Title 42. Public Utilities and Carriers and Energy Programs.

Chapter 04. Regulatory Commission of Alaska.

Article 1. Commission and Staff.


Sec. 42.04.010. Regulatory Commission of Alaska created.
 (a) There is created within the Department of Commerce, Community, and Economic Development as an independent agency of the state the Regulatory Commission of Alaska.

 (b) The commission shall annually elect one of its members to serve as chair for the following fiscal year. When a vacancy occurs in the office of chair, the commission shall elect one of its members to serve the remaining term as chair. The term as chair is one year. The chair may be elected to not more than three successive terms as chair. After a year of not serving as chair, the commissioner is eligible for election as chair again.




Sec. 42.04.020. Commissioners.
 (a) The commission consists of five commissioners appointed by the governor and confirmed by the legislature in joint session. To qualify for appointment as a commissioner, a person must be a member in good standing of the Alaska Bar Association or have a degree from an accredited college or university with a major in engineering, finance, economics, accounting, business administration, or public administration. Actual experience for a period of five years in the practice of law or in the field of engineering, finance, economics, accounting, business administration, or public administration is equivalent to a degree.

 (b) The term of office of each member is six years. A commissioner, upon the expiration of a term, shall continue to hold office until a successor is appointed and qualified.

 (c) A vacancy arising in the office of a commissioner shall be filled by appointment by the governor and confirmed by the legislature in joint session, and, except as provided in AS 39.05.080(4), an appointee selected to fill a vacancy shall hold office for the balance of the full term for which the predecessor on the commission was appointed.

 (d) A vacancy in the commission does not impair the authority of a quorum of commissioners to exercise all the powers and perform all the duties of the commission.

 (e) The governor may remove a commissioner from office for cause, including incompetence, neglect of duty, inability to serve, or misconduct in office or because the member, while serving on the commission, is convicted of a misdemeanor for violating a statute or regulation related to public utilities or is convicted of a felony. A commissioner, to be removed for cause, shall be given a copy of the charges and afforded an opportunity to be publicly heard in person or by counsel in the commissioner’s own defense upon not less than 10 days’ notice. If a commissioner is removed for cause, the governor shall file with the lieutenant governor a complete statement of all charges made against the commissioner and the governor’s finding based on the charges, together with a complete record of the proceedings.

 (f) Members of the commission are in the exempt service and are entitled to a monthly salary equal to a step in Range 27 of the salary schedule in AS 39.27.011(a) for Juneau, Alaska. The chair of the commission is entitled to a monthly salary equal to a step in Range 27 of the salary schedule in AS 39.27.011(a) for Juneau, Alaska.

 (g) Each commissioner, before entering upon the duties of office, shall take and subscribe to the oath prescribed for principal officers of the state.




Sec. 42.04.030. Principal office; seal.
 (a) The commission shall establish a principal office and branch offices necessary to discharge its business efficiently. For the convenience of the public or of parties to a proceeding, the commission may hold meetings, hearings, or other proceedings at other locations.

 (b) The commission shall have an official seal.




Sec. 42.04.040. Legal counsel.
 (a) The Department of Law shall provide full-time legal counsel to the commission.

 (b) The commission may, subject to the approval of the attorney general, contract for the services of specialized legal counsel or legal consultants.




Sec. 42.04.050. Employment of commission personnel.
 (a) The chair of the commission is responsible for directing the administrative functions of the commission and carrying out the policies as set by the commission. The commission chair may employ engineers, hearing examiners, administrative law judges, arbitrators, mediators, experts, clerks, accountants, and other agents and assistants considered necessary. Employees of the commission who are not in the exempt service under AS 39.25.110 or the partially exempt service under AS 39.25.120 are in the classified service under AS 39.25.100.

 (b) The chair of the commission may enter into a contract for no more than $5,000 to engage the services of a consultant or expert the chair considers necessary. The commission may contract for and engage the services of consultants and experts the commission considers necessary.

 (c) At the request of the Alaska Oil and Gas Conservation Commission and to the extent workload permits, the Regulatory Commission of Alaska shall make available to the Alaska Oil and Gas Conservation Commission the services of a hearing examiner.




Sec. 42.04.060. Restrictions on members and employees.
 (a) A member of the commission or an employee of the commission may not have an official connection with, hold stock or securities in, or have a pecuniary interest in a public utility or pipeline carrier within the state. Membership in a cooperative association is not a “pecuniary interest” within the meaning of this section; however, a member or employee of the commission may not be an officer, board member, or employee of a cooperative association. A member or employee may not act upon a matter in which a relationship of the member or employee with any person creates a conflict of interest.

 (b) A member or employee of the commission may not, after leaving the position as a member or employee of the commission, act as agent for or on behalf of a public utility in any matter before the commission that was before the commission during the employee’s employment or the member’s term of office. A violation of this subsection is a class A misdemeanor.

 (c) Members and employees of the commission, except clerical and secretarial staff, are subject to AS 39.50. Members and employees of the commission are subject to AS 39.52.

 (d) A member of the commission is disqualified from voting upon any matter before the commission in which the member has a conflict of interest.




Sec. 42.04.070. Powers and duties of commission chair.
 (a) The chair of the commission shall
     (1) employ the commission staff;

     (2) establish and implement a time management system for the commission;

     (3) assign the work of the commission to members and staff of the commission so that matters before the commission are resolved as expeditiously and competently as possible; when assigning a matter, the chair shall also set a date by which time the matter should be completed.

 (b) The chair of the commission may appoint a hearing examiner or an administrative law judge to hear a matter that has come before the commission; a member of the commission may serve as hearing examiner or, if qualified, as an administrative law judge.

 (c) The chair of the commission shall request the attorney general to participate as a party in a matter when the commission believes that it is in the public interest for the attorney general to do so.




Sec. 42.04.080. Decision-making procedures.
 (a) Except as provided in AS 42.05.171 or AS 42.06.140, when a matter comes for decision before the commission under AS 42.05, AS 42.06, or AS 42.08, the chair shall appoint a hearing panel composed of three or more members to hear, or if a hearing is not required, to otherwise consider, and decide the case. The panel shall exercise the powers of the commission with respect to the matter.

 (b) The commission shall adopt regulations that establish standards of timeliness for the types of cases that come before the commission. The commission shall establish standards based in part on degrees of complexity of the cases.




Sec. 42.04.090. Impartial decision-making. [Repealed, § 6 ch 2 TSSLA 2002.]

Article 2. Communications Carriers Section.


Sec. 42.04.100. Communications carriers section.
There is established within the commission a communications carriers section that shall develop, recommend, and administer policies and programs with respect to the regulation of rates, services, accounting, and facilities of communications common carriers within the state involving the use of wire, cable, radio, and space satellites.


Sec. 42.04.150. Public advocacy section. [Repealed, E.O. No. 111, § 4 (2003). For current law, see AS 44.23.020(e).]

Article 1. Powers and Duties of the Commission.


Chapter 05. Alaska Public Utilities Regulatory Act.

Secs. 42.05.010 — 42.05.131. Establishment of Public Utilities Commission. [Repealed, § 5 ch 113 SLA 1970; § 24 ch 25 SLA 1999.]
Sec. 42.05.141. General powers and duties of the commission.
 (a) The Regulatory Commission of Alaska may do all things necessary or proper to carry out the purposes and exercise the powers expressly granted or reasonably implied in this chapter, including
     (1) regulate every public utility engaged or proposing to engage in a utility business inside the state, except to the extent exempted by AS 42.05.711;

     (2) investigate, upon complaint or upon its own motion, the rates, classifications, rules, regulations, practices, services, and facilities of a public utility and hold hearings on them;

     (3) make or require just, fair, and reasonable rates, classifications, regulations, practices, services, and facilities for a public utility;

     (4) prescribe the system of accounts and regulate the service and safety of operations of a public utility;

     (5) require a public utility to file reports and other information and data;

     (6) appear personally or by counsel and represent the interests and welfare of the state in all matters and proceedings involving a public utility pending before an officer, department, board, commission, or court of the state or of another state or the United States and to intervene in, protest, resist, or advocate the granting, denial, or modification of any petition, application, complaint, or other proceeding;

     (7) examine witnesses and offer evidence in any proceeding affecting the state and initiate or participate in judicial proceedings to the extent necessary to protect and promote the interests of the state.

 (b) The commission shall perform the duties assigned to it under AS 42.45.100 — 42.45.190.

 (c) In the establishment of electric service rates under this chapter the commission shall promote the conservation of resources used in the generation of electric energy.

 (d) When considering whether the approval of a rate or a gas supply contract proposed by a utility to provide a reliable supply of gas for a reasonable price is in the public interest, the commission shall
     (1) recognize the public benefits of allowing a utility to negotiate different pricing mechanisms with different gas suppliers and to maintain a diversified portfolio of gas supply contracts to protect customers from the risks of inadequate supply or excessive cost that may arise from a single pricing mechanism; and

     (2) consider whether a utility could meet its responsibility to the public in a timely manner and without undue risk to the public if the commission fails to approve a rate or a gas supply contract proposed by the utility.




Sec. 42.05.145. Telecommunications regulation policy; restriction on regulation of telephone directories.
 (a) A utility that provides local exchange or interexchange telecommunications service in the state affects the public interest. Regulation of these utilities shall, consistent with this chapter, seek to maintain and further the efficiency, availability, and affordability of universal basic telecommunications service.

 (b) Notwithstanding other provisions of this chapter, the commission may not regulate the production and distribution of telephone directories.




Sec. 42.05.150. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.151. Regulations and hearing procedures.
 (a) The commission may adopt regulations, not inconsistent with the law, necessary or proper to exercise its powers and to perform its duties under this chapter.

 (b) The commission shall adopt regulations governing practice and procedure, consistent with due process of law, including the conduct of formal and informal investigations, pre-hearing conferences, hearings, and proceedings, and the handling of procedural motions by a single commissioner. The regulations must provide for the hearing or, when a hearing is not required, other consideration of a matter in accordance with AS 42.04.080. Technical rules of evidence need not apply to investigations, pre-hearing conferences, hearings, and proceedings before the commission. The commission shall provide for representation by out-of-state attorneys substantially in accordance with Rule 81, Alaska Rules of Civil Procedure.

 (c) The commission, each commissioner, or an employee authorized by the commission may administer oaths, certify to all official acts, and issue subpoenas, subpoenas duces tecum, and other process to compel the attendance of witnesses and the production of testimony, records, papers, accounts, and documents in an inquiry, investigation, hearing, or proceeding before the commission in any part of the state. Each commissioner is authorized to issue orders on procedural motions. The commission may petition a court of this state to enforce its subpoenas, subpoenas duces tecum, or other process.




Sec. 42.05.160. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.161. Application of Administrative Procedure Act.
 (a) The administrative adjudication procedures of AS 44.62 (Administrative Procedure Act) do not apply to adjudicatory proceedings of the commission except that final administrative determinations by the commission are subject to judicial review under that Act as provided in AS 42.05.551(a).

 (b) AS 44.62 (Administrative Procedure Act) applies to regulations adopted by the commission.




Sec. 42.05.170. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.171. Formal hearings.
A formal hearing that the commission has power to hold may be held by or before a hearing panel appointed under AS 42.04.080, a hearing examiner, or an administrative law judge designated for the purpose by the chair of the commission. In appropriate cases, a formal hearing may be held before an arbitrator or mediator designated for the purpose by the commission. The testimony and evidence in a formal hearing may be taken by the panel, by the hearing examiner, by the arbitrator, by the mediator, or by the administrative law judge to whom the hearing has been assigned. A decision of a hearing examiner, an arbitrator, a mediator, or an administrative law judge is not final until approved by the commission. A commissioner who has not heard or read the testimony, including the argument, may not participate in making a decision of a hearing panel. A party may file a petition for reconsideration of, or an administrative appeal of, a decision by a hearing examiner, an arbitrator, a mediator, or an administrative law judge that has been approved by the commission, or a decision of a hearing panel. The full commission shall act on the petition for reconsideration or the appeal. In determining the place of a hearing, the commission shall give preference to holding the hearing at a place most convenient for those interested in the subject of the hearing.


Sec. 42.05.175. Timelines for issuance of final orders.
 (a) The commission shall issue a final order not later than 180 days after a complete application is filed for an application
     (1) for a certificate of public convenience and necessity;

     (2) to amend a certificate of public convenience and necessity;

     (3) to transfer a certificate of public convenience and necessity; and

     (4) to acquire a controlling interest in a certificated public utility.

 (b) Notwithstanding a suspension ordered under AS 42.05.421, the commission shall issue a final order not later than 270 days after a complete tariff filing is made for a tariff filing that does not change the utility’s revenue requirement or rate design.

 (c) Notwithstanding a suspension ordered under AS 42.05.421, the commission shall issue a final order not later than 450 days after a complete tariff filing is made for a tariff filing that changes the utility’s revenue requirement or rate design.

 (d) The commission shall issue a final order not later than 365 days after a complete formal complaint is filed against a utility or, when the commission initiates a formal investigation of a utility without the filing of a complete formal complaint, not later than 365 days after the order initiating the formal investigation is issued.

 (e) The commission shall issue a final order in a rule-making proceeding not later than 730 days after a complete petition for adoption, amendment, or repeal of a regulation under AS 44.62.180 — 44.62.290 is filed or, when the commission initiates a rule-making docket, not later than 730 days after the order initiating the proceeding is issued.

 (f) The commission may extend a timeline required under this section if all parties of record consent to the extension or if, for one time only, before the timeline expires, the
     (1) commission reasonably finds that good cause exists to extend the timeline;

     (2) commission issues a written order extending the timeline and setting out its findings regarding good cause; and

     (3) extension of time is 90 days or less.

 (g) The commission shall file quarterly reports with the Legislative Budget and Audit Committee identifying all extensions ordered under (f) of this section during the previous quarter and including copies of the written orders issued under (f)(2) of this section.

 (h) If the commission does not issue and serve a final order regarding an application or suspended tariff under section (a), (b), or (c) of this section within the applicable timeline specified, and if the commission does not extend the timeline in accordance with (f) of this section, the application or suspended tariff filing shall be considered approved and shall go into effect immediately.

 (i) In adjudicated docket matters that come before the commission under state law or federal law and are not subject to a timeline under federal law or (a) — (e) of this section, the commission shall issue a final order not later than 180 days after the filing of an initiating petition. If the matter is commenced on the commission’s own motion, the commission shall issue a final order not later than 365 days after the issuance of an order opening the docket. This subsection does not apply to a complaint against a utility, a petition to revoke a certificate of public convenience and necessity, or a functionally equivalent filing.

 (j) If the commission does not issue and serve a final order governed by (i) of this section within the applicable timeline specified, including any extension granted by the commission in accordance with (f) of this section, the initiating petition shall be considered approved and shall take effect immediately, or, if the matter was commenced by the commission, the docket shall be closed with no action taken.

 (k) If proceedings subject to different timelines under this section are consolidated or if a single proceeding implicates more than one timeline, the latest applicable deadline for the issuance of a final order shall apply.

 (l) The commission may not evade the requirement of this section by terminating a proceeding in a docket and opening a proceeding in another docket on substantially the same matter.

 (m) For purposes of this section, “final order” means a dispositive administrative order that resolves all matters at issue and that may be the basis for a petition for reconsideration or request for judicial review.

 (n) For purposes of this section, an application, tariff filing, formal complaint, or petition is complete if it complies with the filing, format, and content requirements established by statute, regulation, and forms adopted by the commission under regulation.




Sec. 42.05.180. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.181. Notice and hearing before final orders.
A final order of the commission compelling affirmative action, denying a right or privilege, or granting a right or privilege over protest of the public utility or any party of record may not be entered without giving the interested party reasonable notice and an opportunity to be heard.


Sec. 42.05.190. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.191. Contents and service of orders.
Every formal order of the commission shall be based upon the facts of record. However, the commission may, without a hearing, issue an order approving any settlement supported by all the parties of record in a proceeding, including a compromise settlement. Every order entered pursuant to a hearing must state the commission’s findings, the basis of its findings and conclusions, together with its decision. These orders shall be entered of record and a copy of them shall be served on all parties of record in the proceeding.


Secs. 42.05.193 — 42.05.196. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.200. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.201. Publication of reports, orders, decisions, and regulations.
All reports, orders, decisions, and regulations of the commission shall be in writing. The commission shall apprise all affected utilities and interested parties of these reports, orders, decisions, and regulations as they are issued and adopted, and, when appropriate to do so, shall publish them in a manner that will reasonably inform the public or the affected consumers of any public utility service. The commission may set charges for costs of printing or reproducing and furnishing copies of its reports, orders, decisions and regulations. The publication requirement, as it pertains to regulations, does not supersede the requirements of AS 44.62 (Administrative Procedure Act).


Sec. 42.05.210. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.211. Annual report.
The commission shall, by November 15 of each year, publish an annual report reviewing its activities during the previous fiscal year and notify the legislature that the report is available. The report must address the regulation of public utility service in the state as of June 30 and must contain details about the commission’s compliance with the requirements of AS 42.05.175(a) — (e), with the timeline extensions made by the commission under AS 42.05.175(f), and with other performance measures established by the commission.


Sec. 42.05.220. [Repealed, § 5 ch 113 SLA 1970.]

Article 2. Certificate of Public Convenience and Necessity.


Sec. 42.05.221. Certificates required.
 (a) A public utility may not operate and receive compensation for providing a commodity or service without first having obtained from the commission under this chapter a certificate declaring that public convenience and necessity require or will require the service. Where a public utility provides more than one type of utility service, a separate certificate of convenience and necessity is required for each type. A certificate must describe the nature and extent of the authority granted in it, including, as appropriate for the services involved, a description of the authorized area and scope of operations of the public utility.

 (b) All certificates of convenience and necessity issued to a public utility before July 1, 1970, remain in effect but they are subject to modification where there are areas of conflict with public utilities that have not previously been required to have a certificate or where there is a substantial change in circumstances.

 (c) A certificate shall be issued to a public utility that was not required to have one before July 1, 1970, and that is required to have one after that date, if it appears to the commission that the utility was actually operating in good faith on that date. Such a certificate is subject to modification where there are areas of conflict with other public utilities or where there has been a substantial change in circumstances.

 (d) In an area where the commission determines that two or more public utilities are competing to furnish identical utility service and that this competition is not in the public interest, the commission shall take appropriate action to eliminate the competition and any undesirable duplication of facilities. This appropriate action may include, but is not limited to, ordering the competing utilities to enter into a contract that, among other things, would:
     (1) delineate the service area boundaries of each in those areas of competition;

     (2) eliminate existing duplication and paralleling to the fullest reasonable extent;

     (3) preclude future duplication and paralleling;

     (4) provide for the exchange of customers and facilities for the purposes of providing better public service and of eliminating duplication and paralleling; and

     (5) provide such other mutually equitable arrangements as would be in the public interest.

 (e) If the commission employs professional consultants to assist it in administering this section, it may apportion the expenses relating to their employment among the competing utilities.

 (f) [Repealed, § 12 ch 136 SLA 1980.]




Sec. 42.05.230. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.231. Application.
Application for a certificate shall be in writing and shall be in the form and contain the information required by the commission by regulation.


Sec. 42.05.240. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.241. Conditions of issuance.
A certificate may not be issued unless the commission finds that the applicant is fit, willing, and able to provide the utility services applied for and that the services are required for the convenience and necessity of the public. The commission may issue a certificate granting an application in whole or in part and attach to the grant of it the terms and conditions it considers necessary to protect and promote the public interest including the condition that the applicant may or shall serve an area or provide a necessary service not contemplated by the applicant. The commission may, for good cause, deny an application with or without prejudice.


Sec. 42.05.250. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.251. Use of streets in municipalities.
Public utilities have the right to a permit to use public streets, alleys, and other public ways of a municipality upon payment of a reasonable permit fee and on reasonable terms and conditions and with reasonable exceptions the municipality requires. The fee may not exceed the actual cost to the municipality of the utility’s use of the public way and of administering the permit program. A dispute as to whether fees, terms, conditions, or exceptions are reasonable shall be decided by the commission. The commission may require a utility to add the amount of any permit fee paid as a pro rata surcharge to its bills for service rendered at locations within the boundaries of any municipality that requires payment of a permit fee.


Sec. 42.05.253. Public utility regulatory cost charge. [Repealed, § 36 ch 2 FSSLA 1992.]
Sec. 42.05.254. Public utility regulatory cost charge.
 (a) A regulated public utility operating in the state shall pay to the commission an annual regulatory cost charge in an amount not to exceed the maximum percentage of adjusted gross revenue that applies to the utility sector of which the utility is a part. The regulatory cost charges that the commission expects to collect from all regulated utilities may not exceed the sum of the following percentages of the total adjusted gross revenue of all regulated public utilities derived from operations in the state: (1) not more than .7 percent to fund the operations of the commission, and (2) not more than .17 percent to fund operations of the public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) within the Department of Law. An exempt utility shall pay the actual cost of services provided to it by the commission.

 (b) The commission shall by regulation establish a method to determine annually the amount of the regulatory cost charge for a public utility. If the amount the commission expects to collect under (a) of this section and under AS 42.06.286(a) exceeds the authorized budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e), the commission shall, by order, reduce the percentages determined under (h) of this section so that the total amount of the fees collected approximately equals the authorized budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) for the fiscal year.

 (c) In determining the amount of the regulatory cost charge imposed under (a) of this section,
     (1) a utility selling utility services at wholesale shall modify its gross revenue by deducting payments it receives for wholesale sales;

     (2) a local exchange telephone utility shall modify its gross revenue by deducting payments received from other carriers for settlements or access charges;

     (3) an electric utility shall reduce its gross revenue by subtracting the cost of power; in this paragraph, “cost of power” means the costs of generation and purchased power reported to the commission.

 (d) The commission shall calculate the total regulatory cost charges to be levied against all regulated electric utilities under this section. The commission shall allocate the total amount among the regulated electric utilities by using an equal charge per kilowatt hour sold at retail.

 (e) The commission shall administer the charge imposed under this section. The Department of Revenue shall collect and enforce the charge imposed under this section. The Department of Administration shall identify the amount of the operating budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) that lapse into the general fund each year. The legislature may appropriate an amount equal to the lapsed amount to the commission and to the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) for operating costs for the next fiscal year. If the legislature does so, the commission shall reduce the total regulatory cost charge collected for that fiscal year by a comparable amount.

 (f) The commission shall allow a public utility to recover all payments made to the commission under this section. The commission may not require a public utility to file a rate case in order to be eligible to recover the regulatory cost charge.

 (g) The commission may adopt regulations under AS 44.62 (Administrative Procedure Act) necessary to administer this section, including requirements and procedures for reporting information and making quarterly payments. The Department of Revenue may adopt regulations under AS 44.62 (Administrative Procedure Act) for investigating the accuracy of filed information, and for collecting required payments.

 (h) The commission shall by regulation establish a method to determine annually the maximum percentage of adjusted gross revenue that will apply to each regulated public utility sector and the maximum percentage of gross revenue that will apply to the regulated pipeline carrier sector. Other than the cost of services provided to exempt utilities, the method established shall allocate the commission’s costs, and the Department of Law’s certified costs of its public advocacy function under AS 42.04.070(c) and AS 44.23.020(e), among the regulated public utility sectors and the regulated pipeline carrier sector based on the relative amount of the commission’s annual costs and the Department of Law’s certified costs that is attributable to regulating each sector. For purposes of this subsection, the Department of Law shall annually certify to the commission the costs of its public advocacy function under AS 42.04.070(c) and AS 44.23.020(e).

 (i) In this section,
     (1) “adjusted gross revenue” means the gross revenue of a utility as modified under (c) of this section, if appropriate;

     (2) “exempt utility” means a public utility that is certificated by the commission under AS 42.05.221 — 42.05.281 but, in accordance with AS 42.05.711, is exempt from other regulatory requirements of this chapter;

     (3) “gross revenue” means the total operating revenue from intrastate services, as shown in a utility’s annual report required by the commission by regulation;

     (4) “regulated utility” means a public utility that is certificated by the commission under AS 42.05.221 — 42.05.281 and that is subject to the other regulatory requirements of this chapter;

     (5) “wholesale sales” means sales to another utility for resale under circumstances that make revenue from the resale subject to the regulatory cost charge imposed under this section.




Sec. 42.05.260. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.261. Discontinuance, suspension, or abandonment of certificated service.
 (a) Except as otherwise provided in this section, a public utility may not discontinue or abandon a service for which a certificate has been issued by the commission unless upon the application of the public utility and if, after notice and opportunity for hearing, the commission finds that the continued service is not required by public convenience and necessity. Any interested person may file with the commission a protest or memorandum of opposition to or in support of discontinuance or abandonment. The commission may authorize temporary suspension of a service or of part of a service.

 (b) Upon complaint or upon its own motion, the commission may reinvestigate a previously authorized discontinuance, abandonment, or suspension of a service of an operating public utility. If, after providing notice and an opportunity for a hearing, the commission finds that the public convenience and necessity require the service to be resumed, it may order the public utility to again provide the service.




Sec. 42.05.270. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.271. Modification, suspension, or revocation of certificates.
Upon complaint or upon its own motion the commission, after notice and opportunity for hearing and for good cause shown, may amend, modify, suspend, or revoke a certificate, in whole or in part. Good cause for amendment, modification, suspension, or revocation of a certificate includes
     (1) the requirements of public convenience and necessity;

     (2) misrepresentation of a material fact in obtaining the certificate;

     (3) unauthorized discontinuance or abandonment of all or part of a public utility’s service;

     (4) wilful failure to comply with the provisions of this chapter or the regulations or orders of the commission; or

     (5) wilful failure to comply with a term, condition, or limitation of the certificate.




Sec. 42.05.280. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.281. Transfer of certificate.
A certificate may not be sold or leased, rented, transferred or inherited without the prior approval of the commission.


Sec. 42.05.290. [Repealed, 5 ch 113 SLA 1970.]

Article 3. Services and Facilities.


Sec. 42.05.291. Standards of service and facilities.
 (a) Each public utility shall furnish and maintain adequate, efficient, and safe service and facilities. This service shall be reasonably continuous and without unreasonable interruption or delay.

 (b) Subject to the provisions of this chapter and the regulations or orders of the commission, a public utility may establish reasonable rules and regulations governing the conditions under which it will render service.

 (c) The commission may upon its own motion or upon complaint, after providing reasonable notice and opportunity for hearing, adopt as to service and facilities, including the crossing of facilities, just and reasonable standards, classifications, regulations, and practices to be furnished, imposed, observed, and followed by public utilities; adopt adequate and reasonable standards for the measurement of quantity, quality, pressure, initial voltage, or other conditions pertaining to the supply of the service of public utilities; adopt reasonable regulations for the examination and testing of the service, and for the measurement of it; adopt or approve reasonable regulations, specifications, and standards to secure the accuracy of meters and appliances for measurement; and provide for the examination and testing of appliances used for the measurement of a service of a public utility. In doing so, the commission shall conform to the standard practices of the industry.

 (d) If the commission upon its own motion or upon complaint, after providing reasonable notice and opportunity for hearing, finds that the service or facilities of a public utility are unreasonable, unsafe, inadequate, insufficient, or unreasonably discriminatory, or otherwise in violation of this chapter, the commission shall prescribe, by regulation or order, the reasonable, safe, adequate, sufficient service or facilities to be observed, furnished, enforced, or employed, including all repairs, changes, alterations, extensions, substitutions, or improvements in facilities that are reasonably necessary and proper for the safety, accommodation, and convenience of the public.




Sec. 42.05.296. Telephone services for certain impaired subscribers.
 (a) The commission shall adopt regulations to require telephone utilities to provide service to deaf, hard of hearing, and speech impaired subscribers that permits the subscriber to communicate by telephone with persons of normal hearing and that makes available reasonable access of all phases of public telephone service to deaf, hard of hearing, and speech impaired telephone subscribers. The regulations must provide for cost recovery through surcharges added to the basic local exchange rate. The commission shall hold hearings to determine the most cost-effective method of providing this service.

 (b) A telephone subscriber is eligible for the service required by (a) of this section if the subscriber is certified as deaf, hard of hearing, or speech impaired by a licensed physician, a speech-language pathologist licensed under AS 08.11, an audiologist, or the Department of Health and Social Services or if the subscriber is an organization representing the deaf, hard of hearing, or speech impaired as determined by the commission.




Sec. 42.05.300. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.301. Discrimination in service.
Except as provided in AS 42.05.306, a public utility may not, as to service, make or grant an unreasonable preference or advantage to any person or subject any person to an unreasonable prejudice or disadvantage. A public utility may not establish or maintain or provide an unreasonable difference as to service, either as between localities or as between classes of service, but nothing in this section prohibits the establishment of reasonable classifications of service or requires unreasonable investment in facilities.


Sec. 42.05.306. Discounted service and reduced rate.
A public utility may provide a discounted service or a reduced rate for essential local exchange telecommunication services to individuals who receive benefits from a means test social services assistance program administered by the state or federal government. The commission may not require a utility to provide a discounted service or reduced rate or to incur uncompensated costs or administrative burdens for services provided under this section.


Sec. 42.05.310. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.311. Joint use and interconnection of facilities.
 (a) A public utility having sewers, conduits, utilidors, poles, pole lines, pipes, pipelines, mains, or other distribution or transmission facilities shall, for a reasonable compensation, permit another public utility to use them when the public convenience and necessity require this use and the use will not result in substantial injury to the owner, or in substantial detriment to the service to the customers of the owners. The cost of modifications or additions necessary to a joint use shall be at the expense of the public utility requesting the use of the facilities.

 (b) A telecommunications utility shall permit connection to be made and service to be furnished between a system operated by it and the system or toll facilities operated by another public utility or with the communications facility or system of a nonutility, or between its toll facilities and the toll facilities of another public utility, when public convenience and necessity require the connection and the connection will not result in substantial injury to the owner or other users of the facilities of either public utility or in substantial detriment to the service of either public utility.

 (c) The tariff of a public utility shall include rules setting out the terms and conditions under which it will construct, or permit its customers or subscribers to construct, and install lines, cables, radio links, or pipes from its existing facilities to the premises of applicants for service.




Sec. 42.05.320. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.321. Failure to agree upon joint use or interconnection.
 (a) In case of failure to agree upon the joint use or interconnection of facilities or the conditions or compensation for joint use or interconnections, the public utility, including any municipality, or an interested person may apply to the commission for an order requiring the interconnection. If, after investigation and opportunity for hearing, the commission finds that public convenience and necessity require the joint use or connection, and that the use or connection will not result in substantial injury to the owner utility or its customers, or in substantial detriment to the services furnished by the owner utility, or in the creation of safety hazards, it shall
     (1) order that the use be permitted;

     (2) prescribe reasonable conditions and compensation for the joint use;

     (3) order the interconnection to be made;

     (4) determine the time and manner of the interconnection;

     (5) determine the apportionment of costs and responsibility for operation and maintenance of the interconnection.

 (b) This section and AS 42.05.311 apply to all utilities whether or not they are exempt from other regulation under AS 42.05.711.




Sec. 42.05.325. Registration and regulation of alternate operator services.
 (a) An alternate operator service may not operate in the state until it has registered and filed its tariffs with the commission. The application for registration must include the service’s name, the address of its principal place of business, and the name and address of each of the officers of the service.

 (b) An alternate operator shall identify the entity that is providing the alternate operator service and the cost of the service before the consumer incurs a charge for the call. If requested, the alternate operator shall transfer or assist in the transfer of the consumer’s call to the consumer’s carrier of choice. The consumer may not be charged for the transfer. The service shall also post on or near the telephone instruments subject to the alternate operator service information indicating that the consumer may have access to the carrier the consumer prefers to use at no additional charge.

 (c) In this section, “alternate operator service”
     (1) means a connection to intrastate or interstate long-distance telecommunications facilities from a nonresidential location in the state including a hotel, motel, hospital, or customer-owned pay telephone, or from a place where business from consumers is aggregated, by a person that does not own any of the telecommunications facilities being connected through the service;

     (2) does not include an intrastate or interstate long-distance carrier that contracts for operator services and charges rates for those services that are no greater than the rates charged by long-distance carriers regulated by the Regulatory Commission of Alaska or by the Federal Communications Commission.




Sec. 42.05.330. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.331. Standards for measurement.
The commission shall establish by regulation adequate, fair, and realistic standards for the measurement of quality, pressure, voltage, or other conditions of utility services and shall prescribe reasonable regulations for examination and testing of the service and the accuracy of the devices used to measure it.


Sec. 42.05.340. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.341. Testing of meter standards.
The commission shall provide by regulation for the periodic testing and certification of meter standards by laboratories acceptable to the commission. The commission shall also provide by regulation for the taking of appeals to the commission from the findings of a utility that tests its own meters or appliances for measurement.


Sec. 42.05.350. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.351. Testing of appliances.
The commission shall provide for the examination and testing of appliances used for the measuring of a service of a public utility and may purchase equipment, apparatus, and standards required for this purpose. The commissioner of transportation and public facilities may assign the examination and testing function to appropriate staff of the Department of Transportation and Public Facilities under AS 45.75. Upon the payment of a reasonable fee established by the commission, a consumer may have an appliance that is used by the consumer tested. The commission shall establish by regulation allowable tolerances with respect to the functioning or operation of the appliance. If the measuring appliance does not perform within these tolerances, the utility concerned shall pay the costs of the test by reimbursing the person requesting the test for the fee paid by that person. This reimbursement shall be made no later than at the time of the next regular billing following the test.


Sec. 42.05.360. [Repealed, § 5 ch 113 SLA 1970.]

Article 4. Rates and Rate Schedules.


Sec. 42.05.361. Tariffs, contracts, filing, and public inspection.
 (a) Under regulations the commission shall adopt, every public utility shall file with the commission, within the time and in the form the commission designates, its complete tariff showing all rates, including joint rates, tolls, rentals, and charges collected and all classifications, rules, regulations, and terms and conditions under which it furnishes its services and facilities to the general public, or to a regulated or municipally owned utility for resale to the public, together with a copy of every special contract with customers which in any way affects or relates to the serving utility’s rates, tolls, charges, rentals, classifications, services, or facilities. The public utility shall clearly print, or type, its complete tariff and keep an up-to-date copy of it on file at its principal business office and at a designated place in each community served. The tariffs shall be made available to, and subject to inspection by, the general public on demand.

 (b) The tariffs of a public utility which are also subject to the jurisdiction of a federal regulatory body shall correspond, so far as practicable, to the form of those prescribed by the federal regulatory body.

 (c) The commission may reject the filing of all or part of a tariff that does not comply with the form or filing regulations of the commission. A tariff or provision so rejected is void. If the commission rejects a filing, it shall issue a statement of the reasons for the rejection. Unless the utility and the commission agree to an extension of time, the commission may not reject a filing under this subsection after 45 days have elapsed from the date of filing.




Sec. 42.05.365. Interest on deposits.
 (a) A public utility may collect and retain a deposit for contracted recurring monthly service. A public utility that collects and retains a deposit of over $100 for recurring monthly service shall pay interest on that deposit at or before the time it is returned. Interest paid under this section shall be at the legal rate of interest at the time the deposit is made. However, if the deposit is placed in an interest bearing account, the utility shall pay the interest rate of the interest bearing account.

 (b) If delinquent payments result in interruption of service, a public utility is not required to pay interest under (a) of this section for 12 months after reestablishment of service.




Sec. 42.05.370. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.371. Adherence to tariffs.
The terms and conditions under which a public utility offers its services and facilities to the public shall be governed strictly by the provisions of its currently effective tariffs. A legally filed and effective tariff rate, charge, toll, rental, rule, regulation, or condition of service may not be changed except in the manner provided in this chapter. If more than one tariff rate or charge can reasonably be applied for billing purposes the one most advantageous to the customer shall be used.


Sec. 42.05.380. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.381. Rates to be just and reasonable.
 (a) All rates demanded or received by a public utility, or by any two or more public utilities jointly, for a service furnished or to be furnished shall be just and reasonable; however, a rate may not include an allowance for costs of political contributions, or public relations except for reasonable amounts spent for
     (1) energy conservation efforts;

     (2) public information designed to promote more efficient use of the utility’s facilities or services or to protect the physical plant of the utility;

     (3) informing shareholders and members of a cooperative of meetings of the utility and encouraging attendance; or

     (4) emergency situations to the extent and under the circumstances authorized by the commission for good cause shown.

 (b) In establishing the revenue requirements of a municipally owned and operated utility the municipality is entitled to include a reasonable rate of return.

 (c) A utility, whether subject to regulation by the commission or exempt from regulation, may not charge a fee for connection to, disconnection from, or transfer of services in an amount in excess of the actual cost to the utility of performing the service plus a profit at a reasonable percentage of that cost not to exceed the percentage established by the commission by regulation.

 (d) A utility shall provide for a reduced fee or surcharge for standby water for fire protection systems approved under AS 18.70.081 which use hydraulic sprinklers.

 (e) The commission shall adopt regulations for electric cooperatives and for local exchange telephone utilities setting a range for adjustment of rates by a simplified rate filing procedure. A cooperative or telephone utility may apply for permission to adjust its rates over a period of time under the simplified rate filing procedure regulations. The commission shall grant the application if the cooperative or telephone utility satisfies the requirements of the regulations. The commission may review implementation of the simplified rate filing procedure at reasonable intervals and may revoke permission to use the procedure or require modification of the rates to correct an error.

 (f) A local exchange telephone utility may adjust its rates in conformance with changes in jurisdictional cost allocation factors required by either the Federal Communications Commission or the Regulatory Commission of Alaska upon a showing to the Regulatory Commission of Alaska of
     (1) the order requiring the change in allocation factors;

     (2) the aggregate shift in revenue requirement, segregated by service classes or categories, caused by the change in allocation factors; and

     (3) the rate adjustment required to conform to the required shift in local revenue requirement.

 (g) The commission shall allow, as a necessary and reasonable expense, all payments made to the Department of Environmental Conservation under AS 46.14.240 — 46.14.250. The commission shall allow the public utility to recover these fees through a periodic fuel surcharge rate adjustment.

 (h) An electric or telephone utility that has overhead utility distribution lines and that provides services in a municipality with a population of more than 200,000 must spend at least one percent of the utility’s annual gross revenue from retail customers in that municipality to place existing overhead utility distribution lines in that municipality underground. In determining the annual gross revenue under this subsection, only revenue derived from the utility’s distribution lines in the municipality shall be considered.

 (i) An electric or telephone utility that is implementing a program to place existing overhead utility distribution lines located in a municipality underground may amend its rates for services provided to customers in the municipality to enable the utility to recover the full actual cost of placing the lines underground. Notwithstanding AS 42.05.411 — 42.05.431, an amendment to a utility’s rates under this subsection is not subject to commission review or approval. A utility amending its rates under this subsection shall notify the commission of the amendment. This subsection applies to an undergrounding program to the extent that the costs do not exceed two percent of the utility’s annual gross revenue. If an undergrounding program’s costs exceed two percent, the commission may regulate rate increases proposed for the recovery of the amount above two percent.

 (j) When an electric utility or a telephone utility is implementing a program to place existing overhead utility distribution lines located in a municipality underground, any other overhead line or cable in the same location shall be placed underground at the same time. Each entity whose lines or cables are placed underground shall pay the cost of placing its own lines or cables underground.

 (k) The cost to the utility of storing gas in a gas storage facility or storing liquefied natural gas in a liquefied natural gas storage facility that is allowed in determining a just and reasonable rate shall reflect the reduction in cost attributable to any exemption from a payment due under AS 38.05.096 or 38.05.180(u), as applicable, and the value of a tax credit that the owner of the gas storage facility received under AS 43.20.046 or 43.20.047, as applicable. The commission may request the (1) commissioner of natural resources to report the value of the exemption from a payment due under AS 38.05.096 or 38.05.180(u), as applicable, that the gas storage facility received; and (2) commissioner of revenue to report information on the amount of tax credits claimed under AS 43.20.046 and 43.20.047, as applicable, for the gas storage facility or liquefied natural gas storage facility. In this subsection,
     (1) “gas storage facility” has the meaning given in AS 31.05.032;

     (2) “liquefied natural gas storage facility” has the meaning given in AS 42.05.990.




Sec. 42.05.385. Charges for water and sewer line extensions.
 (a) A water or sewer line extension may not be constructed unless the legislative body of each municipality through which the extension passes has approved the extension. This subsection does not apply to an extension that will not create any charges or assessments against the adjacent property.

 (b) Except as provided in (e) of this section, when utility service is available to a property owner as a result of a water or sewer line extension, the utility offering the service through the extension shall notify the property owner, according to the procedure set forth for service of process in the Alaska Rules of Civil Procedure, of the charges and interest due the utility if the property owner elects to obtain the utility service through the extension. The property owner does not owe the charge for the extension until the property owner connects to the extension.

 (c) Except as provided in (e) of this section, and unless the property owner connects to the extension,
     (1) charges do not accrue against the property for construction of the extension;

     (2) interest does not accrue against the property for the construction of the extension; and

     (3) a lien or encumbrance may not be levied against the property for the construction of the extension.

 (d) If the costs of constructing a water or sewer line extension have been paid by charges collected under this chapter, a utility may not charge for connection to the extension an amount greater than the actual cost of the connection.

 (e) The provisions of this section do not apply to a water or sewer line extension constructed by a municipality under AS 29.46.




Sec. 42.05.390. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.391. Discrimination in rates.
 (a) Except as provided in AS 42.05.306, a public utility may not, as to rates, grant an unreasonable preference or advantage to any of its customers or subject a customer to an unreasonable prejudice or disadvantage. A public utility may not establish or maintain an unreasonable difference as to rates, either as between localities or between classes of service. A municipally owned utility may offer uniform or identical rates for a public utility service to customers located in different areas within its certificated service area who receive the same class of service. Any uniform or identical rate shall, upon complaint, be subject to review by the commission and may be set aside if shown to be unreasonable.

 (b) A rate charged by a municipality for a public utility service furnished beyond its corporate limits is not considered unjustly discriminatory solely because a different rate is charged for a similar service within its corporate limits.

 (c) A public utility may not directly or indirectly refund, rebate or remit in any manner, or by any device, any portion of the rates and charges or charge, demand, or receive a greater or lesser compensation for its services than is specified in its effective tariff. A public utility may not extend to any customer any form of contract, agreement, inducement, privilege, or facility, or apply any rule, regulation, or condition of service except such as are extended or applied to all customers under like circumstances. A public utility may not offer or pay any compensation or consideration or furnish any equipment to secure the installation or adoption of the use of utility service unless it conforms to a tariff approved by the commission, and the compensation, consideration, or equipment is offered to all persons in the same classification using or applying for the public utility service; in determining the reasonableness of such a tariff filed by a public utility the commission shall consider, among other things, evidence of consideration or compensation paid by a competitor, regulated or nonregulated, of the public utility to secure the installation or adoption of the use of the competitor’s service.

 (d) Nothing in this section prevents a public utility from charging reduced rates to customers transferred to it from a competing utility provided the reduction is an integral part of a contract, arrangement, or plan to eliminate the overlapping of service areas or to minimize duplication of facilities and competition between public utilities.




Sec. 42.05.400. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.401. Apportionment of joint rates.
 (a) If public utilities share in a joint rate the apportionment of receipts shall be just and reasonable. The method of apportionment shall be approved by the commission and the commission may, if it considers it to be in the public interest, establish the portion to which each public utility shall be entitled.

 (b) If the commission does not have professional staff to investigate, evaluate, and testify regarding any proceeding under (a) of this section it may employ qualified professional consultants for this purpose at the direct expense of the parties to the dispute and divide the cost among the parties in the proportion of their respective operating revenues before commencement of the proceeding. The cost allocation to each party shall be determined before employment of the consultants and after giving the parties reasonable notice and opportunity to be heard.




Sec. 42.05.410. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.411. New or revised tariffs.
 (a) A public utility may not establish or place in effect any new or revised rates, charges, rules, regulations, conditions of service or practices except after 45 days’ notice to the commission and 30 days’ notice to the public. Notice shall be given to the commission by filing with the commission and keeping open for public inspection the revised tariff provisions which shall plainly indicate the changes to be made in the schedules then in force and the time when the changes will go into effect. The commission shall prescribe means by regulation whereby notice is given to the public before or no later than 15 days after the filing that is reasonably adequate to notify customers affected by the filing. The commission, for good cause shown, may allow changes to take effect on less than 45 days’ notice to the commission or 30 days’ notice to the public under conditions the commission prescribes.

 (b) New and revised tariffs shall be filed in the manner provided in AS 42.05.361(a).

 (c) Upon the filing of a new or revised tariff, the commission upon complaint or upon its own motion, without notice, may initiate an investigation of the reasonableness and lawfulness of the change.




Sec. 42.05.420. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.421. Suspension of tariff filing.
 (a) When a tariff filing is made containing a new or revised rate, classification, rule, regulation, practice, or condition of service the commission may, either upon written complaint or upon its own motion, after reasonable notice, conduct a hearing to determine the reasonableness and propriety of the filing. Pending the hearing the commission may, by order stating the reasons for its action, suspend the operation of the tariff filing. For a tariff filing that does not change the utility’s revenue requirement or rate design, the suspension may last for a period not longer than six months beyond the effective date established in the tariff filing unless the commission extends the period for good cause. For a tariff filing that changes the utility’s revenue requirement or rate design, the suspension may last, unless the commission extends the period for good cause, for a period not longer than
     (1) six months before an interim rate equal to the requested rate goes into effect and not longer than 12 months before a permanent rate goes into effect if the annual gross revenues of the utility making the filing are more than $3,000,000; and

     (2) 150 days before an interim rate equal to the requested new rate goes into effect and not longer than one year before a permanent rate goes into effect if the annual gross revenues of the utility making the filing are $3,000,000 or less.

 (b) An order suspending a tariff filing may be vacated if, after investigation, the commission finds that it is in all respects proper. Otherwise the commission shall hold a hearing on the suspended filing and issue its order, before the end of the suspension period, granting, denying or modifying the suspended tariff in whole or in part.

 (c) In the case of a proposed increased rate, the commission may by order require the interested public utility or utilities to place in escrow in a financial institution approved by the commission and keep accurate account of all amounts received by reason of the increase, specifying by whom and in whose behalf the amounts are paid. Upon completion of the hearing and decision the commission may by order require the public utility to refund to the persons in whose behalf the amounts were paid, that portion of the increased rates which was found to be unreasonable or unlawful. Funds may not be released from escrow without the commission’s prior written consent and the escrow agent shall be so instructed by the utility, in writing, with a copy to the commission. The utility may, at its expense, substitute a bond in lieu of the escrow requirement.

 (d) One who initiates a change in existing tariffs shall bear the burden to prove the reasonableness of the change.




Sec. 42.05.430. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.431. Power of commission to fix rates.
 (a) When the commission, after an investigation and hearing, finds that a rate demanded, observed, charged, or collected by a public utility for a service subject to the jurisdiction of the commission, or that a classification, rule, regulation, practice, or contract affecting the rate, is unjust, unreasonable, unduly discriminatory or preferential, the commission shall determine a just and reasonable rate, classification, rule, regulation, practice, or contract to be observed or allowed and shall establish it by order. A municipality may covenant with bond purchasers regarding rates of a municipally owned utility, and the covenant is valid and enforceable and is considered to be a contract with the holders from time to time of the bonds. The financial covenants contained in mortgages and other debt instruments of cooperative utilities organized under AS 10.25 are also valid and enforceable, and rates set by the commission must be adequate to meet those covenants. However, a cooperative utility that is negotiating to enter a mortgage or other debt instrument that provides for a times-interest-earned ratio (TIER) greater than the ratio the commission most recently approved for that cooperative shall submit the mortgage or debt instrument to the commission before the instrument takes effect. The commission may disapprove the instrument within 60 days after its submission. If the commission has not acted within 60 days, the instrument is considered to be approved.

 (b) A wholesale power agreement between public utilities is subject to advance approval of the commission. After a wholesale power agreement is in effect, the commission may not invalidate any purchase or sale obligation under the agreement. However, if the commission finds that rates set in accordance with the agreement are not just and reasonable, the commission may order the parties to negotiate an amendment to the agreement and if the parties fail to agree, to use the dispute resolution procedures contained in the contract.

 (c) Notwithstanding (b) of this section,
     (1) a wholesale agreement for the sale of power from a project licensed by the Federal Energy Regulatory Commission on or before January 1, 1987, and related contracts for the wheeling, storage, regeneration, or wholesale repurchase of power purchased under the agreement, entered into between the Alaska Energy Authority and one or more other public utilities or among the utilities after October 31, 1987, and before January 1, 1988, and amendments to the wholesale agreement or related contract, and the wholesale agreement or related contract assigned by the Alaska Energy Authority to a joint action agency formed under AS 42.45.310 that purchases the project from the Alaska Energy Authority, are not subject to review or approval by the commission until all long-term debt incurred for the project is retired, or, for a wholesale agreement or related contract assigned to a joint action agency formed under AS 42.45.310, until all long-term debt incurred to pay the purchase price to the Alaska Energy Authority is retired; and

     (2) a wholesale agreement or related contract described in (1) of this subsection may contain a covenant for the public utility to establish, charge, and collect rates sufficient to meet its obligations under the contract; the rate covenant is valid and enforceable.

 (d) Meetings between the Alaska Energy Authority and public utilities concerning a wholesale agreement for the sale of power or other matter exempted from review of the commission under (c) of this section must comply with AS 44.62.310.

 (e) Validated costs incurred by a utility in connection with the related contracts described in (c)(1) of this section must be allowed in the rates charged by the utility. In this subsection, “validated costs” are the actual costs that a utility uses, under the formula set out in related contracts described in (c) of this section, to establish rates, charges for services and rights, and the payment of charges for services and rights. This subsection does not grant the commission jurisdiction to alter or amend the formula set out in those related contracts.

 (f) In the establishment of rates of a utility furnishing solid waste material collection and disposal service, the commission shall permit recovery of reasonable, net capital and operating costs relating to solid waste recovery and recycling services after considering the utility’s recovery of revenue associated with the service.

 (g) In the establishment of rates under this chapter, the commission shall promote cost-effective solid waste recovery and recycling services.

 (h) When setting or reviewing rates for a public utility that sends or receives power over the power transmission interties between Fairbanks and Healy or between Anchorage and the Kenai Peninsula, the commission shall consider those costs that have not been directly assigned to other individual generating utilities by the utility responsible for the construction of the intertie to have been incurred for the system existing on August 11, 1993.




Sec. 42.05.433. Review of certain contracts by the commission.
 (a) A precedent agreement or contract entered into by a public utility with the Alaska Gasline Development Corporation or its successors or assigns may contain a covenant for the public utility to establish, charge, and collect rates sufficient to meet its obligations under the contract. If the precedent agreement associated with the contract is approved by the commission under AS 42.08, the rate covenant in the associated contract is valid and enforceable.

 (b) A public utility negotiating to purchase natural gas to be shipped through an in-state natural gas pipeline regulated under AS 42.08 shall submit the contract to the commission before the contract takes effect.

 (c) A public utility negotiating to contract for the storage of natural gas shipped in an in-state natural gas pipeline regulated under AS 42.08 shall submit the contract to the commission before the contract takes effect.

 (d) The commission shall review and may conduct an investigation and hearing to determine whether a contract submitted under (b) or (c) of this section is just and reasonable. The review and determination shall be conducted as provided in AS 42.08.320(b) — (d). The commission shall either approve the contract as presented or, if the commission finds that a contract is not just and reasonable, disapprove the contract. Notwithstanding AS 42.05.175, if the commission has not acted within 180 days after the contract is submitted, the contract shall be considered approved and shall take effect immediately. The commission may, by order, extend the 180-day review period by the duration of a delay caused by a failure of the public utility to submit supplemental information that is available to the public utility. A contract that is approved or considered approved under this section is not subject to further review by the commission.




Sec. 42.05.440. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.441. Valuation of property of a public utility.
 (a) The commission may, after providing reasonable notice and opportunity to be heard, ascertain and set the fair value of the whole or any part of the property of a public utility, insofar as it is material to the exercise of the jurisdiction of the commission. The commission may make revaluations from time to time and ascertain the fair value of all new construction, extensions, and additions to the property of a public utility. If a public utility furnishes more than one classification of utility service the utility shall allocate the investment and expenses associated with the property used and useful in furnishing service among the utility services and it may not solely consider the utility’s total investment and expenses in fixing rates for a particular service.

 (b) In determining the value for rate-making purposes of public utility property used and useful in rendering service to the public, the commission shall be guided by acquisition cost or, if lower, the original cost of the property to the person first devoting it to public service, less accrued depreciation, plus materials and supplies and a reasonable allowance for cash working capital when required.

 (c) For rate-making purposes, indebtedness, debt service, and payments by a regulated public utility to a person having an ownership interest of more than 70 percent in the utility shall be considered to be ownership equity, profits, or dividends except to the extent that there is a clear and convincing showing that
     (1) the indebtedness was incurred, or the payments made, for goods or services that were reasonably necessary for the operation of the utility; and

     (2) the goods or services were provided at a cost that was competitive with the price at which they could have been obtained from a person having no ownership interest.




Sec. 42.05.450. [Repealed, § 5 ch 113 SLA 1970.]

Article 5. Accounts, Records, and Reports.


Sec. 42.05.451. System of accounts and reports.
 (a) The commission may classify the public utilities under its jurisdiction and prescribe a uniform system of accounts for each class and the manner in which the accounts and supporting records shall be kept.

 (b) A public utility shall maintain its accounts on a calendar year basis unless specifically authorized by the commission to maintain its accounts on a fiscal year basis. Within 90 days after the close of its authorized annual accounting period, or additional time granted upon a showing of good cause, a public utility shall file with the commission a verified annual report of its operations during the period reported, on forms prescribed by the commission.




Sec. 42.05.460. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.461. Continuing property records.
The commission may require a public utility to establish, provide, and maintain as a part of its system of accounts, continuing property records segregated by the year of placement in service, including a list or inventory of all the units of tangible property used or useful in the public service, identifying the property by location and project. The commission may require a public utility to keep accounts and records in a manner that shows the original cost of the property when first devoted to the public service, and the current related reserve for depreciation. A public utility with annual revenues exceeding $100,000 shall keep continuing property records.


Sec. 42.05.470. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.471. Depreciation rates and accounts.
 (a) To provide for the loss in service value of its property, not restored by current maintenance, a utility shall charge adequate, but not excessive, depreciation expense for each major class of utility property used and useful in serving the public. From time to time the commission shall determine the proper and adequate rates of depreciation for each major class of property of a public utility. The commission shall accept rates of depreciation and depreciation accounts prescribed and maintained under regulations of a federal agency or the terms of a bond ordinance. The commission shall determine and allow depreciation expense in fixing the rates, tolls, and charges to be paid for the services of a public utility.

 (b) The commission is not bound in rate proceedings to accept, as just and reasonable for rate-making purposes, estimates of annual or accrued depreciation established under the provisions of this section, or to allow annual or accrued depreciation on utility property directly or indirectly contributed by customers or others.




Sec. 42.05.480. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.481. Subsidiary business accounts.
A public utility engaged, directly or indirectly, in another business, including another utility business or a subsidiary business, shall keep separate accounts relating to that business. Except as the commission provides, property, expense, or revenue used in or derived from that business may not be considered in establishing the rates and charges of the utility for its public services.


Sec. 42.05.490. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.491. Records and accounts to be kept in state.
A public utility shall keep the books, accounts, papers, and records required by the commission in an office within this state, and may not remove them from the state, except upon the terms and conditions that may be prescribed by the commission. The provisions of this section do not apply to a public utility whose accounts are kept at its principal place of business outside the state, in the manner prescribed by a federal regulatory body; however, such a public utility shall at its option, either furnish to the commission, within a reasonable time fixed by the commission, certified copies of its books, accounts, papers, and records relating to the business done by the public utility within this state, or agree to pay the actual expenses incurred by the commission in sending personnel to examine the utility’s books and records at the place where they are kept.


Sec. 42.05.500. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.501. Inspection of books and records.
 (a) The commission shall at all reasonable times have access to, and may designate any of its employees, agents, or consultants to inspect and examine, the accounts, records, books, maps, inventories, appraisals, valuations, or other reports and documents, kept by public utilities or their affiliated interests, or prepared or kept for them by others, that relate to any contract or transaction between them. The commission may require a public utility or its affiliated interest to file with the commission, copies of any or all of these accounts, records, books, maps, inventories, appraisals, valuations, or other reports and documents.

 (b) When participating as a party under AS 42.04.070(c) or AS 44.23.020(e), the attorney general shall, at all reasonable times, have the right to reasonable access to, and may designate any of the attorney general’s employees, agents, or consultants to inspect and examine, the accounts, records, books, maps, inventories, appraisals, valuations, or other reports and documents kept by public utilities that are relevant to the issues presented in any adjudicatory matter before the commission in which the attorney general has appeared as a party under AS 42.04.070(c) or AS 44.23.020(e). This access is subject to reasonable notice to all parties with an opportunity to object before the commission. Included under this subsection is access to records or other documents under the custody or control of an affiliated interest of a public utility that relate to any contract or transaction between the public utility and the affiliated interest.




Sec. 42.05.510. [Repealed, § 5 ch 113 SLA 1970.]

Article 6. Financial and Management Regulation.


Sec. 42.05.511. Unreasonable management practices.
 (a) The commission may investigate the management of a public utility, including but not limited to staffing patterns, wage and salary scales and agreements, investment policies and practices, purchasing and payment arrangements with affiliated interests, for the purpose of determining inefficient or unreasonable practices that adversely affect the cost or quality of service of the public utility.

 (b) Where unreasonable practices are found to exist, the commission may, after providing reasonable notice and opportunity for hearing, take appropriate action to protect the public from the inefficient or unreasonable practices and may order the public utility to take the corrective action the commission may require to achieve effective development and regulation of public utility services.

 (c) In a rate proceeding the utility involved has the burden of proving that any written or unwritten contract or arrangement it may have with any of its affiliated interests for the furnishing of any services or for the purchase, sale, lease, or exchange of any property is necessary and consistent with the public interest and that the payment made therefor, or consideration given, is reasonably based, in part, upon the submission of satisfactory proof as to the cost to the affiliated interest of furnishing the service or property and, in part, upon the estimated cost the utility would have incurred if it furnished the service or property with its own personnel and capital.




Sec. 42.05.520. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.521. Impaired capital.
When the commission finds that the capital of a public utility corporation is impaired, or might become impaired, it may, after investigation and hearing, issue an order directing the public utility to cease paying dividends on its common stock until the impairment has been removed.


Sec. 42.05.530. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.531. Distribution of surplus and profits.
The surplus and profits of a public utility shall be distributed in accordance with the bylaws or ordinances controlling the utility.


Sec. 42.05.540. [Repealed, § 5 ch 113 SLA 1970.]

Article 7. Judicial Review, Penalties, and Enforcement.


Sec. 42.05.541. Effect of regulations.
Regulations adopted and issued by the commission in accordance with this chapter have the effect of law.


Sec. 42.05.550. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.551. Review and enforcement.
 (a) All final orders of the commission are subject to judicial review in accordance with AS 44.62.560 — 44.62.570.

 (b) If an appeal is not taken from a final order of the commission, the commission may apply to the superior court for enforcement of this chapter, the regulations adopted under it, and the orders of the commission. The court shall enforce the order by injunction or other process.




Sec. 42.05.560. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.561. Injunctions and monetary sanctions.
 (a) A person who violates a provision of AS 42.05.291 insofar as it governs the safety of pipeline facilities and the transportation of gas, or of any regulation issued under AS 42.05.291 is subject to a civil penalty of not more than $1,000 for each violation for each day that the violation persists. However, the maximum civil penalty may not exceed $200,000 for any related series of violations.

 (b) A civil penalty may be compromised by the commission. In determining the amount of the penalty, or the amount agreed upon in compromise, the appropriateness of the penalty to the size of the business of the person charged, the gravity of the violation, and the good faith of the person charged in attempting to achieve compliance, after notification of a violation, shall be considered. The amount of the penalty, when finally determined, or the amount agreed upon in compromise, may be deducted from any sums owing by the state to the person charged or may be recovered in a civil action in the state courts.

 (c) A person may be enjoined by the superior court from committing any violation mentioned in this section.




Sec. 42.05.570. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.571. Civil penalties.
 (a) In addition to all other penalties and remedies provided by law, a public utility and every person, and their lessees or receivers appointed by a court in any way subject to the provisions of this chapter, together with their officers, managers, agents, or employees that either violate or procure, aid, or abet the violation of any provision of this chapter, or of any order, regulation, or written requirement of the commission are subject to a maximum penalty of $100 for each violation. Each act of omission as well as each act of commission shall be considered a violation subject to the penalty.

 (b) A penalty may not be assessed unless the commission first issues an order to show cause why the penalty should not be levied. The order shall describe each violation with reasonable particularity and designate the maximum penalty that may be assessed for each violation. The order shall be served on the alleged violator named in the order. The order must state a time and place for the hearing.

 (c) After a hearing the commission shall enter its findings of fact and final order which shall state when the penalties, if any, are payable.




Sec. 42.05.580. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.581. Each violation a separate offense.
Each violation of a provision of this chapter or of an order, decision, regulation, or written requirement of the commission is a separate and distinct offense, and in case of a continuing violation each day’s continuance is a separate and distinct offense.


Secs. 42.05.590 — 42.05.600. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.601. Actions to recover penalties; disposition.
 (a) Actions to recover penalties under this chapter shall be brought by the attorney general in a court of competent jurisdiction.

 (b) All penalties recovered under the provisions of this chapter shall be paid to the commission and deposited by it in the general fund of the state.




Sec. 42.05.610. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.611. Penalties cumulative.
 (a) All penalties imposed under this chapter are cumulative and an action for the recovery of a civil penalty is not a bar to any criminal prosecution. A criminal prosecution is not a bar to an action for the recovery of a civil penalty.

 (b) Neither a criminal prosecution nor an action to recover a civil penalty is a bar to an enforcement proceeding to require compliance, or to any other remedy provided by this chapter.




Sec. 42.05.620. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.621. Joinder of actions.
Under the applicable court rules, appeals from orders of the commission, applications for enforcement of commission orders, and actions for recovery of a penalty may be joined. The court may, in the interests of justice, separate the action.


Sec. 42.05.630. [Repealed, § 5 ch 113 SLA 1970.]

Article 8. Miscellaneous Provisions.


Sec. 42.05.631. Eminent domain.
A public utility may exercise the power of eminent domain for public utility uses. This section does not authorize the use of a declaration of taking.


Sec. 42.05.640. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.641. Regulation by municipality.
The commission’s jurisdiction and authority extend to public utilities operating within a municipality, whether home rule or otherwise. In the event of a conflict between a certificate, order, decision, or regulation of the commission and a charter, permit, franchise, ordinance, rule, or regulation of such a local governmental entity, the certificate, order, decision, or regulation of the commission shall prevail.


Sec. 42.05.645. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.650. [Repealed, § 5 ch 113 SLA 1970.]
Sec. 42.05.651. Expenses of investigation or hearing.
 (a) During a hearing or investigation held under this chapter, the commission may allocate the costs of the hearing or investigation among the parties, including the commission, as is just under the circumstances. In allocating costs, the commission shall consider the regulatory cost charge paid by a utility under AS 42.05.254 and may consider the results, ability to pay, evidence of good faith, other relevant factors, and mitigating circumstances. Notwithstanding an intervening party’s ability to pay, if the commission determines that an intervening party has conducted its intervention in a frivolous manner, the commission shall allocate all costs associated with the intervention to that party. The costs allocated may include the costs of any time devoted to the investigation or hearing by hired consultants, whether or not the consultants appear as witnesses or participants. The costs allocated may also include any out-of-pocket expenses incurred by the commission in the particular proceeding. The commission shall provide an opportunity for any person objecting to an allocation to be heard before the allocation becomes final.

 (b) [Repealed, § 28 ch 90 SLA 1991.]
 (c) Notwithstanding the commission’s discretion under (a) of this section to allocate costs to parties, the commission may not require a state agency to pay any costs allocated to the state agency.




Sec. 42.05.661. Application fees.
With each application relating to a certificate the applicant shall pay the commission a fee set by the commission by regulation that shall be deposited in the general fund of the state.


Sec. 42.05.671. Public records.
 (a) Except as provided in (b) of this section, records in the possession of the commission are open to public inspection at reasonable times.

 (b) The commission may, by regulation, classify the records submitted to it by regulated utilities as privileged records that are not open to the public for inspection. However, if a record involves an application or tariff filing pending before the commission, the commission shall release the record for the purpose of preparing for or making a presentation to the commission in the proceeding if the record or information derived from the record will be used by the commission in the proceeding.

 (c) A person may make written objection to the public disclosure of information contained in a record under the provisions of this chapter or of information obtained by the commission or by the attorney general under the provisions of this chapter, stating the grounds for the objection. When an objection is made, the commission may not order the information withheld from public disclosure unless the information adversely affects the interest of the person making written objection and disclosure is not required in the interest of the public.

 (d) In this section, “record” means a report, file, book, account, paper, or application, and the facts and information contained in it.




Sec. 42.05.681. Validity of certain certificates.
A certificate issued before July 29, 1968, to a public utility for the generation, transmission, or distribution of electric energy and power, or for the furnishing of telecommunications may not be considered as terminated or voided for the sole reason that the utility did not or would not produce an annual gross income in excess of $25,000.


Sec. 42.05.691. Utility classes.
The commission may by regulation provide for the classification of public utilities based upon differences in annual revenue, assets, nature of ownership, and other appropriate distinctions and as between these classifications, by regulation, provide for different reporting, accounting, and other regulatory requirements.


Sec. 42.05.701. [Renumbered as AS 42.05.720.]
Sec. 42.05.711. Exemptions.
 (a) The provisions of this chapter do not apply to a person who furnishes water, gas or petroleum or petroleum products by tank, wagon, or similar conveyance, unless the person is thereby supplying water, gas, petroleum or petroleum products to a public utility in which the person has an “affiliated interest”.

 (b) Except as otherwise provided in this subsection and in (o) of this section, public utilities owned and operated by a political subdivision of the state, or electric operating entities established as the instrumentality of two or more public utilities owned and operated by political subdivisions of the state, are exempt from this chapter, other than AS 42.05.221 — 42.05.281 and 42.05.385. However,
     (1) the governing body of a political subdivision may elect to be subject to this chapter; and

     (2) a utility or electric operating entity that is owned and operated by a political subdivision and that directly competes with another utility or electric operating entity is subject to this chapter and any other utility or electric operating entity owned and operated by the political subdivision is also subject to this chapter; this paragraph does not apply to a utility or electric operating entity owned and operated by a political subdivision that competes with a telecommunications utility.

 (c) The ownership in whole or part of the corporate stock of a public utility does not make the owner a public utility.

 (d) The commission may exempt a utility, a class of utilities, or a utility service from all or a portion of this chapter if the commission finds that the exemption is in the public interest.

 (e) Notwithstanding any other provisions of this chapter, any electric or telephone utility that does not gross $50,000 annually is exempt from regulation under this chapter unless the subscribers petition the commission for regulation under AS 42.05.712(h).

 (f) Notwithstanding any other provisions of this chapter, an electric or telephone utility that does not gross $500,000 annually may elect to be exempt from the provisions of this chapter other than AS 42.05.221 — 42.05.281 under the procedure described in AS 42.05.712.

 (g) A utility, other than a telephone or electric utility, that does not gross $150,000 annually may elect to be exempt from the provisions of this chapter other than AS 42.05.221 — 42.05.281 under the procedure described in AS 42.05.712.

 (h) A cooperative organized under AS 10.25 may elect to be exempt from the provisions of this chapter, other than AS 42.05.221 — 42.05.281, under the procedure described in AS 42.05.712.

 (i) A utility that furnishes collection and disposal service of garbage, refuse, trash, or other waste material and has annual gross revenues of $300,000 or less is exempt from the provisions of this chapter, other than the certification provisions of AS 42.05.221 — 42.05.281, unless the subscribers petition the commission for regulation under AS 42.05.712(h). Notwithstanding AS 42.05.712(b) and (g), if subscribers representing 25 percent of the gross revenue of the utility petition the commission for regulation, the utility is subject to the provisions of this chapter.

 (j) The provisions of this chapter do not apply to sales, exchanges, or gifts of energy to an electric utility certificated under this chapter when the energy which is the subject of the sale, exchange, or gift is waste heat, electricity, or other energy which is surplus or the by-product of an industrial process. In an area in which no electric utility is certificated for service, energy provided by sale, exchange, or gift may be provided to any utility which is certificated for service to that area. A contract for the sale, exchange, or gift of energy exempt under this subsection does not make the supplier a public utility and does not transfer the responsibility to provide utility services from a certificated utility to any other person.

 (k) A utility that furnishes cable television service is exempt from the provisions of this chapter other than AS 42.05.221 — 42.05.281 unless the subscribers petition the commission for regulation under the procedure described in AS 42.05.712.

 (l) A person, utility, joint action agency established under AS 42.45.310, or cooperative that is exempt from regulation under (a), (d) — (k), (o), or (r) of this section is not subject to regulation by a municipality under AS 29.35.060 and 29.35.070.

 (m) The collection and disposal, under AS 29.35.050(c), by a municipality of waste material deposited at an intermediate transfer site is exempt from this chapter.

 (n) Except as provided by AS 42.06.370(c), the provisions of this chapter do not apply to a person who owns or operates a natural gas pipeline as a North Slope natural gas pipeline carrier, as that term is defined in AS 42.06.630.

 (o) A joint action agency established under AS 42.45.310 is exempt from regulation under this chapter, including the requirement to obtain a certificate of public convenience and necessity under AS 42.05.221, for the operation of, sale of power from, and other activities related to the power project the joint action agency purchases from the Alaska Energy Authority until the wholesale agreement and any related contract assigned by the authority becomes subject to review or approval by the commission under AS 42.05.431. The exemption provided by this subsection extends to repairs and improvements to the power project the joint action agency purchases from the authority but does not extend to any other power project or other activity of the joint action agency.

 (p) A regional solid waste management authority established under AS 29.35.800 — 29.35.925 is exempt from regulation under this chapter, except that a solid waste management authority is subject to this chapter if it directly competes with a utility subject to this chapter.

 (q) The service of natural gas storage furnished by operating a natural gas storage facility that is (1) part of a pipeline facility operated by a pipeline carrier, (2) part of a natural gas pipeline facility operated by a natural gas pipeline carrier, or (3) part of a North Slope natural gas pipeline facility operated by a North Slope natural gas pipeline carrier is exempt from this chapter. In this subsection, “natural gas pipeline carrier,” “natural gas pipeline facility,” “North Slope natural gas pipeline carrier,” “North Slope natural gas pipeline facility,” “pipeline carrier,” and “pipeline facility” have the meanings given in AS 42.06.630.

 (r) A plant or facility that generates electricity entirely from renewable energy resources is exempt from regulation under this chapter if
     (1) the plant or facility
          (A) is first placed into commercial operation on or after August 31, 2010, and before July 1, 2021; and

          (B) does not generate more than 65 megawatts of electricity;

     (2) the electricity generated by the plant or facility is sold only to one or more electric utilities that are regulated by the commission; and

     (3) the person that constructs, owns, acquires, or operates the plant or facility has not received from the state
          (A) a grant that was used to generate the electricity from the renewable energy resources; or

          (B) a tax credit related to the generation of electricity from the renewable energy resources.

 (s) In this section, “renewable energy resources” means
     (1) wind, solar, geothermal, wasteheat recovery, hydrothermal, wave, tidal, river in-stream, or hydropower;

     (2) low-emission nontoxic biomass based on solid or liquid organic fuels from wood, forest and field residues, or animal or fish products;

     (3) dedicated energy crops available on a renewable basis; or

     (4) landfill gas and digester gas.

 (t) An in-state natural gas pipeline subject to AS 42.08 and an in-state natural gas pipeline carrier subject to AS 42.08 are exempt from this chapter.




Sec. 42.05.712. Deregulation ballot.
 (a) A utility or cooperative that may elect to be exempt from the provisions of this chapter shall poll its subscribers or members in the manner described in this section.

 (b) The votes of a majority of those voting in an election in which at least 15 percent of the eligible subscribers or members return ballots are required for a utility or cooperative to elect exemption under (a) of this section.

 (c) Each subscriber or member of the utility or cooperative shall receive notice of an election under this section with the subscriber’s or member’s regular bill for service at least 60 days before the date set for the election. The notice shall contain impartial language informing the subscribers or members that an election on the option of deregulation or regulation by the Regulatory Commission of Alaska will be held within 60 days and that a ballot to participate in that election will be mailed or delivered to each subscriber or member of the utility or cooperative with the regular bill for service. The notice shall also state that a subscriber or member of the cooperative is entitled to vote in the election without regard to whether the subscriber’s or member’s account with the utility or cooperative is current and that the ballot must be postmarked or returned to the commission within 30 days after it was mailed or otherwise delivered to the subscriber or member. The notice shall also announce the schedule for one or more public meetings which shall provide an opportunity for the subscribers or members to discuss this election. The public meeting or meetings shall be held not more than 30 days before the ballots are mailed or distributed to those eligible to vote. A cooperative may satisfy this requirement by including a discussion of this election on the agenda of an annual meeting if the annual meeting is scheduled to be held not more than 30 days before the election.

 (d) A ballot with return postage paid shall be mailed or delivered to each subscriber or member of the utility or cooperative with the subscriber’s or member’s bill for service and shall contain only the following language:
     “Shall...................................(name of utility or cooperative) be exempt from regulation by the Regulatory Commission of Alaska?           [ ] YES       [ ] NO”      (e) The results of an election under this section shall be certified by the commission within 60 days after the ballots are mailed or delivered to the subscribers or members.

 (f) During the 60 days immediately preceding an election under this section a list of subscribers or members of the utility or cooperative shall be made available at cost to any subscriber or member of the utility or cooperative who requests one. The list shall be in the same form that is available to the utility or cooperative.

 (g) The board of directors of a utility or cooperative may call an election under this section on its own initiative and shall call an election upon receipt of a valid petition from its subscribers or members. A petition shall be considered valid if it is signed by not less than the number of subscribers or members equal to ten percent of the first 5,000 subscribers or members and three percent of the subscribers or members in excess of 5,000. An election under this section may only be held once every two years.

 (h) A utility or cooperative that is already exempt from regulation under this section or that is exempt from regulation under AS 42.05.711(e), (i), or (k) may elect to terminate its exemption in the same manner.




Sec. 42.05.720. [Renumbered as AS 42.05.990.]
Sec. 42.05.721. [Renumbered as AS 42.05.995.]

Article 9. Competitive Intrastate Long Distance Telephone Service.


Sec. 42.05.800. Findings.
The legislature finds that
     (1) modern, affordable, efficient, and universally available local and long distance telephone service is essential to the people of the state;

     (2) facilities based, long distance telephone service should be provided competitively wherever possible;

     (3) technological advances, reduced costs, and increased consumer choices for long distance telephone service, resulting from the adoption of an appropriate competitive market structure, will enhance the state’s economic development;

     (4) the benefits of competition in long distance telephone service should be shared by consumers throughout the state;

     (5) the commission should oversee competition in long distance telephone service to ensure that the competition is fair to consumers and competitors;

     (6) the commission should provide for competition in a timely manner and should adopt regulations that eliminate inappropriate impediments to entry for long distance carriers fit, willing, and able to provide service.




Sec. 42.05.810. Competition.
 (a) By February 14, 1991, the commission shall adopt regulations that authorize and establish conditions governing competition in long distance telephone service.

 (b) Beginning February 15, 1991, the commission shall accept applications to provide competitive long distance telephone service and shall approve or reject applications within 90 days after the filing of a complete application. The commission shall approve an application upon a finding that the applicant is fit, willing, and able. The authority granted to a fit, willing, and able applicant shall include the authority to provide intrastate long distance telephone service using any facilities that the applicant owned and operated on May 1, 1990, to provide interstate long distance message telephone service to the public.

 (c) Except as provided in (b) of this section, the commission may prohibit installation of facilities for origination or termination of long distance service in a given location only if it determines that installation of the facilities in that location is not in the public interest.




Sec. 42.05.820. No municipal regulation.
A long distance telephone company that is exempted in whole or in part from complying with all or a portion of this chapter may not be regulated by a municipality under AS 29.35.060 and 29.35.070.


Sec. 42.05.830. Exchange access charges.
In providing for competition under AS 42.05.800 — 42.05.890, the commission shall establish a system of access charges to be paid by long distance carriers to compensate local exchange carriers for the cost of originating and terminating long distance services.


Sec. 42.05.840. Universal service fund.
The commission may establish a universal service fund or other mechanism to be used to ensure the provision of long distance telephone service at reasonable rates throughout the state and to otherwise preserve universal service.


Sec. 42.05.850. Exchange carrier association.
The commission may require the local exchange carriers to form an association to assist in administering the system of access charges and may require the association to file tariffs and to engage in pooling of exchange access costs and revenue if necessary to achieve the purposes of AS 42.05.800 — 42.05.890.


Sec. 42.05.860. Restrictions on resale of telecommunications services prohibited.
A telephone company may not prohibit or restrict the resale of telecommunications service. If an interexchange telecommunications service is resold, the reseller shall receive credit in an appropriate amount for an applicable exchange access charge if the credit is necessary to prevent double payment of the access charges.


Sec. 42.05.890. Definitions.
In AS 42.05.800 — 42.05.890,
     (1) “local exchange carrier” means any carrier certificated to provide local telephone services;

     (2) “long distance carrier” or “long distance telephone company” means any carrier certificated to provide long distance telephone services;

     (3) “long distance telephone service” or “long distance service” means intrastate, interexchange telephone service.




Article 10. General Provisions.


Sec. 42.05.990. Definitions.
In this chapter,
     (1) “affiliated interest” includes
          (A) a person owning or holding directly or indirectly five percent or more of the voting securities of a public utility engaged in intrastate business in this state;

          (B) a person, other than those specified in (A) of this paragraph, in a chain of successive ownership of five percent or more of voting securities, the chain beginning with the holder of the voting securities of such public utility;

          (C) a corporation five percent or more of whose voting securities are owned by a person owning five percent or more of the voting securities of the public utility or by a person in such a chain of successive ownership of five percent or more of the voting securities;

          (D) a corporation five percent or more of whose voting securities are owned or held by a public utility;

          (E) a person with whom the public utility has a management or service contract;

          (F) a person who is an officer or director of such a public utility or of a corporation in a chain of successive ownership of five percent or more of voting securities;

          (G) a corporation which has one or more officers or directors in common with a public utility;

          (H) a person or corporation who or which the commission determines as a matter of fact, after investigation and hearing, actually is exercising such substantial influence over the policies and actions of a utility in conjunction with one or more other corporations or persons with whom they are related by ownership or blood, or by action in concert, that together they are affiliated with the utility within the meaning of this section even though none of them alone is so affiliated; or

          (I) a person or corporation who or which the commission determines as a matter of fact after investigation and hearing actually is exercising substantial influence over the policies and actions of a utility even though such influence is not based upon stockholdings, stockholders, officers or directors to the extent specified in this section;

     (2) “commission” means the Regulatory Commission of Alaska;

     (3) “liquefied natural gas storage facility” means a facility that receives natural gas volumes in a liquid or gaseous state from customers, holds the gas volumes in a liquid state in a reservoir, and delivers the gas volumes in a liquid or gaseous state to the customer; in this paragraph, “facility” includes
          (A) all parts of the facility from the point at which the natural gas volumes are received by the facility from the customer to the point at which the natural gas volumes are delivered by the facility to the customer;

          (B) a facility consisting of a reservoir, either underground or aboveground, and one or more of the following components of the facility:
               (i) pipe;

               (ii) compressor stations;

               (iii) station equipment;

               (iv) liquefaction plant or facility;

               (v) gasification plant or facility;

               (vi) on-site or remote monitoring, supervision, and control facilities;

               (vii) gas processing plants and gas treatment plants, but not including a manufacturing plant or facility;

               (viii) other equipment necessary to receive, place into the reservoir, monitor, remove from the reservoir, process, and deliver natural gas;

     (4) “natural gas storage facility” means a facility that receives natural gas volumes from customers, holds the gas volumes in a reservoir, and delivers the gas volumes to the customer; in this paragraph, “facility” includes
          (A) all parts of the facility from the point at which the natural gas volumes are received by the facility from the customer to the point at which the natural gas volumes are delivered by the facility to the customer;

          (B) a facility consisting of a reservoir, either underground or aboveground, and one or more of the following components of the facility:
               (i) pipe;

               (ii) compressor stations;

               (iii) station equipment;

               (iv) injection and extraction wells;

               (v) on-site or remote monitoring, supervision, and control facilities;

               (vi) gas processing plants and gas treatment plants, but not including a liquefied natural gas or manufacturing plant or facility;

               (vii) other equipment necessary to receive, place into the reservoir, monitor, remove from the reservoir, process, and deliver natural gas;

     (5) “public” or “general public” means
          (A) a group of 10 or more customers that purchase the service or commodity furnished by a public utility;

          (B) one or more customers that purchase electrical service for use within an area that is certificated to and presently or formerly served by an electric utility if the total annual compensation that the electrical utility receives for sales of electricity exceeds $50,000; and

          (C) a utility purchasing the product or service or paying for the transmission of electric energy, natural or manufactured gas, or petroleum products that are re-sold to a person or group included in (A) or (B) of this paragraph or that are used to produce the service or commodity sold to the public by the utility;

     (6) “public utility” or “utility” includes every corporation whether public, cooperative, or otherwise, company, individual, or association of individuals, their lessees, trustees, or receivers appointed by a court, that owns, operates, manages, or controls any plant, pipeline, or system for
          (A) furnishing, by generation, transmission, or distribution, electrical service to the public for compensation;

          (B) furnishing telecommunications service to the public for compensation;

          (C) furnishing water, steam, or sewer service to the public for compensation;

          (D) furnishing by transmission or distribution of natural or manufactured gas to the public for compensation;

          (E) furnishing for distribution or by distribution petroleum or petroleum products to the public for compensation when the consumer has no alternative in the choice of supplier of a comparable product and service at an equal or lesser price;

          (F) furnishing collection and disposal service of garbage, refuse, trash, or other waste material to the public for compensation;

          (G) furnishing the service of natural gas storage to the public for compensation;

          (H) furnishing the service of liquefied natural gas storage to the public for compensation;

     (7) “rate” includes each rate, toll, fare, rental, charge, or other form of compensation demanded, observed, charged, or collected by a public utility for its services;

     (8) “reservoir” means a receptacle or chamber, either natural or man-made, holding a gas or liquid, and includes a tank or a depleted or nearly depleted pool;

     (9) “service” means, unless the context indicates otherwise, every commodity, product, use, facility, convenience, or other form of service that is offered for and provided by a public utility for the convenience and necessity of the public;

     (10) “service of liquefied natural gas storage” means the operation of a liquefied natural gas storage facility; “service of liquefied natural gas storage” does not include the storage of liquefied natural gas
          (A) owned by or contractually obligated to the owner, operator, or manager of the liquefied natural gas storage facility;

          (B) that is incidental to the production or sale of natural gas to one or more third-party customers; or

          (C) for which the price of storage is not separately itemized;

     (11) “service of natural gas storage” means the operation of a natural gas storage facility primarily or exclusively for the benefit of third-party customers, and not for the benefit of the owner, operator, or manager of the natural gas storage facility; “service of natural gas storage” does not include the storage of natural gas
          (A) owned by or contractually obligated to the owner, operator, or manager of the natural gas storage facility;

          (B) that is incidental to the production or sale of natural gas to one or more third-party customers; or

          (C) for which the price of storage is not separately itemized;

     (12) “tariff” means a rate, charge, toll, rule, or regulation of a utility relating to services furnished by the utility to the general public for compensation and every map, page, adoption notice, instrument, or other document filed with the commission setting out the terms and conditions under which utility services are offered to the public and instruments of concurrence and all other documents and data setting out the terms of a utility’s business relations with another utility insofar as they affect the general public either directly or indirectly;

     (13) “telecommunications” means the transmission and reception of messages, impressions, pictures, and signals by means of electricity, electromagnetic waves, and any other kind of energy, force variations, or impulses whether conveyed by cable, wire, radiated through space, or transmitted through other media within a specified area or between designated points.




Sec. 42.05.995. Short title.
This chapter may be cited as the Alaska Public Utilities Regulatory Act.


Chapter 06. Pipeline Act.

Article 1. Powers and Duties of Regulatory Commission of Alaska.


Secs. 42.06.010 — 42.06.050. Legislative policy; Alaska Pipeline Commission. [Repealed, § 20 ch 110 SLA 1981.]
Sec. 42.06.055. Commission decision-making procedures.
The commission shall comply with AS 42.04.080 for matters that come before the commission for decision.


Secs. 42.06.060 — 42.60.120. Alaska Pipeline Commission. [Repealed, § 20 ch 110 SLA 1981.]
Sec. 42.06.130. [Renumbered as AS 42.06.605.]
Sec. 42.06.140. General powers and duties.
 (a) The commission
     (1) shall regulate pipelines and pipeline carriers in the state;

     (2) may investigate upon complaint or its own motion, the rates, classifications, rules, regulations, prices, services, practices, and facilities of pipeline carriers, and the performance of obligations under and compliance with the terms of leases issued by the state;

     (3) may make, prescribe, or require just, fair, and reasonable rates, classifications, regulations, practices, services, and facilities for pipeline carriers;

     (4) may require pipeline carriers and affiliated interests to file with the commission reports and other information and data required or permitted to be required by other provisions of this chapter;

     (5) may adopt regulations that are necessary and proper to the performance of its duties under this chapter, including regulations governing practices and procedures of the commission; the regulations may not be inconsistent with state law;

     (6) shall during normal business hours have access to and may designate any of its employees, agents, or consultants to inspect and examine the accounts, financial and property records, books, maps, inventories, appraisals, valuations, and related reports kept by a pipeline carrier, or kept for it by others, that directly affect the interests of the state and directly relate to pipelines located in the state;

     (7) may initiate, intervene in, and appear personally or by counsel and offer evidence in and participate in, any proceedings involving a pipeline carrier and affecting the interests of the state, before any officer, department, board, commission, or court of this state;

     (8) shall require permits for the construction, enlargement in size or operating capacity, extension, connection and interconnection, operation or abandonment of any oil or gas pipeline facility or facilities, subject to necessary and reasonable terms, conditions and limitations;

     (9) may prescribe the system of accounts and regulate the service of an oil or gas pipeline facility;

     (10) shall provide all reasonable assistance to the Department of Law in intervening in, offering evidence in, and participating in proceedings involving a pipeline carrier or affiliated interest and affecting the interests of the state, before an officer, department, board, commission, or court of another state or the United States.

 (b) The commission may assign a qualified, unbiased, and impartial administrative law judge, with experience in the general practice of law, to conduct hearings under this chapter. The administrative law judge may perform other duties in connection with the administration of this chapter and other laws. An administrative law judge hired to conduct hearings under this chapter shall have been admitted to practice law for at least five years immediately before appointment under this subsection.




Sec. 42.06.150. Powers and duties with respect to federally regulated carriers.
AS 42.06.140 applies to oil and gas pipeline carriers regulated under federal law only to the extent not preempted by federal law.


Secs. 42.06.160 — 42.06.200. Administrative authority and procedures. [Repealed, § 20 ch 110 SLA 1981.]
Sec. 42.06.210. Publication of reports, orders, decisions, and regulations.
All reports, orders, decisions, and regulations of the commission shall be in writing. The commission shall apprise all affected operators of oil or gas pipeline facilities and interested parties of these reports, orders, decisions, and regulations as they are issued and adopted, and, when appropriate to do so, publish them in a manner that will reasonably inform the public or the affected consumers of the services of any oil or gas pipeline facility. The commission may set charges for costs of printing or reproducing and furnishing copies of its reports, orders, decisions, and regulations. The publication requirement, as it pertains to regulations, does not supersede the requirements of AS 44.62 (Administrative Procedure Act).


Sec. 42.06.220. Annual report.
The commission shall, by November 15 of each year, publish an annual report reviewing its activities during the previous fiscal year and notify the legislature that the report is available. The report must address the regulation of oil and gas pipeline facilities in the state as of June 30 and must contain details about the commission’s compliance with performance measures reported by the commission.


Sec. 42.06.230. Jurisdiction of commission.
 (a) Except as to jurisdiction of the Department of Law as provided by AS 42.06.140(a)(10), the jurisdiction and authority over the subject matter of this chapter is exclusively in the commission. To the extent that the performance of any duties of the commission affects a pipeline carrier or a pipeline subject to regulation under federal law, the performance of its duties may not, as to that pipeline carrier or pipeline, conflict with applicable federal laws, regulations, orders, or other requirements.

 (b) The commission’s jurisdiction and authority extend to
     (1) an oil or gas pipeline facility operating in a municipality, whether home rule or otherwise; if a conflict between a certificate, order, decision, or regulation of the commission and a charter, permit, franchise, ordinance, rule, or regulation of such a local governmental entity occurs, the certificate, order, decision, or regulation of the commission prevails; and

     (2) the intrastate transportation of North Slope natural gas through a North Slope natural gas pipeline.




Article 2. Certificate of Public Convenience and Necessity.


Sec. 42.06.240. Certificate required; special requirements for North Slope natural gas.
 (a) After January 1, 1974 a pipeline carrier, or person that will be a pipeline carrier upon completion of any proposed construction or extension, may not engage in the transportation of oil or gas by pipeline subject to the jurisdiction of the commission, or undertake the construction or extension of any pipeline facilities for that purpose, or acquire or operate any pipeline facilities or extension, unless there is in force with respect to that pipeline carrier a certificate of public convenience and necessity issued by the commission authorizing those acts or operations. A certificate shall describe the nature and extent of the authority granted in it, including, as appropriate for the services involved, a description of the authorized area and scope of operation of the oil or gas pipeline facility.

 (b) If any person or predecessor in interest was engaged in transportation of oil or gas by pipeline or construction of an oil or gas pipeline on or before January 1, 1974, the commission shall issue a certificate of public convenience and necessity for that pipeline without hearings or proceedings. For purposes of this section, “construction” includes application for a federal right-of-way permit.

 (c) In an area where the commission determines that two or more oil or gas pipelines facilities are competing or are planning to compete to offer identical oil or gas pipeline service, and this competition is not in the public interest, the commission shall take appropriate action to eliminate or not allow the competition and undesirable duplication of facilities.

 (d) The commission may attach to certificates of convenience and necessity terms and conditions and require issuance of securities it considers necessary for the protection of the environment and for the best interest of the oil or gas pipeline facility and the general public.

 (e) The requirement for a certificate does not operate to impose state regulation that has been preempted under federal law. When federal law has preempted state regulation the commission shall accept the findings made under the federal scheme of regulation.

 (f) In addition to other requirements of (a) — (e) of this section, the provisions of this subsection apply to a certificate of public convenience and necessity for a North Slope natural gas pipeline carrier or person that will be a North Slope natural gas pipeline carrier under this chapter:
     (1) the person making application shall dedicate a portion of the pipeline’s initial capacity sufficient to transport the total volume of North Slope natural gas that has been committed by producers and shippers of North Slope natural gas to tendering for intrastate firm transportation service at the time that the operation of the North Slope natural gas pipeline commences;

     (2) upon receipt of the certificate application under this subsection, the commission shall issue a public notice inviting prospective intrastate shippers of North Slope natural gas to file requests for service; a request for service submitted by a shipper in response to a notice issued under this paragraph must include a proof of the shipper’s commitment to use the North Slope natural gas pipeline for intrastate firm transportation service, specifying the volume of North Slope natural gas that the shipper will tender for initial intrastate firm transportation service;

     (3) in its review of an application submitted under this subsection,
          (A) for purposes of evaluating the total volume of intrastate transportation of North Slope natural gas to be accepted for initial intrastate transportation, the commission shall determine total volume based upon written commitments to tender North Slope natural gas for intrastate firm transportation service continuously for a period of not less than three years after the operation of the North Slope natural gas pipeline commences as follows:
               (i) each request for service by an intrastate shipper that is a public utility, as that term is defined in AS 42.05.990, for the purpose of furnishing natural gas for ultimate consumption within the state by its customers that individually consume an average annual volume of less than 20,000,000 standard cubic feet of gas per day shall be supported by a written commitment by the public utility that sets out the utility’s best current estimate of the average annual volume that the utility will require during the three-year period;

               (ii) each request for service by an intrastate shipper that is not a public utility, as that term is defined in AS 42.05.990, and each request for service by a public utility for the purpose of furnishing natural gas for ultimate consumption within the state by a customer that individually consumes an average annual volume of 20,000,000 or more standard cubic feet of gas per day, that purchases North Slope natural gas from a North Slope natural gas producer, must be supported by one or more contracts for the purchase of the North Slope natural gas on a take-or-pay basis that extends for a period of not less than three years after the operation of the North Slope natural gas pipeline commences;

               (iii) the commission may consider peak volumes specified in the written commitments of North Slope natural gas producers and purchase contracts; and

          (B) the commission shall set out in its order granting a certificate of public convenience and necessity the total volume of intrastate North Slope natural gas that the North Slope natural gas pipeline carrier shall accept for intrastate transportation; the total volume may not exceed the volume substantiated by written commitments and contracts that comply with the requirements of this chapter;

     (4) if the North Slope natural gas pipeline carrier wants to transport North Slope natural gas within the state in excess of the amount set out in the statement of total volume in the pipeline carrier’s certificate of public convenience and necessity, the pipeline carrier may apply for authority to transport a greater volume of North Slope natural gas within the state than the carrier is required by the commission to transport in its order entered under (3)(B) of this subsection; the commission shall grant the authority requested by the pipeline carrier if the commission determines that the pipeline carrier’s transportation of a greater volume is consistent with public convenience and necessity.




Sec. 42.06.245. Federally regulated carriers.
The requirements of this chapter pertaining to permits and certificates of public convenience and necessity do not apply to the construction of a pipeline facility exclusively subject to federal jurisdiction or to the interstate portion of the business of a pipeline or pipeline carrier exclusively subject to federal jurisdiction. However, the requirements of this chapter for permits and certificates of public convenience and necessity do apply to all the intrastate portion of the business of a pipeline or pipeline carrier subject to federal jurisdiction whenever it engages in intrastate commerce. However, nothing limits the powers of the commission set out in this chapter except to the extent they are preempted by federal law.


Sec. 42.06.250. Application.
Application for a certificate shall be made in writing to the commission, verified under oath. The commission, by regulation, shall establish the requirements for the form of the application, and the information to be contained in it. Notice of the application shall be served upon the interested parties in the manner that the commission by regulation requires.


Sec. 42.06.260. Public hearings.
At least 30 days before issuing a certificate of convenience and necessity, the commission shall hold a public hearing on the application. Copies of the completed application shall be made available to the public at least 10 days before the public hearing date. A transcript of the public hearing shall be included in the permanent record of agency action on that application, and copies of the public hearing transcripts shall be available to the public. The commission may, without notice of hearing and pending the determination of an application for a certificate, issue a temporary certificate in cases of emergency, to assure maintenance of adequate service or to serve particular customers, and may by regulation exempt from the requirements of this section temporary acts or operations for which the issuance of a certificate will not be required in the public interest.


Sec. 42.06.270. Grant or denial of application.
 (a) Unless governed by AS 42.06.240(b), a certificate shall be issued to any qualified applicant, authorizing the whole or any part of the operation, service, construction, extension, or acquisition covered by the application, if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of this chapter and the requirements and regulations of the commission, and that the proposed service, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise the application shall be denied.

 (b) The commission, after a hearing upon its own motion or upon application, may determine the gathering areas, or the routes over which, the fixed termini between which, and the intermediate and off route points, if any, to which each authorization under this section is to be limited.

 (c) Nothing contained in this chapter shall be construed as a limitation upon the power of the commission to grant certificates of public convenience and necessity for service of an area, or routes, already being served by another pipeline.




Sec. 42.06.280. Insurance and security.
The commission may require a lessee to procure and furnish liability and property damage insurance from a company licensed to do business in the state or furnish other security or undertaking upon the terms and conditions the commission considers necessary if the commission finds that the net assets of the lessee are insufficient to protect the public from damage for which the lessee may be liable arising out of the construction or operation of the pipeline.


Sec. 42.06.285. Pipeline carrier regulatory cost charge. [Repealed, § 36 ch 2 FSSLA 1992.]
Sec. 42.06.286. Pipeline carrier regulatory cost charge.
 (a) A pipeline carrier operating in the state shall pay to the commission an annual regulatory cost charge in an amount not to exceed the sum of the following percentages of gross revenue derived from operations in the state: (1) not more than .7 percent to fund the operations of the commission, and (2) not more than .17 percent to fund operations of the public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) within the Department of Law. A regulatory cost charge may not be assessed on pipeline carrier operations unless the operations are within the jurisdiction of the commission.

 (b) The commission shall by regulation establish a method to determine annually the amount of the regulatory cost charge. If the amount the commission expects to collect under (a) of this section and under AS 42.05.254(a) exceeds the authorized budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e), the commission shall, by order, reduce the percentage determined under (e) of this section so that the total amount of the fees collected approximately equals the authorized budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) for the fiscal year.

 (c) The commission shall administer the charge imposed under this section. The Department of Revenue shall collect and enforce the charge imposed under this section. The Department of Administration shall identify the amount of the operating budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) that lapse into the general fund each year. The legislature may appropriate an amount equal to the lapsed amount to the commission and to the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) for operating costs for the next fiscal year. If the legislature does so, the commission shall reduce the total regulatory cost charge collected for that fiscal year by a comparable amount.

 (d) The commission may adopt regulations under AS 44.62 (Administrative Procedure Act) necessary to administer this section, including requirements and procedures for reporting information and making quarterly payments. The Department of Revenue may adopt regulations under AS 44.62 (Administrative Procedure Act) for investigating the accuracy of filed information, and for collecting required payments.

 (e) The commission shall by regulation establish a method to determine annually the maximum percentage of gross revenue that will apply to each regulated public utility sector and the maximum percentage of gross revenue that will apply to the regulated pipeline carrier sector in accordance with AS 42.05.254(h).

 (f) In this section, “gross revenue” means the total intrastate operating revenue as shown in a pipeline carrier’s annual report required by the commission by regulation.




Sec. 42.06.290. Abandonment.
 (a) A pipeline carrier may not abandon or permanently discontinue use of all or any portion of a pipeline or abandon or discontinue any service rendered by means of a pipeline that is the subject of a certificate of convenience and necessity, without the permission and approval of the commission, after due notice and hearing, and a finding by the commission that continued service is not required by public convenience and necessity. Any interested person may file with the commission a protest or memorandum of opposition to or in support of discontinuance or abandonment. The commission may authorize temporary suspension of a service or of part of a service.

 (b) Upon complaint or upon its own motion, the commission may reinvestigate a previously authorized discontinuance, abandonment, or suspension of a service described in (a) of this section. If, after due notice and hearing, the commission finds that the public convenience and necessity requires the service to be resumed, and that there has not been detrimental reliance on the previous authorization, it may order the operator or owner of the oil or gas pipeline facility to again provide the service.




Sec. 42.06.300. Modification, suspension, or revocation of certificates.
Upon complaint or upon its own motion the commission, after due notice and hearing and for good cause shown, may amend, modify, suspend, or revoke a certificate, in whole or in part. Good cause for amendment, modification, suspension, or revocation of a certificate shall be
     (1) the requirements of public convenience and necessity;

     (2) misrepresentation of a material fact in obtaining the certificate;

     (3) unauthorized discontinuance or abandonment of all or part of a service that is the subject of the certificate;

     (4) wilful failure to comply with the provisions of this chapter, or the regulations or orders of the commission; or

     (5) wilful failure to comply with a term, condition, or limitation of the certificate.




Sec. 42.06.305. Transfer of operating authority.
 (a) Operating authority may not be transferred by sale or lease of the certificate or by the sale of substantially all of the stock or assets of a pipeline carrier holding a certificate without the prior approval of the commission. A transfer not involving a substantial change in ownership shall be summarily approved.

 (b) The commission’s decision under this section shall be based on the best interest of the public.




Article 3. Services and Facilities.


Sec. 42.06.310. Standards of service and facilities.
 (a) Each oil or gas pipeline facility shall furnish and maintain adequate, efficient, and safe service and facilities. This service shall be reasonably continuous and without unreasonable interruption or delay.

 (b) If the commission, upon its own motion or upon complaint, after providing reasonable notice and opportunity for hearing, finds that the service or facilities of an oil or gas pipeline facility are unreasonable, unsafe, inadequate, insufficient, or unreasonably discriminatory, or otherwise in violation of this chapter, the commission shall prescribe by regulation or order, the reasonable, safe, adequate, sufficient service or facilities to be observed, furnished, enforced, or employed, including all repairs, changes, alterations, extensions, substitutions, or improvements in facilities that are reasonably necessary and proper for the safety, accommodation, and convenience of the public and the users. Regulations or orders issued under this subsection shall conform to accepted industry standards and practices.

 (c) Every common carrier shall, when ordered by the commission, extend or enlarge its pipeline or storage facilities provided the extension or enlargement shall be found to be reasonable and required in the public interest and that the expense involved will not impair the ability of the common carrier or public utility to perform its duty to the public.

 (d) The requirement of (c) of this section does not apply to a North Slope natural gas pipeline carrier to the extent that the capacity of the carrier’s North Slope natural gas pipeline does not allow for expanded capacity, and does not apply to require a North Slope natural gas pipeline carrier to enlarge or extend its North Slope natural gas pipeline system. However, the commission may require a North Slope natural gas pipeline carrier to expand, enlarge, or extend its North Slope natural gas pipeline system if, after notice and opportunity for hearing, the commission determines that
     (1) a person making a request for expanded, enlarged, or extended service by a North Slope natural gas pipeline carrier has made a firm contractual commitment to the North Slope natural gas pipeline carrier to transport North Slope natural gas; and

     (2) the expansion, enlargement, or extension will not result in
          (A) substantial injury, including economic injury, to the North Slope natural gas pipeline facility or its customers;

          (B) substantial detriment to the services furnished by the North Slope natural gas pipeline facility; or

          (C) the creation of safety hazards.




Sec. 42.06.320. Discrimination in service.
An oil or gas pipeline carrier may not, as to service, make or grant an unreasonable preference or advantage to any person or subject any person to an unreasonable prejudice or disadvantage. An oil or gas pipeline facility that is owned by more than one owner may not require that users make separate requests of each separate owner in order to obtain a reasonable share of the service provided by the oil or gas pipeline facility.


Sec. 42.06.330. Power of commission to allocate usage.
If the commission, upon its own motion or upon complaint, after providing reasonable notice and opportunity for hearing, finds that an oil or gas pipeline facility is making or granting an unreasonable preference or advantage to any person or subjecting any person to an unreasonable prejudice or discrimination, the commission may prescribe rules to end the discrimination or the commission may itself prescribe the allocation of the service until it determines the discrimination can be avoided by appropriate rule or agreement.


Sec. 42.06.340. Order for joint use or connection.
 (a) When there is failure to agree upon the joint use or interconnection of oil or gas pipeline facilities or the conditions or compensation for joint use or interconnections, any interested person may apply to the commission for an order requiring the interconnection. If, after investigation and opportunity for hearing, the commission finds that public convenience and necessity require the joint use or connection, and that the use or connection will not result in substantial injury to the oil or gas pipeline facility or its customers, or in substantial detriment to the services furnished by the oil or gas pipeline facility, or in the creation of safety hazards, it shall
     (1) order that the use be permitted;

     (2) prescribe reasonable conditions and compensation for the joint use;

     (3) order the interconnection to be made;

     (4) determine the time and manner of the interconnection;

     (5) determine the apportionment of costs and responsibility for operation and maintenance of the interconnection.

 (b) During construction of a pipeline the commission, after investigation and opportunity for hearing and findings as required in (a) of this section, may order the inclusion within the pipeline at points that it designates, special fittings including but not limited to tees, wyes, spools, reducers, enlargers, flanges, flange plates, valves, and valve boxes, to reduce the time and cost of future connections for the injection and removal of gas and oil from the main pipeline, and to maintain and facilitate intrastate commerce. A request for special fittings may be made by the commissioner of natural resources for the state. A request for special fittings and valves may be made to the commission by a local government, person, company, or corporation. The cost of furnishing and installing the special fittings shall be paid by the state. However, if the special fittings are used by a person for a commercial enterprise or by a municipality for the operation of a utility, the commission shall require that the using person or municipality reimburse the state for the cost of furnishing and installing.




Article 4. Rates and Rate Schedules.


Sec. 42.06.350. Tariffs, contracts, filing, and public inspection.
 (a) Under regulations adopted by the commission, every intrastate oil or gas pipeline carrier shall file with the commission, within the time and in the form designated by the commission, all rates, tariffs, charges, classifications, rules, regulations, terms, and conditions pertaining to service provided under the certificate, and shall maintain copies on file at its principal business office and at places designated by the commission, available to, and subject to inspection by, the general public on demand.

 (b) The commission may reject the filing of all or part of a tariff that does not comply with the form or filing regulations of the commission or that is not consistent with this chapter or the regulations of the commission. A tariff or provision so rejected is void.

 (c) In its tariff filed with the commission under (a) of this section, a natural gas pipeline carrier may charge separate rates for firm transportation service and for interruptible transportation service. A natural gas pipeline carrier
     (1) may, in addition, impose a reservation fee or similar charge for reservation of capacity in a natural gas pipeline as a condition of providing firm transportation service; the reservation fee or charge imposed by the carrier may not include any variable costs or fixed costs that are not attributable to the provision of firm transportation service;

     (2) may not impose a reservation fee or similar charge for reservation of capacity in a natural gas pipeline for interruptible transportation service.




Sec. 42.06.360. Adherence to tariffs.
The terms and conditions under which a pipeline carrier offers its services and facilities to the public shall be governed strictly by the provisions of its currently effective tariffs. A legally filed and effective tariff rate, charge, rule, regulation, or condition of service may not be changed except in the manner provided in this chapter. If more than one tariff rate or charge can reasonably be applied for billing purposes the one most advantageous to the customer shall be used.


Sec. 42.06.370. Rates to be just and reasonable.
 (a) All rates demanded or received by a pipeline carrier, or by any two or more pipeline carriers jointly, for a service furnished or to be furnished shall be just and reasonable.

 (b) Additional regulations governing determination of a reasonable tariff shall be published by the commission.

 (c) Rates demanded, observed, charged, or collected by a North Slope natural gas pipeline carrier for intrastate service shall be designed as if that portion of the North Slope natural gas pipeline were a public utility regulated under the provisions of AS 42.05.




Sec. 42.06.380. Discrimination in rates.
 (a) A pipeline carrier may not, as to rates, grant a preference or advantage to any customer or subject a customer to an unreasonable prejudice or disadvantage. A pipeline carrier may not establish or maintain an unreasonable difference as to rates, either as between localities served or between classes of service provided under the certificate.

 (b) A pipeline carrier may not directly or indirectly refund, rebate or remit in any manner, or by any device, any portion of the rates and charges or charge, demand or receive a greater or lesser compensation for service than is specified in its effective tariff nor extend to any customer served under the certificate any form of contract, agreement, inducement, privilege or facility, or apply any rule, regulation or condition of service except as are extended or applied to all customers under like circumstances.




Sec. 42.06.390. Initial or revised rates.
 (a) A pipeline carrier may not establish or place in effect any initial rates, charges, rules, regulations, conditions of service or practices except after 90 days’ notice to the commission and to the public. Notice shall be given by filing with the commission and keeping open for public inspection the tariff provisions which shall plainly indicate the time when the tariff will go into effect. The commission may prescribe additional means of giving notice. The commission, for good cause shown, may allow initial tariffs to take effect on less than 90 days’ notice under conditions the commission prescribes by order.

 (b) A pipeline carrier may not establish or place in effect any revised rates, charges, rules, regulations, conditions of service or practices except after 30 days’ notice to the commission and to the public. Notice shall be given by filing with the commission and keeping open for public inspection the revised tariff provisions which shall plainly indicate the changes to be made in the schedules then in force and the time when the changes will go into effect. The commission may prescribe additional means of giving notice. The commission, for good cause shown, may allow changes to take effect on less than 30 days’ notice under conditions the commission prescribes by order.

 (c) Initial and revised tariffs shall be filed in the manner provided in AS 42.06.350.




Sec. 42.06.400. Suspension of tariff filing.
 (a) When a tariff filing is made containing an initial or revised rate, classification, rule, regulation, practice, or condition of service the commission may, either upon written complaint or upon its own motion, after reasonable notice, conduct a hearing to determine the reasonableness and propriety of the filing. Pending a hearing the commission may, by order stating the reasons for its action, suspend the operation of the tariff filing for an initial period not longer than six months beyond the time when it would otherwise go into effect. If good cause is shown, the commission may suspend the operation of the tariff filing for an additional period not to exceed one year following the end of the initial suspension period. If information on which to base a just and reasonable tariff is lacking or incomplete at the close of the second suspension period, the commission may, during the suspension period and for good cause shown, with or without a hearing, order a further suspension and in such instance shall order the filed rate to be collected, subject to refund of the difference between the filed rate and the final rate, until a final rate can be set. The commission may order the difference between the temporary rate established under this section and the filed rate to be placed in escrow or secured by bond pending establishment of the final rate.

 (b) An order suspending a tariff filing may be vacated if, after investigation, the commission finds that it is in all respects proper. Otherwise the commission shall hold a hearing on the suspended filing and issue its order, before the end of the suspension period, granting, denying, or modifying the suspended tariff in whole or in part. If an initial tariff is suspended, the commission shall establish a reasonable temporary tariff. The commission may allow the collection of the filed initial tariff, or it may require collection of the temporary tariff. If the commission allows collection of the filed initial tariff, it shall require the pipeline carrier to place the revenue representing the difference between the filed tariff and the temporary tariff in escrow in a financial institution approved by the commission, and keep accurate accounts of all amounts received, specifying by whom and in whose behalf the amounts are paid. At the end or vacation of the suspension period the amount, if any, owing to the pipeline carrier from the difference between the temporary tariff and the permanent tariff shall be paid to the pipeline carrier. The surplus, if any, shall be refunded to the persons in whose behalf the amounts were paid into escrow. Funds may not be released from escrow without the commission’s prior written consent and instructions to the escrow agent. The commission may allow the pipeline carrier, at the carrier’s expense, to substitute a bond or letter of credit in lieu of the escrow requirement. If the commission requires collection of the temporary tariff, it shall require the shipper to place the revenue representing the difference between the filed initial tariff and the temporary tariff in escrow in a financial institution approved by the commission, and require that accurate accounts similar to those specified above in this section be kept by the carrier and the shipper. The person owing shall pay the person owed to the satisfaction of the commission within 30 days after the commission order allowing or setting a permanent tariff. The amount, if any, by which the permanent tariff exceeds the temporary tariff shall be paid by the shipper to the carrier, or, if the temporary tariff exceeds the permanent tariff, the difference shall be paid by the carrier to the shipper, and in either event such payment shall be made with interest calculated on the balance due at the end of each calendar month at the legal rate, as defined in AS 45.45.010(a). The commission may allow the shipper, at the shipper’s expense, to substitute a bond or letter of credit in place of the escrow requirement.

 (c) If a proposed increased rate is suspended, the commission shall establish a reasonable temporary tariff. The temporary tariff may be the same as the tariff the carrier is seeking to revise. The commission may allow the collection of the filed proposed increased rate, or it may require collection of the temporary rate. If the commission allows collection of the filed increased rate, it shall require the pipeline carrier to place the revenue representing the difference between the filed proposed increased rate and the temporary rate in escrow in a financial institution approved by the commission, and keep an accurate account of all amounts received, specifying by whom and on whose behalf the amounts are paid. At the end or vacation of the suspension period the amount, if any, owing to the pipeline carrier from the difference between the temporary rate and the permanent rate shall be paid to the pipeline carrier. The surplus, if any, shall be refunded to the persons on whose behalf the amounts were paid into escrow. Funds may not be released from escrow without the commission’s prior written consent and instructions to the escrow agent. The commission may allow the pipeline carrier, at the carrier’s expense, to substitute a bond or letter of credit in place of the escrow requirement. If the commission requires collection of the temporary rate, it shall require the shipper to place the revenue representing the difference between the proposed increased rate and the temporary rate in escrow in a financial institution approved by the commission, and require that accurate accounts similar to those specified above in this subsection be kept by the carrier and the shipper. The person owing shall pay the person owed to the satisfaction of the commission within 30 days after the commission’s order allowing or setting a permanent tariff. The commission may allow the shipper, at the shipper’s expense, to substitute a bond or letter of credit instead of meeting the escrow requirement.

 (d) One who initiates a change in existing tariffs bears the burden of proving the reasonableness of the change.




Sec. 42.06.410. Power of commission to fix rates.
 (a) When the commission, after an investigation and hearing, finds that a rate demanded, observed, charged, or collected by a pipeline carrier for a service, subject to the jurisdiction of the commission, or that a classification, rule, regulation, practice, or contract affecting the rate, is unjust, unreasonable, unduly discriminatory or preferential, the commission shall determine a just and reasonable rate, classification, rule, regulation, practice, or contract to be observed or allowed and shall establish it by order.

 (b) If an investigation is conducted in multiple phases, the commission may establish a rate at the end of a single phase. The rate established at the end of a single phase is to be considered a final rate under AS 42.06.400. If the rate established at the conclusion of the proceeding under (a) of this section or after judicial review is less than the rate established after a single phase of an investigation, a shipper is entitled to a refund of the difference between the amounts paid by the shipper and the amounts that would have been paid under the rate established at the conclusion of the proceeding or after judicial review. If the rate established at the conclusion of the proceeding under (a) of this section or after judicial review is more than the rate established after a single phase, a pipeline carrier is entitled to a payment of the difference between the amounts paid to the carrier and the amount that would have been paid under the rate established at the conclusion of the proceeding or after judicial review.




Sec. 42.06.420. Valuation of property of a pipeline carrier.
The commission may, after providing reasonable notice and opportunity to be heard, ascertain and set the fair value of the whole or any part of the property of a pipeline carrier, insofar as it is material to the exercise of the jurisdiction of the commission. The commission may make revaluations from time to time and ascertain the fair value of all new construction, extensions, and additions to the property of a pipeline carrier.


Article 5. Accounts, Records, and Reports.


Sec. 42.06.430. General provisions as to accounts, records, and reports.
To the extent necessary to the performance of the duties of the commission as provided in this chapter,
     (1) the commission by regulation shall, for the purposes of this section, classify pipeline facilities, and may designate the pipeline facilities or groups of pipeline facilities within the state that constitute a pipeline system for the purposes of this section;

     (2) the commission may by regulation prescribe a uniform system of accounts for any classification of pipeline facilities which best represents and clearly reveals the investment, revenues, direct operating costs and other expenses of the subject classification of facilities, and may prescribe the manner in which the accounts and supporting records are kept in order to clearly show the investment, revenues, and costs pertaining to the subject facilities or to a pipeline system constituting a part of it; accounts shall be maintained on the calendar year basis unless the commission specifically authorizes the maintenance of accounts on the basis of a fiscal year other than the calendar year;

     (3) the commission may by regulation require a pipeline carrier or affiliated interest engaged in activities relating to pipelines to establish and maintain as part of its system of accounts continuing property records showing, as to property units which are actually being used in pipeline activity in this state, the year of placement in service, original cost and current location, and, as to a pipeline system, accounts and records in a manner showing, on a current basis, the original cost of the system in the state and related reserves for depreciation; from time to time the commission shall determine the proper and adequate rates of depreciation for each major class of property of an oil or gas pipeline facility;

     (4) the pipeline carrier shall keep its accounts for its pipeline facilities located in this state separate from any accounts relating to any other business (including another pipeline facilities business, or a subsidiary business) it engages in, directly or indirectly; except as the commission provides, property, expense or revenue used in or derived from the other business may not be considered in establishing the rates and charges of the facility;

     (5) the pipeline carrier shall keep books, accounts, papers, and records required by this chapter or by regulations adopted by the commission under this chapter in an office in this state and may not remove them from the state except upon written authority by the commission;

     (6) for pipelines subject to the Interstate Commerce Act or the Natural Gas Act, the uniform system of accounts and manner of maintaining them and the property records kept and maintained shall, where considered practicable by the commission, be the same as required under regulations prescribed by the applicable federal agency; however, where federal law permits a pipeline carrier to consolidate its reporting for more than one pipeline in which it has an ownership interest, the commission shall require the reports to be made on an individual pipeline basis for any pipeline located wholly or in part in the state;

     (7) within 90 days after the close of its authorized annual accounting period, or within additional time granted by the commission for good cause shown, a pipeline carrier shall file a verified annual report with the commission; the annual report must consist of the following:
          (A) for a pipeline subject to the Interstate Commerce Act or 15 U.S.C. 717 — 717w (Natural Gas Act), a copy of the annual report as filed with the appropriate federal agency under the applicable Act, and, for other pipelines, a report of general corporation information and financial statements in the same general format as the report of pipelines of the same classification subject to the jurisdiction of the appropriate federal agency;

          (B) in the same general format as the report referred to in (A) of this paragraph, a statement of income and investment applicable to pipelines in this state, and a statement of investment, revenues, direct operating costs and other expenses, detailed in accordance with the uniform system of accounts to be applied under this chapter, for each pipeline system designated by the commission under (1) of this section; and

          (C) such additional accounts and information as may be required under (2) of this section;

     (8) the commission may require such additional accounts and information as may be necessary.




Sec. 42.06.440. Inspection of records.
 (a) Subject to AS 31.05.035(c), the commission shall at all reasonable times have access to, and may designate any of its employees, agents, or consultants to inspect and examine, the accounts, records, books, maps, inventories, appraisals, valuations, or other reports and documents, kept by an oil or gas pipeline carrier or its affiliated interests, or prepared or kept for it by others, which relate to any contract or transaction between them. The commission may require an oil or gas pipeline carrier or its affiliated interest to file with the commission copies of any or all of these accounts, records, books, maps, inventories, appraisals, valuations, or other reports and documents, or to maintain those materials at some convenient location in the state specified by order. Costs incurred in complying with a commission request to review the records referred to in this section or to maintain these records in such a manner as to make them conveniently available for the commission’s review shall be borne by the party controlling the records.

 (b) Subject to AS 31.05.035(c), when participating as a party under AS 42.04.070(c) or AS 44.23.020(e), the attorney general shall, at all reasonable times, have the right to reasonable access to, and may designate any of the attorney general’s employees, agents, or consultants to inspect and examine, the accounts, records, books, maps, inventories, appraisals, valuations, or other reports and documents kept by an oil or gas pipeline carrier that are relevant to the issues presented in any adjudicatory matter before the commission in which the attorney general has appeared as a party under AS 42.04.070(c) or AS 44.23.020(e). This access is subject to reasonable notice to all parties with an opportunity to object before the commission. Included under this subsection is access to records or other documents under the custody or control of an affiliated interest of the pipeline carrier that relate to any contract or transaction between the public utility and the affiliated interest. Costs incurred in complying with a request to review the records referred to in this subsection or to maintain those records in such a manner as to make them conveniently available for review shall be borne by the party controlling the records.




Sec. 42.06.445. Public records.
 (a) Except as provided in (b) and (c) of this section, or prohibited from disclosure under state or federal law, records in the possession of the commission are open to public inspection at reasonable times.

 (b) The commission may, by regulation, classify records submitted to it by regulated pipeline carriers or pipelines as privileged records that are not open to the public for inspection. However, if a record involves an application or tariff filing pending before the commission, the commission may release the record for the purpose of preparing for or making a presentation to the commission in the proceeding if the record or information derived from the record is considered by the commission to be relevant to an issue in the proceeding, and if the record or information will be used by the commission in the proceeding. A record or information that the commission releases under this subsection may be released only after giving to the party that filed the record or information reasonable notice of its intention to release the record or information and opportunity to object to that release.

 (c) A document filed with the commission that relates to the finances or operations of a pipeline subject to federal jurisdiction and that is in addition to or other than the copy of a document required to be filed with the appropriate federal agency is open to inspection only by an appropriate officer or official of the state for relevant purposes of the state.

 (d) A person may make written objection to the public disclosure of information contained in a record filed under the provisions of this chapter or of information obtained by the commission or by the attorney general under the provisions of this chapter, stating the grounds for the objection. When an objection is made, the commission shall order the information withheld from public disclosure if the information adversely affects the interest of the person making written objection and disclosure is not required in the interest of the public.

 (e) A commissioner may certify as to all official records of the commission under this section and may certify as to all official acts of the commission under this chapter.

 (f) In this section, “record” means a report, file, book, account, paper, or application, and the facts and information contained in it.




Sec. 42.06.450. Investigations.
The commission may investigate any matter that affects the cost or quality of transportation of oil or gas in this state by pipeline carriers or affiliated interests or of related services and may ensure compliance by pipeline carriers and their affiliated interests with the provisions of this chapter. Investigations may be public, nonpublic, or both. In conducting investigations, the commission may compel the attendance and testimony of witnesses and the production of records and testimony before the commission or its designee. In the course of an investigation, the commission may exclude from attendance at the taking of investigative testimony all persons except the person compelled to attend, that person’s attorney, members of the commission or the commission’s staff, and a person authorized to transcribe the proceedings. Following an investigation and after providing reasonable notice and opportunity for hearing, the commission may institute proceedings to determine whether unreasonable practices have occurred, whether expenditures have been imprudently incurred, the costs of those practices or expenditures, and whether a pipeline carrier and its affiliated interests are in compliance with this chapter. Following such a determination, the commission shall take appropriate action to ensure that neither the direct nor indirect costs of any unreasonable practices or imprudent expenditures are included in any tariff or rate of a pipeline carrier or are borne by the public or the state.


Sec. 42.06.460. Designation of service agents.
Each pipeline carrier shall file with the commission a written appointment of a named permanent resident, which may be a corporation, of this state as its registered agent in this state upon whom service of all notices, regulations, and requests of the commission may be made. The appointment shall specify an address in this state of the appointed agent, which address may be changed from time to time by filing a new Alaska address with the commission. If a pipeline carrier fails to appoint an agent, service of notices, regulations, and requests may be made by posting a copy in the main office of the commission and filing a copy in the office of the lieutenant governor.


Article 6. Enforcement Provisions.


Sec. 42.06.470. Effect of regulations.
Regulations adopted by the commission under this chapter have the effect of law.


Sec. 42.06.480. Review and enforcement.
 (a) All final orders of the commission are subject to judicial review under AS 44.62.560 — 44.62.570.

 (b) If an appeal is not taken from a final order of the commission within 10 calendar days, the commission may apply to the superior court for enforcement of this chapter, the regulations adopted under it, and the orders of the commission. The court shall enforce the order by injunction or other process.




Secs. 42.06.490 — 42.06.500. Complaint against pipeline carriers; adjudication. [Repealed, § 20 ch 110 SLA 1981.]
Sec. 42.06.510. [Renumbered as AS 42.06.445.]
Sec. 42.06.520. [Renumbered as AS 42.06.607.]
Sec. 42.06.530. Injunctions and monetary sanctions.
 (a) The full amount of damages determined by a civil action may be compromised by the commission. In determining the amount of the damages, or the amount agreed upon in compromise, the gravity of the violation, and the good faith of the person charged in attempting to achieve compliance, after notification of a violation, shall be considered. The amount of the damages, when finally determined, or the amount agreed upon in compromise, may be deducted from any sums owing by the state to the person charged or may be recovered in a civil action in the state courts.

 (b) A person may be enjoined by the superior court from committing a violation mentioned in this section.




Sec. 42.06.540. Civil penalties.
 (a) In addition to all other penalties and remedies provided by law, a person subject to the provisions of this chapter, as well as an officer, manager, agent, or employee of that person, that either violates or procures, aids, or abets the violation of any provision of this chapter, or of an order, regulation, or written requirement of the commission is subject to a maximum penalty of $500 for each violation.

 (b) A penalty may not be assessed unless the commission first issues an order to show cause why the penalty should not be levied. The order shall describe the violation with reasonable particularity and designate the maximum penalty that may be assessed for the violation. The order shall be served on the alleged violator named in the order. The order shall state a time and place for the hearing.

 (c) After a hearing the commission shall enter its findings of fact and final order which shall state when the penalties, if any, are payable.




Sec. 42.06.550. Each violation a separate offense.
Each violation of a provision of this chapter or of an order, decision, regulation, or written requirement of the commission is a separate and distinct offense and in case of a continuing violation each day the violation continues constitutes a separate offense.


Sec. 42.06.560. Actions to recover damages and penalties; disposition.
 (a) Actions to recover damages and penalties under this chapter shall be brought by the attorney general in a court of competent jurisdiction.

 (b) All damages and penalties recovered under the provisions of this chapter shall be paid to the commission and deposited by it in the general fund of the state.




Sec. 42.06.570. Penalties cumulative.
 (a) All penalties imposed under this chapter are cumulative.

 (b) An action to recover a civil penalty is not a bar to an enforcement proceeding to require compliance, or to any other remedy provided by this chapter.




Sec. 42.06.580. Joinder of actions.
Under the applicable court rules, appeals from orders of the commission, applications for enforcement of commission orders and actions for recovery of damages or penalties may be joined. The court may in the interests of justice separate the actions.


Sec. 42.06.590. Private cause of action.
 (a) A person subjected to an unlawful rate, price, service, or practice, in violation of this chapter, may sue in a state court of appropriate jurisdiction for damages resulting from the unlawful rate, price, service, or practice.

 (b) If the violation described in (a) of this section resulted in the overcharge of rate or price, the person paying the unlawful rate or price is entitled to recover as damages at least double the amount of the overcharge.

 (c) A person recovering damages under this section is entitled to a reasonable attorney fee, fixed by the court, to be taxed and collected as costs of the suit.




Article 7. General Provisions.


Sec. 42.06.600. [Renumbered as AS 42.06.230(b).]
Sec. 42.06.601. Exemption.
An in-state natural gas pipeline subject to AS 42.08 and an in-state natural gas pipeline carrier subject to AS 42.08 are exempt from this chapter.


Sec. 42.06.605. Restrictions on commissioners and employees.
A member or employee of the commission may not have an official connection with, or hold stock or securities in, or have a pecuniary interest in, a corporation, company, or association engaged in the production or the transportation of oil or gas. A member or employee may not act upon a matter in which the relationship of the member or employee with any person creates a conflict of interest.


Sec. 42.06.607. Application fees.
The commission may establish reasonable fees to cover the costs of initial processing of applications for certificates or amendments to certificates.


Sec. 42.06.610. Expenses of investigation or hearing.
 (a) During a proceeding held under this chapter, the commission may allocate the cost of the proceeding among the parties, including the commission, as is just under the circumstances. In allocating costs, the commission shall consider the regulatory cost charge paid directly or indirectly under AS 42.06.286. The costs allocated may include the costs of any time devoted to investigations or hearings by hired consultants, whether or not the consultants appear as witnesses or participants. The commission shall provide an opportunity for any person objecting to an allocation to be heard before the allocation becomes final.

 (b) After completion of a proceeding held under this chapter, the commission may reallocate the cost of the proceeding among the parties, including the commission, as is just under the circumstances. The costs which are reallocated may include the costs of time devoted to investigations or hearings by hired consultants, whether or not the consultants appear as witnesses or participants. The commission shall provide an opportunity for any person objecting to a reallocation to be heard before the reallocation becomes final.

 (c) [Repealed, § 28 ch 90 SLA 1991.]
 (d) Notwithstanding the commission’s discretion under (a) and (b) of this section to allocate costs to parties, the commission may not require a state agency to pay any costs allocated to the state agency.




Sec. 42.06.620. Classification.
The commission may by regulation provide for the classification of oil or gas pipeline facilities based upon differences in annual revenue, assets, nature of ownership, and other appropriate distinctions and as between these classifications, by regulation, provide for different reporting, accounting, and other regulatory requirements.


Sec. 42.06.630. Definitions.
In this chapter,
     (1) “affiliated interest” means any person or other entity that
          (A) is controlled or owned, in whole or in part, by a pipeline carrier;

          (B) is controlled or owned, in whole or in part, by an entity which controls or owns, in whole or in part, a pipeline carrier;

          (C) is an agent, employee, contractor, or subcontractor of a pipeline carrier or any entity controlled or owned, in whole or in part, by a pipeline carrier; or

          (D) controls or owns, in whole or in part, a pipeline carrier;

     (2) “capacity” means, with reference to a North Slope natural gas pipeline, the average daily volume throughput of the North Slope natural gas pipeline, calculated at the normal operating pressure of the North Slope natural gas pipeline as set out in the pipeline design;

     (3) “commission” means the Regulatory Commission of Alaska (AS 42.04.010);

     (4) “commissioner” means a member of the commission;

     (5) “duties” means duties, powers, obligations, and functions;

     (6) “firm transportation service” means service by a natural gas pipeline carrier that is not subject to a prior claim by another shipper or another class of service; service constitutes “firm transportation service” if the service receives the same priority as any other class of firm transportation service;

     (7) “gas” includes all natural gas and hydrocarbons produced at the wellhead and not defined as oil;

     (8) “interruptible transportation service” means service by a natural gas pipeline carrier in which the carrier’s pipeline system capacity may be subject to a prior claim by another shipper or another class of service; a service constitutes “interruptible transportation service” if the service is given a lower priority than another class of service, resulting in noncontinuous service to a shipper of natural gas;

     (9) “intrastate,” as applied to the transportation of North Slope natural gas, means the transportation of North Slope natural gas between any point within the state and another point within the state, for ultimate consumption of the North Slope natural gas within the state;

     (10) “natural gas pipeline” or “natural gas pipeline facility” means all the facilities of a total system of pipe, whether owned or operated by a natural gas pipeline carrier under a contract, agreement, or lease in this state used by a natural gas pipeline carrier for transportation of natural gas for delivery, storage, or further transportation, and including all pipe, pump and compressor stations, station equipment, and all other facilities used or necessary for an integral line of pipe to effectuate the transportation from point to point, excluding, however, gas processing plants, treaters, and separators;

     (11) “natural gas pipeline carrier” means the owner, including a corporation, company, or other entity organized under the laws of the United States or of any state, of a natural gas pipeline, as the term is defined in this section, or an interest in it, or any person, including a corporation, company, or other entity organized under the laws of the United States or of any state, authorized to construct or extend pipeline facilities under this chapter;

     (12) “North Slope natural gas” means gas that is produced from the area of Alaska lying north of 68 degrees North latitude and that, but for a pipeline subject to regulation under this chapter, had not been committed for sale and delivery in a commercial market due to the prevailing costs or price conditions;

     (13) “North Slope natural gas pipeline” or “North Slope natural gas pipeline facility” means all the facilities of a total system of pipe, whether owned or operated by a North Slope natural gas pipeline carrier under a contract, agreement, or lease, in this state used by a North Slope natural gas pipeline carrier for transportation of North Slope natural gas for delivery, storage, or further transportation, including all pipe, pump, and compressor stations, station equipment, gas processing plants, treaters, separators, and all other facilities used or necessary for an integral line of pipe to carry out the transportation from point to point, but excluding marine terminal facilities and the integrated plant, facilities, and equipment, including pollution control equipment, used for conditioning, storage, handling, or processing of North Slope natural gas into liquefied natural gas;

     (14) “North Slope natural gas pipeline carrier” means the owner, including a corporation, company, or other entity organized under the laws of the United States or of a state, of a North Slope natural gas pipeline, or an interest in it, or a person, including a corporation, company, or other entity, organized under the laws of the United States or of a state, authorized to construct, operate, or extend North Slope natural gas pipeline facilities under this chapter;

     (15) “oil” includes crude oil, and other hydrocarbons regardless of gravity that are produced at the wellhead in liquid form, its products and liquid hydrocarbons, including the liquid hydrocarbons known as distillate or condensate recovered or extracted from gas, other than gas produced in association with oil and commonly known as casinghead gas;

     (16) “pipeline” or “pipeline facility” means all the facilities of a total system of pipe, whether owned or operated by a pipeline carrier under a contract, agreement, or lease, in this state used by a pipeline carrier for transportation, for hire and as a common carrier, of oil, gas, coal, or other mineral slurry for delivery, storage, or further transportation, and including all pipe, pump and compressor stations, station equipment, and all other facilities used or necessary for an integral line of pipe to effectuate the transportation from point to point, excluding, however, gas processing plants, treaters, and separators;

     (17) “pipeline carrier” means the owner, including corporations organized under the laws of the United States or of any state, of any pipeline, as the term is defined in this section, or any interest in it, or any person, including corporations organized under the laws of the United States or of any state, authorized to construct or extend pipeline facilities under AS 42.06.240(a);

     (18) “regulation” includes rules;

     (19) “tariff” means a rate, charge, toll, rule, or regulation of an oil or gas pipeline facility relating to services furnished by the facility to the general public or other users for compensation.




Sec. 42.06.640. Short title.
This chapter may be cited as the Pipeline Act.


Chapter 07. Alaska Transportation Commission Act.

[Repealed, 1983 Initiative Proposal No. 2, § 6.]

Article 1. Application of Chapter; Qualifications.


Chapter 08. In-State Pipeline Contract Carrier.

Sec. 42.08.010. Application of chapter.
 (a) This chapter applies to the regulation of in-state natural gas pipelines that provide transportation by contract carriage.

 (b) An in-state natural gas pipeline subject exclusively to federal jurisdiction is exempt from this chapter.




Sec. 42.08.020. Qualification of the Alaska Gasline Development Corporation; findings.
 (a) The Alaska Gasline Development Corporation is financially fit, willing, and able to take the actions, perform the service, and conform to the requirements of this chapter.

 (b) The board of directors and the officers of the Alaska Gasline Development Corporation are managerially fit, willing, and able to manage the Alaska Gasline Development Corporation and to take the actions, perform the service, and conform to the requirements of this chapter.

 (c) The proposed service, construction, and operation of an in-state natural gas pipeline for which the Alaska Gasline Development Corporation applies for a certificate under this chapter is required by present and future public convenience and necessity.

 (d) The findings that the Alaska Gasline Development Corporation is financially fit in (a) of this section and managerially fit in (b) of this section and that an in-state natural gas pipeline is required by present or future public convenience and necessity in (c) of this section are conclusive and binding on the commission.

 (e) The commission shall determine whether a person making application under this chapter is technically fit, willing, and able to take the actions, perform the service, and conform to the requirements in this chapter.




Article 2. Powers and Duties of Regulatory Commission of Alaska.


Sec. 42.08.220. General powers and duties.
 (a) The commission shall
     (1) regulate, under the provisions of this chapter, an in-state natural gas pipeline that provides transportation by way of contract carriage;

     (2) require permits for the construction, enlargement in size or operating capacity, extension, connection and interconnection, operation, or abandonment of an in-state natural gas pipeline facility under the provisions of this chapter and subject to the same standards as certification in AS 42.08.330;

     (3) to the extent necessary to perform the duties of the commission under this chapter, have access to, and may designate its employees, agents, or consultants to inspect and examine, the accounts, financial and property records, books, maps, inventories, appraisals, valuations, and related reports kept by an in-state natural gas pipeline carrier, or kept for an in-state natural gas pipeline carrier by others, that directly affect the interests of the state and directly relate to in-state natural gas pipelines located in the state during normal business hours;

     (4) provide all reasonable assistance to the Department of Law in intervening in, offering evidence in, and participating in proceedings before an officer, department, board, commission, or court of another state or the United States involving an in-state natural gas pipeline carrier or an affiliated interest and affecting the interests of the state.

 (b) The commission may
     (1) review and approve recourse tariffs filed by an in-state natural gas pipeline carrier under this chapter;

     (2) review and approve contracts;

     (3) investigate, on its own motion or after receiving a formal complaint, a dispute
          (A) related to rules, regulations, services, practices, and facilities that are not subject to the dispute resolution provisions in an in-state natural gas pipeline carrier’s contracts or recourse tariff;

          (B) presented by a complainant that does not have a contract with the in-state natural gas pipeline carrier;

          (C) related to the conduct of an in-state natural gas pipeline carrier’s open season under AS 42.08.300; to resolve the dispute, the commission may order an expansion of an in-state natural gas pipeline or order an open season under the terms provided for an expansion or open season in this chapter or AS 38.35.121(a)(4) and (c); or

          (D) related to an unreasonable diminution in quantity or quality in the provision of service to a public utility that
               (i) is a violation of the in-state natural gas pipeline carrier’s tariff or contract with the public utility;

               (ii) has not been resolved by the in-state natural gas pipeline carrier; and

               (iii) will result in immediate injury, loss, or damage to the peace, health, safety, or general welfare of the public as clearly demonstrated by specific facts shown by affidavit or verified complaint;

     (4) adopt regulations that are necessary and proper to the performance of the duties of the commission under this chapter, including regulations governing practices and procedures of the commission; regulations adopted by the commission may not be inconsistent with state law;

     (5) initiate, intervene in, and appear personally or by counsel and offer evidence in and participate in, proceedings before an officer, department, board, commission, or court of this state involving an in-state natural gas pipeline carrier and affecting the interests of the state; and

     (6) appoint a qualified, unbiased, and impartial administrative law judge with experience in the general practice of law to conduct hearings under this chapter; the administrative law judge may perform other duties in connection with the administration of this chapter and other laws; an administrative law judge hired to conduct hearings under this chapter shall have been admitted to practice law for at least five years immediately before appointment under this paragraph.

 (c) Except with regard to a precedent agreement under AS 42.08.320(a) that is filed before the issuance of a certificate, consideration of an application for a contract carriage certificate under AS 42.08.330, and an initial recourse tariff under AS 42.08.350(a), the commission may extend a timeline required under this chapter if all parties of record consent to the extension or if, for one time only, before the timeline expires, the
     (1) commission reasonably finds that good cause exists to extend the timeline;

     (2) commission issues a written order extending the timeline and setting out its findings regarding good cause; and

     (3) extension of time is 30 days or less.

 (d) Except as provided in this chapter, the commission may not
     (1) require rates, rate design, or tariff rates or regulations;

     (2) require an in-state natural gas pipeline carrier to make a recourse tariff filing;

     (3) order a modification of a contract that is approved, considered approved, or filed under this chapter;

     (4) conduct further review or investigation of a contract that is approved, considered approved, or filed under this chapter; or

     (5) investigate a dispute under (b)(3) of this section if a complete formal complaint has not been filed with the commission within 60 days after the event giving rise to the complaint.




Sec. 42.08.230. Commission decision-making procedures.
The commission shall comply with AS 42.04.080(a) and expeditiously adjudicate all matters that come before the commission.


Sec. 42.08.240. Publication of reports, orders, decisions, and regulations.
All reports, orders, decisions, and regulations of the commission shall be in writing. The commission shall notify all affected operators of in-state natural gas pipeline facilities and interested parties of reports, orders, decisions, and regulations as they are issued and adopted and, when appropriate, publish them in a manner that will reasonably inform the public or the affected consumers of the services of an in-state natural gas pipeline facility. The commission may set charges for costs of printing or reproducing and furnishing copies of reports, orders, decisions, and regulations. The publication requirement, as it pertains to regulations, does not supersede the requirements of AS 44.62 (Administrative Procedure Act).


Sec. 42.08.250. Application of Administrative Procedure Act.
 (a) The administrative adjudication procedures of AS 44.62 (Administrative Procedure Act) do not apply to adjudicatory proceedings of the commission under this chapter, except that final administrative determinations by the commission are subject to judicial review under AS 44.62 (Administrative Procedure Act) as provided in AS 42.08.530.

 (b) AS 44.62 (Administrative Procedure Act) applies to regulations adopted by the commission.




Sec. 42.08.260. Annual report.
The commission shall include in its annual reports under AS 42.05.211 and AS 42.06.220 a review of its activities under this chapter during the previous fiscal year. The report must address the regulation of in-state natural gas pipeline facilities in the state as of June 30 of each year and must contain details about the commission’s compliance with the performance measures in this chapter.


Article 3. Contract Review; Contract Carriage Certificate; Open Seasons.


Sec. 42.08.300. Open seasons.
 (a) An in-state natural gas pipeline carrier shall include in its approved recourse tariff the procedures for conducting open seasons for uncommitted firm transportation service and for expansion. At a minimum, the in-state natural gas pipeline carrier shall publish reasonable public notice in advance of an open season. The notice shall contain the approved recourse tariff, the proposed form of the precedent agreement, the proposed form of the firm transportation service agreement, and other information sufficient to show the proposed route, capacity, operating pressures, in-service date, quality specifications, and other operating conditions that the pipeline carrier determines are relevant to an evaluation of the proposed service. The notice shall also state the methods for awarding capacity set out in the carrier’s recourse tariff and whether presubscription agreements have been executed. An in-state natural gas pipeline carrier shall provide a mechanism for providing additional relevant information requested by potential shippers.

 (b) An open season shall be conducted and firm transportation service shall be awarded without undue discrimination or preference. Presubscription agreements are subject to the methods for awarding capacity set out in the open season notice.

 (c) An in-state natural gas pipeline carrier shall conduct an open season for firm transportation service when it has existing uncommitted firm transportation capacity and has received a request for firm transportation capacity from one or more potential shippers that meet the pipeline’s creditworthiness requirements or after it has executed presubscription agreements for firm transportation.

 (d) An in-state natural gas pipeline carrier shall conduct an open season for an expansion of its pipeline system when it has received one or more requests for firm transportation service from potential shippers that meet the pipeline’s creditworthiness requirements and that, in the aggregate, would enable the expansion of the pipeline’s system on a commercially reasonable basis. An expansion of the pipeline system is not commercially reasonable if the expansion would cause the pipeline to be a competing natural gas pipeline project for purposes of AS 43.90.

 (e) A natural gas pipeline carrier may enter into presubscription agreements before the start of an open season, but not before an initial recourse tariff is approved.

 (f) An in-state natural gas pipeline carrier shall file revised recourse rates before conducting an open season under (c) and (d) of this section unless the in-state natural gas pipeline carrier filed revised recourse rates during the immediately preceding two-year period.

 (g) If executed precedent agreements are received by an in-state natural gas pipeline carrier, the carrier shall, within 10 days after accepting and executing the agreements, inform the public of the results through publication on the carrier’s Internet website and in a press release or other announcement to the media. The results made public must include the name of each prospective shipper, the amount of capacity allocated, and the period of commitment. If the carrier determines that the commitments received during the open season are not sufficient to permit the carrier to continue the development or construction of the in-state natural gas pipeline, the corporation shall report that to the commission within 30 days.




Sec. 42.08.310. Transportation service.
 (a) Firm transportation service shall be made available only through a presubscription agreement, a recourse tariff, or an open season conducted in accordance with AS 42.08.300.

 (b) The pipeline carrier shall offer a recourse tariff for firm transportation service. The rates included in the recourse tariff shall be determined on a cost-of-service basis and may be levelized over the depreciable life of the pipeline. The recourse tariff may not preclude the pipeline carrier from collecting rolled-in rates so long as the resulting rate for prior shippers does not exceed the initial maximum rate allowable under agreements for capacity.

 (c) An in-state natural gas pipeline carrier may contract to provide firm transportation service for rates and containing provisions different than those in the recourse tariff. For purposes of this subsection, “provisions” are limited to those terms and conditions that directly relate to the rate and do not include the general operating terms and conditions of the recourse tariff.

 (d) An in-state natural gas pipeline carrier shall provide interruptible transportation service through capacity not used for firm transportation service. An in-state natural gas pipeline carrier shall establish means for routinely advising potential shippers of the availability of interruptible transportation service and of uncommitted firm transportation capacity.




Sec. 42.08.320. Review of certain contracts by the commission.
 (a) An in-state natural gas pipeline carrier shall submit each of its precedent agreements for firm transportation service and any substantial amendments to the commission. A precedent agreement negotiated with an entity that is not a public utility regulated by the commission may be filed under seal. Under AS 42.08.400, the commission shall keep confidential a precedent agreement filed under seal. Submission of precedent agreements to the commission is permissible before construction of an in-state natural gas pipeline and before a request for certification under this chapter. In this subsection, “substantial amendment” means an amendment that materially changes a rate or term and condition of service.

 (b) In the review of a precedent agreement submitted under (a) of this section or a related contract submitted under AS 42.05.433(b) or (c), the commission shall
     (1) conclude that a precedent agreement or related contract negotiated at arm’s length between the parties is just and reasonable unless the commission finds that unlawful market activity affected the rate or unfair dealing, such as fraud or duress, affected the formation of the contract;

     (2) review and may conduct an investigation and hearing to determine whether a contract submitted under (a) of this section is just and reasonable; the commission shall either approve the contract as presented or, if the commission finds that a contract is not just and reasonable, disapprove the contract; if the commission has not acted within 180 days after the submission of a contract, the contract shall be considered approved and shall take effect immediately; a contract that is approved or considered approved under this paragraph and the associated firm transportation service agreement are not subject to further review by the commission.

 (c) For purposes of (b)(1) of this section, and except as provided in (d) of this section, a precedent agreement or related contract is arm’s length
     (1) if it incorporates the approved recourse tariff; or

     (2) if it does not incorporate the approved recourse tariff,
          (A) the precedent agreement or related contract is between two state-owned parties;

          (B) the parties are not affiliated; or

          (C) if the parties are affiliated, the precedent agreement or related contract is substantially similar to a precedent agreement or related contract between unaffiliated parties, and the formation of the precedent agreement or related contract was not affected by unlawful market activity or unfair dealing as described in (b)(1) of this section.

 (d) Notwithstanding (c) of this section, a precedent agreement or related contract with a public utility is not arm’s length if the rate paid for transportation on an in-state natural gas pipeline is greater than the recourse tariff rate.

 (e) If a precedent agreement or related contract is not arm’s length, the commission shall determine whether the precedent agreement or related contract is just and reasonable using the standards normally applied under AS 42.06.140. If the commission is reviewing a precedent agreement under (c)(2) of this section, the commission may consider the in-state natural gas pipeline carrier’s approved recourse tariff, including the cost data underlying the tariff. When considering whether to approve a contract as just and reasonable under this subsection, the commission shall consider the consequences of failing to approve the contract.




Sec. 42.08.330. Contract carriage certificate.
 (a) The owner of an in-state natural gas pipeline subject to this chapter may not engage in the transportation of natural gas or undertake the construction of a natural gas pipeline facility for that purpose, or acquire or operate an in-state natural gas pipeline facility, unless a certificate of public convenience and necessity by the commission authorizing contract carriage is in force with respect to that owner. A certificate shall describe the nature and extent of the authority granted, including, as appropriate for the services involved, a description of the authorized area and scope of operation for the in-state natural gas pipeline facility.

 (b) Application for a certificate shall be made in writing to the commission and verified under oath. The commission by regulation shall establish the requirements for the form of the application and the information to be contained in the application. Notice of the application shall be provided to interested parties in the manner provided by regulation.

 (c) Within 180 days after receiving an application under this chapter, the commission shall issue a contract carriage certificate authorizing, in whole or in part, the operation, service, construction, or acquisition covered by the application to a qualified applicant if the commission finds that the applicant is fit, willing, and able to do the acts, perform the proposed service, and conform to the provisions of this chapter and the requirements of the commission, and that the proposed service, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity. The commission may, by order, extend the 180-day period for considering an application by the duration of a delay caused by the failure of the applicant to provide additional information reasonably required by the commission. If, within the 180-day period and any extension of the period for considering the application, the commission fails to issue a contract carriage certificate and does not make a finding that the applicant is not fit, willing, and able under this subsection or that the proposed service is not required by public convenience and necessity, the application shall be considered approved and the contract carriage certificate shall take effect immediately.

 (d) The commission may attach to a contract carriage certificate reasonable terms and conditions that are consistent with the terms of this chapter and are for the mutual benefit of the in-state natural gas pipeline facility and the public.

 (e) Operating authority may not be transferred by sale or lease of the contract carriage certificate or by the sale of substantially all of the stock or assets of a pipeline carrier holding a certificate without prior approval and a finding by the commission that the safe and efficient operation of the natural gas pipeline is not impaired by the transfer. The commission shall summarily approve a transfer not involving a substantial change in ownership.

 (f) After receiving a complaint or on its own motion, the commission, after notice and hearing and for good cause shown, may amend, modify, suspend, or revoke, in whole or in part, a certificate. Good cause for amendment, modification, suspension, or revocation of a certificate is shown by
     (1) misrepresentation of a material fact in obtaining the certificate;

     (2) unauthorized discontinuance or abandonment of all or part of a service that is the subject of the certificate;

     (3) wilful failure to comply with the provisions of this chapter or a regulation or order of the commission; or

     (4) wilful failure to comply with a term, condition, or limitation of the certificate.

 (g) A person holding a certificate issued under this chapter may not abandon or permanently discontinue the use of all or a portion of an in-state natural gas pipeline without permission and approval by the commission, after due notice and hearing and a finding by the commission that continued service is not required by public convenience and necessity. An interested person may file a protest or memorandum of opposition to or in support of discontinuance or abandonment with the commission. The commission may order the temporary suspension of a service or part of a service.




Sec. 42.08.340. Filing requirements; recourse tariffs.
 (a) An in-state natural gas pipeline carrier shall file with the commission a complete recourse tariff containing rates, rules, regulations, terms, and conditions pertaining to service provided under the certificate and copies of all contracts with shippers that in any way affect or relate to the carrier’s rates, tariffs, charges, classifications, rules, regulations, terms, and conditions to service provided under the certificate.

 (b) The terms and conditions under which an in-state natural gas pipeline carrier offers its services and facilities to the public shall be governed strictly by the provisions of its currently effective recourse tariff as supplemented and modified by contracts that have been approved by the commission. A legally filed and effective recourse tariff rate, charge, rule, regulation, or condition of service may not be changed except as provided in this chapter. The in-state natural gas pipeline carrier shall maintain copies of its recourse tariff on file at its principal business office and at places designated by the commission and make the copies available to and subject to inspection by the general public on demand.

 (c) A change in a recourse tariff rate, charge, rule, regulation, or condition of service is not effective until filed under (a) of this section. If more than one recourse tariff rate or charge may reasonably be applied for billing purposes, the recourse tariff rate or charge most advantageous to the shipper shall be used.

 (d) The commission may reject the filing of all or part of a recourse tariff that is not consistent with this chapter. A recourse tariff rate or provision so rejected is void.

 (e) Initial and revised recourse tariffs shall be filed in the manner provided in AS 42.08.350.




Sec. 42.08.350. Initial or revised rates.
 (a) An in-state natural gas pipeline carrier may not establish or place in effect an initial recourse tariff containing rates, charges, rules, regulations, conditions of service, or practices without providing notice to the commission and to the public at least 90 days before establishing or placing in effect the initial recourse tariff. Notice shall be filed with the commission before an open season and by making the recourse tariff provisions available for public inspection. The notice shall plainly indicate the time when the recourse tariff will go into effect and include a supporting cost study. The commission may prescribe additional requirements for the notice and the form in which the notice must be provided. The commission, for good cause shown, may allow initial recourse tariffs to take effect on less than 90 days’ notice under conditions the commission prescribes by order. Submission of a precedent agreement or an associated contract is not subject to this section.

 (b) The commission shall review the proposed initial recourse tariff and verify that the proposed terms and conditions of service are not unduly discriminatory. The commission also shall review the supporting cost study provided with an initial recourse tariff filing and verify, taking into consideration the expected risks, that the proposed rate of return on equity is within the range of permissible rates of return as determined by the Federal Energy Regulatory Commission in recent decisions related to the construction of natural gas pipelines, that the cost study incorporates a reasonable depreciation methodology and depreciable life, and that the cost study uses a reasonable capital structure. A proposed depreciation methodology, depreciable life, or capital structure is reasonable if it is commonly accepted or used by the commission or the Federal Energy Regulatory Commission.

 (c) Upon written complaint or in its own motion, and after reasonable notice, the commission may conduct a hearing to determine whether the initial recourse tariff filed with the commission complies with the requirements in (b) of this section. Pending a hearing the commission may, by order stating the reasons for its action, suspend the operation of the initial recourse tariff for a period not longer than 30 days beyond the time when the initial recourse tariff would otherwise go into effect. An order suspending an initial recourse tariff filing may be vacated if, after investigation, the commission finds that it is in all respects proper. Otherwise, the commission shall hold a hearing on the suspended filing and issue its order, before the end of the suspension period, approving or denying the suspended initial recourse tariff.

 (d) Unless a recourse tariff is denied because it includes a proposed term or condition of service that is unduly discriminatory, includes a proposed rate element that does not comply with (b) of this section, or violates a provision of this chapter, the commission shall approve the initial recourse tariff. If the commission does not issue its ruling within the 90-day period, and the period of suspension, if any, the initial recourse tariff filing shall be considered approved.

 (e) An in-state natural gas pipeline carrier may not establish or place in effect a revised rate, charge, rule, regulation, condition of service, or practice contained in a recourse tariff before providing notice to the commission and to the public at least 90 days before taking the action. After construction or an expansion of the pipeline, and at any time that a carrier files for a revised recourse rate, the carrier shall file a supporting cost study. Notice shall be given by filing with the commission and keeping open for public inspection the revised recourse tariff provisions, which shall plainly indicate the changes to be made in the schedules then in force and the time when the changes will go into effect. The commission may prescribe additional means of giving notice. The commission, for good cause shown, may allow changes to take effect on shorter notice under conditions the commission prescribes by order. Submission of a precedent agreement or an associated contract is not subject to this subsection.

 (f) The commission shall review a proposed revised recourse tariff in the same manner as the review of a proposed initial recourse tariff under (b) of this section, except that the depreciable life may be adjusted in accordance with the time period between the approval of the recourse tariff and the approval of the revised recourse tariff. The commission shall verify that the carrier is using the same elements that were last approved by the commission. A proposed recourse tariff with a new or revised term or condition of service that is unduly discriminatory shall be denied. The commission also shall deny a revised tariff rate that does not use the previously approved value of the specified rate element, unless the carrier proves that the new value is just and reasonable. If the commission does not issue its ruling within 90 days, the revised recourse tariff filing shall be considered approved.

 (g) A person initiating a change in an existing recourse tariff bears the burden of proving the reasonableness of the change. The in-state natural gas pipeline carrier bears the burden of proving the recourse tariff terms and conditions are not unduly discriminatory.

 (h) An in-state natural gas pipeline carrier shall provide for separate rates for one or more classes of firm transportation service and for interruptible transportation service in a recourse tariff filed with the commission under (a) of this section. An in-state natural gas pipeline carrier may impose a reservation fee or similar charge for reservation of capacity in an in-state natural gas pipeline as a condition of providing firm transportation service, but may not impose a reservation fee or similar charge for reservation of capacity in an in-state natural gas pipeline for interruptible transportation service.




Sec. 42.08.370. Expansion; dispute resolution.
 (a) A contract entered into by an in-state natural gas pipeline carrier may provide for expansion unless the expansion would cause the pipeline to be a competing natural gas pipeline project for purposes of AS 43.90.

 (b) The recourse tariff or a contract filed by an in-state natural gas pipeline carrier may include a dispute resolution procedure. A dispute resolution procedure shall
     (1) provide that notice of a dispute be given to all shippers;

     (2) culminate in a process that is determined by an independent third party or panel; and

     (3) permit the participation of existing shippers and creditworthy potential shippers that have previously made good-faith requests for firm transportation service; a participant must satisfy the commission’s standard for intervention in an adjudicatory proceeding and demonstrate that the participant has a property, financial, or other significant interest in the dispute.




Sec. 42.08.380. Regulatory cost charge.
 (a) Each year, a person operating an in-state natural gas pipeline under this chapter shall pay to the commission a regulatory cost charge if the pipeline for which the charge is assessed is subject to this chapter and the commission has taken action on the pipeline or certificate under this chapter during the prior fiscal year. The amount of the regulatory cost charge may not exceed the sum of the following percentages of gross revenue derived from operations in the state:
     (1) 0.7 percent to fund the operations of the commission; and

     (2) 0.17 percent to fund operations of the public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) in the Department of Law.

 (b) The commission shall by regulation establish a method to determine annually the amount of the regulatory cost charge that will apply to a pipeline regulated under this chapter. If the amount the commission expects to collect under (a) of this section, AS 42.05.254(a), and AS 42.06.286(a) exceeds the authorized budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e), the commission shall, by order, reduce the percentage determined under a regulation adopted under this subsection so that the total amount of the fees collected approximately equals the authorized budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) for the fiscal year.

 (c) The commission shall administer the charge imposed under this section. The Department of Revenue shall collect and enforce the charge imposed under this section. The Department of Administration shall identify the amount of the operating budgets of the commission and the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) that lapses into the general fund each year. The legislature may appropriate an amount equal to the lapsed amount to the commission and to the Department of Law public advocacy function under AS 42.04.070(c) and AS 44.23.020(e) for operating costs for the next fiscal year. If the legislature does so, the commission shall reduce the total regulatory cost charge collected for that fiscal year by a comparable amount.

 (d) The commission may adopt regulations under AS 44.62 (Administrative Procedure Act) necessary to administer this section, including procedures and requirements for reporting information and a requirement for paying the regulatory cost charge in quarterly payments. The Department of Revenue may adopt regulations under AS 44.62 (Administrative Procedure Act) for investigating the accuracy of filed information and for collecting required payments.




Sec. 42.08.390. Effect of chapter on taxes and royalties.
Nothing in this chapter shall alter the calculation of a production tax under AS 43.55.011 — 43.55.180 or the calculation of a royalty due for a lease issued under AS 38.05.180.


Article 4. Public Records; Investigations.


Sec. 42.08.400. Public records.
 (a) Except as provided in (b) and (c) of this section or prohibited from disclosure under state or federal law, records in the possession of the commission are open to public inspection at reasonable times.

 (b) The commission may by regulation classify records received from an in-state natural gas pipeline carrier or in-state natural gas pipeline as privileged records that are not open to the public for inspection.

 (c) A record filed with the commission that is a precedent agreement between an in-state natural gas pipeline carrier and an unregulated entity is a privileged record that is not open to the public for inspection. For a record that relates to a precedent agreement, or is or relates to a contract other than a precedent agreement between an in-state natural gas pipeline carrier and an unregulated entity, if an in-state natural gas pipeline carrier identifies the provisions of the record that contain information that, if disclosed, could adversely affect the competitive position of the shipper or could cause commercial or competitive harm or damage if disclosed and the commission agrees, the information shall be treated by the commission as confidential.

 (d) A person may make written objection to the public disclosure of information contained in a record filed under this chapter or of information obtained by the commission or by the attorney general under this chapter, stating the grounds for the objection. When an objection is made, the commission shall order the information withheld from public disclosure if the information adversely affects the interest of the person making written objection and disclosure is not required in the interest of the public.

 (e) A commissioner may certify as to all official records of the commission under this section and may certify as to all official acts of the commission under this chapter.




Sec. 42.08.410. Investigations.
The commission may investigate any matter for which an investigation is authorized under this chapter. An investigation may be public, nonpublic, or both. In conducting an investigation, the commission may compel the attendance and testimony of witnesses and the production of records and testimony before the commission or its designee. In the course of an investigation, the commission may, subject to AS 44.23.020(e), exclude from attendance at the taking of investigative testimony all persons except a person compelled to attend, that person’s attorney, members of the commission or the commission’s staff, and a person authorized to transcribe the proceedings. In conducting an investigation related to a timely filed dispute, the commission shall issue a final order within 150 days after the date the formal complaint was filed with the commission, except for disputes related to open seasons, in which case, a final order must be issued within 60 days. If the commission has not acted within the applicable time period in this section, the dispute shall be considered to have been dismissed with prejudice.


Article 5. Accounts, Records, and Reports.


Sec. 42.08.440. Uniform system of accounts.
An in-state natural gas pipeline carrier operating under this chapter shall maintain its records and accounts in accordance with the uniform system of accounts for class A natural gas pipelines in 18 C.F.R. 201 (Federal Energy Regulatory Commission), as amended.


Sec. 42.08.450. Accounts; records; triennial reports.
 (a) To the extent necessary for the commission to perform the duties of the commission under this chapter,
     (1) the commission may by regulation require an in-state natural gas pipeline carrier or affiliated interest engaged in activities relating to pipelines to establish and maintain as part of its system of accounts continuing property records showing, as to property that is actually being used in pipeline activity in this state, the year of placement in service, original cost, and current location, and, as to a pipeline system, accounts and records in a manner showing, on a current basis, the original cost of the system in the state and related reserves for depreciation;

     (2) the in-state natural gas pipeline carrier shall
          (A) keep its accounts for its pipeline facilities located in this state separate from any accounts relating to any other business, including another pipeline facilities business or a subsidiary business, in which it engages, directly or indirectly; except as the commission provides, property, expense, or revenue used in or derived from the other business may not be considered in establishing the rates and charges of the facility;

          (B) keep books, accounts, papers, and records required by this chapter or by regulations adopted by the commission under this chapter in an office in this state and may not remove them from the state except upon written authority by the commission; and

          (C) file a report with the commission that contains an updated cost study and a calculation of the three-year average actual return on equity; the report shall be filed every three years after the pipeline begins operations, within 90 days after the close of the annual accounting period for the in-state natural gas pipeline carrier, or within additional time granted by the commission upon a showing of good cause.

 (b) The commission shall review the cost study described in (a)(2)(C) of this section and verify that, for the rate elements specified in AS 42.08.350(b), the carrier is using the same elements that were last approved by the commission. If the carrier does not use the correct rate elements in its triennial report, the commission may require the carrier to recalculate and file a corrected report. If, on the date the report described in (a)(2)(C) of this section is delivered, the report reflects that the three-year average actual return on equity exceeds the approved rate of return, the carrier shall, not later than 90 days after the date the report is delivered, deposit an amount equal to the excess in a segregated operating reserve fund. The carrier shall continue to deposit the excess described in this subsection at the times described in this subsection until the amount in the operating reserve fund is equal to 20 percent of the most recent three-year average of the carrier’s annual operating costs. The carrier may use money in the operating reserve fund to offset any shortage in the recovery of operating costs set out in another triennial report. If a deposit will cause the operating reserve fund to exceed 20 percent of the most recent three-year average of the carrier’s annual operating costs, the amount exceeding 20 percent must be used to reduce, on a volumetric basis, the firm transportation service rates for all shippers for the next three-year period.




Article 6. General Provisions.


Sec. 42.08.510. Designation of service agents.
An in-state natural gas pipeline carrier shall file with the commission a written appointment of a named permanent resident, which may be a corporation, of this state as its registered agent in this state on whom service of all notices, regulations, and requests of the commission may be made. The appointment shall specify the address in this state of the appointed agent. The address may be changed from time to time by filing a new address in the state with the commission. If an in-state natural gas pipeline carrier fails to appoint a registered agent, service of notices, regulations, and requests may be made by posting a copy in the main office of the commission and filing a copy in the office of the lieutenant governor.


Sec. 42.08.520. Effect of regulations.
Regulations adopted by the commission under this chapter have the effect of law.


Sec. 42.08.530. Judicial review and enforcement.
 (a) Except as provided in AS 38.35.200(c), a final order of the commission under this chapter is subject to judicial review under AS 44.62.560 and 44.62.570.

 (b) If an appeal is not taken from a final order of the commission within 10 calendar days after an investigation under AS 42.08.220(b)(3), the commission may apply to the superior court for enforcement of the order of the commission. The court shall enforce the order by injunction or other process.




Sec. 42.08.540. Joinder of actions.
Under the applicable court rules, appeals from orders of the commission and applications for enforcement of orders of the commission may be joined. The court may, in the interests of justice, separate the actions.


Sec. 42.08.900. Definitions.
In this chapter,
     (1) “affiliated” or “affiliated interest,” with respect to an in-state natural gas pipeline carrier, means any person that
          (A) is controlled or owned, in whole or in part, by the in-state natural gas pipeline carrier;

          (B) is controlled or owned, in whole or in part, by an entity that controls or owns, in whole or in part, the in-state natural gas pipeline carrier; or

          (C) controls or owns, in whole or in part, the in-state natural gas pipeline carrier;

     (2) “commission” means the Regulatory Commission of Alaska created under AS 42.04.010;

     (3) “commissioner” means a member of the commission;

     (4) “firm transportation service” means service by a natural gas pipeline carrier that is not subject to a prior claim by another shipper or another class of service; service constitutes “firm transportation service” if the service receives the same priority as any other class of firm transportation service;

     (5) “in-state natural gas pipeline” or “in-state natural gas pipeline facility” means a natural gas pipeline that transports or will transport natural gas in the state by way of contract carriage;

     (6) “in-state natural gas pipeline carrier” means the owner, including a corporation, company, or other entity organized under the laws of the United States or of any state, of an in-state natural gas pipeline or an interest in it, or a person, including a corporation, company, or other entity organized under the laws of the United States or of any state, that transports or will transport natural gas as a contract carrier;

     (7) “natural gas pipeline” has the meaning given in AS 31.25.390;

     (8) “precedent agreement” means a contractual commitment, including a presubscription agreement, to acquire firm transportation capacity, executed between an in-state natural gas pipeline carrier and another person, that establishes the rates, terms, and conditions for service;

     (9) “record” means a report, file, book, account, paper, or application and the facts and information contained in it.




Chapter 10. Alaska Motor Freight Carrier Act.

[Repealed, 1983 Initiative Proposal No. 2, § 6.]

Chapter 15. Bus Transportation.

[Repealed, § 29 ch 115 SLA 1980.]

Article 1. Ownership.


Chapter 20. Telegraph and Telephone Systems and Cable Lines; Eavesdropping.

Sec. 42.20.010. Establishment by foreigners prohibited.
Telegraph or cable lines owned or operated or controlled by persons not citizens of the United States, or by any foreign corporation or government, may not be established in or permitted to enter Alaska.


Article 2. Offenses Relating to Utilities.


Sec. 42.20.020. [Renumbered as AS 42.20.085.]
Sec. 42.20.030. Civil liability for taking utility service and for damages to or interference with a utility line.
 (a) A person is civilly liable to the utility whose property is damaged in a sum equal to three times the amount of the actual damages sustained and three times the value of the service taken if the person intentionally or in the exercise of gross negligence
     (1) damages a pole, tree, pipeline, or other object used in a utility line;

     (2) damages an insulator in use in the line or damages or removes from its insulator any wire used in a utility line;

     (3) damages the insulation of the line or interrupts the transmission of the service through it or damages the protective wrapping of a water, oil, or gas pipeline;

     (4) damages property or materials belonging to a utility;

     (5) interferes with the use of a utility line, or obstructs or postpones the transmission of service over a utility line;

     (6) procures or advises damage to any utility line;

     (7) interferes with or alters a meter or other device for the measuring of service from a utility; or

     (8) without the permission of the utility takes service from the utility or taps a wire or line used for the transmission of service or procures or advises this to be done.

 (b) A person is civilly liable to the utility whose property is negligently damaged under (a)(1), (2), (3), (4), or (5) of this section in a sum equal to the amount of the damages sustained.




Sec. 42.20.032. Presumption from use of nonmetered utility service.
It is presumed that a person intended to deprive a utility of compensation for service from the utility if
     (1) the person possesses or has access to a utility service metering device that is being used to meter utility service and has been interfered with, avoided, or altered to inhibit or prevent the accurate measurement of utility service without the permission of the utility or the person has access to a utility line that has been tapped without the permission of the utility; and

     (2) the person enjoys the use or receives the economic benefit of the unmetered utility service.




Sec. 42.20.035. Jurisdiction.
The district court has jurisdiction of civil actions filed under AS 42.20.030.


Sec. 42.20.038. Definitions.
In AS 42.20.030 — 42.20.038,
     (1) “service” means a commodity, product, use, facility, convenience, or other form of service that is offered and provided by a utility;

     (2) “utility” means an enterprise, whether publicly or privately owned or operated, that provides gas, electric, steam, water, sewer, or telecommunications service.




Sec. 42.20.040. Removal of instrument or meter or disconnecting of wire.
An agent or employee of a telephone or electric light company may not remove any instrument or meter or disconnect any wire connected to the instrument or meter without notifying the owner, agent, or tenant of the building or room where the instrument or meter is installed. A notice in writing of the intention to remove the instrument or meter or to disconnect a wire is sufficient if delivered to the owner, agent, or tenant of the building or room before removal or disconnection, or in case of the absence of the owner, agent, or tenant, either by depositing the notice in the post office with postage prepaid, or by posting in a conspicuous place upon the building or room 24 hours before removal or disconnection. An agent or employee of a telephone or electric light company may not enter a building or room to examine, remove, or disconnect an instrument or meter without first announcing the agent’s or employee’s presence to the occupant. A person violating this section is guilty of a misdemeanor, and upon conviction, is punishable by a fine of not more than $200, or by imprisonment for not more than 30 days, or by both.


Article 3. Offenses Relating to Telegraphs.


Sec. 42.20.050. Altering message; punishment.
 (a) A person is guilty of a misdemeanor and is punishable by a fine of not more than $1,000, or by imprisonment for not more than one year, or by both if the person wilfully alters a message by adding to it or omitting from it a word or figure so as to materially change the sense, purport, or meaning of the message, to the injury of the person sending or desiring to send it, or to whom it was directed.

 (b) When numerals or words of number occur in a message the operator or clerk sending or receiving may express them in words or figures, or in both words and figures, and this may not be considered an alteration of the message or to affect its genuineness, force, or validity.




Sec. 42.20.060. Sending or delivering false or forged message; punishment.
A person is guilty of a misdemeanor and is punishable by a fine of not more than $1,000, or by imprisonment for not more than one year, or by both if the person
     (1) knowingly and wilfully sends by telegraph a false or forged message;

     (2) wilfully delivers, or has delivered, a false or forged message, falsely purporting to have been received by telegraph; or

     (3) furnishes or conspires to furnish, or have furnished, to an agent, operator, or employee in a telegraph office, to be sent by telegraph, or to be delivered, a false or forged message, knowing that it is false or forged, with the intention to deceive, injure, or defraud any person.




Sec. 42.20.070. Punishment and civil liability for use by employee of information derived from message.
An agent, operator, or employee in a telegraph office who uses or appropriates information derived by that person from a private message passing through the person’s hands and addressed to another, or information acquired by reason of the person’s trust as agent, operator, or employee, or who trades or speculates upon this information, or who turns or attempts to turn it to personal account, profit, or advantage is guilty of a misdemeanor and is punishable by a fine of not more than $1000, or by imprisonment for not more than one year, or by both, and is liable in treble damages to the party aggrieved for loss or injury sustained.


Sec. 42.20.080. Delaying or refusing to send or deliver message; punishment.
 (a) An agent, operator, or employee in a telegraph office who unreasonably and wilfully refuses or neglects to send a message received at the office for transmission, or who unreasonably or wilfully postpones the message out of its order, or unreasonably and wilfully refuses or neglects to deliver a message received by telegraph is guilty of a misdemeanor and is punishable by a fine of not more than $500, or by imprisonment for not more than six months, or by both.

 (b) This section does not require a person to receive, transmit, or deliver a message unless the charges are paid, or to require the sending, receiving, or delivery of a message counseling, aiding, abetting, or encouraging treason against the government of the United States, or other resistance to the lawful authority, or a message calculated to further a fraudulent plan or purpose, or to instigate or encourage the perpetration of an unlawful act, or to facilitate the escape of a criminal or person accused of crime.




Sec. 42.20.085. Priority of official communications; penalty for refusal, delay, or alteration of transmission.
On application of an officer of the state in case of war, insurrection, riot, civil commotion, or resistance of public authority, for the prevention and punishment of crime, or for the arrest of persons suspected or charged with crime, a telegraph company shall give immediate dispatch to the communication of the officer at the price of ordinary communications of the same length. An officer, agent, operator, or employee of the company who refuses or wilfully omits to transmit the communication, or designedly alters it or falsifies it is, upon conviction, punishable by a fine of not more than $1000, or by imprisonment in jail for not more than one year, or by both.


Sec. 42.20.090. Punishment and civil liability for opening or obtaining message addressed to another.
A person not connected with a telegraph office who, without the authority or consent of the person to whom the message is directed, wilfully opens a sealed envelope enclosing a telegraph message, and addressed to another, with the purpose of learning the contents of the message, or who fraudulently represents another person, and thereby procures to receive a telegraph message addressed to another, with the intent to use, destroy, or detain it from the person entitled to receive the message, is guilty of a misdemeanor and is punishable by a fine of not more than $1000, or by imprisonment for not more than one year, or by both and is liable in damages to the party injured for all loss and damage sustained by reason of the wrongful act.


Sec. 42.20.100. Taking information from wire. [Repealed, § 3 ch 133 SLA 1966.]
Sec. 42.20.110. Bribing operator or employee to disclose private message; punishment.
A person who, by the payment or promise of a bribe, inducement, or reward, procures or attempts to procure a telegraph agent, operator, or employee to disclose a private message, or the contents, purport, substance, or meaning of a private message, or who offers to an agent, operator, or employee a bribe, compensation, or reward for the disclosure of private information received by reason of the position of trust as agent, operator, or employee, or who uses or attempts to use the information so obtained, is guilty of a misdemeanor and is punishable by a fine of not more than $1000, or by imprisonment for not more than one year, or by both.


Article 4. Emergency Calls on Party Lines.


Sec. 42.20.120. Refusal to yield to emergency calls; penalties.
A person who wilfully refuses to yield or surrender the use of a party line to another person for the purpose of permitting the other person to report a fire or summon police, medical, or other aid in case of emergency, is guilty of a misdemeanor and is punishable by a fine of not less than $50 nor more than $500, or by imprisonment for not more than 30 days, or by both.


Sec. 42.20.130. Pretext of emergency.
A person who asks for or requests the use of a party line on pretext that an emergency exists, knowing that no emergency in fact exists, is guilty of a misdemeanor and is punishable by a fine of not less than $50 nor more than $500 or by imprisonment for not more than 30 days, or by both.


Sec. 42.20.140. Publication in telephone directory.
Every telephone directory published for distribution to the members of the general public must contain a notice that explains AS 42.20.120 — 42.20.150. The notice must be printed in type that is no smaller than any other type on the same page and must be preceded by the word “warning.” This section does not apply to directories distributed solely for business advertising purposes, commonly known as classified directories.


Sec. 42.20.150. Definitions.
In AS 42.20.120 — 42.20.150,
     (1) “emergency” means a situation in which property or human life is in jeopardy and the prompt summoning of aid is essential;

     (2) “party line” means a subscriber’s line telephone circuit, consisting of two or more main telephone stations connected with it, each station with a distinctive ring or telephone number.




Article 5. Communications, Eavesdropping, and Wiretapping.


Sec. 42.20.300. Unauthorized publication or use of communications.
 (a) Except for a party to a private conversation, a person who receives or assists in receiving, or who transmits or assists in transmitting, a private communication may not divulge or publish the existence, contents, substance, purport, effect, or meaning of the communication, except through authorized channels of transmission or reception
     (1) to the addressee or the agent or attorney of the addressee;

     (2) to a person employed or authorized to forward a communication to its destination;

     (3) to proper accounting or distributing officers of the various communicating centers over which the communication may be passed;

     (4) to the master of a ship under whom the person is serving;

     (5) to another on demand of lawful authority; or

     (6) in response to a subpoena issued or order entered by a court of competent jurisdiction.

 (b) Except as provided in AS 12.37, a person not authorized by a party to the communication may not intentionally intercept a private communication or divulge or publish the existence, contents, substance, purport, effect, or meaning of the intercepted communication to any person.

 (c) A person who is not entitled to a communication but who has received the communication may not use it or any information contained in it for personal benefit or another’s benefit.

 (d) A person who has received a communication and who knows or reasonably should know that the communication and the information contained in it was obtained in violation of this section may not divulge or publish the existence, contents, substance, purport, effect, or meaning of the communication or any part of the communication.

 (e) A person who has become acquainted with a communication or the information contained in it, and who is not entitled to the communication, may not use the same for personal benefit or another’s benefit, or divulge or publish the existence, contents, substance, purport, effect, or meaning of the communication or any part of the communication.




Sec. 42.20.310. Eavesdropping.
 (a) A person may not
     (1) use an eavesdropping device to hear or record all or any part of an oral conversation without the consent of a party to the conversation;

     (2) use or divulge any information which the person knows or reasonably should know was obtained through the illegal use of an eavesdropping device for personal benefit or another’s benefit;

     (3) publish the existence, contents, substance, purport, effect, or meaning of any conversation the person has heard through the illegal use of an eavesdropping device;

     (4) divulge, or publish the existence, contents, substance, purport, effect, or meaning of any conversation the person has become acquainted with after the person knows or reasonably should know that the conversation and the information contained in the conversation was obtained through the illegal use of an eavesdropping device.

 (b) In this section “eavesdropping device” means any device capable of being used to hear or record oral conversation whether the conversation is conducted in person, by telephone, or by any other means; provided that this definition does not include devices used for the restoration of the deaf or hard-of-hearing to normal or partial hearing.




Sec. 42.20.320. Exemptions.
 (a) The following activities are exempt from the provisions of AS 42.20.300 and 42.20.310:
     (1) listening to a radio or wireless communications of any sort where the same are publicly made;

     (2) hearing conversation when heard by employees of a common carrier by wire incidental to the normal course of their employment in the operation, maintenance, or repair of the equipment of the common carrier by wire, provided the information obtained is not used or divulged in any manner by the hearer;

     (3) a broadcast by radio or other means whether it is a live broadcast or recorded for the purpose of later broadcasts of any function where the public is in attendance and the conversations that are overheard are incidental to the main purpose for which the broadcast is then being made;

     (4) recording or listening with the aid of any device to an emergency communication made in the normal course of operations by a federal, state, or local law enforcement agency or institutions dealing in emergency services, including hospitals, clinics, ambulance services, fire fighting agencies, a public utility emergency repair facility, civilian defense establishment, or military installations;

     (5) inadvertent interception of telephone conversations over party lines;

     (6) a peace officer, or a person acting at the direction or request of a peace officer, engaging in conduct authorized by or under AS 12.37;

     (7) interception, listening, or recording of communications by a peace officer, or a person acting under the direction or request of a peace officer, in an emergency where the communications are received from a device that intercepts the communications of a person
          (A) barricaded and not exiting or surrendering at the direction or request of a peace officer, in circumstances where there is an imminent risk of harm to life or property;

          (B) holding another person hostage; or

          (C) threatening the imminent illegal use of an explosive;

     (8) the interception by a peace officer of an oral communication by use of an electronic, mechanical, or other eavesdropping device that is concealed on or carried on the person of the peace officer and that transmits that oral communication by means of radio to a receiving unit that is monitored by other peace officers, if
          (A) the interception and monitoring occurs
               (i) during the investigation of a crime or the arrest of a person for a crime; and

               (ii) for the purpose of ensuring the safety of the peace officer conducting the investigation or making the arrest;

          (B) the peace officer who intercepts the oral communication is a party to the communication and has consented to the interception; and

          (C) the communication intercepted is not recorded;

     (9) interception of a private communication to which a minor is a party by a parent of the minor, except that interception of a private communication between a minor and the minor’s attorney or guardian ad litem or between a minor and a child-custody investigator is not exempt from the provisions of AS 42.20.300 and 42.20.310; evidence obtained under this paragraph may be
          (A) considered by a guardian ad litem or a child custody investigator only if the guardian ad litem or child custody investigator determines that consideration of the evidence is in the best interests of the minor;

          (B) admitted in a judicial proceeding, subject to the Alaska Rules of Evidence;

          (C) admitted in a judicial proceeding relating to the custody of a minor, subject to the Alaska Rules of Evidence and only if the court determines that admission of the evidence is in the best interests of the minor; or

          (D) admitted in an official proceeding that is not a judicial proceeding, subject to the rules of evidence governing the proceeding and only if the official presiding over the proceeding determines that admission of the evidence is in the best interests of the minor.

 (b) Notwithstanding any other provision of law, a person who inadvertently intercepts a private communication that appears to pertain to the commission of a crime may report the information to a law enforcement agency.

 (c) In this section, “explosive” has the meaning given in AS 11.81.900.




Sec. 42.20.325. Duty to report.
A person who is an employee of a communications common carrier or of an electronic communication service or of a private investigation agency, and has knowledge of the probable occurrence of conduct that violates a provision of AS 42.20.300 or 42.20.310 shall report the conduct, in writing, to the commissioner of public safety within 30 days after learning of the conduct.


Sec. 42.20.330. Penalty.
A person who violates any of the provisions of AS 42.20.300 and 42.20.310 is guilty of a class A misdemeanor.


Sec. 42.20.340. [Renumbered as AS 42.20.310(b).]
Sec. 42.20.390. Definitions.
In AS 42.20.300 — 42.20.390,
     (1) “communications common carrier” means a business or person engaged as a common carrier for hire in the transmission of communications by wire, cable, satellite, electromagnetic waves, or radio, not including radio broadcasting;

     (2) “contents” includes information obtained from a private communication concerning the existence, substance, purport, or meaning of the communication, or the identity of a party of the communication;

     (3) “eavesdropping device” means a device or apparatus, including an induction coil, that can be used to intercept an oral, wire, or electronic communication, other than
          (A) a hearing aid or similar device used for the restoration of subnormal hearing to not better than normal; or

          (B) a telephone or telegraph instrument, equipment, or facility, or any component of such an instrument, equipment, or facility
               (i) being used by a provider of wire or electronic communication service in the ordinary course of its business; or

               (ii) furnished to a subscriber or user by a provider of wire or electronic communication service in the ordinary course of its business and being used by the subscriber or user in the ordinary course of its business;

     (4) “electronic communication” means any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photo-optical system, including a cellular or cordless telephone communication, but does not include
          (A) wire or oral communications;

          (B) communications made through a tone-only paging device;

          (C) communications made through a tracking device consisting of an electronic or mechanical device that permits the tracking of the movement of a person or object; or

          (D) communications that are disseminated by the sender with the intent or expectation, or through a method of transmission that is so configured, that the communication is readily accessible to the general public;

     (5) “electronic communication service” means a service that provides to users of the service the ability to send or receive wire or electronic communications;

     (6) “employee” includes a person who is an officer, agent, or employee of, or a person under contract with, a business or a government entity;

     (7) “intercept” means the aural or other acquisition of the contents of an oral, wire, or electronic communication through the use of any electronic, mechanical, or other device, including the acquisition of the contents by simultaneous transmission or by recording;

     (8) “minor” means a child under 18 years of age who has not had the disabilities of a minor removed as described in AS 09.55.590;

     (9) “oral communication” means human speech used to communicate information from one party to another;

     (10) “parent” means a natural person who is the minor’s natural or adoptive parent, or who has been legally appointed as the minor’s guardian, with parental rights that are not terminated by court order and who is not prohibited by court order from communicating with the minor, or a stepparent as defined in AS 25.23.240 who is not prohibited by court order from communicating with the minor;

     (11) “private communication” means an oral, wire, or electronic communication uttered or transmitted by a person who has a reasonable expectation that the communication is not subject to interception;

     (12) “wire communication” means human speech used to communicate information from one party to another in whole or in part through the use of facilities for the transmission of communications by wire, cable, or other similar connection between the point of origin and the point of reception furnished or operated by a telephone, telegraph, or radio company for hire as a communications common carrier, but does not include the radio portion of a cordless telephone communication that is transmitted between the cordless telephone handset and the base unit.




Chapter 25. Alaska Ferry Transportation Act.

[Repealed, § 29 ch 115 SLA 1980.]

Article 1. Rights and Obligations of Public Utilities Operating in Cities.


Chapter 30. Miscellaneous Regulations Governing Public Utilities and Carriers.

Sec. 42.30.010. Use of streets and public places.
A person may not use the streets, alleys, or other public places of a city for public service except under AS 42.30.010 — 42.30.050. AS 42.30.010 — 42.30.050 do not apply to or affect a franchise granted before August 2, 1923, and may not be construed to legalize a franchise claimed to have been granted by a city.


Sec. 42.30.020. Duty to serve without discrimination and adopt regulations.
 (a) Every person operating a public service plant or undertaking wholly or partially in a city for the furnishing of telephone service, water, power, lighterage, wharfage, dockage, storage, heat or light or kindred public service shall serve everybody alike without discrimination, and without denial, except for good and sufficient cause. Every person undertaking to supply this public service shall adopt reasonable rules and regulations for the conduct of the business and the operation of the public service plant. The rules and rates of charges for service shall be given fair and reasonable publicity.

 (b) A person operating a public service plant may not furnish the service cheaper than at rates lawfully established by charter, city ordinance, or otherwise, or grant or give a rebate from any sum due, owing, or earned for the service.

 (c) A person violating this section is guilty of a misdemeanor, and upon conviction is punishable by a fine of not more than $1000, or by imprisonment for not more than 90 days, or by both.




Sec. 42.30.030. Books of account.
Every person installing, operating, or maintaining a public service plant for the purpose of supplying the city or the inhabitants of the city with telephone service, water, power, lighterage, wharfage, dockage, storage, heat or light, or rendering other kindred public service shall keep correct books of account in permanent convenient form showing in detail the volume of business done, the character of the business done, the quantity and kind of service rendered, rates charged, and all expenses incurred in connection with the operation of the enterprise, showing the items of expense in detail. The books shall be open to inspection by the mayor and the city council and by an accredited agent, auditor or representative appointed by the mayor and city council.


Sec. 42.30.040. Annual statement.
 (a) During April of each year, each person engaged in furnishing a public service, except a rural electrification or telephone cooperative or nonprofit association receiving financial assistance from the federal government under the Rural Electrification Act, shall file with the city council a written statement under oath, sworn to by the person having the management and control of the business or other person familiar with all the facts. The statement must contain a detailed list of all property used in connection with the enterprise and give the valuation of each piece of property listed. It must also contain a statement of the receipts and disbursements during the year, and the profits or losses. The statement of disbursements must show to whom each item was paid and what for. The statement shall be for the calendar year preceding and shall be for the use of the city council.

 (b) The city council is not bound by the statement but may inquire into its truth.




Sec. 42.30.050. Penalty for failure to file annual report.
A person, firm, or corporation operating a public service plant or public utility, who wilfully fails, refuses, or neglects to file the report required by AS 42.30.040 within the time specified is guilty of a misdemeanor, and upon conviction is punishable by a fine of not more than $1,000.


Article 2. Transportation of Explosives.


Sec. 42.30.060. Prohibition of explosives on vessels or vehicles carrying passengers.
A person may not transport, carry, or convey dynamite, gunpowder, nitroglycerine, naphtha, benzine, gasoline, crude or refined petroleum, or similar explosive burning fluid, or similar dangerous article on a vessel or vehicle operating in the state, or on the waters of the state, when the vessel or vehicle is carrying passengers for hire. Refined petroleum may be carried on a vessel or vehicle if it is put in good iron-bound casks, barrels, or boxes, in metallic cans, or vessels carefully packed in boxes and if it will not ignite at a temperature of less than 110 degrees Fahrenheit. Each cask, barrel, or box shall be plainly marked upon its head with the name of the manufacturer, the name of the article, and the temperature at which it will ignite. The empty containers in which the refined oil is carried may be returned to the place of shipment by the vessel or vehicle which transported it.


Sec. 42.30.070. Marking packages containing explosives.
The contents of every package containing an explosive or other dangerous article when presented to the master, conductor, or proprietor of a vessel or vehicle for shipment shall be plainly marked on the outside. A person may not deliver, or have delivered, to a vessel or vehicle engaged in commerce by land or water in the state, or carry upon the vessel or vehicle, an explosive or other dangerous article under false or deceptive marking, description, invoice, shipping order, or other declaration, or without informing the agent of the carrier of its character at or before the time delivery or carriage is made.


Sec. 42.30.080. Penalty for violation.
A person who knowingly violates AS 42.30.060 or 42.30.070 is guilty of a misdemeanor, and is punishable by a fine of not more than $2,000, or by imprisonment for not more than 18 months, or by both.


Sec. 42.30.090. Penalty for violation causing death or injury.
When death or bodily injury is caused by the explosion of an article referred to in AS 42.30.060 — 42.30.100 while it is being placed on a vessel or vehicle for transportation in violation of AS 42.30.060 — 42.30.100, or while it is being transported or removed from a vessel or vehicle, the person knowingly placing, or aiding, or permitting the placing of the article upon the vessel or vehicle, upon conviction, is punishable by imprisonment for not less than one year nor more than 10 years.


Sec. 42.30.100. Transportation of motor fuel not prohibited.
Nothing in AS 42.30.060 — 42.30.090 prohibits the transportation of gasoline or petroleum products on a motorboat or vessel for use as a source of motive power on the motorboat or vessel.


Article 3. Safety Regulations Governing Transportation of Passengers in Vehicles.


Sec. 42.30.110. Escape doorway.
A person engaged in business in the state as a common carrier may not use in the transportation of passengers on land a bus or other closed vehicle unless it has at least one escape doorway other than at the main entrance. The escape door shall be located at the rear of the vehicle or on the side opposite the regular entrance, and shall be kept and maintained in working order and free of obstacles without locks at all times when passengers are being carried. AS 42.30.110 — 42.30.140 do not apply to vehicles now in use in the state on March 14, 1949.


Sec. 42.30.120. Standing passengers.
Every passenger bus operating as a common carrier may transport standing passengers in numbers that do not endanger the safe operation of the bus. A passenger bus operating as a common carrier on a route exceeding 15 miles from the center of a municipality may not carry standing passengers greater than 25 percent of the rated seating capacity of the bus.


Sec. 42.30.130. Enforcement.
The Department of Public Safety and every peace officer and municipal law enforcement agency shall enforce AS 42.30.110 — 42.30.140.


Sec. 42.30.140. Penalties.
A person who violates AS 42.30.110 — 42.30.140, upon conviction, is punishable for each offense by a fine of not more than $300.


Article 4. Injury to Livestock by Railroads.


Sec. 42.30.150. Liability of railroad for injury to or death of livestock.
A person or the lessee or agent of a person owning or operating a railroad in the state is liable for the value of or injury to a horse, mule, colt, cow, bull, calf, hog, sheep, or other domesticated animal killed or injured upon or near an unfenced track of a railroad in the state, whenever the death or injury is caused by a moving train, engine, or car upon a track.


Sec. 42.30.160. When railroad track considered fenced.
A railroad track is not fenced within the meaning of AS 42.30.150 — 42.30.190 unless the track is guarded against the entrance of the livestock on either side and not more than 100 feet distant from the track by a fence constructed as required by law. Complete natural defenses against the entrance of stock, such as natural walls or deep ditches, are lawful fences within the meaning of AS 42.30.150 — 42.30.190 when they form, in connection with other legal fences, a continuous guard and defense against the entrance of livestock upon the track.


Sec. 42.30.170. Notice and filing of killing or injury.
Whenever livestock mentioned in AS 42.30.150 is killed or injured upon an unfenced railroad track, the person owning or operating the railroad, or that person’s lessee or agent, or an authorized agent or employee, shall immediately have a notice of killing or injury filed by filing a concise description of the animal killed or injured, including brand, earmark, or other marks of ownership with the railroad agents at the two extremities of the section on which the killing or injury took place. If the animal is injured, the notice must describe the nature of the injury. The description shall be open to inspection at all reasonable hours of each week day for one month after the killing or injury.


Sec. 42.30.180. Penalty for failure to file notice.
A person who neglects or fails to file or have filed the notice provided for in AS 42.30.170 is guilty of a misdemeanor and upon conviction is punishable by a fine of not more than $200 for each offense.


Sec. 42.30.190. Action for killing or injury.
In an action for the recovery of the value of livestock referred to in AS 42.30.150, proof of death or injury is conclusive evidence of negligence upon the part of the person or the person’s lessee or agent owning or operating the railroad. Contributory negligence on the part of the plaintiff in the action is a defense. However, allowing stock to run at large upon common unfenced range or upon enclosed land owned or in possession of the owner is not contributory negligence. Proof of wilful intent on the part of the plaintiff to procure the death or injury of stock defeats the recovery of damages for death or injury.


Article 5. Responsibilities of Air Carriers.


Secs. 42.30.200 — 42.30.380. Responsibilities of Air Carriers. [Repealed, E.O. No. 98, § 16 (1997). For current law, see AS 02.40.]

Article 6. Locating Underground Facilities.


Sec. 42.30.400. Excavator’s notice of proposed excavation.
 (a) Before beginning an excavation, an excavator shall give notice of the proposed excavation to each underground facility operator who has an underground facility in the area of the proposed excavation and request the operator to field mark the location of its underground facility. The excavator shall notify an underground facility operator who subscribes to a notification center by giving notice to the center. The excavator shall notify an underground facility operator listed in the applicable telephone directory who is not a subscriber to a notification center by giving notice directly to the operator.

 (b) Except in the case of an emergency locate request or a request to locate in a remote, unstaffed, or inaccessible location, the excavator shall notify an underground facility operator who may have a facility in the area of a proposed excavation at least two but not more than 15 working days before the date scheduled for beginning the excavation. In the case of a request to locate in a remote or unstaffed location, the excavator shall notify the operator at least 10 but not more than 20 working days before the scheduled date for beginning excavation.

 (c) In an emergency, the excavator shall immediately notify each underground facility operator in the area of the emergency and of the need for the excavation and request prompt location of underground facilities.




Sec. 42.30.410. Operator’s response to request to locate; immunity related to unmarked or inaccurately marked facilities.
 (a) An underground facility operator shall accept requests to locate underground facilities during the operator’s regular business hours. An operator who receives a request to locate shall maintain for at least one year an accurate record of the request and responses to the request.

 (b) When an underground facility operator receives a request to locate, it shall notify the excavator of the location of the underground facilities that the operator is able to field mark with reasonable accuracy and field mark those facilities. If the operator owns, uses, or operates an underground facility that is identified as being in the area of the proposed excavation but that the operator cannot field mark with reasonable accuracy, the operator shall provide the excavator with the best information available to the operator about its location and shall provide on-site assistance until the facility is located or until the excavator no longer needs assistance in locating that facility.

 (c) The field marks for an underground facility buried 10 feet deep or less must be located within 24 horizontal inches of the outside dimensions of the facility. For a facility buried deeper than 10 feet, the operator shall locate the field marks within 30 horizontal inches of the outside dimensions of the facility. The operator shall use stakes, paint, or other clearly identifiable material to show the field location of the underground facility. The marker used to designate the approximate location of an underground facility must follow the current color code standard used by the American Public Works Association.

 (d) Except for an underground facility in a remote, unstaffed, or inaccessible location, an underground facility operator shall respond to a request to locate promptly. A response is considered to be prompt if it is made within two working days after the operator receives the request or at a later time so long as the response occurs before the beginning of the excavation. For an underground facility in an accessible remote or unstaffed location, the operator shall respond within 10 working days after the operator receives the request or at a later time so long as the response occurs before the beginning of excavation.

 (e) After an operator has field marked an underground facility, the excavator is responsible for maintaining the markings.

 (f) An excavator may not begin to excavate until each underground facility has been field marked.

 (g) When an operator has field marked an underground facility once at the request of an excavator, the operator has the right to receive compensation from the excavator for costs incurred in responding to subsequent requests to locate the same underground facility during the same excavation project if the excavator failed to maintain the original marking.

 (h) If an excavator discovers an underground facility that was not field marked or was inaccurately field marked, the excavator shall immediately stop excavating in the vicinity of the facility and shall notify the operator of the discovery. The excavator may notify the operator by means of a notification center. The operator shall treat the notification as a request to locate in an emergency and shall respond accordingly. An excavator may not be held liable for inadvertent damage caused to an unmarked or an inaccurately marked underground facility.

 (i) Unless the request to locate is made in response to an emergency, an underground facility operator has the right to receive compensation for costs incurred in responding to a request to locate that gives the operator less notice than the minimum notice required by this section. This subsection may not be interpreted to require the operator to respond to the request to locate within the time requested in the notice.




Sec. 42.30.420. Responsibility of construction project owners.
The owner of a construction project that will require excavation shall indicate in bid documents or contracts for construction the existence of underground facilities that the project owner knows are located inside of the proposed area of excavation. This requirement does not release the excavator from the excavator’s responsibility under AS 42.30.400 — 42.30.490.


Sec. 42.30.430. Obligations concerning the conduct of excavations.
 (a) An excavator shall use reasonable care to avoid damaging an underground facility. The excavator shall
     (1) determine, without damage to the facility, the precise location of an underground facility whose location has been marked;

     (2) plan the excavation to avoid damage to and minimize interference with an underground facility in or near the excavation area; and

     (3) to the extent necessary to protect a facility from damage, provide support for an underground facility in and near the construction area during the excavation.

 (b) An excavator who, in the course of excavation, contacts or damages an underground facility shall notify the operator. If the damage causes an emergency, the excavator shall also alert appropriate local public safety agencies and take reasonable steps to ensure public safety. A damaged underground facility may not be reburied until it is repaired or relocated to the satisfaction of the operator. The operator of an underground facility that was damaged during excavation shall arrange for repair or relocation of the facility as soon as practical.




Sec. 42.30.440. Penalties; injunctive relief.
 (a) In addition to all other remedies provided by law, a person who violates a provision of AS 42.30.400 — 42.30.490 is subject to a civil penalty of not less than $50 nor more than $1,000 for each offense if the violation results in or significantly contributes to damage to an underground facility.

 (b) If the court finds that an excavator is violating or threatening to violate a provision of AS 42.30.400 — 42.30.490 and the violation may result in damage to an underground facility, the court may grant injunctive relief to the underground facility operator.




Sec. 42.30.450. Waiver of requirements by written agreement.
An operator and an excavator may, by written agreement, waive the requirements of AS 42.30.400 — 42.30.490 that the excavator notify the operator of planned excavations and that the operator locate underground facilities. The agreement must identify the geographic areas to which the waiver applies and the time period for which the waiver is valid.


Sec. 42.30.460. Underground facility owner.
If the operator of an underground facility is not the owner of the facility and if the operator cannot be identified or has been identified but cannot be reached in a reasonable amount of time, the excavator may give the notice required by AS 42.30.400 — 42.30.490 to the owner of the underground facility and the owner shall assume the duties and responsibilities of the operator under AS 42.30.400 — 42.30.490.


Sec. 42.30.490. Definitions.
In AS 42.30.400 — 42.30.490,
     (1) “damage” means
          (A) the substantial weakening of structural or lateral support of an underground facility;

          (B) penetration, impairment, or destruction of any underground protective coating, housing, or other protective device; and

          (C) the partial or complete severance of an underground facility to the extent that the project owner or facility operator determines that repairs are required;

     (2) “emergency” means
          (A) a condition that constitutes a clear and present danger to life, health, or property; or

          (B) an unplanned service interruption;

     (3) “excavation” means
          (A) an activity in which earth, rock, or other material on or below the ground is moved or otherwise displaced by any means;

          (B) road maintenance that changes the original road grade;

          (C) demolition or movement of earth by equipment, tools, or explosive device except tilling of the soil less than 12 inches in depth for agricultural purposes;

     (4) “excavator” means a person who conducts excavation in the state;

     (5) “inaccessible” means impossible or unreasonably difficult to reach due to conditions beyond the control of the underground facility operator;

     (6) “notification center” or “center” means a service through which a person is able to call one number to notify member operators of underground facilities that an excavation is proposed and to request the operators to mark facilities located inside of the proposed excavation area;

     (7) “operator” means a person who supplies a service for commercial or public use by means of an underground facility;

     (8) “person” means any individual, public or private corporation, political subdivision, government agency, municipality, industry, partnership, copartnership, association, firm, trust, estate, or any other entity whatsoever;

     (9) “remote” means not accessible by road;

     (10) “underground facility” means a pipe, sewer, conduit, cable, valve, line, or wire, including attachments and those parts of poles or anchors that are below ground, for use in connection with the storage or conveyance of water, sewage, telecommunications, cable television, electricity, petroleum, petroleum products, hazardous liquids, or flammable, toxic, or corrosive gas;

     (11) “unstaffed” means not normally staffed with employees;

     (12) “working day” means a day on which an underground facility operator is open for regular business.




Chapter 35. Public Utility Districts.

[Repealed, § 72 ch 69 SLA 1970.]

Article 1. Establishment and Organization.


Chapter 40. Alaska Railroad Corporation.

Sec. 42.40.010. Establishment of the corporation.
There is established the Alaska Railroad Corporation. The corporation is a public corporation and is an instrumentality of the state within the Department of Commerce, Community, and Economic Development. The corporation has a legal existence independent of and separate from the state. The continued operation of the Alaska Railroad by the corporation as provided in this chapter is considered an essential government function of the state.


Sec. 42.40.020. Board of directors.
 (a) The powers of the corporation are vested in the board of directors. The board consists of the commissioner of commerce, community, and economic development, the commissioner of transportation and public facilities, and five members appointed by the governor. The five appointed members must be registered voters in the state except as provided in (1) and (2) of this subsection. Except for the commissioners and the member appointed under (5) of this subsection, a member may not be a state officer or employee. Appointed members shall have the following qualifications:
     (1) one member of the board shall be a person who has at least 10 years of experience in railroad management; a person who is not a resident of the state may be appointed under this paragraph;

     (2) one member of the board shall be or have been an executive official of a United States railroad and shall be selected in accordance with any requirements imposed under 49 U.S.C. (Interstate Commerce Act); a person who is not a resident of the state may be appointed under this paragraph;

     (3) at least one member shall be from each judicial district directly served by the Alaska Railroad;

     (4) one member shall have at least five years experience as an owner or manager of a business in the state;

     (5) one member shall be an employee who is a member of a bargaining unit representing employees of the corporation.

 (b) Except for the commissioners, the members of the board shall be confirmed by a majority of the members of the legislature in joint session. A member appointed by the governor has the full powers and responsibilities of a confirmed board member until the member is rejected by the legislature or the legislature adjourns without confirming the member.




Sec. 42.40.030. Term of office.
Except for the commissioner of commerce, community, and economic development and the commissioner of transportation and public facilities, members of the board serve for staggered terms of five years each at the pleasure of the governor.


Sec. 42.40.040. Vacancies.
 (a) Except for the commissioner of commerce, community, and economic development and the commissioner of transportation and public facilities, a vacancy on the board is filled by appointment by the governor, and the appointment must be confirmed by the members of the legislature in joint session. Except as provided in AS 39.05.080(4), a member appointed to fill a vacancy holds office for the balance of the term for which the member’s predecessor was appointed.

 (b) A vacancy on the board does not impair the authority of a quorum of members to exercise the powers and perform the duties of the board.

 (c) A member of the board whose term has expired shall serve until a successor has been appointed.




Sec. 42.40.050. Compensation and expenses.
 (a) An appointed member of the board is entitled to compensation at a rate of $400 for each day the member is engaged in the actual performance of duties as a member of the board. The board may provide by rule for compensation for partial days during which an appointed member is engaged in actual performance of duties as a member of the board.

 (b) In addition to compensation under (a) of this section, an appointed member of the board is entitled to per diem and travel expenses authorized by law for state boards and commissions.




Sec. 42.40.060. Board officers.
 (a) The board shall elect from its membership a chairman and vice-chairman and prescribe their duties by rule.

 (b) The board shall appoint a secretary and prescribe the duties of the secretary.




Article 2. Management.


Sec. 42.40.100. Management by the board.
The board is responsible for the management of the corporation but shall delegate certain powers and duties to the chief executive officer in accordance with AS 42.40.120. In managing the corporation, the board shall
     (1) be responsible for the management of the financial and legal obligations of the Alaska Railroad;

     (2) operate the Alaska Railroad as a common carrier subject to the jurisdiction of the United States Surface Transportation Board consistent with 45 U.S.C. 1207;

     (3) generally manage the corporation on a self-sustaining basis;

     (4) apply to the legislature for an appropriation with the concurrence of the governor to be used to provide a particular service that is not otherwise self-sustaining if a subsidy is required to maintain that service;

     (5) provide for safe, efficient, and economical transportation to meet the overall needs of the state;

     (6) raise needed capital by issuing bonds of the corporation upon approval by the legislature while ensuring that borrowing by the corporation does not directly or indirectly endanger the state’s own borrowing capacity;

     (7) review all state and other land disposal proposals to aid in planning for future development or expansion of transportation services;

     (8) ensure that the procurement procedures of the corporation meet accepted railroad industry standards;

     (9) ensure that the accounting procedures of the corporation meet generally accepted accounting principles consistent with industry standards for comparable railroads.




Sec. 42.40.110. Executive officers.
 (a) The board shall appoint the chief executive officer of the corporation who serves at the pleasure of the board. The board shall fix compensation for the chief executive officer.

 (b) The chief executive officer of the corporation shall appoint and fix the compensation for other executive officers. The compensation for an executive officer appointed under this subsection is subject to board approval.




Sec. 42.40.120. Delegation.
 (a) The board shall by rule delegate to the chief executive officer powers and duties necessary or appropriate for the management of the daily affairs and operations of the corporation. The board may by rule require the exercise of a delegated power or duty to be subject to board approval.

 (b) Within 60 days after its first meeting, the board shall delegate the following activities of the corporation to the chief executive officer or other executive officers designated by the board:
     (1) leasing subject to AS 42.40.285 and 42.40.350(b) and (d), granting easements in, issuing permits for the use of, or conveying other interests in property that do not constitute a transfer of the corporation’s entire interest in land;

     (2) establishing specific rates, tariffs, divisions, and contract rate agreements;

     (3) making routine changes in service levels;

     (4) establishing procurement and accounting procedures for the corporation; and

     (5) performing procurement activities.

 (c) Notwithstanding (a) and (b) of this section, specific board approval is required for the following:
     (1) issuing bonds upon approval by the legislature;

     (2) mortgaging or pledging corporation assets;

     (3) donating property or other assets belonging to the corporation;

     (4) acting as a surety or guarantor;

     (5) adopting a long-range capital improvement and program plan;

     (6) adopting annual reports;

     (7) effecting general, comprehensive increases and decreases in rates;

     (8) expanding or reducing services in a major way;

     (9) expanding the main or branch rail lines including spur, industrial, team, switching, or side tracks, other than performing routine track alignment as necessary to maintain existing service levels;

     (10) selecting independent auditors and accountants;

     (11) entering into collective bargaining agreements;

     (12) adopting annual budgets;

     (13) beginning a capital project with an estimated completion cost of more than $500,000 or an estimated completion time of more than one year;

     (14) exchanging, donating, selling, or otherwise conveying its entire interest in land subject to approval by the legislature;

     (15) exercising the power of eminent domain.




Article 3. Administrative Provisions.


Sec. 42.40.150. Meetings of the board.
 (a) The chairman of the board shall call meetings of the board at least once every three months. The chairman or a majority of the members of the board may call other meetings of the board as necessary. The chairman shall preside at meetings.

 (b) Except for executive sessions, the meetings of the board are public. The board shall provide by rule for a method of providing reasonable notice to the public of its meetings.

 (c) The board shall keep minutes of each meeting.




Sec. 42.40.160. Quorum and voting.
 (a) Four voting members of the board constitute a quorum for the transaction of business.

 (b) Four affirmative votes are required for board action. The board shall provide by rule for the manner of voting, except that the board may not provide for voting by proxy. The rules may provide for voting and conferring by telecommunication devices.




Sec. 42.40.170. Executive sessions.
 (a) The question of holding an executive session shall be determined in accordance with AS 42.40.160. A subject may not be considered at an executive session unless it is mentioned in the motion calling for the executive session or is auxiliary to a subject mentioned. An action may not be taken at an executive session.

 (b) Only the following subjects may be discussed in an executive session:
     (1) matters, the immediate knowledge of which would clearly have an adverse effect upon the finances of the corporation;

     (2) unless the person has requested to have the subjects discussed in public, subjects that tend to prejudice the reputation and character of a person;

     (3) matters that, by law or municipal charter or ordinance, are permitted to be kept confidential from public disclosure;

     (4) matters pertaining to personnel;

     (5) matters pertaining to the corporation’s legal position;

     (6) land acquisition or disposal; and

     (7) proprietary or other information of a type treated as confidential under the standards and practices of the United States Surface Transportation Board, including practices that protect information associated with specific shippers, divisions, and contract rate agreements.




Sec. 42.40.180. Rules.
 (a) The board shall adopt rules to carry out its functions and the purposes of this chapter, including rules to safeguard property owned, managed, or transported by the corporation and to protect employees and persons using the corporation’s property or services. At least 15 days before the adoption of a rule, the board shall give public notice of the proposed action by publishing a notice in at least three newspapers of general circulation in the state and by mailing a copy of the notice to each person who has requested notice of proposed changes to rules. The notice must state the time, place, and nature of the proceedings and must contain a summary of the subject of the proposed rule.

 (b) On the date and at the time and place designated in the notice required under (a) of this section the board shall provide each interested person an opportunity to present statements in writing concerning the proposed rule and shall give members of the public an opportunity to present oral statements for a total period of at least one hour.

 (c) The board shall consider all relevant matters presented to it before adopting a rule. The board may take action on a rule that varies in content from the summary provided with the notice of the proposed rule if the subject of the rule was reflected in the summary and it provided reasonable notice to the public as to whether their interests could be affected by the board’s action on that subject.

 (d) The board shall establish in the bylaws of the corporation additional procedures for adopting rules if necessary.




Sec. 42.40.190. Emergency rules.
 (a) The board shall establish in the bylaws of the corporation a procedure for the adoption of a rule on an emergency basis. An emergency rule may be adopted only when necessary for the orderly operation of the corporation’s facilities or programs. The requirements of AS 42.40.180 do not apply to actions taken under this section. However, within 10 days after the adoption of a rule on an emergency basis the board shall give notice of its action that substantially complies with the notice requirements of AS 42.40.180(a).

 (b) An action taken under this section remains in effect for not more than 120 days. To prevent an emergency rule from lapsing the board may adopt the same rule under AS 42.40.180 before the end of the 120-day period.




Sec. 42.40.200. Validity of rules.
 (a) Failure to mail notice to a person under AS 42.40.180(a) or 42.40.190(a) does not invalidate an action taken by the board.

 (b) An interested person may challenge a rule adopted by the board by bringing an action in the superior court. In addition to other grounds, a court may declare a change invalid
     (1) for substantial failure by the board to comply with AS 42.40.180 or 42.40.190; or

     (2) if the rule was adopted under AS 42.40.190, upon the grounds that the emergency rule was not necessary for the orderly operation of the corporation’s facilities or programs.




Sec. 42.40.205. Application of AS 42.40.180 and 42.40.190.
Adoption of a rule is not subject to AS 42.40.180 or 42.40.190 if it
     (1) relates only to the internal management of the corporation;

     (2) relates to specific rates, tariffs, divisions, and contract rate agreements;

     (3) relates to service schedules of the railroad;

     (4) is directed to a specifically named person or to a group of persons and does not apply to the general public; or

     (5) relates to the use of public works under the jurisdiction of the corporation if the effect of the order is indicated to the public by means of signs or signals.




Sec. 42.40.210. Previously adopted rules and orders.
The board may provide by resolution that rules and orders in effect on the date of transfer remain in effect until amended or repealed by the board. AS 42.40.180 does not apply to actions taken under this section.


Sec. 42.40.220. Public disclosure of information.
 (a) Except as provided under (b) of this section, information in the possession of the corporation is public and is open to public inspection at reasonable times.

 (b) The corporation may by rule designate and withhold public disclosure of matters of a privileged or proprietary nature. Those matters include personnel records, communications with and work product of legal counsel, and, consistent with the standards and practices of the United States Surface Transportation Board for the protection of these matters, other information including proprietary information associated with specific shippers, divisions, and contract rate agreements.




Sec. 42.40.230. Conflicts of interest. [Repealed, §§ 103, 198 ch 74 SLA 1998.]

Article 4. Powers and Duties.


Sec. 42.40.250. General powers.
In addition to the exercise of other powers authorized by law, the corporation may
     (1) adopt a seal;

     (2) adopt bylaws governing the business of the corporation;

     (3) sue and be sued;

     (4) appoint trustees and agents of the corporation and prescribe their powers and duties;

     (5) hire legal counsel to represent the corporation;

     (6) make contracts and execute instruments necessary or convenient in the exercise of its powers and duties;

     (7) acquire by purchase, lease, bequest, devise, gift, exchange, the satisfaction of debts, the foreclosure of mortgages, or otherwise, personal property, rights, rights-of-way, franchises, easements, and other interests in land, and acquire by appropriation water rights that are located in the state, taking title to the property in the name of the corporation;

     (8) hold, maintain, use, operate, improve, lease, exchange, donate, convey, alienate, encumber, or otherwise grant a security interest in, or authorize use or dispose of, land or personal property, subject to other provisions of this chapter;

     (9) contract with and accept transfers, gifts, grants, or loans of funds or property from the United States and the state or its political subdivisions, subject to other provisions of federal or state law or municipal ordinances;

     (10) undertake and provide for the management, operation, maintenance, use, and control of all of the property of the corporation, including all land and personal property of the Alaska Railroad transferred under 45 U.S.C. 1203(a) and described in the report dated July 14, 1983, as amended, submitted to Congress and the legislature under 45 U.S.C. 1204(a);

     (11) recommend to the legislature and the governor any tax, financing, or financial arrangement the corporation considers appropriate for expansion or extension and operation of the Alaska Railroad;

     (12) maintain offices and facilities at places it designates;

     (13) apply to the state, the United States, and foreign countries or other proper agencies for the permits, licenses, rights-of-way, or approvals necessary to construct, maintain, and operate transportation and related services, and obtain, hold, and reuse the licenses and permits in the same manner as other railroad operators;

     (14) prescribe rates to be charged for services provided by the Alaska Railroad consistent with 45 U.S.C. 1201 — 1214 (Alaska Railroad Transfer Act of 1982);

     (15) determine the routes, schedules, and types of service to be provided by the Alaska Railroad;

     (16) enter into contracts, leases, and other agreements with connecting carriers, shippers, and other persons concerning the services, activities, operations, property, and facilities of the corporation, including agreements that contain provisions to preserve and expand the railroad’s traffic base;

     (17) plan for and undertake expansion of the railroad and railroad activities, including extension of the rail system, and contract with other modes of transportation service connecting to the rail system;

     (18) hire and discharge railroad personnel and determine benefits and other terms and conditions of employment;

     (19) assume all rights, liabilities, and obligations of the Alaska Railroad in accordance with 45 U.S.C. 1201 — 1214 (Alaska Railroad Transfer Act of 1982);

     (20) maintain a security force to enforce municipal ordinances, state laws, and the corporation’s rules with respect to violations that occur on or to property owned, managed or transported by the corporation;

     (21) issue its bonds upon approval of the legislature and provide for and secure their payment, provide for the rights of their holders and hold or dispose of them;

     (22) purchase the corporation’s bonds at a price not more than the principal amount of them plus interest;

     (23) cancel bonds of the corporation purchased by the corporation;

     (24) secure the payment of its bonds by pledge, mortgage, or other lien on its contracts, revenues, income, or property;

     (25) consent to the modification of the rate of interest, time of payment of an installment of principal or interest, or other term of a loan, contract, or agreement to which the corporation is a party;

     (26) borrow money, including the amounts necessary to establish reasonable reserves, and pay financing charges and interest on bonds for a reasonable period after which the corporation estimates other money will be available to pay the interest, consultant, advisory, and legal fees, and other expenses necessary or incident to borrowing;

     (27) acquire, hold, and dispose of stocks, memberships, contracts, bonds, general or limited partnership interests or other interests in another corporation, association, partnership, joint venture, or other legal entity, and exercise the powers or rights in connection with these interests that are provided in contracts or agreements and that are allowed by law concerning the satisfaction of debts;

     (28) undertake and provide for the acquisition, construction, maintenance, equipping, and operation of connecting, switching, terminal, or other railroads and railroad facilities;

     (29) enter into agreements with a state agency or other instrumentality of the state;

     (30) do all things necessary or desirable to carry out the powers and duties of the corporation granted or necessarily implied in this chapter or other laws of the state or the laws or regulations of the federal government.

     (31) [Renumbered as AS 42.40.560.]




Sec. 42.40.260. Annual report.
 (a) Within 90 days following the end of the fiscal year of the Alaska Railroad, the board shall present to the governor a report describing the operations and financial condition of the corporation during the preceding fiscal year. The report may include suggestions for legislation relating to the structure, powers, or duties of the corporation or to the operation or facilities of the corporation. Subject to AS 42.40.220, the report shall itemize the cost of providing each category of service offered by the railroad and the income generated by each category. The board shall notify the legislature that the report is available.

 (b) The annual report must include an analysis of potential sale arrangements whereby the corporation may be transferred into private ownership.

 (c) As part of complying with its annual reporting requirements under this section, the board shall file a travel and compensation report with the Department of Administration by January 21 of each year as required by AS 37.05.210.




Sec. 42.40.270. Audits.
 (a) The board shall have the financial records of the corporation audited annually by an independent certified public accountant experienced in railroad accounting. The board shall have an annual performance audit conducted by a recognized railroad management expert to assure that the railroad is being managed and operated effectively and efficiently in accordance with the requirements of this chapter and that each appropriation is used to directly support those services for which the appropriation was requested. Auditors shall use the standards required under AS 42.40.100(9) and determine whether appropriations received for a service that is not self-sustaining were calculated in accordance with United States Surface Transportation Board standards for determining rail service subsidies.

 (b) The corporation shall make all of its financial records available to an auditor appointed by the governor and to the legislative audit division for examination. Disclosure to the public by the auditor or legislative audit division of this information is subject to AS 42.40.220 and rules implementing that section.




Sec. 42.40.280. State oversight reports.
 (a) The board shall provide a state oversight report to the governor and the legislature before undertaking
     (1) expansion, reduction, or diversification of services provided by the railroad upon the date of transfer or as provided under this chapter that the board determines would represent a significant and permanent change in the level and nature of services provided; or

     (2) an application for an appropriation to be used for providing any service that is not self-sustaining.

 (b) The report under (a) of this section shall be in writing, describe the proposed undertaking in detail, and specify
     (1) its financial impact on the corporation;

     (2) its impact on the level and nature of services provided by the corporation;

     (3) the reasons the action is necessary or desirable to achieve the purposes of this chapter;

     (4) whether and when the undertaking or service is expected to be self-sustaining financially; and

     (5) if the undertaking requires an appropriation to be used for providing a service that is not self-sustaining, that the amount of the appropriation has been strictly calculated in accordance with United States Surface Transportation Board standards for determining rail service subsidies.




Sec. 42.40.285. Legislative approval required.
Unless the legislature approves the action by law, the corporation may not
     (1) exchange, donate, sell, or otherwise convey its entire interest in land;

     (2) issue bonds;

     (3) extend railroad lines; this paragraph does not apply to a spur, industrial, team, switching, or side track;

     (4) lease land for a period in excess of 95 years unless the corporation reserves the right to terminate the lease if the land is needed for railroad purposes;

     (5) apply for or accept a grant of federal land within a municipality; before approving an action under this paragraph, the legislature must determine that the federal land is required for essential railroad purposes; this paragraph does not apply to the application for or acceptance of a grant of federal land associated with
          (A) the Anchorage-Wasilla line change project on Elmendorf Air Force Base and Fort Richardson;

          (B) the Fairbanks intermodal rail yard expansion project;

          (C) a conveyance of rail properties of the Alaska Railroad under the original Alaska Railroad Transfer Act of 1982 as set out in Title VI, P.L. 97-468; in this subparagraph, “rail properties of the Alaska Railroad” has the meaning given in 45 U.S.C. 1202(10).




Sec. 42.40.290. Long-range capital improvement and program plan.
 (a) The corporation shall prepare and the board shall adopt a long-range capital improvement and program plan. The plan must explain the manner in which the corporation intends to accomplish the purposes of this chapter and the corporation’s anticipated capital improvements during each of the five years after the plan is adopted.

 (b) The board shall annually review and approve revisions to the long-range capital improvement and program plan. The board shall provide copies of the updated plan to the governor and the legislature by December 1 of each year.




Sec. 42.40.300. Use of corporation assets.
The corporation shall apply all money, property, other assets, and credit of the corporation toward activities authorized by this chapter. The corporation may not issue shares of stock, pay dividends, make private distributions of assets, make loans to board members or employees, or engage in business for private benefit. The use of money, property, another asset, or credit of the corporation for a purpose not authorized by law by a person having the possession or control of it is prohibited.


Sec. 42.40.310. Indemnification.
 (a) The corporation may defend and indemnify a current or former member of the board, employee, or agent of the corporation against all costs, expenses, judgments, and liabilities, including attorney’s fees, incurred by or imposed upon that person in connection with a civil or criminal action in which the person is involved by affiliation with the corporation, if the person acted in good faith on behalf of the corporation and within the scope of official duties or powers.

 (b) The corporation may purchase insurance to protect and hold personally harmless its employees, agents, and board members from an action, claim, or proceeding arising out of the performance, purported performance, or failure of performance, in good faith, of duties for, or employment with, the corporation and to hold them harmless from expenses connected with the defense, settlement, or monetary judgments from that action, claim, or proceeding. The purchase of insurance is discretionary with the board and insurance is not considered to be compensation to the insured person.




Article 5. Corporation Property.


Sec. 42.40.350. Land.
 (a) The corporation shall receive from the United States and, in its own name, take title to all rail property transferred under 45 U.S.C. 1201 — 1214 (Alaska Railroad Transfer Act of 1982). All land that is transferred or acquired by the corporation is designated as follows:
     (1) railroad rights-of-way are railroad utility corridors;

     (2) land outside railroad utility corridors is rail land.

 (b) Railroad utility corridors shall be of a width at least 100 feet on both sides of the centerline of the extended main or branch line, unless the corporation does not own or control sufficient land to allow a corridor of that width. Railroad utility corridors may be surveyed by the metes and bounds method. The corporation may not convey its entire interest in land within a utility corridor except as provided in AS 42.40.285, 42.40.370(d) and 42.40.400. However, the corporation may lease, subject to AS 42.40.285 and (d) of this section, grant easements in or permits for, or otherwise authorize use of portions of a utility corridor for transportation, communication, and transmission purposes and support functions associated with those purposes, and for commercial and other uses authorized under this chapter if the use does not restrict other parallel uses of the utility corridor.

 (c) The corporation may lease, subject to AS 42.40.285 and (d) of this section, grant easements in or permits for, or otherwise authorize use of portions of rail land. However, the corporation may not convey its entire interest in rail land except as provided in AS 42.40.285, 42.40.352, 42.40.370(d), and 42.40.400.

 (d) A lease or disposal of land approved by the legislature under AS 42.40.285 by the corporation to a party other than the state shall be made at fair market value as determined by a qualified appraiser or by competitive bid.




Sec. 42.40.352. Sale of land not necessary for railroad purposes.
 (a) The corporation may sell land if the board finds (1) the land is not necessary for railroad purposes, and (2) the sale of the land is in the best interest of the state. The sale of land is subject to the terms and conditions of AS 42.40.285, 42.40.350(d), and this section.

 (b) Before offering land for sale under this section, the corporation shall
     (1) publish public notice of the proposed sale that includes the finding by the board that the land is not necessary for railroad purposes and that the sale is in the best interest of the state;

     (2) provide notice to persons having a leasehold interest in the land proposed to be sold and offer the leaseholders the right of first refusal; and

     (3) receive legislative approval under AS 42.40.285.

 (c) The corporation shall separately account for the proceeds from the sale of land under this section and shall report the earnings and balance in the account in the annual report required by AS 42.40.260. Money in the account may be appropriated in accordance with 45 U.S.C. 1207(a)(5) (Alaska Railroad Transfer Act of 1982).




Sec. 42.40.355. Prohibition.
Notwithstanding any other provision in this chapter, the state-owned railroad as defined under 45 U.S.C. 1202(14) may not apply for a right-of-way across, or exercise eminent domain in, the western (Kobuk River) unit of the Gates of the Arctic National Preserve under 16 U.S.C. 410hh(4)(b)-(e).


Sec. 42.40.360. Request for land.
 (a) The board may nominate federal land it determines may be useful for present or future railroad purposes for selection under the Alaska Statehood Act (P.L. 85 — 508, 72 Stat. 339), as amended, and request the commissioner of natural resources to select the land for the state through the federal land selection process.

 (b) The board may identify and request the commissioner of natural resources to convey land necessary or useful for present or future railroad purposes owned by or tentatively approved for transfer to the state, including land not contiguous with a railroad utility corridor or rail land. The request must include a statement of and justification for the present or future railroad use. Upon receipt of a request, the commissioner shall temporarily reserve the land identified in the request for railroad purposes and defer disposal or lease of that land under other laws to a party other than the corporation. The temporary reservation of land is subject to valid existing rights and remains in effect for 180 days.




Sec. 42.40.370. Conveyance of land.
 (a) Within 90 days after receiving a request under AS 42.40.360(b) the commissioner of natural resources shall by written decision
     (1) designate the identified land for railroad purposes and, subject to valid existing rights, convey the state’s interests in the land to the corporation;

     (2) notify the corporation of reasons for refusal to designate the identified land for railroad purposes; or

     (3) approve the request in part and deny it in part and convey as appropriate.

 (b) A conveyance of land under this section may be for less than its appraised value as determined by the commissioner of natural resources.

 (c) In the absence of a reservation to the contrary, a conveyance of land under this section vests in the corporation ownership, control of the surface, material and mineral estate, including the right to extract or use timber and other construction materials, sand, gravel, rock, and the right to tunnel, ditch, recontour, excavate, or otherwise use the land for railroad, transportation, transmission, communication, and related purposes.

 (d) The corporation may reconvey to the state land received under this section that the corporation and the commissioner of natural resources jointly identify as unnecessary or unsuitable for the corporation’s purposes.




Sec. 42.40.380. Use of state land.
When emergency conditions require that track or other right-of-way fixtures of the corporation be moved from the existing location and relocated on state land adjacent to or in the vicinity of the existing right-of-way and the chief executive officer determines that relocation is necessary to maintain safe and adequate rail operations, the corporation may effect the relocation and notify the Department of Natural Resources. The relocation must affect only the amount of state land necessary to adequately restore or continue safe rail operations at a normal level.


Sec. 42.40.385. Eminent domain.
 (a) The corporation may exercise the power of eminent domain under AS 09.55.240 — 09.55.460 to acquire land for railroad transportation purposes consistent with this chapter. Notwithstanding AS 09.55.250, the corporation may acquire a fee simple title whenever, in the judgment of the board, ownership of a fee simple title is necessary to carry out the purposes of this chapter.

 (b) The corporation may file a declaration of taking in the manner provided for the state under AS 09.55.420.

 (c) The power of eminent domain conferred under this section includes the power to obtain clay, gravel, sand, timber, rock, or other material for the operation of the railroad, the land necessary to obtain the material, and access to the land and material.

 (d) The exercise of the power of eminent domain requires the prior approval of the governor.




Sec. 42.40.390. Land use rules.
The board may adopt exclusive rules governing land use by parties having interests in or permits for land owned or managed by the corporation. The power conferred by this section is exercised for the common health, safety, and welfare of the public and to the extent constitutionally permissible, may not be limited by the terms and conditions of leases, contracts, or other transactions.


Sec. 42.40.400. Vacation of easements.
The corporation may vacate an easement acquired under this chapter by executing and filing a deed in the appropriate recording district. If the easement was acquired by the corporation under 45 U.S.C. 1201 — 1214 (Alaska Railroad Transfer Act of 1982), the state shall acquire the easement for use in conformity with those laws.


Sec. 42.40.410. Federal land.
Except as provided in AS 42.40.285(5), the corporation may submit applications on its own behalf as an instrumentality of the state for acquisition of federal land available under federal law that will enhance the operations of the corporation if it is available under a federal law other than the Alaska Statehood Act of 1958 (P.L. 85 — 508, 72 Stat. 339), as amended. The corporation may receive in its own name conveyances of all interests in federal land.


Sec. 42.40.420. Public use of railroad land.
Upon request of a municipality or the state, the corporation may authorize use of railroad land for public purposes. Subject to AS 42.40.350(b), the corporation shall authorize a walkway or a trail if the board first finds in writing that the proposed walkway or trail will not create a safety hazard and will not unreasonably interfere with continued or expanded operations in the utility corridor. Before authorizing a use under this section, the board shall require the municipality or state to execute an agreement in a form approved by the board to
     (1) agree to restrictions, limitations, and conditions on the proposed use required by the corporation and reasonably calculated to reduce the risk of a safety hazard or interference with authorized uses in the utility corridor;

     (2) hold the corporation harmless from and indemnify the corporation for liability and claims arising from any use authorized under this section including
          (A) defending the corporation in a cause of action brought against the corporation as a result of the use; and

          (B) indemnifying the corporation for the amount of a judgment, including prejudgment and postjudgment interest, rendered against the corporation, and for all costs and attorney’s fees incurred by the corporation in settling or defending the claim; and

     (3) stop the use upon request of the corporation if the use interferes with expansion or replacement of railroad facilities, creates a safety hazard, or interferes with railroad operations.




Sec. 42.40.430. Acquisition of government property.
The corporation, as an instrumentality of the state, may acquire in its own name from the United States under 40 U.S.C. 101 et seq. or other law, property under the control of a federal department or agency that is useful for the corporation’s purposes. The corporation may acquire from the Department of Administration property of the state made available under AS 44.68.110 — 44.68.140.


Sec. 42.40.435. Exchange of land.
The corporation may exchange land subject to AS 42.40.285. The corporation is an instrumentality and agency of the state for purposes of exchanging land with the United States, municipalities, corporations including corporations formed under 43 U.S.C. 1601 — 1628 (Alaska Native Claims Settlement Act), and individuals.


Sec. 42.40.440. Use of pesticides and herbicides.
Vegetation control involving the use of pesticides or herbicides on land owned or managed by the corporation may be conducted only in compliance with state requirements applicable to other state pesticide or herbicide use.


Sec. 42.40.450. Adverse possession.
No prescription or statute of limitations runs against the title or interest of the corporation to or in land owned by the corporation or under its jurisdiction. Title to or interest in land owned by the corporation or under its jurisdiction may not be acquired by adverse possession or prescription, or in any other manner except by conveyance from or formal vacation by the corporation.


Sec. 42.40.460. Extension of the Alaska Railroad.
 (a) The corporation may delineate a proposed transportation corridor between the existing railroad utility corridor of the Alaska Railroad and the border of Alaska and Canada. The transportation corridor shall be 500 feet wide except where, in the corporation’s discretion, physical obstacles or private land ownership patterns make a narrower transportation corridor appropriate. The transportation corridor may be designated for a use identified under AS 38.35.020(a) or AS 42.40.350(b), and, subject to this section, other transportation and utility uses. The corporation may also identify land for use as rail land that can be developed for terminal, station, and maintenance facilities, switching yards, and other purposes associated with the transportation corridor. The corporation shall prepare a complete legal description of the proposed transportation corridor and the rail land identified under this subsection.

 (b) In performing the work authorized by (a) of this section, the corporation, in consultation with interested parties, shall consider the following factors:
     (1) safety;

     (2) grade and alignment standards that are commensurate with rail and utility construction standards and that minimize the prospect of at-grade railroad and highway crossings;

     (3) availability of construction materials;

     (4) effects on and service to adjacent communities and potential intermodal transportation connections;

     (5) environmental concerns;

     (6) use of public land to the maximum degree possible;

     (7) minimization of probable construction costs;

     (8) the location of and the opportunity to obtain access to identified natural resources that could contribute significantly to the economic development of the state and Canada;

     (9) avoidance of possibly unstable ground due to thawing of frozen soils; and

     (10) prior and established traditional uses.

 (c) If the corporation identifies all or a portion of the proposed transportation corridor or associated rail land and if the Department of Natural Resources, after consultation with the corporation and potentially affected parties, finds that the location of the proposed transportation corridor and associated rail land minimizes adverse effects on existing and potential rights-of-way and land uses associated with the location, construction, and operation of a gas pipeline in a manner that is in the best interest of the state,
     (1) the Department of Natural Resources shall reserve the transportation corridor and associated rail land across state land identified by the corporation, subject to valid existing rights and provisions of this section;

     (2) the department shall continue to manage the land reserved under (1) of this subsection; the department shall consult with the corporation before disposing of an interest in land within the transportation corridor and associated rail land; the department shall condition authorizations for activities on the reserved land to protect the right of the corporation to construct the railroad or other uses identified for the land;

     (3) the department and the corporation shall cooperate to identify, on a continuing basis and to the extent practicable, the potential crossings for economic development and public access along the land reserved for the transportation corridor and associated rail land; and

     (4) while the land is reserved for the transportation corridor and associated rail land under this subsection, the department may retain money received from disposal or third-party use of the land.

 (d) If the corporation notifies the Department of Natural Resources that the corporation will begin construction of a railroad improvement on a segment of the transportation corridor or associated rail land and the corporation has identified a source of funding for the construction, then, as of the beginning of construction of that segment, the department shall delegate authority to manage land within that segment of the transportation corridor and associated rail land to the corporation, including the authority to authorize or permit use of the land by third parties under the provisions of this chapter, subject to
     (1) valid existing rights; and

     (2) the authority of the department
          (A) to identify and reserve rights-of-way for potential future crossings under (g) of this section; and

          (B) after consultation with the corporation, to identify, reserve, authorize, and manage land within the transportation corridor and associated rail land for future right-of-way leases and uses under AS 38.35.

 (e) Upon completion of construction of the railroad improvement on all or a portion of the reserved transportation corridor or associated rail land,
     (1) the corporation shall, without cost to the Department of Natural Resources, provide the department with a survey of the state land within a 200-foot corridor, 100 feet on each side of the as-built centerline of track, and the associated rail land;

     (2) the Department of Natural Resources shall convey the state’s entire interest in the land within the boundaries of the survey to the corporation, subject to valid existing rights, and reserving to the state (A) the interests required by AS 38.05.125; (B) the right of the department to identify and reserve rights-of-way for potential future crossings under (g) of this section; and (C) the authority of the department to identify, reserve, authorize, and manage land within the transportation corridor and associated rail land for future right-of-way leases and uses under AS 38.35; the conveyance of land under this paragraph shall be without cost to the corporation except for the direct administrative costs of the department;

     (3) the Department of Natural Resources shall assign any existing contracts within that segment of the transportation corridor and associated rail land to the corporation; the corporation may thereafter retain the revenue from the conveyed land; the department shall prorate revenue from contracts affecting both conveyed and unconveyed land;

     (4) the remaining state land in a segment of the transportation corridor in which the corporation has received a conveyance under this section shall be managed by the Department of Natural Resources as a transportation corridor unless the department determines the land is no longer needed for that purpose; and

     (5) the remaining segments of the transportation corridor in which the corporation has not completed construction and any associated state land designated as rail land shall continue to be managed by the Department of Natural Resources as a transportation corridor and associated rail land under (c) and (d) of this section.

 (f) Notwithstanding other provisions of this section, before the Department of Natural Resources grants a gas pipeline right-of-way lease under AS 38.35.020(a) across a transportation corridor or associated rail land delineated, identified, reserved, or conveyed under this section, the department shall consult with the corporation; if a railroad improvement has not been constructed on a segment of the transportation corridor or associated rail land that is crossed by the proposed gas pipeline right-of-way, the department may adjust the location of the transportation corridor or associated rail land if the department finds that relocation of the transportation corridor or associated rail land to accommodate the proposed gas pipeline right-of-way is in the best interest of the state.

 (g) In delegating management authority over or conveying all or a portion of state land to the corporation, the Department of Natural Resources shall reserve the right to authorize, by lease, permit, or other method, a person to cross or construct access across the transportation corridor and associated rail land; however, before authorizing a crossing or construction of access, the department shall obtain concurrence from the corporation that the proposed crossing or construction is consistent with applicable safety standards and, to the extent practical, minimizes effects on railroad operating efficiency. Neither the corporation nor the state is liable for claims arising from public use of the transportation corridor and associated rail land, except to the extent the claims arise from the gross negligence of the state, the corporation, their employees, or their contractors, respectively. The department shall indemnify the corporation consistent with AS 42.40.420(1) — (3) for claims or related litigation arising from an authorization issued by the department under this section, except to the extent the claims arise from the gross negligence of the corporation, its employees, or its contractors.

 (h) The corporation shall,
     (1) as the corporation considers appropriate, exercise its authority under this chapter to acquire rights-of-way across land within the transportation corridor and associated rail land that is subject to the corporation’s power of eminent domain;

     (2) upon delineation of the transportation corridor and identification of associated rail land, expeditiously work with federal officials to secure reclassification and withdrawal of federal land for reservations and rights-of-way across the federal land for use as transportation corridor and rail land; and

     (3) before undertaking acquisition of federal land, prepare a report evaluating the effects of construction of an extension of the Alaska Railroad across federal land; the statement must satisfy the requirements for an environmental impact statement under 42 U.S.C. 4332.

 (i) The requirements of AS 38.04.065 and 38.05.300, relating to classification and reclassification of land, are inapplicable to actions taken by the Department of Natural Resources under this section.

 (j) The Department of Natural Resources shall retain the classifications and reservations of land identified for use as a proposed utility corridor and railroad right-of-way under former AS 19.05.122 until the corporation informs the department in writing that the land is not needed by the corporation for a utility corridor. If, under (a) of this section, the corporation includes land identified under former AS 19.05.122 as part of the proposed transportation corridor, the department shall manage that land under provisions of this section.

 (k) To complete the work authorized by this section, the corporation may enter into agreements relating to the work with the federal government, an agency or instrumentality of the state, a municipality, or a private organization.




Sec. 42.40.465. Extension of the Alaska Railroad to connect with the North American railroad system.
 (a) The corporation may investigate extension of the Alaska Railroad from the border of Alaska and Canada to connect with the North American railroad system. The corporation may acquire land or interests in land in Canada as the corporation considers appropriate for the development, construction, and operation of an extension of the Alaska Railroad to connect with the North American railroad system.

 (b) In performing the work authorized by (a) of this section, the corporation shall consider the following factors:
     (1) safety;

     (2) grade and alignment standards that are commensurate with rail and utility construction standards and that minimize the prospect of at-grade railroad and highway crossings;

     (3) availability of construction materials;

     (4) effects on and service to adjacent communities and potential intermodal transportation connections;

     (5) environmental concerns;

     (6) use of public land to the maximum degree possible;

     (7) minimization of probable construction costs;

     (8) the location of and the opportunity to obtain access to identified natural resources that could contribute significantly to the economic development of the state and Canada;

     (9) avoidance of possibly unstable ground due to thawing of frozen soils; and

     (10) prior and established traditional uses.




Article 6. Financial Provisions.


Sec. 42.40.500. Limitation of liability.
A liability incurred by the corporation shall be satisfied exclusively from the assets or revenue of the corporation and no creditor or other person has a right of action against the state because of a debt, obligation, or liability of the corporation.


Sec. 42.40.510. Fidelity bond.
The corporation shall obtain a fidelity bond in an amount determined by the board for board members and each executive officer responsible for accounts and finances. A bond must be in effect during the entire tenure in office of the bonded person.


Sec. 42.40.520. Insurance.
Except as provided in AS 42.40.310(b), the corporation shall protect its assets, services, and employees by purchasing insurance or providing for certain self-insurance retentions. The corporation shall also maintain casualty, property, business interruption, marine, boiler and machinery, pollution liability, and other insurance in amounts reasonably calculated to cover potential claims against the corporation or state for bodily injury, death or disability and property damage that may arise from or be related to corporation operations and activities.


Sec. 42.40.530. Revenue.
Revenue generated by or appropriated to the corporation shall be retained and managed by the corporation for railroad and related purposes in accordance with 45 U.S.C. 1207(a)(5) (Alaska Railroad Transfer Act of 1982).


Sec. 42.40.540. Appropriations.
The corporation may request, with the concurrence of the governor, a direct appropriation or grant from the legislature to assist in carrying out the provisions of this chapter.


Article 7. Specific Projects.


Sec. 42.40.550. Extension of railroad to Fort Greely.
The corporation may acquire a transportation corridor between the existing railroad corridor and Fort Greely, Alaska, and construct a rail line within the corridor to provide rail service to the Fort Greely area and points between. The transportation corridor may be designated for a use identified under AS 42.40.350(b) and other transportation and utility uses. The corporation may also acquire land along the corridor for use as rail land that can be developed for terminal, station, and maintenance facilities, switching yards, and any other purposes associated with the railroad utility corridor. The corporation may provide financing for the acquisition, construction, improvement, maintenance, equipping, and operation of the rail line and related facilities between the existing railroad corridor and Fort Greely, Alaska.


Sec. 42.40.560. North Slope natural gas pipeline.
The corporation may provide financing for the acquisition, construction, improvement, maintenance, equipping, and operation of a natural gas pipeline and related facilities for the transportation of natural gas recovered from the North Slope of this state without regard to whether the facilities are or will be owned in whole or in part by the corporation or located on land owned by the corporation.


Sec. 42.40.570. Kenai gasification project.
 (a) The corporation may participate in a project consisting of the acquisition, construction, improvement, maintenance, equipping, and operation of real and personal property, including facilities and equipment for the transportation of coal from Healy to the northern Kenai Peninsula, and facilities and equipment for coal gasification and electrical power generation adjacent to the Agrium fertilizer plants in the northern Kenai Peninsula.

 (b) The corporation may participate in a project consisting of the acquisition, construction, improvement, maintenance, equipping, and operation of real and personal property, including facilities and equipment, for the transportation of coal by rail from Healy to Port MacKenzie and thereafter by barge to the northern Kenai Peninsula.

 (c) The corporation may finance all or a portion of the projects described in (a) and (b) of this section through the issuance of its bonds.




Article 8. Bonds.


Sec. 42.40.600. General provisions.
 (a) Upon receiving legislative approval under AS 42.40.285 the corporation may issue bonds by resolution to provide money to carry out its purposes.

 (b) Bonds may be issued in one or more series and shall, as provided by the resolution of the board,
     (1) be dated;

     (2) bear fixed or variable interest at a specified rate or rates per year or within a maximum rate;

     (3) be in a specified denomination;

     (4) be in a coupon or registered form;

     (5) carry conversion or registration provisions;

     (6) have a specified rank or priority;

     (7) be executed in the specified manner and form;

     (8) be payable as specified from the sources, in the medium of payment, and place or places inside or outside the state;

     (9) be subject to authentication by a trustee or fiscal agent; and

     (10) be subject to terms of redemption with or without premium.

 (c) Bonds may be sold in the manner, on the terms, and at the price the board determines. Notes shall mature at the time or times determined by the board. Except for bond anticipation notes, notes, or other obligations, bonds shall mature at the time, not exceeding 50 years from their date, determined by the board.




Sec. 42.40.610. Negotiable instruments.
Bonds issued under this chapter and interest coupons attached to them are negotiable instruments under the laws of this state, subject only to applicable provisions for registration.


Sec. 42.40.620. Bonds eligible for investment.
Bonds issued under 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 bonds may be deposited with a state or municipal officer of an agency or political subdivision of the state for any purpose for which the deposit of bonds of the state is authorized by law.


Sec. 42.40.630. Payment of bonds.
 (a) The principal and interest on bonds of the corporation is payable from corporation money or assets. Bonds may be additionally secured by a pledge of a grant or contribution from the federal or state government, a municipality, a corporation, an association, an institution, or a person, or a pledge of money, income, or revenue of the corporation from any source.

 (b) Before issuing bonds to provide the financing described in AS 42.40.560 for a facility to be owned in whole or in part by an entity other than the corporation, the corporation shall enter into a contract, lease, or other form of agreement that will, in the judgment of the corporation, provide sufficient consideration to
     (1) pay the principal of and interest on the bonds as they become due;

     (2) create and maintain the reserves for the bond payments that the corporation considers necessary or desirable; and

     (3) pay all costs necessary to service or additionally secure the bonds, including trustee’s fees and bond insurance premiums, unless these costs are to be paid by a party other than the corporation.

 (c) Before issuing bonds to provide the financing described in AS 42.40.570 for real or personal property to be owned in whole or in part by an entity other than the corporation, the corporation shall enter into one or more contracts, leases, or other forms of agreement that will, in the judgment of the corporation, provide sufficient consideration to
     (1) pay the principal of and interest on the bonds as they become due;

     (2) create and maintain any reserves for the bond payments that the corporation considers necessary or desirable; and

     (3) pay all costs necessary to issue, service, or additionally secure the bonds, including trustee’s fees and bond insurance premiums, unless these costs are to be paid from bond proceeds or by a party other than the corporation.




Sec. 42.40.640. Security for bonds.
In the discretion of the board, an issue of bonds may be secured by a trust indenture, which may be a trust company, bank or national banking association, with corporate trust powers, located inside or outside the state, or by a secured loan agreement or other instrument or under resolution giving powers to a corporate trustee by means of which the corporation may
     (1) make and enter into any and all the covenants and agreements with the trustees or the holders of the bonds that the corporation may determine to be necessary or desirable, including covenants, provisions, limitations, and agreements as to
          (A) the application, investment, deposit, use, and disposition of the proceeds of bonds of the corporation or of money or other property of the corporation or in which it has an interest;

          (B) the fixing and collection of rentals, charges, fees, or other consideration for, and the other terms to be incorporated in, contracts with respect to the use of any of the corporation’s property;

          (C) the fixing and collection of tariffs, fees, charges, or other consideration for the use or service of the Alaska Railroad by passengers, and other users and freight;

          (D) the terms and conditions upon which additional bonds of the corporation may be issued;

          (E) the vesting in the trustee of rights and remedies exercisable by the trustee for the protection of the holders of bonds of the corporation and not otherwise in violation of law and the restriction of the rights of an individual holder of bonds of the corporation;

     (2) pledge, mortgage, or assign money, leases, agreements, assets, or property of the corporation either presently in hand or to be received in the future, or both; and

     (3) provide for any other matters of like or different character that in any way affect the security or protection of the bonds.




Sec. 42.40.650. Independent financial advisor.
In negotiating the private or public sale of bonds to an underwriter, the board shall retain a financial advisor who is independent from the underwriter.


Sec. 42.40.660. Validity of signatures.
If an officer of the corporation whose signature or a facsimile of whose signature appears on bonds or coupons attached to them ceases to be an officer before the delivery of the bond or coupon, the signature or facsimile is valid the same as if the person had remained in office until delivery.


Sec. 42.40.670. Validity of pledge.
 (a) The pledge of assets or revenue of the corporation to the payment of the principal or interest on bonds of the corporation is valid and binding from the time the pledge is made and the assets or revenue are 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 of any kind against the corporation, irrespective of whether those parties have notice of the lien of the pledge.

 (b) Nothing in this section prohibits the corporation 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 bonds.




Sec. 42.40.675. Pledge of the state.
The state pledges to and agrees with the holders of bonds issued under this chapter and with the federal agency that loans or contributes funds in respect to a project, that the state will not limit or alter the rights and powers vested in the corporation by this chapter to fulfill the terms of a contract made by the corporation with the holders or federal agency, or in any way impair the rights and remedies of the holders until the bonds together with the interest on them with interest on unpaid installments of interest, and all costs and expenses in connection with an action or proceeding by or on behalf of the holders, are fully met and discharged. The corporation is authorized to include this pledge and agreement of the state, insofar as it refers to holders of bonds of the corporation, in a contract with the holders and insofar as it relates to a federal agency, in a contract with the federal agency.


Sec. 42.40.680. Remedies.
A holder of bonds issued under this chapter or of coupons attached to them, and a trustee under a trust agreement or resolution authorizing the issuance of the bonds, except as restricted by a trust agreement or resolution, either at law or in equity, may
     (1) enforce all rights granted under this chapter, the trust agreement or resolution, or any other contract executed by the corporation under this chapter; and

     (2) compel the performance of all duties of the corporation required by this chapter or by the trust agreement or resolution.




Sec. 42.40.690. Credit of state not pledged.
 (a) The state and its political subdivisions are not liable for the debts of the corporation. Bonds issued under this chapter are payable solely from the revenue or assets of the corporation and do not constitute a
     (1) debt, liability, or obligation of the state or of a political subdivision of the state; or

     (2) pledge of the faith and credit of the state or of a political subdivision of the state.

 (b) The corporation may not pledge the credit or the taxing power of the state or its political subdivisions. Each bond issued under this chapter shall contain on its face a statement that
     (1) the corporation is not obligated to pay it or the interest on it except from the revenue or assets pledged for it; and

     (2) neither the faith and credit nor the taxing power of the state or of a political subdivision of the state is pledged to the payment of it.




Sec. 42.40.695. Public purpose of bonds.
Bonds of the corporation issued to finance facilities described in AS 42.40.550 and 42.40.560 and bonds of the corporation issued to finance the acquisition, construction, improvement, maintenance, equipping, and operation of real and personal property, including facilities and equipment, described in AS 42.40.570 are issued by a public corporation and an instrumentality of the state for an essential public and governmental purpose.


Sec. 42.40.700. Limitation on personal liability.
A board member or employee of the corporation is not subject to personal liability or accountability because of the execution or issuance of bonds.


Article 9. Personnel and Labor Relations.


Sec. 42.40.705. Political activities.
 (a) Money, assets, or property of the corporation may not be used for political activities. However, board members and employees may communicate with and appear before committees of Congress, the state legislature, and municipal governing bodies in connection with matters directly affecting the corporation.

 (b) A board member or employee who violates the provisions of this section is personally subject to a civil penalty assessed by a judge of the superior court in an amount not to exceed $5,000. An action to enforce this section may be brought by any person.




Sec. 42.40.710. Corporation employees.
 (a) Employees of the Alaska Railroad are employees of the corporation and not of the state. However, employees of the corporation shall be treated as employees of the state for the purposes of AS 39.52. The provisions of AS 39, other than AS 39.52, do not apply to employees of the corporation.

 (b) Except as provided in this subsection, employees of the corporation are covered by AS 23.10.050 — 23.10.150 (Alaska Wage and Hour Act). If the terms of a collective bargaining agreement that was mutually agreed upon by an organization representing train or engine service employees and the corporation so provide, AS 23.10.050 — 23.10.150 do not apply to train or engine service employees to the extent set out in the collective bargaining agreement.




Sec. 42.40.720. Collective bargaining rights.
The provisions of AS 23.40.070 — 23.40.260 do not apply to the corporation or to its employees. However, employees who are not executive officers may organize and form, join, or assist an organization to engage in collective bargaining through representatives of their own choosing and engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.


Sec. 42.40.730. Railroad labor relations agency.
 (a) The Alaska labor relations agency, established in AS 23.05.360, is the sole railroad labor relations agency.

 (b) The Alaska labor relations agency shall carry out the provisions of AS 42.40.730 — 42.40.890.




Sec. 42.40.740. Collective bargaining unit.
The railroad labor relations agency shall decide in each case, in order to ensure employees the fullest freedom in exercising the rights guaranteed by AS 42.40.710 — 42.40.890 the unit appropriate for the purposes of collective bargaining, based on such factors as community of interest, wages, hours, and other working conditions of the employees involved, the history of collective bargaining, and the desires of the employees. Bargaining units shall be as large as is reasonable, and unnecessary fragmenting shall be avoided.


Sec. 42.40.750. Representatives and elections.
 (a) The railroad labor relations agency shall investigate a petition if it is submitted in a manner prescribed by the railroad labor relations agency by
     (1) an employee or group of employees or an organization acting in their behalf alleging that 30 percent of the employees of a proposed bargaining unit
          (A) want to be represented for collective bargaining by a labor or employee organization as exclusive representative; or

          (B) assert that the organization that has been certified or is currently being recognized by the corporation as bargaining representative is no longer the representative of the majority of employees in an appropriate unit; or

     (2) the corporation alleging that one or more organizations have presented to it a claim to be recognized as a representative of a majority of employees in an appropriate unit.

 (b) If the railroad labor relations agency has reasonable cause to believe that a question of representation exists, it shall provide for a hearing upon due notice. If the railroad labor relations agency finds that there is a question of representation, it shall direct an election by secret ballot to determine whether or by which organization the employees desire to be represented and shall certify the results of the election. Nothing in this subsection prohibits the waiving of hearings by stipulation for the purpose of a consent election in conformity with the regulations of the railroad labor relations agency or an election in a bargaining unit agreed upon by the parties.

 (c) The railroad labor relations agency shall determine who is eligible to vote in an election held under this section and shall adopt regulations governing the election. In an election in which none of the choices on the ballot receives a majority of the votes cast, a runoff election shall be conducted, the ballot providing for selection between the two choices receiving the largest number of valid votes cast in the election. If an organization receives the majority of the votes cast in the election, it shall be certified by the railroad labor relations agency as exclusive representative of all the employees in the bargaining unit. An election may not be held in a bargaining unit or in a subdivision of a bargaining unit if a valid election has been held within the preceding 12 months.

 (d) Nothing in this chapter prohibits recognition of an organization as the exclusive representative by the corporation by mutual consent.

 (e) An election may not be directed by the railroad labor relations agency in a bargaining unit in which there is in force a valid collective bargaining agreement, except during a 90-day period preceding the expiration date. However, a collective bargaining agreement may not bar an election upon petition of employees in the bargaining unit if
     (1) the petitioners are not parties to the agreements; and

     (2) more than three years have elapsed since the execution of the agreement or its last timely renewal, whichever was later.




Sec. 42.40.760. Unfair labor practices.
 (a) The corporation or its agent may not
     (1) interfere, restrain, or coerce an employee in the exercise of the rights guaranteed in AS 42.40.720;

     (2) dominate or interfere with the formation, existence, or administration of an organization;

     (3) discriminate in regard to hire or tenure of employment or a term or condition of employment to encourage or discourage membership in an organization;

     (4) discharge or discriminate against an employee because the employee has signed or filed an affidavit, petition, or complaint or given testimony under AS 42.40.710 — 42.40.890;

     (5) refuse to bargain collectively in good faith with an organization that is the exclusive representative of employees in an appropriate unit, including the discussing of grievances with the exclusive representative.

 (b) Nothing in AS 42.40.710 — 42.40.890 prohibits the corporation from making an agreement with an organization to require as a condition of employment
     (1) membership in the organization that represents the unit on or after the 30th day following the beginning of employment or on the effective date of the agreement, whichever is later; or

     (2) payment by the employee to the exclusive bargaining agent of a service fee to reimburse the exclusive bargaining agency for the expense of representing the members of the bargaining unit.

 (c) An organization or its agents may not
     (1) restrain or coerce
          (A) an employee in the exercise of the rights guaranteed in AS 42.40.720; or

          (B) the corporation in the selection of a representative for the purposes of collective bargaining or the adjustment of grievances;

     (2) refuse to bargain collectively in good faith with the corporation, if it has been designated in accordance with AS 42.40.710 — 42.40.890 as the exclusive representative of employees in an appropriate unit.




Sec. 42.40.770. Investigation and conciliation of complaints.
If a verified written complaint by or for a person claiming to be aggrieved by a practice prohibited by AS 42.40.760 or a written accusation that a person subject to AS 42.40.710 — 42.40.890 has engaged in a prohibited practice, is filed with the railroad labor relations agency, it shall investigate the complaint or accusation. If it determines after a preliminary investigation that probable cause exists in support of the complaint or accusation, it shall try to eliminate the prohibited practice by informal methods of conference, conciliation, and persuasion. Nothing said or done during this endeavor may be used as evidence in a subsequent proceeding.


Sec. 42.40.780. Complaint and accusation.
If the railroad labor relations agency fails to eliminate the prohibited practice by conciliation and to obtain voluntary compliance with AS 42.40.710 — 42.40.890 or before it attempts conciliation, it may serve a copy of the complaint or accusation upon the respondent. The complaint or accusation and the subsequent procedures shall be handled in accordance with the administrative adjudication portion of AS 44.62 (Administrative Procedure Act).


Sec. 42.40.790. Orders and decisions.
If the railroad labor relations agency finds that a person named in the written complaint or accusation has engaged in a prohibited practice, the railroad labor relations agency shall issue and serve on the person an order or decision requiring the person to cease and desist from the prohibited practice and to take affirmative action that will carry out the provisions of AS 42.40.710 — 42.40.890. If the railroad labor relations agency finds that a person named in the complaint or accusation has not engaged or is not engaging in a prohibited practice, the railroad labor relations agency shall state its findings of fact and issue an order dismissing the complaint or accusation.


Sec. 42.40.800. Enforcement by injunction.
The railroad labor relations agency may apply to the superior court in the judicial district in which the prohibited practice occurred for an order enjoining the prohibited acts specified in the order or decision of the railroad labor relations agency. Upon showing by the railroad labor relations agency that the person has engaged or is about to engage in the practice, an injunction, restraining order, or other order that is appropriate may be granted by the court and shall be without bond.


Sec. 42.40.810. Power to investigate and compel testimony.
 (a) For the purpose of the investigations, proceedings, or hearings that the railroad labor relations agency considers necessary to carry out AS 42.40.710 — 42.40.890, the railroad labor relations agency may issue subpoenas requiring the attendance and testimony of witnesses and the production of relevant evidence.

 (b) The railroad labor relations agency may administer oaths, examine witnesses, and receive evidence.

 (c) The attendance of witnesses and the production of evidence may be required from any place in the state at any designated place of hearing.

 (d) If a person refuses to obey a subpoena issued under AS 42.40.710 — 42.40.890, the superior court in the district in which the person resides or is found may, upon application by the railroad labor relations agency, issue an order requiring the person to comply with the subpoena.




Sec. 42.40.820. Regulations.
The railroad labor relations agency shall adopt regulations under AS 44.62 (Administrative Procedure Act) to carry out AS 42.40.710 — 42.40.890.


Sec. 42.40.830. Penalty for violation of order or decision.
A person who violates a provision of an order or decision of the railroad labor relations agency is guilty of a misdemeanor and is punishable by a fine of not more than $500.


Sec. 42.40.840. Mediation.
 (a) If, after a reasonable period of negotiation over the terms of a collective bargaining agreement, an impasse as determined by the railroad labor relations agency exists between the corporation and an organization, the railroad labor relations agency shall appoint a person mutually agreeable to the parties from a list of seven qualified mediators or arbitrators knowledgeable in railway labor agreements to act as mediator in the dispute.

 (b) Before the determination of an impasse under this section, the parties may also select a mediator by mutual consent.

 (c) It shall be the function of the mediator to bring the parties together to effectuate a settlement of the dispute, but neither the mediator nor the railroad labor relations agency has any power of compulsion in mediation proceedings.




Sec. 42.40.850. Strikes.
 (a) Following a decision by the mediator to end the mediation proceedings, employees of a collective bargaining unit may engage in a strike for a limited time if a majority of the employees in that collective bargaining unit vote by secret ballot to do so. The limit of the strike is determined by the interest of the health, safety, or welfare of the public.

 (b) The corporation may apply to the superior court in the judicial district in which the strike is occurring for an order enjoining the strike. A strike may not be enjoined unless it can be shown that it has begun to threaten, or is about to threaten, the health, safety, or welfare of the public. A court, in deciding whether to enjoin the strike, shall consider the total equities in the particular case, including the impact of a strike on the public and the extent to which an employee organization and the corporation have met their statutory obligations.

 (c) If an impasse or deadlock still exists after the issuance of an injunction, the parties shall submit the dispute to binding arbitration. The railroad labor relations agency shall appoint an arbitrator selected by the parties by mutual consent. If the parties are unable to agree on an arbitrator, the railroad labor relations agency shall appoint an arbitrator from a list of arbitrators knowledgeable in railroad labor agreements. The arbitrator shall fashion the award the arbitrator considers equitable.

 (d) Notwithstanding (a) — (c) of this section, an organization and the corporation may mutually agree to submit a dispute to binding arbitration at any time.




Sec. 42.40.860. Agreements.
 (a) The Department of Administration may participate in labor negotiations between the corporation and an organization. The corporation may seek advice of the Department of Administration before entering into a collective bargaining agreement concerning wages, hours, and other terms and conditions of employment. However, the final decision regarding collective bargaining agreements shall be made by the board.

 (b) Upon the completion of negotiations between an organization and the corporation, if a settlement is reached, the corporation shall reduce it to writing in the form of an agreement. The agreement shall include a grievance procedure that shall have binding arbitration as its final step. Either party to the agreement has a right of action to enforce the agreement by petition to the railroad labor relations agency.

 (c) The parties to an agreement under this section may agree to terms that specify an expiration date for the agreement.

 (d) Notwithstanding any provision of AS 42.40.710 — 42.40.890 to the contrary, an agreement between the corporation and an employee bargaining organization that does not contain benefit provisions at least as beneficial to the employee as those provided by AS 39.20.500 — 39.20.550 shall be considered to contain the benefit provisions of those statutes.




Sec. 42.40.870. Organization dues and employee benefits; deduction and authorization.
Upon written authorization of an employee within a bargaining unit, the corporation shall deduct from the payroll of the employee the monthly amount of dues, fees, and other employee benefits as certified by the secretary of the exclusive bargaining representative and shall deliver it to the chief fiscal officer of the exclusive bargaining representative.


Sec. 42.40.880. Exemption.
Notwithstanding the provisions of AS 42.40.870, a collective bargaining settlement reached, or agreement entered into, under AS 42.40.860 that incorporates union security provisions, including a union shop or agency shop provision or agreement, shall safeguard the rights of nonassociation of employees having bona fide religious convictions based on tenets or teachings of a church or religious body of which an employee is a member. Upon submission of proper proof of religious conviction to the railroad labor relations agency, the agency shall declare the employee exempt from becoming a member of an organization. The employee shall pay an amount of money equivalent to regular organization dues, initiation fees, and assessments to the organization. Nonpayment of this money subjects the employee to the same penalty as if it were nonpayment of dues. The receiving organization shall contribute an equivalent amount of money to a charity of its choice not affiliated with a religious, labor, or employee organization. The organization shall submit to the railroad labor relations agency proof of contribution.


Sec. 42.40.885. Prohibited acts.
 (a) The corporation or an employee may not directly or indirectly
     (1) require or coerce an employee to participate in any way in any activity or undertaking unless the activity or undertaking is related to the performance of official duties;

     (2) require or coerce an employee to make any report concerning an activity or undertaking of the employee unless the activity or undertaking is related to the performance of official duties;

     (3) except as directly related to the performance of official duties, require or coerce an employee to submit to an interrogation, examination, or psychological test that is designed to elicit information concerning
          (A) a personal relationship with a person connected with the employee by blood or marriage;

          (B) the employee’s religious beliefs or practices;

          (C) sexual matters;

          (D) the employee’s political affiliation or philosophy;

     (4) coerce an employee to invest or contribute earnings in any manner or for any purpose;

     (5) restrict or attempt to restrict after-working-hour statements, pronouncements, or other activities, not otherwise prohibited by law or personnel rule, of an employee, if the employee does not purport to speak or act in an official capacity.

 (b) The provisions of (a) of this section do not diminish the authority of an authorized law enforcement agency to conduct criminal investigations of employees suspected of being involved in criminal activity or to investigate other activity directly related to official railroad business.




Sec. 42.40.890. Definitions for AS 42.40.710 — 42.40.890.
In AS 42.40.710 — 42.40.890,
     (1) “election” means a proceeding conducted by the labor relations agency in which the employees in a collective bargaining unit cast a secret ballot for collective bargaining representatives, or for any other purpose specified in AS 42.40.710 — 42.40.890;

     (2) “organization” means a labor or employee organization of any kind in which employees participate and that exists for the primary purpose of dealing with the corporation concerning grievances, labor disputes, wages, rates of pay, hours of employment, and conditions of employment;

     (3) “railroad labor relations agency” means the Alaska labor relations agency established in AS 23.05.360.




Article 10. General Provisions.


Sec. 42.40.900. Claims.
 (a) All claims and lawsuits involving activities of the railroad, including suits in contract, quasi-contract, or tort, shall be brought against the corporation and not against the state.

 (b) For the purposes of actionable claims, undertakings, payments of judgments, execution, interest, punitive damages, statutes of limitations, bonds, costs, and similar matters related to the presentation and prosecution of claims by and against the corporation, the corporation and its board members and employees enjoy the same rights, privileges, and immunities as the state and state officers.

 (c) Claims against the corporation are not subject to the provisions of AS 44.77 regarding claims against the state.

 (d) The corporation is not subject to the provisions of AS 44.80.010, regarding the state as a party to an action.




Sec. 42.40.905. Notice of legal actions.
 (a) The corporation shall notify the Department of Law within 30 days before initiating legal action unless special circumstances exist that require immediate legal action to protect the corporation assets or to continue existing service.

 (b) If notice of legal action is not given under (a) of this section, within seven days of taking action the board shall notify the Department of Law of the action taken and of the special circumstances that exempted the action from the requirements of (a) of this section.




Sec. 42.40.910. Exemption from taxation.
 (a) The exercise of the powers granted by this chapter shall be in all respects for the benefit of the people of the state, for their well-being and prosperity, and for the improvement of their social and economic conditions. Subject to (b) of this section, the real and personal property of the corporation and its assets, income, and receipts are exempt from all taxes and special assessments of the state or a political subdivision of the state.

 (b) Bonds and notes issued under this chapter are issued by a body corporate and public of the state and for an essential public and governmental purpose. Therefore, the bonds and notes, the interest and income from them, and all fees, charges, funds, revenue, income, and other money pledged or available to pay or secure the payment of the bonds and notes or interest on them, are exempt from taxation except for inheritance, transfer, and estate taxes.

 (c) This section does not affect or limit an exemption from license fees, property taxes, or excise, income, or other taxes, provided under any other law, nor does it create a tax exemption with respect to the interest of any business enterprise or other person, other than the corporation.




Sec. 42.40.915. Transportation of members of the Alaska organized militia.
To the extent that space is available, the corporation shall provide free transportation on the Alaska Railroad for a member of the Alaska National Guard, the Alaska Naval Militia, or the Alaska State Defense Force who is en route to or from drill, training, or other official militia activities.


Sec. 42.40.920. Application of existing laws.
 (a) [Repealed, § 38 ch 168 SLA 1990.]
 (b) Unless specifically provided otherwise in this chapter, the following laws do not apply to the operations of the corporation:
     (1) AS 19;

     (2) AS 30.15;

     (3) AS 35;

     (4) AS 36.30, except as specifically provided in that chapter;

     (5) AS 37.05, except as specifically provided in AS 37.05.210;

     (6) AS 37.07;

     (7) AS 37.10.010 — 37.10.060;

     (8) AS 37.10.085;

     (9) AS 37.20;

     (10) AS 37.25;

     (11) AS 38;

     (12) AS 44.62.010 — 44.62.320.




Sec. 42.40.930. Conflicting laws inapplicable.
If provisions of this chapter conflict with the provisions of other state law, the provisions of this chapter prevail. Provisions of this chapter shall be construed so that they do not conflict with 45 U.S.C. 1201 — 1214 (Alaska Railroad Transfer Act of 1982).


Sec. 42.40.935. Railroad facilities code compliance.
 (a) Not later than two years after the date of transfer the corporation in consultation with the Department of Labor and Workforce Development shall develop and adopt a plan to achieve compliance with AS 18.60. The plan shall be implemented and compliance achieved within five years after it is adopted.

 (b) No later than two years after the date of transfer, the corporation in consultation with the Department of Public Safety and appropriate municipal officials, shall develop and adopt a plan to achieve compliance with building and related safety codes applicable to facilities of the corporation. The plan shall be implemented and compliance achieved within five years after it is adopted. In the sole determination of the commissioner of public safety, any existing building owned or controlled by the corporation that does not present a serious safety hazard and for which compliance would be uneconomical in consideration of its remaining useful life shall be exempted from compliance with state or municipal safety codes.




Sec. 42.40.940. Sale or lease of the railroad.
 (a) The governor may provide for the sale or lease of the Alaska Railroad and dissolve the corporation if
     (1) it can be assured that the railroad will continue to operate after the sale or lease; and

     (2) under the terms of the sale or lease, the state will receive the amount of money it has spent in connection with the Alaska Railroad.

 (b) A sale under this section is subject to approval by law.




Sec. 42.40.950. Reversion of assets.
Except as provided in AS 42.40.940, if the corporation ceases to exist its assets revert to the state.


Sec. 42.40.980. Definitions.
In this chapter unless the context otherwise requires,
     (1) “board” means the board of directors of the Alaska Railroad Corporation;

     (2) “bonds” means bonds, bond anticipation notes, notes, refunding bonds, or other obligations;

     (3) “collective bargaining” means the performance of the mutual obligation of the corporation or its designated representatives and the representatives of the employees to meet at reasonable times, including meetings in advance of the budget making process, and negotiating in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or negotiation of a question arising under an agreement and the execution of a written contract incorporating an agreement reached if requested by either party, but these obligations do not compel either party to agree to a proposal or require the making of a concession;

     (4) “corporation” means the Alaska Railroad Corporation;

     (5) “date of transfer” means the date on which the United States Secretary of Transportation delivers the transfer documents under 45 U.S.C. 1201 — 1214 (Alaska Railroad Transfer Act of 1982);

     (6) “employees” means all persons employed by the corporation including executive officers;

     (7) “executive officer” means the corporation’s chief executive officer, assistant chief executive officer, assistant to the chief executive officer, chief of administration, superintendent of transportation, manager of marketing and sales, chief engineer, chief mechanical officer, manager of industrial development and real estate, manager of budget and accounting, manager of planning, manager of personnel, manager of supply and procurement, chief of security, manager of operating rules, manager of data processing, manager of strategy, manager of operations planning, manager of supply, manager of procurement, manager of safety, manager of administrative procedure, chief counsel, or, if so designated by the board, any employee who fulfills these management functions under a different title or who exercises a similar or comparable level of responsibility or supervision;

     (8) “land” means any interest in real property, including tide and submerged land, and any right appurtenant to the interest;

     (9) “rule” means a standard of general application or the amendment, supplement, revision, or repeal of a standard adopted by the corporation to implement, interpret, or make specific the law enforced or administered by it or to govern its procedure;

     (10) “terms and conditions of employment” means the hours of employment, the compensation and fringe benefits, and the employer’s personnel policies affecting the working conditions of the employees, but does not mean the general policies describing the function and purposes of an employer.




Sec. 42.40.990. Short title.
This chapter may be referred to as the Alaska Railroad Corporation Act.


Article 1. Power Assistance Programs.


Chapter 45. Rural and Statewide Energy Programs.

Sec. 42.45.010. Power project fund.
 (a) The power project fund is established as a separate fund. The fund shall be distinct from any other money or funds of the authority and includes only money appropriated by the legislature, proceeds from the sale of loans appropriated by the legislature, and money deposited under (g) of this section.

 (b) The authority may make loans from the power project fund
     (1) to electric utilities, regional electric authorities, municipalities, regional and village corporations, village councils, and independent power producers to pay the costs of
          (A) reconnaissance studies, feasibility studies, license and permit applications, preconstruction engineering, and design of power projects; and

          (B) constructing, equipping, modifying, improving, and expanding small-scale power production facilities that are designed to produce less than 10 megawatts of power, bulk fuel storage facilities, and transmission and distribution facilities, including energy production, transmission and distribution, waste energy, energy conservation, energy efficiency, and alternative energy facilities and equipment;

     (2) to a borrower for a power project or for bulk fuel, waste energy, energy conservation, energy efficiency, or alternative energy facilities or equipment if
          (A) the loan is entered into under a leveraged lease financing arrangement;

          (B) the party that will be responsible for the power project or the bulk fuel, waste energy, energy conservation, energy efficiency, or alternative energy facilities or equipment is an electric utility, regional electric authority, municipality, regional or village corporation, village council, or independent power producer; and

          (C) the borrower seeking the loan demonstrates to the authority that the financing arrangement for the power project or the bulk fuel, waste energy, energy conservation, energy efficiency, or alternative energy facilities or equipment will reduce financing costs for the project, facilities, or equipment below costs of comparable public power projects, facilities, or equipment.

 (c) Before making a loan from the power project fund, the authority shall, by regulation, specify
     (1) standards for the eligibility of borrowers and the types of projects to be financed with loans;

     (2) standards regarding the technical and economic viability and revenue self-sufficiency of eligible projects;

     (3) collateral or other security required for loans;

     (4) the terms and conditions of loans;

     (5) criteria to establish financial feasibility and to measure the amount of state assistance necessary for particular projects to meet the financial feasibility criteria; and

     (6) other relevant criteria, standards, or procedures.

 (d) The authority may adopt regulations to establish the standards, criteria, and procedures for making loans under this section, including regulations to establish reasonable fees for applications and loan origination, and charges for reimbursement of the costs of analyzing the feasibility of a project.

 (e) Repayment of the loans shall be secured in any manner that the authority determines is feasible to assure prompt repayment under a loan agreement entered into with the borrower. The authority may make an unsecured loan from the power project fund to a borrower regulated by the Regulatory Commission of Alaska under AS 42.05 if the borrower has a substantial history of repaying long-term loans and the capacity to repay the loan. Under a loan agreement, repayment may be deferred for 10 years or until the project for which the loan is made has achieved earnings from its operations sufficient to pay the loan, whichever is earlier.

 (f) A loan for power projects and bulk fuel, waste energy, energy conservation, energy efficiency, and alternative energy facilities or equipment
     (1) may not be granted for a term that exceeds 50 years; and

     (2) shall be granted at an interest rate that is not less than zero percent and that is the lesser of
          (A) a rate equal to the percentage that is the average weekly yield of municipal bonds for the 12 months preceding the date of the loan, as determined by the authority from municipal bond yield rates reported in the 30-year revenue index of The Bond Buyer; or

          (B) a rate determined by the authority that allows the project to meet criteria of financial feasibility established under (c) of this section.

 (g) Loan repayments and interest earned by loans from the power project fund shall be deposited in the power project fund unless an appropriation to fund the loan directs otherwise.

 (h) The legislature may forgive the repayment of a loan made from the power project fund for a reconnaissance study or a feasibility study when the authority finds that the power project for which the loan was made is not feasible.

 (i) Money in the power project fund may be used by the legislature to make appropriations for costs of administering the fund.

 (j) The authority may not enter into a loan from the power project fund for a major project unless it has legislative approval of the project and the amount. An appropriation for the loan that names the project constitutes approval required by this subsection. A major project is a project in which the cumulative state monetary involvement, through loans, grants, and bonds, is at least $5,000,000 or a project for which a loan of more than $5,000,000 has been requested.

 (k) The authority may collect the fees and charges established under (d) of this section and shall deposit the money in the general fund.

 (l) The authority may sell loans of the power project fund with legislative approval. The authority may use money in the power project fund to repurchase loans sold under this subsection that default. Money received by the authority from the sale of loans under this subsection shall be deposited into the power project fund under (a) of this section.




Sec. 42.45.020. Rural electrification revolving loan fund.
 (a) The rural electrification revolving loan fund is established in the authority. The fund consists of
     (1) appropriations made to the fund; and

     (2) repayments of principal and interest on loans made under this section.

 (b) The authority may make loans from the rural electrification revolving loan fund to electric utilities certified under AS 42.05. A loan from the fund may be made only for the purpose of extending new electric service into an area of the state that an electric utility may serve under a certificate of public convenience and necessity issued under AS 42.05. A loan may be made from the fund to an electric utility if the utility invests the money necessary to provide one pole, one span of line, one transformer, and one service drop for each consumer for whom immediate service would be provided by the extension of electric service. However, a loan may not be made from the fund unless the extension of electric service would provide immediate service to at least three consumers.

 (c) A loan from the rural electrification revolving loan fund shall bear an annual rate of interest of two percent of the unpaid balance of the loan.

 (d) When the authority makes a loan under this section, the electric utility receiving the loan shall,
     (1) in addition to the rates that it is authorized to charge, charge the consumers served by the electric service extended with the loan proceeds an amount sufficient to pay the interest costs of the loan;

     (2) pay to the authority annually an amount equal to
          (A) interest of two percent on the unpaid balance of the loan; and

          (B) payments on the unpaid balance of the principal of the loan for each new consumer served by the electric service extended with the loan proceeds; payments on the unpaid balance of the principal of the loan shall be made at a rate equal to the difference between the actual cost of making the service connection to the consumers and the minimum investment per consumer required of the utility before a loan is made under (b) of this section.

 (e) The authority shall
     (1) adopt regulations necessary to carry out the provisions of this section; and

     (2) administer the rural electrification revolving loan fund.

 (f) Money in the rural electrification revolving loan fund may be used by the legislature to make appropriations for costs of administering the fund.

 (g) On June 30 of each fiscal year the unexpended and unobligated cash balance of the fund that is attributable to loans owned by the fund lapses into the general fund.

 (h) In this section,
     (1) “consumer” means a person or a governmental agency, if the person or governmental agency requests and offers to pay for electrical service to a facility or part of a facility; the authority shall consider a person who, or a governmental agency that, offers to pay for electrical service to several facilities to be a separate consumer for each facility, if each facility is physically separate from another facility, other than through electric service lines, and if the person or governmental agency requests and offers to pay for electrical service to each facility;

     (2) “facility” means a structure capable of receiving and using electrical energy; and

     (3) “governmental agency” includes, with respect to the state or federal government or a municipal government, a legislative body, board of regents, administrative body, board, commission, committee, subcommittee, authority, council, agency, public corporation, school board, department, division, bureau, or other subordinate unit, whether advisory or otherwise, of the state, federal, or municipal government.




Sec. 42.45.030. Loan advisory committee. [Repealed, § 84 ch 58 SLA 1999.] .
Sec. 42.45.040. Southeast energy fund.
 (a) The Southeast energy fund is established as a separate fund. The fund consists of
     (1) money appropriated to the fund by the legislature;

     (2) money transferred to it under former AS 42.45.050;

     (3) gifts, bequests, contributions from other sources, and federal money;

     (4) interest earned on the fund balance; and

     (5) investments, to be managed by the Department of Revenue, which shall be the fiduciary of the fund under AS 37.10.071.

 (b) The fund is not a dedicated fund.

 (c) The authority may make grants from the Southeast energy fund to a municipality of the state, a joint action agency established under AS 42.45.300 and 42.45.310, a member-owned electric cooperative established under AS 10.25, or another electric utility holding a certificate of public convenience and necessity under AS 42.05 for power projects, repayment of loans, and payments on bonds for hydroelectric projects and electrical transmission lines or interties serving Southeast Alaska that are entirely owned by the grantee.

 (d) An appropriation from the fund for a project described in (c) of this section lapses back into the fund if substantial, ongoing work on the project has not begun within seven years after the effective date of the appropriation.




Sec. 42.45.045. Renewable energy grant fund and recommendation program.
 (a) A renewable energy grant fund is established as a separate fund to finance certain energy projects in Alaska.

 (b) The authority shall administer the fund as a fund distinct from other funds of the authority. The fund consists of
     (1) money appropriated to the fund by the legislature to provide grants for certain energy projects determined by the legislature;

     (2) gifts, bequests, contributions from other sources, and federal money;

     (3) interest earned on the fund balance; and

     (4) investments to be managed by the Department of Revenue, which shall be the fiduciary of the fund under AS 37.10.071.

 (c) The fund is not a dedicated fund.

 (d) The authority shall, in consultation with the advisory committee established under (i) of this section and the Department of Natural Resources,
     (1) develop a methodology for determining the order of projects that may receive assistance, including separate requirements for grant eligibility, and adopt regulations identifying criteria to evaluate the benefit and feasibility of projects for which an applicant applies for support from the legislature, with the most weight being given to projects that serve any area in which the average cost of energy to each resident of the area exceeds the average cost to each resident of other areas of the state, and significant weight being given to a statewide balance of grant funds and to the amount of matching funds an applicant is able to make available;

     (2) make recommendations to the legislature for renewable power production reimbursement grants; and

     (3) not later than 10 days after the first day of each regular legislative session, submit to the legislature a report summarizing and reviewing each grant application submitted under this section and a recommended priority for awarding grants.

 (e) In consultation with the advisory committee established in (i) of this section, the authority shall make recommendations to the legislature regarding eligible applicants’ projects that finance feasibility studies, reconnaissance studies, energy resource monitoring, and construction of renewable energy projects, natural gas projects, or transmission or distribution infrastructure located in Alaska that meet the requirements of (f), (g), or (h) of this section, as applicable, and shall, at least once each year, solicit from the advisory committee funding recommendations for all grants.

 (f) For a renewable energy project to qualify for a grant recommendation under (e) of this section, the project must
     (1) be a new project not in operation on August 20, 2008 or an addition to an existing project made after August 20, 2008; and

     (2) be a
          (A) hydroelectric facility;

          (B) direct use of renewable energy resources;

          (C) facility that generates electricity from fuel cells that use hydrogen from renewable energy resources or natural gas; or

          (D) facility that generates energy from renewable energy resources.

 (g) To qualify for a grant recommendation under (e) of this section, a project that is a natural gas project must benefit a community that
     (1) has a population of 10,000 or less; and

     (2) does not have economically viable renewable energy resources it can develop.

 (h) To qualify for a grant recommendation under (e) of this section, transmission or distribution infrastructure must link a renewable energy project or natural gas project to the transmission or distribution infrastructure. A grant may be recommended under this subsection even if the grant applicant is not itself financing the construction of the renewable energy project or natural gas project.

 (i) An advisory committee is established and consists of nine members, appointed as follows:
     (1) five members shall be appointed by the governor to staggered three-year terms, with one representative to be appointed from each of the following groups:
          (A) small Alaska rural electric utilities;

          (B) large Alaska urban electric utilities;

          (C) Alaska Native organizations;

          (D) businesses or organizations engaged in the renewable energy sector; and

          (E) the Denali Commission established under P.L. 105-277, 42 U.S.C. 3121 note;

     (2) two members of the house of representatives shall be appointed by the speaker of the house of representatives; and

     (3) two members of the senate shall be appointed by the president of the senate.

 (j) A member of the advisory committee appointed under (i) of this section serves without compensation but is entitled to travel and per diem expenses as provided in AS 39.20.180.

 (k) The legislature may appropriate money for grants from the renewable energy grant fund for renewable energy projects described in this section.

 (l) In this section,
     (1) “eligible applicant” means an electric utility holding a certificate of public convenience and necessity under AS 42.05, independent power producer, local government, or other governmental utility, including a tribal council and housing authority;

     (2) “fund” means the renewable energy grant fund;

     (3) “hydroelectric facility” has the meaning given to the term “project” under AS 42.45.350;

     (4) “natural gas project” means use or access of natural gas other than landfill or digester gas;

     (5) “renewable energy resources” means
          (A) wind, solar, geothermal, wasteheat recovery, hydrothermal, wave, tidal, river in-stream, or hydropower;

          (B) low-emission nontoxic biomass based on solid or liquid organic fuels from wood, forest and field residues, or animal or fish products;

          (C) dedicated energy crops available on a renewable basis; or

          (D) landfill gas and digester gas.




Sec. 42.45.050. Four dam pool transfer fund. [Repealed, § 12 ch 60 SLA 2000.]
Sec. 42.45.060. Approval by loan committee and legislature. [Repealed, § 11 ch 36 SLA 2004.]
Sec. 42.45.065. Reimbursement for costs of power projects.
 (a) Subject to appropriations for the purpose, during each fiscal year, the authority shall allocate to each entity listed in (b) of this section an amount to reimburse the cost paid by the entity during the immediately preceding fiscal year for the principal and interest on outstanding debt for the project listed. An allocation may be made to an entity only if
     (1) the debt was incurred before July 1, 2005; and

     (2) the power project financed with the debt proceeds is owned and operated by the entity.

 (b) The authority may make an allocation to an entity under (a) of this section only for reimbursement of costs incurred for construction and renovation of the following power projects and only for reimbursement of total project costs incurred up to the following amounts:


PROJECT               Kodiak Electric Association, Inc. (Nyman Combined Cycle Cogeneration Plant)          $ 6,000,000     Cordova Electric Cooperative (Power Creek Hydropower Station)          12,000,000     Golden Valley Electric Association (Rock Creek line extension)           700,000     Copper Valley Electric Association, Inc., Valdez (cogeneration projects)          10,000,000     The Four Dam Pool Power Agency (Southeast Intertie, Swan Lake to Tyee Lake)          20,000,000     Metlakatla Power and Light (utility plant and capital additions)          3,000,000     



Article 2. Power Cost Equalization Endowment Fund.


Sec. 42.45.070. Power cost equalization endowment fund established.
 (a) The power cost equalization endowment fund is established as a separate fund of the authority. The fund consists of
     (1) legislative appropriations to the fund that are not designated for annual expenditure for the purpose of power cost equalization;

     (2) accumulated earnings of the fund;

     (3) gifts, bequests, contributions of money and other assets, and federal money given to the fund that are not designated for annual expenditure for power cost equalization; and

     (4) [Repealed, § 13 ch 60 SLA 2000.]
 (b) Nothing in this section creates a dedicated fund.

 (c) [Repealed, § 13 ch 60 SLA 2000.]




Sec. 42.45.080. Powers and duties of the commissioner of revenue.
 (a) The commissioner of revenue is the fiduciary of the fund. In managing the fund, the commissioner shall
     (1) have the same powers and duties as are provided in AS 37.10.071; and

     (2) invest the fund in a manner likely to achieve at least a four percent nominal return over a five-year period to meet the objectives of the power cost equalization and rural electric capitalization fund (AS 42.45.100).

 (b) In managing the fund, the commissioner shall
     (1) consider the status of the fund’s capital and the income generated on both current and probable future bases;

     (2) determine the appropriate investment objectives;

     (3) establish investment policies to achieve the objectives; and

     (4) act only in regard to the best financial interests of the fund.

 (c) On July 1 of each year, the commissioner shall determine
     (1) the monthly average market value of the fund for the previous three closed fiscal years; and

     (2) the earnings of the fund for the previous closed fiscal year.




Sec. 42.45.085. Use of the power cost equalization endowment fund.
 (a) Five percent of the amount determined by the commissioner of revenue on July 1 of each year under AS 42.45.080(c)(1) may be appropriated for the following purposes:
     (1) funding the power cost equalization and rural electric capitalization fund (AS 42.45.100);

     (2) reimbursement to the Department of Revenue for the costs of establishing and managing the fund; and

     (3) reimbursement of other costs of administration of the fund.

 (b) Nothing in this section creates a dedicated fund.

 (c) If the amount appropriated under (a) of this section is insufficient to achieve the purposes of (a)(1) - (3) of this section, the amount shall be prorated among the purposes listed in (a)(1) and (2) of this section.

 (d) If the earnings of the fund for the previous closed fiscal year, as calculated under AS 42.45.080(c)(2), exceed the appropriation under (a) of this section for the current fiscal year, the legislature may appropriate 70 percent of the difference between the earnings of the fund for the previous closed fiscal year, as calculated under AS 42.45.080(c)(2), and the appropriation made under (a) of this section for the current fiscal year as follows:
     (1) if the amount calculated under this subsection is less than $30,000,000, that amount to a community revenue sharing or community assistance fund; or

     (2) if the amount calculated under this subsection is $30,000,000 or more,
          (A) $30,000,000 to a community revenue sharing or community assistance fund; and

          (B) the remaining amount, not to exceed $25,000,000, to the renewable energy grant fund established under AS 42.45.045, to the bulk fuel revolving loan fund established under AS 42.45.250, or for rural power system upgrades or to a combination of the funds or purposes listed in this subparagraph.




Sec. 42.45.099. Definition.
In AS 42.45.070 — 42.45.099, “fund” means the power cost equalization endowment fund established in AS 42.45.070.


Article 3. Power Cost Equalization and Rural Electric Capitalization.


Sec. 42.45.100. Power cost equalization and rural electric capitalization fund.
 (a) The power cost equalization and rural electric capitalization fund is established as a separate fund for the purpose of
     (1) equalizing power cost per kilowatt-hour statewide at a cost close to or equal to the mean of the cost per kilowatt-hour in Anchorage, Fairbanks, and Juneau by paying money from the fund to eligible electric utilities in the state; and

     (2) making grants to eligible utilities under AS 42.45.180 to improve the performance of the utility.

 (b) The fund shall be administered by the authority as a fund distinct from the other funds of the authority. The fund is composed of
     (1) money appropriated to provide power cost equalization to eligible electric utilities and to provide grants for utility improvements;

     (2) money appropriated from the National Petroleum Reserve — Alaska special revenue fund under AS 37.05.530(g);

     (3) money appropriated from the power cost equalization endowment fund (AS 42.45.070) under AS 42.45.085(a);

     (4) gifts, bequests, contributions from other sources, and federal money; and

     (5) interest earned on the fund balance.

 (c) The fund is not a dedicated fund.




Sec. 42.45.110. Entitlement to power cost equalization.
 (a) The costs used to calculate the amount of power cost equalization for all electric utilities eligible under AS 42.45.100 — 42.45.150 include all allowable costs, except return on equity, used by the Regulatory Commission of Alaska to determine the revenue requirement for electric utilities subject to rate regulation under AS 42.05. The costs used in determining the power cost equalization per kilowatt-hour shall exclude any other type of assistance that reduces the customer’s costs of power on a kilowatt-hour basis and that is provided to the electric utility within 60 days before the commission determines the power cost equalization per kilowatt-hour of the electric utility. In calculating power cost equalization, the commission may not consider validated costs or kilowatt-hour sales associated with a United States Department of Defense facility.

 (b) An eligible electric utility is entitled to receive power cost equalization
     (1) for sales of power to local community facilities, calculated in the aggregate for each community served by the electric utility, for actual consumption of not more than 70 kilowatt-hours a month for each resident of the community; the number of community residents shall be determined annually by the latest figures of the United States Bureau of the Census or other population data that the Department of Commerce, Community, and Economic Development determines is reliable; and

     (2) for actual consumption of not more than 500 kilowatt-hours a month sold to each residential customer.

 (c) The amount of power cost equalization provided for each kilowatt-hour under (b) of this section may not exceed 95 percent of the power costs, or the average rate for each eligible kilowatt-hour sold, whichever is less, as determined by the commission. However,
     (1) the power costs for which power cost equalization are paid to an electric utility are limited to minimum power costs of more than 12 cents a kilowatt-hour and less than $1 a kilowatt-hour;

     (2) each year, the commission shall adjust the power costs for which power cost equalization may be paid to an electric utility based on the weighted average retail residential rate in Anchorage, Fairbanks, and Juneau; however, the commission may not adjust the power costs under this paragraph to reduce the amount below the lower limit set out in (1) of this subsection; and

     (3) the power cost equalization for each kilowatt-hour may be determined for a utility without historical kilowatt-hour sales data by using kilowatt-hours generated.

 (d) An electric utility whose customers receive power cost equalization under AS 42.45.100 — 42.45.150 shall set out in its tariff the rates without the power cost equalization and the amount of power cost equalization per kilowatt-hour sold. The rate charged to the customer shall be the difference between the two amounts. Power cost equalization paid under AS 42.45.100 — 42.45.150 shall be used to reduce the cost of all power sold to local community facilities, in the aggregate, to the extent of 70 kilowatt-hours per month per resident of the community, and to reduce the cost of the first 500 kilowatt-hours per residential customer per month.

 (e) The power cost equalization program shall be administered by the authority based on a determination by the commission under (a) and (c) of this section of power cost equalization per kilowatt-hour for each eligible electric utility.

 (f) The authority may not deny an eligible electric utility power cost equalization because complete cost information is not available. The commission shall assist an eligible electric utility that is exempt from rate regulation under AS 42.05 to provide the cost information the commission considers necessary to comply with AS 42.45.100 — 42.45.150. Only power costs that are supportable may be considered in calculating power cost equalization. Each electric utility is responsible for keeping records that provide the information necessary to comply with AS 42.45.100 — 42.45.150 including records of monthly kilowatt-hour sales or generation, monthly fuel balances, fuel purchases, and monthly utility fuel consumption.

 (g) The commission shall determine the cost of fuel for each eligible electric utility using the procedure for approving fuel cost rate adjustments of electric utilities subject to rate regulation under AS 42.05.

 (h) Each electric utility receiving power cost equalization approved by the commission shall
     (1) report monthly to the authority within the time and in the form the authority requires; and

     (2) use operational equipment designed to meter individual utility customer power consumption and to determine and record the utility’s overall fuel consumption.

 (i) The authority shall review the report required under (h) of this section. After review and approval of the report, the authority shall, subject to appropriation, pay to each eligible electric utility an amount equal to the power cost equalization per kilowatt-hour determined under (a) and (c) of this section, multiplied by the number of kilowatt-hours eligible for power cost equalization that were sold during the preceding month to all customers of the utility under (b) of this section. Payment shall be made by the authority within 30 days after receipt from the utility of the report required under (h) of this section. If appropriations that have been made for the purpose by July 1 of a fiscal year are insufficient for payment in full, the amount paid to each electric utility shall be reduced on a pro rata basis. In making the pro rata reductions required by this subsection, the authority may not consider any potential supplemental appropriation until the appropriation has been enacted.




Sec. 42.45.115. Exclusion from eligibility.
 (a) Notwithstanding the definition of “eligible electric utility” in AS 42.45.150, an electric utility whose primary source of power for sale to customers is one or more of the power projects that were part of the former initial project may not be considered an eligible electric utility.

 (b) In this section, “former initial project” includes the Tyee Lake, Swan Lake, Solomon Gulch, and Terror Lake hydroelectric facilities.




Sec. 42.45.120. Notice to customers.
If an electric utility receives power cost equalization under AS 42.45.100 — 42.45.150, the utility shall either give to its electric service customers eligible under this program, for each period for which the payment is received,
     (1) the following notice:


NOTICE TO CUSTOMERFor the most recent monthly reporting period under the State of Alaska”s power cost equalization program, this utility”s actual fuel efficiency for your community was __________________________________ kilowatt-hours a gallon. The applicable fuel efficiency standard set out in regulations for the power cost equalization program is __________________________________ kilowatt-hours a gallon.     For the current billing period, the utility will be paid under the State of Alaska”s power cost equalization program (AS 42.45.100) to assist the utility and its customers in reducing the high cost of generation of electric energy.     Your total electrical service cost      $............     Less state equalization      $............     Your charge      $............; or          (2) a notice approved by the authority that provides electric service customers the same information provided by the notice in (1) of this section.




Sec. 42.45.130. Cost minimization.
 (a) In order to qualify for power cost equalization, each electric utility shall make every reasonable effort to minimize administrative, operating, and overhead costs, including using the best available technology consistent with sound utility management practices. In reviewing applications for power cost equalization, the commission may require the elimination of unnecessary operating expenses. Each eligible electric utility shall cooperate with appropriate state agencies to implement cost-effective energy conservation measures and to plan for and implement feasible alternatives to diesel generation.

 (b) In this section, “energy conservation measures” include weatherization and other insulating methods, utilization of waste heat, appropriate sizing of new generating equipment, and other programs of the state or federal government intended and available for energy conservation.




Sec. 42.45.140. Customer petitions.
If the authority receives a petition requesting power cost equalization, signed by at least 25 percent of the customers of an electric utility that is subject to rate regulation under AS 42.05 and that has not applied for power cost equalization under AS 42.45.100 — 42.45.150, the authority shall require the utility to submit a power cost equalization application. Upon a determination of eligibility for power cost equalization, the utility, as a part of its service, shall receive power cost equalization and pass power cost equalization benefits to its customers under AS 42.45.100 — 42.45.150.


Sec. 42.45.150. Definitions for AS 42.45.100 — 42.45.150.
In AS 42.45.100 — 42.45.150,
     (1) “community facility” means a water and sewer facility, public outdoor lighting, charitable educational facility, or community building whose operations are not paid for by the state, the federal government, or private commercial interests;

     (2) “eligible electric utility” or “electric utility” means a public, cooperative, or other corporation, company, individual, or association of individuals, and includes the lessees, trustees, or receivers appointed by a court, that
          (A) owns, operates, manages, or controls a plant or system for the furnishing, by generation, transmission, or distribution, of electric service to the public for compensation;

          (B) during calendar year 1983, had a residential consumption level of power eligible for power cost equalization under former AS 44.83 of less than 7,500 megawatt hours or had a residential consumption level of power eligible for power cost equalization under former AS 44.83 of less than 15,000 megawatt hours if the utility served two or more municipalities or unincorporated communities; and

          (C) during calendar year 1984, used diesel fired generators to produce more than 75 percent of the electrical consumption of the utility; an electric utility that is a subsidiary of another electric utility is an “eligible electric utility” if the operations of the subsidiary, considered separately, meet the eligibility requirements of AS 42.45.100 — 42.45.150; if an electric utility did not receive power cost assistance in 1983 but is otherwise eligible for power cost equalization under AS 42.45.100 — 42.45.150, the utility is an “eligible electric utility”;

     (3) “power costs” means costs used in determining power cost equalization under AS 42.45.110(a) and (c).




Sec. 42.45.160. Adjustments to power cost equalization.
 (a) The commission may adjust the power cost equalization per kilowatt-hour, determined under AS 42.45.100 — 42.45.150, payable to an electric utility that is subject to rate regulation under AS 42.05 if the
     (1) commission has approved a fuel cost rate adjustment caused by an increase or decrease in the electric utility’s cost of fuel;

     (2) commission has approved a permanent or interim rate increase or decrease that establishes a higher or lower power cost;

     (3) authority has discovered, in reviewing the monthly data submitted by the electric utility, discrepancies that require adjustment of the power cost equalization; or

     (4) authority determines that appropriations are insufficient to finance full payments to eligible electric utilities.

 (b) An electric utility that is eligible to receive power cost equalization under this section and that receives power cost equalization per kilowatt-hour approved by the commission shall report monthly to the authority within the time and in the form the authority requires. An electric utility shall report
     (1) the power cost equalization per kilowatt-hour approved by the commission;

     (2) the total kilowatt-hours sold to each class of customer during the preceding month;

     (3) the total kilowatt-hours eligible for power cost equalization under this section sold to each class of customer during the preceding month;

     (4) the total kilowatt-hours generated during the preceding month, if available;

     (5) any commission approved amendments to the schedule of rates in effect during the preceding month; and

     (6) an increase or decrease in the current unit price of fuel from the base price used by the commission in determining power costs if the change is expected to result in a subsequent power cost equalization adjustment.

 (c) The provisions of AS 42.45.100 — 42.45.150 relating to the determination of the amount of power cost equalization and payment of the equalization assistance apply to equalization assistance under this section.




Sec. 42.45.170. Equalization assistance to unregulated utilities.
 (a) An electric utility that is not subject to rate regulation by the Regulatory Commission of Alaska under AS 42.05 may receive power cost equalization if the utility is otherwise eligible for equalization assistance under AS 42.45.100 — 42.45.150 and if the utility
     (1) files with the commission financial data necessary to determine the power cost equalization per kilowatt-hour as prescribed by the commission and that is in compliance with AS 42.45.100 — 42.45.150;

     (2) reports monthly to the authority, within the time and in the form required, the information required in (b) of this section;

     (3) sets rates
          (A) that consider the power cost equalization provided under AS 42.45.100 — 42.45.150 by subtracting from its revenue requirements for electric services the power cost equalization per kilowatt-hour that it is eligible to receive; and

          (B) under which the power cost equalization provided in AS 42.45.070 — 42.45.110 is applied as a credit only against the cost of kilowatt-hours eligible for equalization assistance under AS 42.45.100 — 42.45.150 that are consumed by each customer in any month;

     (4) allows audits that the commission determines are necessary to ensure compliance with this section; and

     (5) furnishes its electric service customers eligible under this program a notice as specified in AS 42.45.120.

 (b) An electric utility that is eligible to receive power cost equalization under this section shall report in accordance with (a)(2) of this section
     (1) the power cost equalization per kilowatt-hour approved by the commission;

     (2) the total kilowatt-hours sold to each class of customer during the preceding month;

     (3) the total kilowatt-hours eligible for power cost equalization under this section sold to each class of customer during the preceding month;

     (4) the total kilowatt-hours generated during the preceding month, if available;

     (5) any amendments to the schedule of rates in effect during the preceding month; and

     (6) an increase or decrease in the current unit price of fuel from the base price used by the commission in determining power costs if the change is expected to result in a subsequent equalization assistance level adjustment.

 (c) An electric utility that is eligible to receive power cost equalization under this section may have its power cost equalization per kilowatt-hour determination changed by the commission if the
     (1) commission has verified an increase or decrease in the electric utility’s cost of fuel;

     (2) commission has verified an increase in rates based on an increase in costs;

     (3) authority has discovered, in reviewing the monthly data submitted by the electric utility, discrepancies that require adjustment of the power cost equalization; or

     (4) authority determines that appropriations are insufficient to finance full payments to eligible electric utilities.

 (d) The provisions of AS 42.45.100 — 42.45.150 relating to the determination of the amount of power cost equalization and payment of the equalization assistance apply to equalization assistance under this section.

 (e) An application for power cost equalization by an electric utility that is eligible to receive power cost under this section does not extend the jurisdiction of the Regulatory Commission of Alaska beyond that established by AS 42.05.




Sec. 42.45.180. Grants for utility improvements.
 (a) The authority may make a grant from the fund for an eligible utility for a small power project that will reduce the cost of generating or transmitting power to the customers of the utility. The amount of the grant may not exceed 75 percent of the cost of the project. The authority may not make a grant under this section unless the eligible utility has secured financing for 25 percent of the cost of the project from a source other than the power cost equalization and rural electric capitalization fund, as provided under (c) of this section.

 (b) The authority may not allocate more than three percent of the balance in the fund to grants under this section in a fiscal year.

 (c) In determining whether an eligible utility has secured financing for 25 percent of the cost of the project from a source other than the power cost equalization and rural electric capitalization fund, the authority shall accept solicited and unsolicited proposals for third party financing or for a joint venture between the utility and an entity from the private sector provided that the private sector participant has
     (1) a valid state business license;

     (2) a resolution or letter of agreement executed by the eligible utility agreeing to participation by the private sector participant;

     (3) a business plan that illustrates how the proposed project will reduce the cost of generating or transmitting power to the customers of the utility.

 (d) In this section,
     (1) “eligible utility” has the meaning given in AS 42.45.150;

     (2) “project” includes
          (A) power generation systems;

          (B) transmission systems;

          (C) distribution systems;

          (D) metering systems;

          (E) energy store systems;

          (F) energy conservation programs; and

          (G) bulk fuel storage facilities;

     (3) “small power project” means a new or modified project that will either generate, store, or conserve no more than 1.5 megawatts of power or provide a metering system, transmission system, distribution system, or bulk fuel storage facility that has an estimated cost of less than $3,000,000.




Sec. 42.45.190. Definition for AS 42.45.100 — 42.45.190.
In AS 42.45.100 — 42.45.190, “fund” means the power cost equalization and rural electric capitalization fund established under AS 42.45.100.


Article 4. Bulk Fuel Revolving Loan Fund.


Sec. 42.45.200. Electrical service extension fund established. [Repealed, § 12 ch 36 SLA 2004.]
Sec. 42.45.250. Bulk fuel revolving loan fund.
 (a) The bulk fuel revolving loan fund is established in the division to assist communities, utilities providing power in communities, and fuel retailers in communities in purchasing bulk fuel to generate power or supply the public with fuel for use in communities. A community, or a person generating power or selling fuel in a community or maintaining community facilities or infrastructure is eligible for a bulk fuel loan under AS 42.45.260 or a bulk fuel bridge loan under AS 42.45.270 to purchase bulk fuel to be used in the community.

 (b) Money in the fund may be used by the legislature to make appropriations for costs of administering AS 42.45.250 — 42.45.299.

 (c) [Repealed, § 2 ch 46 SLA 2012.]
 (d) [Repealed, § 2 ch 46 SLA 2012.]
 (e) [Repealed, § 2 ch 46 SLA 2012.]
 (f) [Repealed, § 2 ch 46 SLA 2012.]
 (g) [Repealed, § 2 ch 46 SLA 2012.]
 (h) [Repealed, § 2 ch 46 SLA 2012.]
 (i) [Repealed, § 2 ch 46 SLA 2012.]
 (j) [Repealed, § 2 ch 46 SLA 2012.]
 (k) [Repealed, § 2 ch 46 SLA 2012.]
 (l) [Repealed, § 2 ch 46 SLA 2012.]
 (m) [Repealed, § 2 ch 46 SLA 2012.]
 (n) The fund consists of
     (1) money appropriated to, transferred to, or received by gift, grant, devise, bequest, or donation to the fund;

     (2) principal and interest payments or other income earned on loans or investments of the fund and appropriated to the fund.

 (o) The fund is not a dedicated fund.

 (p) The division shall establish and implement a technical assistance program for borrowers. Technical assistance shall be provided to borrowers who need assistance in applying for a loan or who have received a bulk fuel loan to help those borrowers improve creditworthiness or other financial criteria likely to be considered by the division if the borrower applies for another bulk fuel loan in the future. The division may contract with a state agency or private contractor to administer or implement the technical assistance program.




Sec. 42.45.260. Bulk fuel loan account; loans.
 (a) The bulk fuel loan account is established as a separate account within the fund. The division may make loans from the bulk fuel loan account as provided in AS 42.45.250 — 42.45.299.

 (b) The division shall establish by regulation criteria under which communities or entities eligible under AS 42.45.250(a) may obtain a bulk fuel loan. The criteria must require the division to consider the applicant’s creditworthiness and repayment history and may require the consideration of other factors.

 (c) The division shall evaluate each application for a bulk fuel loan and shall make findings if the application is denied.

 (d) Loans made from the bulk fuel loan account to one borrower
     (1) may not exceed $750,000 or, if the borrower is a cooperative corporation organized under AS 10.15 or an electric cooperative organized under AS 10.25 and uses the loan to purchase bulk fuel on behalf of more than one community, may not exceed $750,000 multiplied by the number of communities on whose behalf the bulk fuel is to be purchased or $1,800,000, whichever is less;

     (2) shall be repaid within one year after the date of the loan disbursement; and

     (3) may include additional terms and conditions required by the division.

 (e) The division may contract with a private contractor to administer the loan account.




Sec. 42.45.270. Bulk fuel bridge account; loans.
 (a) The bulk fuel bridge loan account is established as a separate account within the fund. Subject to availability of funds in the account, the division may make bulk fuel bridge loans from the bulk fuel bridge loan account as provided in AS 42.45.250 — 42.45.299.

 (b) A community or person is eligible for a bulk fuel bridge loan only if the community or person
     (1) meets the requirements of AS 42.45.250(a); and

     (2) has been denied an application for a bulk fuel loan under AS 42.45.260.

 (c) Loans made from the bulk fuel bridge loan account to one borrower in a fiscal year
     (1) may not exceed $750,000;

     (2) shall be repaid within one year after the date of the loan disbursement; and

     (3) may include additional terms and conditions required by the division.

 (d) The division shall implement a technical assistance and counseling plan for borrowers who have received a bulk fuel bridge loan to help those borrowers improve creditworthiness or other financial criteria likely to be considered by the division if the borrower applies for another bulk fuel loan in the future. The division may contract with a state agency or outside contractor to administer or implement the technical assistance and counseling plan.




Sec. 42.45.280. Bulk fuel loan and bulk fuel bridge loan interest rates.
 (a) Except as provided under (b) and (c) of this section, interest shall be charged on a bulk fuel loan and bulk fuel bridge loan at a base rate of four percent.

 (b) The division may establish by regulation a program to reduce the interest rate on the second and subsequent bulk fuel loans obtained by a borrower. In evaluating a potential interest rate reduction, the division shall consider the borrower’s repayment history and any other criteria that may be established by regulation. The division may by regulation reduce the interest rate on a bulk fuel loan made by the division by one percent for a borrower who has had at least one previous bulk fuel loan made by the division or by two percent for a borrower who has had two or more previous bulk fuel loans made by the division. The division shall make findings if an application for an interest rate reduction is denied.

 (c) For the first time a borrower receives a bulk fuel bridge loan, the interest rate shall be zero percent. For all loans made after the first bulk fuel bridge loan to a borrower, the interest rate shall be set according to the procedure described in (a) of this section.




Sec. 42.45.299. Definitions.
In AS 42.45.250 — 42.45.299, unless the context otherwise requires,
     (1) “community” means an organized municipality or an unincorporated village that is a social unit if the organized municipality or unincorporated village has a population of less than 2,000 people;

     (2) “division” means the division in the Department of Commerce, Community, and Economic Development that is responsible for community and regional affairs;

     (3) “fund” means the bulk fuel revolving loan fund established in AS 42.45.250(a) and administered under AS 42.45.250 — 42.45.299;

     (4) “person”
          (A) has the meaning given in AS 01.10.060;

          (B) includes a cooperative, a joint venture, and a governmental entity.




Article 5. Joint Action Agencies.


Sec. 42.45.300. Joint action agencies.
Two or more public utilities may form a joint action agency for the purpose of participation in the design, construction, operation, and maintenance of a generating or transmission facility and to secure financing for carrying out the design, construction, operation, and maintenance of the facility. A joint action agency may request the Alaska Industrial Development and Export Authority to issue revenue bonds for projects of the agency. A joint action agency has the powers of a public utility under AS 42.05.


Sec. 42.45.310. Acquisition of power project.
 (a) Two or more public utilities that purchase power from a power project acquired or constructed as part of the former energy program for Alaska and owned by the Alaska Energy Authority under AS 44.83.396 may form a joint action agency under AS 42.45.300 and under this section to purchase the power project from the Alaska Energy Authority if the purchase and sale of the project has first been authorized by law.

 (b) The agency may
     (1) acquire, own, operate, and manage one or more power projects or generating or transmission facilities; and

     (2) participate in the design, development, construction, operation, and maintenance of a generating or transmission facility.

 (c) The agency is a body corporate and politic and an instrumentality of the public utilities that form the agency, but has a separate and independent legal existence from the public utilities. A debt, obligation, or liability of the agency does not constitute a debt, obligation, or liability of a public utility or the state. A liability incurred by the agency shall be satisfied exclusively from the assets or revenue of the agency, and a creditor of the agency or any other person does not have any right of action or claim against a public utility or the state, because of a debt, obligation, or liability of the agency. The agency has the powers of a public utility under AS 42.05 and the immunities of a public utility. In addition to the powers granted to the agency under AS 42.45.300 and this section, the agency has the power
     (1) to adopt bylaws of the agency;

     (2) to sue and be sued;

     (3) to carry out the authorized purposes of the agency;

     (4) subject to (e) of this section, to issue revenue bonds and other obligations that are not obligations of either the state or the public utilities that are parties to the agency agreement to provide financing to carry out the authorized purposes of the agency;

     (5) in addition to the powers of eminent domain in AS 42.05.631, to exercise the powers of eminent domain and a declaration of taking to acquire land or materials within the boundaries of the power project purchased by the agency from the Alaska Energy Authority under the procedures set out in AS 09.55.240 — 09.55.460 to carry out the authorized purposes of a joint action agency; and

     (6) to use facilities, projects, and related assets owned, leased, or operated by the joint action agency as security in accordance with applicable law.

 (d) The agency is created by a written agreement among the public utilities forming the agency. Each public utility forming the agency shall adopt the terms of the agreement by ordinance or resolution. After the public utilities that are parties to the agency agreement adopt and execute the agreement, the board of directors of the agency shall file the agency agreement with the Department of Commerce, Community, and Economic Development. Subject to (c) of this section, the agency agreement may define the powers, functions, and activities of the agency and specify the means by which they shall be performed. The agency agreement may establish the rights and responsibilities of the public utilities that form the agency. If applicable, the agency agreement must provide for
     (1) apportionment between the public utilities that are parties to the agency agreement of responsibility for expenses incurred in the performance of the functions or activities;

     (2) apportionment of fees or other revenue derived from the functions or activities and the manner in which the revenue shall be accounted for;

     (3) the transfer of personnel and the preservation of employment benefits; and

     (4) the rights of the public utilities that are parties to the agency agreement to terminate the agreement, subject to (e) of this section, including resolving disputes if the public utilities are unable, upon termination of the agency agreement, to agree on the transfer of personnel or the division of assets and liabilities between the parties to the agreement.

 (e) The public utilities that are parties to the agency agreement shall pledge and agree with the holders of revenue bonds or other obligations issued by the agency, including with a state entity that provides financing to the agency, that the public utilities and the agency will not terminate the agency or take any other action that would limit or alter the rights and powers vested in the agency by this section to fulfill the terms of a contract made by the agency with the holders of the bonds or other obligations and that the public utilities and the agency will not in any way impair the rights and remedies of the holders until the bonds or other obligations, together with the interest on them with interest on unpaid installments of interest, and all costs and expenses in connection with an action or proceeding by or on behalf of the holders of the bonds or other obligations are fully met and discharged. The agency may include this pledge and agreement of the public utilities and the agency, insofar as it refers to holders of bonds and other obligations of the agency, in a contract with the holders and, insofar as it relates to a state entity, in a contract with the state entity.

 (f) Bonds and other obligations issued by the agency and all interest and income from them and all fees, charges, funds, revenue, income, and other money pledged or available to pay or secure the payment of the bonds or obligations or interest on them are exempt from taxation. The real and personal property of the agency and the assets, income, and receipts of the agency are exempt from all taxes and special assessments of the state or a political subdivision of the state, except that electricity sold at retail by an agency is subject to the electric cooperative tax (AS 10.25.540 — 10.25.570).

 (g) A loan to, investment in, or other financial assistance provided to the agency by the state or any political subdivision of the state does not constitute a violation of AS 37.10.085.

 (h) An agency formed by, and that continues to include, one or more municipal public utilities is a political subdivision for purposes of AS 38.05.810, and functions as a political subdivision in the acquisition and ownership of the power project under the agreement authorized by this section. Except as provided in this subsection, the agency is not a political subdivision of the state.

 (i) The agency may not sell a project owned by the agency to any purchaser without the approval of the legislature in advance of the effective date of the sale, except that a sale made to a public utility that is a party to the agreement does not require legislative approval.

 (j) Notwithstanding (i) of this section, the project and related assets may be transferred in connection with a foreclosure or other enforcement of a lien or security interest to a party holding a lien or security interest acquired under (c)(6) of this section or to another party without legislative approval. A party obtaining a property interest under this subsection may transfer that interest without legislative approval.

 (k) In this section,
     (1) “agency” means a joint action agency formed under this section;

     (2) “agency agreement” or “agreement” means the written agreement described in (d) of this section between or among the public utilities creating a joint action agency;

     (3) “parties to the agency agreement” means those public utilities that initially form the agency and,
          (A) in the event of a permitted withdrawal of a public utility from the agency in accordance with the terms of the agency agreement, those public utilities that remain parties to the agency agreement; and

          (B) if authorized by law, includes an additional public utility that becomes a party to the agency agreement;

     (4) “public utility” has the meaning given the term in AS 42.05.990;

     (5) “state entity” means a state department, authority, or other administrative unit of the executive branch of state government.




Sec. 42.45.320. Liability, indemnification, and insurance.
 (a) A protected person is not individually liable for conduct performed within the scope of the person’s duties for the agency. However, the protected person may be held individually liable for conduct if it was not reasonable for the person to believe that the conduct was in, or not contrary to, the best interests of the agency.

 (b) Unless prohibited by the agency agreement, the agency shall indemnify a protected person who is or may be made a party to a contested matter arising out of acts or omissions within the scope of the person’s duties for the agency against expenses actually and reasonably incurred in connection with the contested matter. However, the agency may not indemnify the protected person if the person did not reasonably believe the conduct to be in, or not opposed to, the best interests of the agency. With respect to a criminal action or proceeding, the agency shall indemnify a protected person unless the person had reasonable cause to believe that the conduct was unlawful.

 (c) An agency may purchase and maintain insurance on behalf of a protected person against liability asserted against the protected person and incurred in an official capacity or arising out of the person’s status.

 (d) In this section,
     (1) “agency” means a joint action agency formed under AS 42.45.310;

     (2) “conduct” includes action, inaction, and omission;

     (3) “contested matter” means a proposed, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative;

     (4) “expenses” include attorney fees, judgments, fines, and amounts paid in settlement;

     (5) “protected person” means a director, officer, employee, or agent of an agency.




Article 6. Water-Power Development Projects.


Sec. 42.45.350. Licensing of water-power development projects.
 (a) The Regulatory Commission of Alaska shall adopt regulations to establish a regulatory program for water-power development projects that qualify under this section.

 (b) The regulatory program established under this section must
     (1) protect the public interest, the purposes listed in (2) of this subsection, and the environment to the same extent provided by the requirements for licensing and regulation by the Federal Energy Regulatory Commission under 16 U.S.C. 792 — 823c and other applicable federal laws, including 16 U.S.C. 1531 et seq. (Endangered Species Act) and 16 U.S.C. 661 et seq. (Fish and Wildlife Coordination Act);

     (2) give equal consideration to
          (A) energy conservation;

          (B) the protection of, mitigation of damage to, and enhancement of, fish and wildlife, including related spawning grounds and habitat;

          (C) the protection of recreational opportunities;

          (D) the preservation of other aspects of environmental quality;

          (E) the interests of resident Alaska Natives;

          (F) other beneficial public uses, including irrigation, flood control, water supply, navigation; and

          (G) the interest of Alaska residents and landowners; and

     (3) require, as a condition of a license for any qualifying project work,
          (A) the construction, maintenance, and operation by a licensee at the licensee’s own expense of the lights and signals that may be directed by the secretary of the department of the United States government in which the United States Coast Guard is operating and the fishways that are prescribed by the Secretary of the Interior or the Secretary of Commerce, as appropriate;

          (B) the operation of any navigation facilities that may be constructed as part of any project to be controlled at all times by the reasonable rules and regulations that are adopted by the Secretary of the Army; and

          (C) conditions for the protection of, mitigation of damage to, and enhancement of fish and wildlife based on recommendations received under 16 U.S.C. 661 et seq. (Fish and Wildlife Coordination Act) from the National Marine Fisheries Service, the United States Fish and Wildlife Service, and the state Department of Fish and Game.

 (c) For purposes of this section, the term “qualifying project work” means a project work
     (1) that is not part of a project licensed under 16 U.S.C. 792 — 823c or exempted from licensing under 16 U.S.C. 792 — 823c or under 16 U.S.C. 2705 (sec. 405 of the Public Utility Regulatory Policies Act of 1978) before November 9, 2000;

     (2) for which a preliminary permit, a license application, or an application for an exemption from licensing has not been accepted for filing by the Federal Energy Regulatory Commission before November 9, 2000, unless the application is withdrawn at the election of the applicant;

     (3) that is part of a project that has a power production capacity of 5,000 kilowatts or less;

     (4) that is located entirely within the boundaries of the state; and

     (5) that is not located in whole or in part on an Indian reservation, a conservation system unit as defined in 16 U.S.C. 3102 (sec. 102, Alaska National Interest Lands Conservation Act), or on a segment of a river designated for study for addition to the National Wild and Scenic Rivers System.

 (d) In the case of nonqualifying project work that would be qualifying project work but for the fact that the project has been licensed or exempted from licensing by the Federal Energy Regulatory Commission before November 9, 2000, the licensee of the project may elect to make the project subject to licensing and regulation by the state under this section.

 (e) With respect to projects located in whole or in part on a reservation, a conservation system unit, or federal public land, a state license or exemption from licensing is subject to
     (1) the approval of the secretary of the federal department having jurisdiction over those lands; and

     (2) the conditions that the secretary may prescribe.

 (f) The Regulatory Commission of Alaska shall notify the Federal Energy Regulatory Commission not later than 30 days after making any significant modification to its regulatory program under this section.

 (g) In this section,
     (1) “federal public land” means the land and interest in land owned by the United States that is subject to private appropriation and disposal under public land laws, but does not include a reservation;

     (2) “licensee” means any person, state, or municipality licensed under the provisions of 16 U.S.C. 797 and any assignee or successor in interest of the licensee thereof;

     (3) “project” means, notwithstanding the definition in AS 42.45.990, a complete unit of improvement or development, consisting of a power house, all water conduits, all dams and appurtenant works and structures, including navigation structures, that are a part of the unit, and all storage, diverting, or forebay reservoirs directly connected with the unit, the primary line or lines transmitting power from the unit to the point of junction with the distribution system or with the interconnected primary transmission system, all miscellaneous structures used and useful in connection with the unit or any part of the unit, and all water rights, rights-of-way, ditches, dams, reservoirs, land, or interests in land the use and occupancy of which are necessary or appropriate in the maintenance and operation of the unit;

     (4) “project work” means the physical structure of a project;

     (5) “reservation”
          (A) means a national forest; tribal land embraced within an Indian reservation; a military reservation; other land and an interest in land owned by the United States and withdrawn, reserved, or withheld from private appropriation and disposal under the public land laws; and land and an interest in land acquired and held for any public purposes;

          (B) does not include a national monument or national park.




Article 7. Emerging Energy Technology Fund.


Sec. 42.45.375. Emerging energy technology fund.
 (a) In order to promote the expansion of energy sources available to Alaskans, the emerging energy technology fund is established. The fund consists of
     (1) money appropriated to the fund by the legislature to provide grants for energy projects; and

     (2) gifts, bequests, contributions from other sources, and federal money appropriated to the fund.

 (b) The fund is not a dedicated fund.

 (c) The fund shall be administered by the authority, but the authority may contract for the investment of money appropriated to the fund but not disbursed for a grant. The authority, in consultation with the advisory committee established under (f) of this section, may make grants from the fund to eligible applicants for demonstration projects of technologies that have a reasonable expectation to be commercially viable within five years and that are designed to
     (1) test emerging energy technologies or methods of conserving energy;

     (2) improve an existing energy technology; or

     (3) deploy an existing technology that has not previously been demonstrated in the state.

 (d) In making grants under this section, the authority, in consultation with the advisory committee established under (f) of this section, shall give priority to
     (1) Alaska residents, associations, organizations, or institutions;

     (2) projects that demonstrate partnership with the University of Alaska or another Alaska postsecondary institution;

     (3) projects supported by matching funds or in-kind partnerships; and

     (4) projects with potential for widespread deployment in the state.

 (e) In administering the fund, the authority may enter into a contract or agreement with the University of Alaska to provide technical and economic review and analysis for the advisory committee established under (f) of this section and data acquisition and analysis of the projects awarded grants.

 (f) An advisory committee is established and consists of seven members. Each member of the committee shall have a degree in science or engineering, or equivalent professional experience, and at least two years of experience working in the state. Members of the committee shall be appointed by the governor to staggered three-year terms. The committee consists of one representative of each of the following groups:
     (1) a business or organization engaged in the renewable energy sector;

     (2) a business or organization engaged in the fossil fuel energy sector;

     (3) the Alaska Power Association or an Alaska electric utility;

     (4) the Denali Commission established under P.L. 105-277 and mentioned in a note at 42 U.S.C. 3121;

     (5) the National Renewable Energy Laboratory;

     (6) the Arctic Energy Office of the National Energy Technology Laboratory;

     (7) the Alaska Industrial Development and Export Authority.

 (g) A member of the advisory committee appointed under (f) of this section serves without compensation but is entitled to per diem and travel expenses as provided in AS 39.20.180.

 (h) If a member of the advisory committee appointed under (f)(4), (5), or (6) of this section is not available to serve as a member of the committee, the governor shall appoint a representative from a federal agency or department with a comparable mission or purpose to the agency listed in (f)(4), (5), or (6) of this section to fill the position on the committee. If a representative from a federal agency or department is not available to fill the position, the governor may appoint a member from a state agency or department.

 (i) A business or organization represented by a member of the advisory committee under (f) of this section is not eligible to receive a grant from the fund.

 (j) In this section,
     (1) “eligible applicant” means
          (A) an electric utility holding a certificate of public convenience and necessity under AS 42.05;

          (B) an independent power producer;

          (C) a local government, quasi-governmental entity, or other governmental entity, including a tribal council or housing authority;

          (D) a business holding an Alaska business license; or

          (E) a nonprofit organization;

     (2) “energy technology” means technology that promotes, enhances, or expands the diversity of available energy supply sources or means of transmission, increases energy efficiency, or reduces negative energy-related environmental effects; “energy technology” includes technology related to renewable sources of energy, conservation of energy, enabling technologies, efficient and effective use of hydrocarbons, and integrated energy systems;

     (3) “fund” means the emerging energy technology fund.




Article 8. Miscellaneous Provisions.


Sec. 42.45.400. [Renumbered as AS 42.45.900.]
Sec. 42.45.410. [Renumbered as AS 42.45.910.]
Sec. 42.45.900. Assistance to rural utilities.
 (a) The authority shall provide technical assistance to rural utilities including catastrophe prevention programs and other training programs for utility projects. The authority shall provide rural utilities with the technical assistance and training that the utilities need to improve the efficiency, safety, and reliability of their power systems and to prevent emergency situations from developing. At a minimum, the assistance and training must include information on
     (1) reducing distribution line losses;

     (2) installation of generators that are more fuel efficient;

     (3) preventative maintenance programs;

     (4) safety inspections;

     (5) installing and maintaining waste heat systems;

     (6) improved metering systems;

     (7) improved management and administration; and

     (8) coordinating regional activities, including circuit rider maintenance programs.

 (b) In providing rural utilities with technical assistance and training, the authority shall give priority to contracting with the private sector for these services.

 (c) This section does not create a duty in tort, and may not be the basis for an action against the state, the authority, or the officers, employees, agents, or contractors of either for damages, injury, or death.




Sec. 42.45.910. Relationship with private sector.
The authority shall, to the maximum extent feasible, carry out its powers and duties under this chapter by entering into contracts with appropriate entities in the private sector.


Article 9. General Provisions.


Sec. 42.45.990. Definitions.
In this chapter, unless the context otherwise requires,
     (1) “authority” means the Alaska Energy Authority;

     (2) “feasibility study”
          (A) means a study conducted to establish the economic and environmental practicality of completing a proposed power project;

          (B) includes engineering and design work to meet the requirements for submission of a license application for a proposed new project to the Federal Energy Regulatory Commission;

     (3) “power” includes electrical energy generated, distributed, bought, or sold for lighting, heating, power, and every other useful purpose;

     (4) “power project” or “project” means a plant, works, system, or facility, together with related or necessary facilities and appurtenances, including a divided or undivided interest in or a right to the capacity of a power project or project, that is used or is useful for the purpose of
          (A) electrical or thermal energy production;

          (B) waste energy utilization and energy conservation; or

          (C) transmission, purchase, sale, exchange, and interchange of electrical or thermal energy, including district heating or interties;

     (5) “reconnaissance study” means a study conducted to assess the present and future electrical and thermal energy needs of an area.




Title 43. Revenue and Taxation.