The Stranded Gas Act; What's it all about Alfie

AS 43.82.210. Contract Terms Relating to Payment in Lieu of One or More Taxes.

(a) If the commissioner approves an application and proposed project plan under AS 43.82.140 , the commissioner may develop proposed terms for inclusion in a contract under AS 43.82.020 for periodic payment in lieu of one or more of the following taxes that otherwise would be imposed by the state or a municipality on the qualified sponsor or member of a qualified sponsor group as a consequence of participating in an approved qualified project:


(1) oil and gas production taxes and oil surcharges under AS 43.55;


(2) oil and gas exploration, production, and pipeline transportation property taxes under AS 43.56;


(3) [Repealed, Sec. 6 ch 34 SLA 1999].


(4) Alaska net income tax under AS 43.20;


(5) municipal sales and use tax under AS 29.45.650 - 29.45.710;


(6) municipal property tax under AS 29.45.010 - 29.45.250 or 29.45.550 - 29.45.600;


(7) municipal special assessments under AS 29.46;


(8) a comparable tax or levy imposed by the state or a municipality after June 18, 1998;


(9) other state or municipal taxes or categories of taxes identified by the commissioner.


(b) If the commissioner chooses to develop proposed terms under (a) of this section, the commissioner shall, if practicable and consistent with the long-term fiscal interests of the state, develop the terms in a manner that attempts to balance the following principles:


(1) the terms should, in conjunction with other factors such as cost reduction of the project, cost overrun risk reduction of the project, increased fiscal certainty, and successful marketing, improve the competitiveness of the approved qualified project in relation to other development efforts aimed at supplying the same market;


(2) the terms should accommodate the interests of the state, affected municipalities, and the project sponsors under a wide range of economic conditions, potential project structures, and marketing arrangements;


(3) the state's and affected municipalities' combined share of the economic rent of the approved qualified project under the contract should be relatively progressive; that is, the state's and affected municipalities' combined annual share of the economic rent of the approved qualified project generally should not increase when there are decreases in project profitability, or decrease when there are increases in project profitability;

(4) the state's and affected municipalities' combined share of the economic rent of the approved qualified project under the contract should be relatively lower in the earlier years than in the later years of the approved qualified project;


(5) the terms should allow the project sponsors to retain a share of the economic rent of the approved qualified project that is sufficient to compensate the sponsors for risks under a range of economic circumstances;


(6) the terms should provide the state and affected municipalities with a significant share of the economic rent of the approved qualified project, when discounted to present value, under favorable price and cost conditions;


(7) the method for calculating the periodic payment in lieu of certain taxes under the contract should be clear and unambiguous; and


(8) while cost calculations for the approved qualified project under the contract should be based on amounts that closely approximate actual costs, agreed-upon formulas reflecting reasonable economic assumptions should be used if possible to promote administrative certainty and efficiency.


(c) Except as provided in (b) of this section, the commissioner's discretion under this section in developing proposed terms for a contract under AS 43.82.020 is not limited to consideration of the economic rent of the approved qualified project.


That dreaded "fiscal certainty" is written into the law. Where do French and Gara get their facts from?

AS 43.82.230. Contract Terms Relating to Hiring of Alaska Residents and Contracting With Alaska Businesses.

(a) The commissioner shall include in a contract under AS 43.82.020 a term requiring the qualified sponsor or qualified sponsor group and contractors of the qualified sponsor or qualified sponsor group to comply with all valid federal, state, and municipal laws relating to hiring Alaska residents and contracting with Alaska businesses to work in the state on the approved qualified project and not to discriminate against Alaska residents or Alaska businesses. Within the constraints of law, the commissioner shall also include in a contract under AS 43.82.020 a term that requires the qualified sponsor or qualified sponsor group and contractors of the qualified sponsor or qualified sponsor group to employ Alaska residents and to contract with Alaska businesses to work in the state on the approved qualified project to the extent the residents and businesses are available, competitively priced, and qualified.


(b) The commissioner shall include in a contract under AS 43.82.020 a term requiring the qualified sponsor or qualified sponsor group and contractors of the qualified sponsor or qualified sponsor group to


(1) advertise for available positions in newspapers in the location where the work is to be performed and in other publications distributed throughout the state, including in rural areas; and


(2) use Alaska job service organizations located throughout the state and not just in the location where the work is to be performed in order to notify Alaskans of work opportunities on the approved qualified project.


(c) Subject to the voluntary agreement of the qualified sponsor, the commissioner may include a term in the contract providing for incentives to encourage training and hiring of Alaska residents.


(d) This section does not create or abridge individual rights and does not create a private right of action for any person.


(e) For purposes of this section,


(1) "Alaska business" means a firm or contractor that


(A) has held an Alaska business license for the preceding 12 months;


(B) maintains, and has maintained for the preceding 12 months, a place of business in the state that competently and professionally deals in supplies, services, or construction of the nature required for the approved qualified project; and


(C) is


(i) a sole proprietorship and the proprietor is an Alaska resident;


(ii) a partnership and more than 50 percent of the partnership interest is held by Alaska residents;


(iii) a limited liability company and more than 50 percent of the membership interest is held by Alaska residents;


(iv) a corporation that has been incorporated in the state or is authorized to do business in the state; or


(v) a joint venture and a majority of the venturers qualify as Alaska businesses under this paragraph;


(2) "Alaska job service organizations" means those offices maintained by the state and recommended by the Department of Labor and Workforce Development whose functions are to aid the unemployed or underemployed in finding employment;


(3) "Alaska resident" means a natural person who


(A) receives a permanent fund dividend under AS 43.23; or


(B) is registered to vote under AS 15 and qualifies for a resident fishing, hunting, or trapping license under AS 16;


(4) "available," as applied to an Alaska resident or Alaska business, means that the resident or business is available for employment at the time required and is located anywhere in the state, not just in the area of the state where the work is to be performed;


(5) "qualified," as applied to an Alaska resident or Alaska business, means that the resident or business possesses the requisite education, training, skills, certification, or experience to perform the work necessary for a particular position or to perform a particular service.

This part of the law has yet to be tested in federal court. And Hicklin vs. Orbeck could be used to challenge any "Alaskan Hire" provision unless the State could prove an "evil" in hiring non-residents and given the low unemployment rate in Alaaska, this portion of the law could be challenged as well as an "Alaska Hire" preference in the contract. The only saving portion in the law is the more than 50 percent ownership provision in the gas pipeline. This would carry weight and may be used. But Les Gara the lawyer thinks that may be ownership is a not too wise move.


AS 43.82.310. Disclosure of Information; Confidentiality.

(a) An applicant may request confidential treatment of information that the applicant provides under AS 43.82.300 by clearly identifying the information and the reasons supporting the request for confidential treatment. The commissioner of revenue or the commissioner of natural resources, as appropriate, shall keep the information confidential until the commissioner determines whether the requirements of (b) of this section are met. If the commissioner of revenue or the commissioner of natural resources has not made a determination under (b) of this section within 14 days after receiving a request for confidential treatment, the request is considered denied. If the appropriate commissioner determines that the information does not meet the requirements of (b) of this section or if the commissioner fails to make a determination within 14 days, the commissioner shall return the information and any copies of it at the request of the applicant. If the commissioner of revenue or the commissioner of natural resources, as appropriate, returns information under this subsection, the commissioner shall cease review of the application or cease contract development under AS 43.82.200 - 43.82.270, as appropriate, unless the commissioner determines that the returned information is unnecessary to make a determination on the application or to develop contract terms under AS 43.82.200 - 43.82.270.


(b) If requested by the applicant, information provided to the commissioner of revenue or the commissioner of natural resources under AS 43.82.300 shall be kept confidential if the commissioner receiving the information determines, upon an adequate showing by the applicant, that the information


(1) is a trade secret or other proprietary research, development, or commercial information that the applicant treats as confidential;


(2) affects the applicant's competitive position; and


(3) has commercial value that may be significantly diminished by public disclosure or that public disclosure is not in the long-term fiscal interests of the state.


(c) Information determined to be confidential under (b) of this section is confidential under that subsection only so long as is necessary to protect the competitive position of the applicant, to prevent the significant diminution of the commercial value of the information, or to protect the long-term fiscal interests of the state. The commissioner of revenue or the commissioner of natural resources, as appropriate, may not release information that the commissioner has previously determined to be confidential under (b) of this section without providing the applicant notice and an opportunity to be heard.


(d) Notwithstanding the limitation in (c) of this section, the Department of Revenue and the Department of Natural Resources may provide to one another, to the Department of Law, to the legislature, and to the Office of the Governor any information provided under AS 43.82.300 relevant to the implementation of this chapter or to the enforcement of state or federal laws. Information that is exchanged under this subsection that was determined to be confidential under (b) of this section remains confidential except as provided in (c) of this section. The portions of the records and files of the Department of Revenue, the Department of Natural Resources, the Department of Law, the legislature, and the Office of the Governor that reflect, incorporate, or analyze information that is determined to be confidential under (b) of this section are not public records except as provided in (c) of this section.


(e) Notwithstanding the limitation in (c) of this section, information that is determined to be confidential under (b) of this section shall be disclosed on request by the commissioner of revenue, the commissioner of natural resources, or the attorney general to a legislator; to the legislative auditor; and, as directed by the chair or vice-chair of the Legislative Budget and Audit Committee, to the director of legislative finance, to the permanent employees of those divisions who are responsible for evaluating a contract under AS 43.82.020, and to agents or contractors of the legislative auditor or the director of legislative finance who are engaged to evaluate a contract under AS 43.82.020 . Information that is determined to be confidential under (b) of this section may also be disclosed by the commissioner of revenue or the commissioner of natural resources to an independent contractor under AS 43.82.240 or to a municipal advisory group established under AS 43.82.510 . Before confidential information is disclosed under this subsection, the person receiving the information must sign an appropriate confidentiality agreement.


(f) If the commissioner of revenue chooses to develop a contract under AS 43.82.020 , the portions of the records and files of the Department of Revenue, the Department of Natural Resources, the Department of Law, and a municipal advisory group established under AS 43.82.510 that reflect, incorporate, or analyze information that is relevant to the development of the position or strategy of the commissioner of revenue, the commissioner of natural resources, or the attorney general with respect to a particular provision that may be incorporated into the contract are not public records until the commissioner of revenue gives public notice under AS 43.82.410 of the commissioner's preliminary findings and determination under AS 43.82.400 . Nothing in this subsection


(1) makes a record or file of the Department of Revenue, the Department of Natural Resources, or the Department of Law a public record that otherwise would not be a public record under AS 40.25.100 - 40.25.220;


(2) affects the confidentiality provisions of (a) - (e) of this section; or


(3) abridges a privilege recognized under the laws of this state, whether at common law or by statute or by court rule.

Article 05. CONTRACT REVIEW, APPROVAL, AND TERMINATION

Affect's the applicant's competitive position; that is a key component that is not mentioned in all of the political rhetoric.

The applicant's competitive position is in the global market place and Alaska and the Oil companies are in negotiations together and are competing against other nations like Russia.

Negotiations between Russia/Gazprom and Conoco and other companies have been taking place on the Shtokamn field and supposedly Gazprom was going to announce their choices at the G-8 summit, but that ain't happening It has been post-poned until August. And we know what takes place in August don't we.