Legislature(1993 - 1994)

1993-07-21 House Journal

Full Journal pdf

1993-07-21                     House Journal                      Page 1956
HB 116                                                                       
The following letter dated June 3, 1993, was received:                         
"Dear Speaker Barnes:                                                          
I am allowing the following bill to become law without my signature            
and am transmitting the engrossed and enrolled copies to the                   
Lieutenant Governor's office for permanent filing:                             
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 116                                   
(FIN)(title am)                                                                
"An Act amending the manner of determining the royalty received               
by the state on gas production, and directing the commissioner of              
natural resources to accept, under certain circumstances, the                  
contract price agreed to between a lessee of federal land and a gas            
or electric utility as the value of the federal government's royalty           
share from natural gas production on federal land from which the               
state is entitled under applicable federal law to receive a share of           
the royalty on gas production; and providing for an effective date."           
Chapter 53, SLA 1993                                                          
	[Effective Date:  See Chapter]                                                
It has been and continues to be one of my highest priorities to assure         
that the state's oil and gas lessees pay their full royalty and severance      
tax obligations to the state so that all of Alaska's citizens benefit from     
those shared resources.  It was for that reason that I pursued what            
some regarded as a controversial course of insisting that the federal          
government collect additional royalties which we believe were owed             
from lessees in Cook Inlet, even though the cost of those additional           
royalties would eventually be passed on to Chugach Electric consumers          
in the Anchorage area.  It was a difficult decision, but under the law         
as it existed, I felt I had no alternative but to act on behalf of all         
Alaskans who would have benefitted by virtue of the state's receiving          
90 percent of those royalties.                                                 
House Bill 116 represents the Legislature's decision to amend that law         
to remove the financial uncertainty to which Chugach Electric                  
customers were subject pending final resolution of our appeal to the           
federal government that it properly manage its royalty obligations to          
the state.  I steadfastly maintained neutrality during the Legislature's       

1993-07-21                     House Journal                      Page 1957
HB 116                                                                       
deliberations of this bill.  On balance, because the legislation has very      
narrowly focused on accepting lower royalty values for sales to public         
utilities which directly benefit Alaska consumers, I believe the               
legislation should not be vetoed.  On the other hand, I do not want to         
send conflicting signals that the state will not pursue vigorously its full    
royalty and tax entitlements from such a valuable nonrecurring                 
resource.  The Legislature has seen fit to carve out a narrow exception        
to this general policy, and I will not disagree with that decision.            
However, in recognition of the inevitable policy tension which this bill       
reflects, I have decided to allow House Bill 116 to become law without         
my signature.                                                                  
										Walter J. Hickel