TO: Gary Superman, Assembly President

Kenai Peninsula Borough Assembly Members

THRU: Dale L. Bagley, Mayor

FROM: Bill Popp, Oil & Gas Liaison

DATE: November 3, 2004

SUBJECT: State of Alaska Stranded Gas Act Municipal Advisory Group Resolutions

The State of Alaska Stranded Gas Act (ASGA) contains provisions that establish a Municipal Advisory Group (MAG) to provide for input from municipalities and the unorganized borough to the State of Alaska on issues related to the potential economic and revenue impacts of any proposed Alaska North Slope natural gas pipeline projects. Revenue impacted communities are those whose tax structures might be directly affected by the provisions of any proposed fiscal contract negotiated under the ASGA or the actual construction of a gas pipeline project through the respective community. Economically impacted municipalities are those that are not directly impacted by the construction of a pipeline project, but are still impacted by affects on their tax structure because of collateral support activities related to a gas pipeline project that are located within those municipalities. Economically impacted municipalities asked by the State of Alaska to participate in MAG include the Kenai Peninsula Borough, the City of Kenai and the City of Seward.

Several issues have been analyzed and discussed by MAG over the last several months and MAG has passed eight non-binding resolutions to date that provide input on topics ranging from tax policy to local hire and local access to natural gas. The Administration requests Assembly support for these resolutions.