INITIATIVE PETITION BILL LANGUAGE
by Petition Sponsors
Petition ID: 01GSLN
The All-Alaskan Gasline Initiative:
An Act establishing the Alaska Natural Gas Development Authority,
to maximize revenues for Alaska and jobs and gas for Alaskans
BE IT ENACTED BY THE PEOPLE OF THE STATE OF ALASKA:
* Section 1. The uncodified law of the State of Alaska is amended by adding a new
section to read:
FINDINGS AND INTENT. (a) The people find that
(b) It is the intent of this Act to create the All-Alaskan Natural Gas Development Authority for
the purpose of developing, constructing, managing, and operating a gas pipeline from the
North Slope of Alaska and a spur line to the Southcentral Alaska natural gas distribution
- The Phillips-Marathon liquefaction facility at Nikiski has been supplying
Cook Inlet natural gas to Japan and Southcentral Alaska at great profit
and without interruption since 1969;
- Cook Inlet gas supplies are dwindling rapidly with shortfalls anticipated as
early as the winter of 2003;
- Alaska's North Slope contains vast proven reserves of natural gas that have
been known for at least 25 years but have never been developed;
- these gas resources have never been offered for sale, because there has
been no way to transport them to market;
- multiple markets in North America and Asia have recently expressed an
interest in receiving a proposal from Alaska for the purchase of Alaska
- if developed, these natural gas resources could represent substantial
economic benefits to Alaskans in jobs, state revenue, and gas for Alaska
citizens and businesses;
- the major North slope leaseholders have competing gas reserves in other
parts of the world vying for the same markets, creating a conflict of
interest for them in advancing the sales of Alaska gas;
- the North slope Producers agreed in 1991 to strand North Slope gas until at
- given the producer's conflicts of interest and their historic refusal to
make North Slope natural gas available it may be necessary to take the
- the permits necessary for an Alaskan gasline project have been pledged to
the Alaska Natural Gas Development Authority, operating as a port
authority, to facilitate the development of the project;
- there is sufficient gas for an all-Alaskan gasline project;
- the Alaska Natural Gas Development Authority offers substantial tax
benefits that improve the economics of a gasline project;
- state ownership of the pipeline and associated facilities has the potential
to provide substantial revenues to the state and the Alaska Permanent
- Alaska's constitution requires that Alaska's resources are developed,
utilized, and conserved for the maximum benefit of Alaska's people.
- an all-Alaskan gasline maximizes jobs for Alaskans, revenues for the Alaskan
treasury, and access to gas for Alaskans.
*Sec. 2. AS 41 is amended by adding a new chapter to read:
Chapter 41. Alaskan Natural Gas Development Authority.
Article 1. Establishment of the Authority.
Sec. 41.41.010. Establishment of the authority. (a) There is established the
Alaska Natural Gas Development Authority, the purpose of which is to provide one or more of the
following services and functions in order to bring natural gas from the North Slope to market,
(b) The authority is a public corporation and an instrumentality of the state within the
Department of Revenue.
- the acquisition and conditioning of North Slope natural gas;
- the design and construction of the pipeline system;
- the operation and maintenance of the pipeline system;
- the design, construction, operation, of other facilities necessary for delivering
the gas to market and to Southcentral Alaska; and
- the acquisition of natural gas market share sufficient to ensure the long-term
feasibility of the pipeline system project.
(c) The authority has a legal existence independent of and separate from the state.
(d) The acquisition of natural gas from the North Slope and its delivery to tidewater
for shipment to market by the authority is an essential government function of
(e) The authority may not be terminated as long as it has bonds, notes, or other
Sec. 41.41.020. Authority governing body. (a) The authority shall be governed by a
board of directors consisting of seven members from the general public appointed by the Governor
and confirmed by the legislature.
(b) The board shall annually elect a chair, and may elect other officers, from among its
Sec. 41.41.030. Term of office. (a) The members of the board shall be appointed
for terms of three years, and they may be reappointed.
(b) The terms of the members shall be staggered.
Sec. 41.41.040. Removal and vacancies. (a) The governor may remove a member of
the board from office. A removal must be in writing and must state the reason
for the removal. A member who is removed may not participate in board business
and may not be counted for purposes of establishing a quorum after the member
receives written notice of removal. A member who is removed is not entitled to
honoraria, per diem, or travel expenses authorized under AS 41.41.060 for work
performed after the member receives the written notice of removal.
(b) The governor shall promptly fill a vacancy on the board by appointment. An
appointee to a vacancy shall hold office for the balance of the term for which
the appointee's predecessor on the board was appointed.
(c) A vacancy on the board does not impair the authority of a quorum of the board to
exercise all the powers and perform all the duties of the board.
Sec. 41.41.050. Quorum and voting. Four members of the board constitute a
quorum for the transaction of business and the exercise of the powers and duties
of the board. Action may be taken only upon the affirmative vote of a majority
of the full membership of the board.
Sec. 41.41.060. Compensation of board members; per diem and travel expenses.
Members of the board are entitled to per diem and travel expenses authorized for
boards and commissions under AS 39.20.180.
Sec. 41.41.070. Authority staff. (a) The board may employ and determine the
salary of a chief executive officer.
(b) The chief executive officer may, with the approval of the board, select and employ
additional staff as necessary.
(c) An employee of the authority, including the chief executive officer, may not be a
member of the board. The chief executive officer and the other employees of the
board are in the exempt service under AS 39.25.110.
(d) In addition to its employees, the authority may contract for and engage the services
of bond counsel, consultants, experts, and financial advisors the corporation
considers necessary for the purpose of developing information, furnishing
advice, or conducting studies, investigations, hearings, or other proceedings.
Sec. 41.41.080. Legal counsel. The attorney general
Sec. 41.41.090. Conflicts of interest. (a) Members of the board and the chief
executive officer of the authority are subject to the provisions of AS 39.50.
- is the legal counsel for the authority;
- shall advise the authority in legal matters; and
- shall represent the authority in legal actions.
(b) If a member of the board or an employee of the authority acquires, owns, or controls
an interest, direct of indirect, in an entity or project in which assets of the
authority are invested, the member shall immediately disclose the interest to
the board. The disclosure is a matter of public record and shall be included in
the minutes of the first board meeting following the disclosure.
Sec. 41.41.100. Budget. The revenue earned by operations of the authority must
be identified as the source of the operating budget of the authority in the
state's operating budget under AS 37.07 (Executive Budget Act).
Sec. 41.41.110. Audits. The Legislative Budget and Audit Committee may provide
for an annual post audit and annual operational and performance evaluations of
the authority's operations and budget.
Sec. 41.41.120. Reports and publications. (a) By September 30 of each year,
the board shall publish a report of the authority for distribution to the
governor and the public. The board shall notify the legislature that the report
(b) The report must include financial statements audited by independent outside auditors
and a statement of the amount of money received by the authority from its
operations during the period covered.
Sec. 41.41.130. Tax exemption. The security instruments issued by the
authority, the transfer of the security instruments, and the income on the
security instruments are exempt from all taxes and assessments in the state.
Sec. 41.41.140. Political activities. The resources of the authority may not be
used to finance or influence political activities.
Sec 41.41.150. Public access to information. (a) Information in the possession
of the authority is a public record, except that information that discloses the
particulars of the business or affairs of a private enterprise or investor is
confidential and is not a public record for purposes of AS 40.25.110 -
40.25.140. Confidential information may be disclosed only for the purposes of
an official law enforcement investigation or when its production is required in
a court proceeding.
(b) The restrictions of (a) of this section do not prohibit the publication of
statistics presented in a manner that prevents the identification of particular
reports, items, persons, or enterprises.
Article 2. Powers of the Authority.
Sec. 41.41.200. Powers of the authority. In furtherance of its corporate
purposes, in addition to its other powers, the authority may
Article 3. Revenue Bonds and Notes.
- sue and be sued;
- adopt a seal;
- adopt, amend, and repeal bylaws and regulations;
- make and execute contracts and other instruments;
- in its own name acquire property, lease, rent, convey, or acquire real and
personal property; a project site or part of a project site may be
acquired by eminent domain;
- acquire natural gas supplies;
- issue bonds and otherwise incur indebtedness in accordance with AS 41.41.300
- 41.41.410 in order to pay the cost of a project;
- accept gifts, grants, or loans from and enter into contracts or other
transactions regarding gifts, grants, or loans with a federal agency or
an agency or instrumentality of the state, a municipality, private
organization, or other source;
- enter into contracts or agreements with a federal agency, agency or
instrumentality of the state, municipality, or public or private
individual or entity, with respect to the exercise of its powers;
- charge fees or other forms of remuneration for the use of authority
properties and facilities;
- defend and indemnify a current or former member of the board or an employee
or agent of the authority against the costs, expenses, judgments, and
liabilities as a result of actions taken in good faith on behalf of the
- purchase insurance to protect its assets, services, and employees against
liabilities that may arise from authority operations and activities.
Sec. 41.41.300. Bonds and notes of the authority. (a) The authority, by
resolution, may issue revenue bonds and bond anticipation notes in order to
provide funds to carry out the purposes set out in AS 41.41.010(a).
(b) The principal and interest on the revenue bonds or notes authorized and issued
under (a) of this section are payable from authority funds. Bond anticipation
notes may be payable from the proceeds of the sale of bonds or from the proceeds
of the sale of other bond anticipation notes or, in the event bond or bond
anticipation note proceeds are not available, the notes may be paid from other
funds or assets of the authority.
(c) Bonds or notes may be additionally secured by a pledge of a grant or contribution
from the federal government, or a corporation, association, institution, or
person, or a pledge of money, income, or revenues of the authority from any
(d) Bonds or bond anticipation notes of the authority may be issued in one or more
series and shall be dated, bear interest at the rate or rates per year or within
the maximum rate, be in the denomination, be in the form, either coupon or
registered, carry the conversion or registration provisions, have the rank or
priority, be executed in the manner and form, be payable at the times, from the
sources, and in the medium of payment and place or places within or outside the
state, be subject to authentication by a trustee or fiscal agent, and be subject
to the terms of redemption with or without premium, as the resolution of the
authority may provide. Bond anticipation notes shall mature at the time or
times that are determined by the authority. Bonds shall mature at a time not
exceeding a number of years from their date that is determined by the
authority. Before the preparation of definitive bonds or bond anticipation
notes, the authority may issue interim receipts or temporary bonds or bond
anticipation notes, with or without coupons, exchangeable for bonds or bond
anticipation notes when these definitive bonds or bond anticipation notes have
been executed and are available for delivery.
(e) Bonds or bond anticipation notes may be sold in the manner and on the terms the
(f) If an officer whose signature or a facsimile of whose signature appears on a bond,
note, or coupon attached to them ceases to be an officer before the delivery of
the bond, note, or coupon, the signature or facsimile is valid to the same
extent as if the officer had remained in office until delivery.
Sec. 41.41.310. Covenants. In a resolution of the authority authorizing or
relating to the issuance of bonds or bond anticipation notes, the authority has
power by provisions in the resolution that will constitute covenants of the
authority and contracts with the holders of the bonds or bond anticipation notes
Sec. 41.41.320. Limitations of issuance of bonds. (a) The authority may not
issue bonds in an amount that exceeds the amount of bonds authorized to be
issued by the legislature.
- pledge to a payment or purpose all or a part of its revenues to which its
right then exists or may thereafter come into existence, and the money
derived from the revenues, and the proceeds of bonds or notes;
- covenant as to the use and disposition of payments of principal or interest
received by the authority on loans or other investments held by the
- covenant as to establishment of reserves or sinking funds and the making of
provision for and the regulation and disposition of the reserves or
- covenant with respect to or against limitations on a right to sell or
otherwise dispose of property of any kind;
- covenant as to bonds and notes to be issued, and their limitations, terms,
and conditions, and as to the custody, application, and disposition of
the proceeds of the bonds and notes;
- covenant as to the issuance of additional bonds or notes, or as to
limitations on the issuance of additional bonds or notes and the
incurring of other debts;
- covenant as to the payment of the principal of or interest on the bonds or
notes, as to the sources and methods of the payment, as to the rank or
priority of the bonds or notes with respect to a lien or security, or as
to the acceleration of the maturity of the bonds or notes;
- for the replacement of lost, stolen, destroyed, or mutilated bonds or notes;
- covenant as to the redemption of bonds or notes and privileges of their
exchange for other bonds or notes of the authority;
- covenant to create or authorize the creation of special funds of money to be
held in pledge or otherwise for operating expenses, payment or
redemption of bonds or notes, reserves, or other purposes;
- establish the procedure, if any, by which the terms of a contract or
covenant with or for the benefit of the holders of bonds or notes may be
amended or abrogated, the amount of bonds or notes the holders of which
must consent to amendment or abrogation, and the manner in which the
consent may be given;
- covenant as to the custody of property or investments, their safekeeping and
insurance, and the use and disposition of insurance money;
- agree with a corporate trustee that may be a trust company or bank having
the powers of a trust company within or outside the state as to the
pledging or assigning of revenue or funds to which or in which the
authority has rights or an interest; the agreement may further provide
for other rights and remedies exercisable by the trustee as may be
proper for the protection of the holders of a bond or note of the
authority and not otherwise in violation of law and may provide for the
restriction of the rights of an individual holder of bonds or notes of
- appoint and provide for the duties and obligations of a paying agent or
paying agents or other fiduciaries as the resolution may provide within
or outside the state;
- limit the rights of the holders of a bond or note to enforce a pledge or
covenant securing the bonds or notes;
- make covenants other than and in addition to the covenants expressly
authorized in this section of like or different character, and to make
covenants to do or refrain from doing acts and things as may be
necessary or convenient and desirable in order to better secure bonds or
notes or that, in the absolute discretion of the authority, will tend to
make bonds or notes more marketable, notwithstanding that the covenants,
acts, or things may not be enumerated in this section.
(b) This section does not apply to the issuance by the authority of refunding bonds or
to the issuance by the authority of bonds the proceeds of which are intended to
be used to refinance the loans held by the authority.
Sec. 41.41.330. Independent financial advisor. In negotiating the private sale
of bonds or bond anticipation notes to an underwriter, the authority may retain
a financial advisor. A financial advisor retained under this section must be
independent from the underwriter.
Sec. 41.41.340. Validity of pledge. (a) The pledge of assets or revenue of the
authority to the payment of the principal or interest on an obligation of the
authority is valid and binding from the time the pledge is made, and the assets
or revenue become immediately subject to the lien of the pledge without physical
delivery or further act. The lien of a pledge is valid and binding against all
parties having claims in tort, contract, or otherwise against the authority,
irrespective of whether those parties have notice of the lien of the pledge.
(b) This section does not prohibit the authority from selling assets subject to a
pledge, except that a sale may be restricted by the trust agreement or
resolution providing for the issuance of the obligations.
Sec. 41.41.350. Capital reserve funds. (a) For the purpose of securing one or
more issues of its obligations, the authority may establish one or more special
funds, called "capital reserve funds," and shall pay into those
capital reserve funds (1) money appropriated and made available by the state for
the purpose of those funds, (2) proceeds of the sale of its obligations, to the
extent provided in the resolution or resolutions of the authority authorizing
their issuance, and (3) other money that may be made available to the authority
for the purpose of those funds from another source. All money held in a capital
reserve fund, except as provided in this section, shall, subject to
appropriation, be used as required solely for the payment of the principal of
obligations or of the sinking fund payments with respect to those obligations;
the purchase or redemption of obligations; the payment of interest on
obligations; or the payment of a redemption premium required to be paid when
those obligations are redeemed before maturity. However, money in a fund may
not be withdrawn from that fund at any time in an amount that would reduce the
amount of that fund to less than the capital reserve requirement set out in (b)
of this section, except for the purpose of making, with respect to those
obligations, payment, when due, of principal, interest, redemption premiums, and
the sinking fund payments for the payment of which other money of the authority
is not available. Income or interest earned by, or increment to, a capital
reserve fund due to the investment of the fund or other amounts in it may be
transferred by the authority to other funds or accounts of the authority to the
extent that the transfer does not reduce the amount of the capital reserve fund
below the capital reserve fund requirement.
(b) If the authority decides to issue obligations secured by a capital reserve fund,
the obligations may not be issued if the amount in the capital reserve fund is
less than a percent, not exceeding 10 percent, of the principal amount of all of
those obligations secured by that capital reserve fund then to be issued and
then outstanding in accordance with their terms, as may be established by
resolution of the authority, called the "capital reserve fund
requirement," unless the authority, at the time of issuance of the
obligations, deposits in the capital reserve fund from the proceeds of the
obligations to be issued or from other sources an amount that, together with the
amount then in the fund, will not be less than the capital reserve fund
(c) In computing the amount of a capital reserve fund for the purpose of this section,
securities in which all or a portion of the funds are invested shall be valued
at par or, if purchased at less than par, at amortized costs as the term is
defined by resolution of the authority authorizing the issue of the obligations
or by some other reasonable method established by the authority by resolution.
Valuation on a particular date must include the amount of interest earned or
accrued to that date.
(d) To assure the continued operation and solvency of the authority for the carrying out
of its corporate purposes, provision is made in (a) of this section for the
accumulation in capital reserve funds of an amount equal to their capital
reserve fund requirement.
(e) The chair of the authority shall annually, not later than January 2, make and
deliver to the governor and chairs of the house and senate finance committees a
certificate stating the sum, if any, required to restore a capital reserve fund
to the capital reserve fund requirement. The legislature may appropriate that
sum, and all sums appropriated during the current fiscal year by the legislature
for the restoration shall be deposited by the authority in the appropriate
capital reserve fund.
(f) This section does not create a debt or liability of the state.
Sec. 41.41.360. Remedies. A holder of obligations or coupons attached to them
issued under the provisions of this chapter, and a trustee under a trust
agreement or resolution authorizing the issuance of the obligations, except as
restricted by a trust agreement or resolution, either at law or in equity, may
enforce all rights granted hereunder or under the trust agreement or resolution,
or under another contract executed by the authority under this chapter, and may
enforce and compel the performance of all duties required by this chapter or by
the trust agreement or resolution to be performed by the authority or by an
officer of it.
Sec. 41.41.370. Negotiable instruments. All obligations and interest coupons
attached to them are negotiable instruments under the laws of this state,
subject only to applicable provisions for registration.
Sec. 41.41.380. Obligations eligible for investment. Obligations issued under
the provisions of this chapter are securities in which all public officers and
public bodies of the state and its political subdivisions, all insurance
companies, trust companies, banking associations, investment companies,
executors, administrators, trustees, and other fiduciaries may properly and
legally invest funds, including capital in their control or belonging to them.
These obligations may be deposited with a state or municipal officer of an
agency or political subdivision of the state for a purpose for which the deposit
of bonds, notes, or obligations of the state is authorized by law.
Sec. 41.41.390. Refunding bonds. (a) The authority may provide for the issuance
of refunding bonds for the purpose of refunding an obligation then outstanding
that has been issued under the provisions of this chapter, including the payment
of redemption premium on them and interest accrued or to accrue to the date of
redemption of the obligations. The issuance of the bonds, the maturities and
other details of them, the rights of the holders of them, and the rights, duties,
and obligations of the authority in respect of them are governed by the
provisions of this chapter that relate to the issuance of obligations insofar
as those provisions may be appropriate.
(b) Refunding bonds may be sold or exchanged for outstanding bonds issued under this
chapter, and, if sold, the proceeds may be applied, subject to appropriation and
in addition to another authorized purpose, to the purchase, redemption, or
payment of the outstanding obligations. Pending the application of the proceeds
of refunding bonds, with any other available funds, to the payment of the
principal, accrued interest, and redemption premium on the obligations being
refunded, and, if so provided or permitted in the resolution authorizing the
issuance of the refunding bonds or in the trust agreement securing them, to the
payment of any interest on the refunding bonds and expenses in connection with
the refunding, the proceeds may be invested in direct obligations of, or
obligations the principal of and the interest on which are unconditionally
guaranteed by, the United States that mature or that will be subject to
redemption, at the option of the holders of them, not later than the respective
dates when the proceeds, together with the interest accruing on them, will be
required for the purposes intended.
Sec. 41.41.400. Credit of state not pledged. (a) Obligations issued under the
provisions of this chapter do not constitute a debt, liability, or obligation of
the state or of a political subdivision of the state or a pledge of the faith
and credit of the state or of a political subdivision of the state but are
payable solely from the revenue or assets of the authority. Each obligation
issued under this chapter must contain on its face a statement that the
authority is not obligated to pay it or the interest on it except from the
revenue or assets of the authority and that neither the faith and credit not the
taxing power of the state or of a political subdivision of the state is pledged
to the payment of the principal of or the interest on the obligation.
(b) Expenses incurred by the authority in carrying out the provisions of this chapter
are payable from funds provided under this chapter, and liability may not be
incurred by the authority in excess of these funds.
Sec. 41.41.410. Officers not liable. A member or other officer of the
authority is not subject to personal liability or accountability by reason of
having executed or issued an obligation.
Article 4. Property of the Authority.
Sec. 41.41.450. Property of the authority. The authority may acquire, by
purchase, lease, or gift, upon terms that it considers proper, land, structures,
real or personal property rights, rights-of-way, franchises, easements, and
other interests in land it considers necessary or convenient for the financing
of the project or a part of the project.
Article 5. Project Construction.
Sec. 41.41.500. Contract terms relating to use of Alaska resources. (a) The
authority shall enter into one or more prehire project term agreements with
labor organizations that (1) contain no-strike clauses; and (2) secure timely
completion of the project and maximum employment opportunities for state
(b) To maximize the economic benefits of the project to Alaskan businesses, the
authority shall use Alaska contractors and suppliers to the maximum extent
possible to take advantage of the Alaska experience in Arctic engineering and
Article 6. General Provisions.
Sec. 41.41.900. Tax exemption. All obligations issued under this chapter are
declared to be issued by a body corporate and public of the state and for an
essential public and governmental purpose, and the obligations, and the interest
and income on and from the obligations, and all fees, charges, funds, revenues,
income, and other money pledged or available to pay or secure the payment of the
obligations, or interest on the obligations, are exempt from state taxation
except for transfer, inheritance, and estate taxes.
Sec. 41.41.990. Definitions. In this chapter,
*Sec. 3. AS 39.25.110(11) is amended by adding a new subparagraph to read:
- "authority" means the Alaska Natural Gas Development Authority;
- "board" means the board of directors of the Alaska Natural Gas
- "project" means the gas transmission pipeline, together with all
related property and facilities, to extend from the Prudhoe Bay area on
the North Slope of Alaska to tidewater at a point on Prince William
Sound and the spur line from Glennallen to the Southcentral gas
distribution grid, and includes planning, design, and construction of
the pipeline and facilities as described in AS 41.41.010(a)(1) - (5).
(G) Alaska Natural Gas Development Authority;
*Sec. 4. AS 39.50.200(b) is amended by adding a new paragraph to read:
(57) the board of directors and chief executive officer of the Alaska Natural Gas
Development Authority (AS 41.41.020).
*Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to
DEVELOPMENT OF PROJECT PLAN. Not later than one year after the first meeting of
the board of directors of the Alaska Natural Gas Development Authority, the
board shall produce a development plan. The development plan must include
*Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to
- estimates of construction costs and timelines;
- gas procurement prices;
- use of the state's royalty gas;
- estimates of revenue to the general fund and the Alaska permanent fund;
- a revenue sharing plan with municipal governments;
- a plan for delivery and pricing of natural gas to communities along the
pipeline route and to Southcentral Alaska through a spur line;
- a plan for delivery and pricing of LNG to Yukon River and coastal
- a payment schedule to companies providing permits or other valuable assets;
- a marketing plan to approach potential buyers;
- a plan to maximize Alaskan hire, including project labor agreements; and
- a plan to ensure meeting the highest environmental and safety standards,
including a citizens advisory council.
- The goal of the authority is to have the Alaskan gas line in full production
INITIAL APPOINTMENTS OF MEMBERS OF ALASKA NATURAL GAS DEVELOPMENT AUTHORITY BOARD OF
DIRECTORS. Of the members first appointed under AS 41.41.020(a), enacted by
sec. 2 of this Act,
- three members shall be appointed to three-year terms;
- two members shall be appointed to two-year terms; and
- two members shall be appointed to one-year terms.