,                                                                    
     identification of  land ownership, not only  state, but                                                                    
     federal  and private.  That  affects  who an  applicant                                                                    
     must  deal with  to  complete  a pipeline  right-of-way                                                                    
     lease. Another thing would be  an identification of any                                                                    
     restrictions that  exist on affected state  lands which                                                                    
     might  interfere with  our  authorizing a  right-of-way                                                                    
     lease  or  hinder  an   applicant's  ability  to  begin                                                                    
     construction. These things  might include a third-party                                                                    
     interest  such as  a  utility  right-of-way or  outside                                                                    
     influences  such  as   archeological  sights.  We  also                                                                    
     identify   potential  environmental   issues  such   as                                                                    
     difficult  stream   crossings.  Our   assistance  could                                                                    
     include  reaching out  to  other  affected parties.  We                                                                    
     have done  that in the  past to help an  applicant with                                                                    
     entities such  as utilities that do  have the right-of-                                                                    
     way or  other landowners  or even  competing applicants                                                                    
     for  the same  right-of-way.  We help  an applicant  to                                                                    
     understand  the  other  party's interest  and  to  help                                                                    
     resolve those conflicts.                                                                                                   
                                                                                                                                
     Our  assistance can  be with  helping  an applicant  to                                                                    
     develop an initial project  application and perhaps one                                                                    
     of the  most important  aspects for  a large  project -                                                                    
     our ability  to enter into reimbursement  agreement for                                                                    
     the pre-application  work allows  us to  staff up  in a                                                                    
     timely  fashion. So  when an  application does  come in                                                                    
     the door, we can move the project through quickly.                                                                         
                                                                                                                                
MS.  RUTHERFORD  said  the  pre-application  work  is  completely                                                               
applicant initiated.  Without this  legislation, DNR is  not able                                                               
to work with  the applicants until receiving  an application. The                                                               
fiscal impact  of passing  this is  zero, but  the impact  of not                                                               
passing it  is significant. Without  it, they can't enter  into a                                                               
reimbursable service  agreement and don't have  any general funds                                                               
available to provide this type of assistance.                                                                                   
                                                                                                                                
CHAIR OGAN asked  when this bill was originally  passed and about                                                               
the discussion of the sunset date in 2003.                                                                                      
                                                                                                                                
MS. RUTHERFORD  replied that  she thought it  was passed  in 2000                                                               
and she couldn't find out why the sunset date was added.                                                                        
                                                                                                                                
SENATOR SEEKINS  moved to  pass SB 264  from committee  with zero                                                               
fiscal  note  and  individual   recommendations.  There  were  no                                                               
objections and it was so ordered.                                                                                               

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