1995-04-22                     House Journal                      Page 1452
HB 320                                                                       
HOUSE BILL NO. 320 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
"An Act approving the sale of Prudhoe Bay Unit royalty oil by the             
State of Alaska to Tesoro Alaska Petroleum Company; and                        
providing for an effective date."                                              
                                                                               
was read the first time and referred to the Finance Committee.                 
                                                                               
The following fiscal notes apply:                                              
                                                                               
Zero fiscal note, Dept. of Natural Resources, 4/22/95                          
Zero fiscal note, Dept. of Revenue, 4/22/95                                    
                                                                               
The following attachments will be published in the House & Senate              
Joint Journal Supplement No. 12:                                               
                                                                               
Dept. of Natural Resources                                                     
                                                                               
Agreement for the Sale and Purchase                                           
	of State Royalty Oil to                                                       
	Tesoro Alaska Petroleum Company                                               
	Dated April 21, 1995                                                          
                                                                               
	Final Findings to Sell Royalty Oil to                                         
	Tesoro Alaska Petroleum Company                                               
	Dated April 21, 1995                                                          
                                                                               
Alaska Royalty Oil & Gas Development Advisory Board                            
Resolution 95-1                                                                
                                                                               
The Governor's transmittal letter, dated April 22, 1995, appears below:        
                                                                               
"Dear Speaker Phillips:                                                        
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am     
transmitting a bill that provides for legislative approval of a royalty oil    

1995-04-22                     House Journal                      Page 1453
HB 320                                                                       
contract between the state and Tesoro Alaska Petroleum Company for             
the sale of Prudhoe Bay Unit royalty oil.  Also transmitted with this          
bill are copies of the resolution of the Alaska Royalty Oil and Gas            
Development Advisory Board recommending approval of that contract              
in accordance with AS38.06.040(a)(3) and 38.06.050(a), and the report          
required by AS38.06.070(c).                                                    
                                                                               
The contract is described in a final finding issued by the commissioner        
of the Department of Natural Resources on April21, 1995.  A copy of            
the commissioners final finding and the signed contract are attached.          
Copies of the commissioners preliminary finding and the draft contract         
previously were sent to the legislature and made available to the public       
for review.                                                                    
                                                                               
A bill approving the contract is being introduced for legislative              
approval for two reasons.  First, as a matter of comity, I respect the         
legislatures desire to have a direct voice in major disposals of royalty       
oil.  Therefore, although this and previous Administrations have               
consistently taken the position that the statutory requirement of              
legislative approval of royalty oil contracts (AS 38.06.055) is                
unconstitutional, the contract itself contains provisions requiring            
approval by the legislature before it can take effect.                         
                                                                               
Second, this legislation would ratify the royalty oil contract.  This          
ratification would cure any procedural defect that might have occurred         
in the process of entering into this contract.                                 
                                                                               
I urge your prompt consideration and passage of this bill.                     
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"