03/20/2007 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB18 | |
| SJR4 | |
| SB121 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SJR 4 | TELECONFERENCED | |
| *+ | SB 121 | TELECONFERENCED | |
| += | SB 99 | TELECONFERENCED | |
| += | SB 18 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 20, 2007
1:32 p.m.
MEMBERS PRESENT
Senator Johnny Ellis, Chair
Senator Gary Stevens, Vice Chair
Senator Bettye Davis
Senator Lyman Hoffman
Senator Con Bunde
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 4
Urging the attorney general, the producers of natural gas in the
Cook Inlet region, and the Regulatory Commission of Alaska to
work to secure long-term and affordable supplies of natural gas
for the people and businesses of the state.
HEARD AND HELD
SENATE BILL NO. 18
"An Act relating to property foreclosures and executions; and
amending Rule 65, Alaska Rules of Civil Procedure."
MOVED CSSB 18(L&C) OUT OF COMMITTEE
SENATE BILL NO. 121
"An Act relating to discharge from commercial passenger vessels;
providing for an effective date by repealing the delayed
effective date found in sec. 16, ch. 153, SLA 2004; and
providing for an effective date."
HEARD AND HELD
SENATE BILL NO. 99
"An Act relating to the composition of the Alaska Police
Standards Council; and providing for an effective date."
SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SJR 4
SHORT TITLE: NATURAL GAS FOR STATE RESIDENTS
SPONSOR(s): SENATOR(s) WIELECHOWSKI
03/12/07 (S) READ THE FIRST TIME - REFERRALS
03/12/07 (S) L&C, RES
03/20/07 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 18
SHORT TITLE: PROPERTY FORECLOSURES AND EXECUTIONS
SPONSOR(s): SENATOR(s) BUNDE
01/16/07 (S) PREFILE RELEASED 1/5/07
01/16/07 (S) READ THE FIRST TIME - REFERRALS
01/16/07 (S) L&C, JUD, FIN
03/13/07 (S) L&C AT 1:30 PM BELTZ 211
03/13/07 (S) Heard & Held
03/13/07 (S) MINUTE(L&C)
03/15/07 (S) L&C AT 1:30 PM BELTZ 211
03/15/07 (S) Scheduled But Not Heard
03/20/07 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 121
SHORT TITLE: CRUISE SHIP DISCHARGE
SPONSOR(s): SENATOR(s) ELTON
03/14/07 (S) READ THE FIRST TIME - REFERRALS
03/14/07 (S) L&C
03/20/07 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
BRYAN MERRELL
First American Title Insurance Co.
Seattle WA
POSITION STATEMENT: Available to answer questions on SB 18.
SENATOR CON BUNDE
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 18.
STEPHAN ROUTH, Attorney
Routh Crabtree
Anchorage AK
POSITION STATEMENT: Explained CSSB 18(L&C), version M.
SENATOR WIELECHOWSKI
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SJR 4.
BARBARA WILLIAMS
Alaska Public Interest Research Group (AKPIRG)
Anchorage AK
POSITION STATEMENT: Supported SJR 4.
PAUL KENDALL
Representing himself
Anchorage AK
POSITION STATEMENT: Supported SJR 4.
PAT LUBY, Advocacy Director
AARP
Anchorage AK
POSITION STATEMENT: Supported SJR 4.
SENATOR KIM ELTON
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 121.
BRYCE BROCKWAY, Vice Present
Operations
Cruise West
POSITION STATEMENT: Supported SB 121.
CAPTAIN MICHAEL JONES
Linblad Expositions
POSITION STATEMENT: Supported SB 121.
ACTION NARRATIVE
CHAIR JOHNNY ELLIS called the Senate Labor and Commerce Standing
Committee meeting to order at 1:32:00 PM. Members present at the
call to order were Senators Bunde, Stevens and Ellis.
SB 18-PROPERTY FORECLOSURES AND EXECUTIONS
CHAIR ELLIS announced SB 18 to be up for consideration. He asked
Bryan Merrell, First American Title Insurance Co., Seattle,
Washington, if he had any comments to make.
MR. MERRELL responded that he was available to answer questions.
1:33:29 PM
SENATOR BUNDE mentioned that he had a proposed CS to SB 18 [25-
LS0153\ L] that Mr. Routh would explain.
STEPHAN ROUTH, Crabtree Routh, explained that the CS has changes
in five areas. The first is an inconsistency in terminology
between "grantor" and "trustor". It's a technical change and has
been made consistently "trustor" throughout the document. The
second change is also technical that sets up parameters for the
length of time for publishing on the Website. The third change
clarifies why the Website for dissemination of the information
has to be free to the public for viewing.
SENATOR DAVIS joined the committee at 1:34:36 PM.
MR. ROUTH continued explaining that the fourth item adds
language to clarify that "physical possession" means actual
physical possession. So, in two places in section 4 the word
"actual" or "actually" has been added. Last, a typo that read
"and" in section 11 was corrected to "or".
CHAIR ELLIS mentioned that they are referring to the Bannister
CSSB 18, version L.
SENATOR BUNDE moved to adopt CSSB 18(L&C), version L. There were
no objections and it was so ordered.
1:36:33 PM
SENATOR BUNDE said the changes to the foreclosure procedure were
technical and made for a more efficient and consumer friendly
law. The bill had not changed substantially from the original.
It would allow people to bid on a foreclosure property and use
it as a residence and assume the American dream.
CHAIR ELLIS said he personally supported his goal and asked if
he would be able to get all the commercials off late-night TV
that promote wealth-creating systems built around flipping
properties with no money down.
SENATOR BUNDE replied that while the Alaska State Senate has
awesome power, it has its limitations.
SENATOR HOFFMAN joined the committee at 1:38:02 PM.
SENATOR STEVENS asked what "actually in physical possession"
means.
MR. ROUTH explained the intent was to deal with a Supreme Court
case heard a few years ago called the Nystrom v. Buckhorn that
set up standards that were hard for the title industry to
conform to. So, the intent of this language is to make the
meaning absolutely clear that somebody has to actually be
physically occupying the property.
CHAIR ELLIS noted there was no opposition to the bill and he saw
nothing in the CS that would trigger a new fiscal note, which
was zero.
SENATOR BUNDE said he had heard of no opposition either and
moved to pass CSSB 18(L&C). There were no objections and it was
so ordered.
SJR 4-NATURAL GAS FOR STATE RESIDENTS
CHAIR ELLIS announced SJR 4 to be up for consideration.
1:44:57 PM
SENATOR WIELECHOWSKI, sponsor of SJR 4, explained how the people
of Southcentral Alaska have seen soaring heating costs in the
past five years and there are about 340,000 Alaskans that use
Cook Inlet gas to heat their homes from Fairbanks and Anchorage
to the Kenai Peninsula. Since 2002 the prices of natural gas
have increased 97 percent with a 30 percent increase this year
alone. The average cost of heating a home has approximately
doubled from about $750 five years ago to about $1,544 today.
He said the increases have caused severe hardship especially to
those on fixed incomes. Constituents are looking to the
legislature to control the costs. The company that delivers gas
to residents of Southcentral Alaska, Enstar Natural Gas Company,
reports that its share of gas costs have declined. The big issue
according to them is the cost at which they are securing gas
from Cook Inlet producers because the Inlet's known gas supplies
are being depleted. The DNR estimates there is approximately 1.7
tcf of gas reserves remaining out of about 8.8 tcf that have
been discovered in the Inlet.
At the same time the Southcentral businesses and residents are
struggling to pay their soaring heating costs, the owners of the
Kenai Liquefied Natural Gas Plant are applying for a two-year
extension of their license to export natural gas to Japan.
ConocoPhillips and Marathon currently export 1.3 metric tons of
LNG or about 36 percent of the gas produced each year in the
Inlet to Tokyo Japan for use by the Tokyo Electric Power Company
and Tokyo Gas.
SJR 4 calls on the Attorney General, in consultation with the
Department of Natural Resources, to evaluate whether the
extension of the export license is in the interests of local
consumers in the state and whether the non-renewal of the
license will result in lower prices for local businesses and
residents. It also calls on the producers of natural gas in Cook
Inlet to work with local utilities to provide more affordable
gas for Alaskans.
SENATOR WIELECHOWSKI said he has been told by several
knowledgeable individuals that the cost of producing gas from
Cook Inlet, particularly from the Legacy Fields, is less than $1
per mcf while Enstar consumers are paying $6. He has also heard,
but cannot verify because the information is proprietary, that
Tokyo utilities are paying roughly the same or less for their
gas than local consumers despite the fact it has to add the cost
of transportation over 6,600 nautical miles round trip to Japan
and the cost of liquification and regasification to it.
In a recent proposed contract between Marathon and Enstar,
Enstar agreed to pay Marathon at a rate tied to the Henry Hub
pricing point in Louisiana. Over the last two years the Henry
Hub rate has averaged about $7.60. This rate spiked in 2005
because of Hurricane Katrina, so local consumers are paying high
prices in part because of a hurricane that occurred thousands of
miles away. The Henry Hub benchmark for pricing Cook Inlet gas
is relatively new. Prior to 2004, the contracts relied primarily
on the price of oil. Gas under these contracts cost Enstar
significantly less than the Henry Hub rate.
SENATOR WIELECHOWSKI said the intent of SJR 4 is to express the
will of the legislature that producers offer terms as beneficial
as possible to local consumers recognizing that natural gas
sells on a world market and Alaska is competing in it for
exploration dollars and that high prices may serve as an
incentive for more exploration.
1:46:55 PM
SENATOR WIELECHOWSKI said a first reasonable step is to evaluate
whether continuing the export of Cook Inlet's gas is in the best
interests of those who rely on it. The third thing SJR 4 does is
it calls on the Regulatory Commission of Alaska to expedite
review of any contract that will provide long-term affordable
gas for Alaskans. He has heard from both the utilities and the
producers that the timelines under which the RCA operates need
to be tightened in the interests of everyone.
1:47:12 PM
CHAIR ELLIS said he has heard the same from his constituents and
he appreciated him addressing the issue.
SENATOR BUNDE pointed out that people in the Cook Inlet have had
below-market natural gas prices for a long time and going to
market price would naturally be shocking because of that. He
asked Senator Wielechowski if people realize that prohibiting
commercialization of the gas will probably make the price go up
even more and that commercialization of the gas allows a volume
to be produced that reduces consumers' price overall. Household
consumption would not use the large volume that would help
amortize the cost of exploration.
1:48:51 PM
SENATOR WIELECHOWSKI responded that he is just asking that the
Attorney General consider whether it is in Southcentral's best
interest to export 36 percent of its gas.
SENATOR BUNDE said he hoped the Attorney General would consider
that the resource belongs to the whole state, not just
Southcentral and if the state's economy would be negatively
impacted by subsidizing Southcentral.
SENATOR WIELECHOWSKI replied that Cook Inlet supplies natural
gas to 473,000 people, two-thirds of all Alaskans.
1:51:28 PM
SENATOR STEVENS asked if Agrium's use is part of the 64 percent
that remains in Alaska. He also didn't quite understand where
the cost of gasification fit in with his comparison of the gas
prices in Tokyo and Alaska. What happens to the gas that would
make him think the cost would be higher?
SENATOR WIELECHOWSKI replied that the percentages vary, but
roughly 36 percent of the gas goes oversees; roughly 20 percent
goes to Agrium; 36 percent to ConocoPhillips and Marathon; 16
percent goes to EnStar users, and varying percentages go to
utilities. The vast majority is going to users in Kenai.
He thought one of the reasons Tokyo users pay less is because
they have a longer term contract, which is coming up for
renewal. The price might go up then. But when all the costs of
getting the gas up, liquification, regasification and
transportation are factored in, the residents of Japan are
paying roughly the same, if not less, than the residents of
Southcentral are paying.
1:54:12 PM
SENATOR STEVENS asked how many years he expected this to
continue before the gas supply goes into decline.
SENATOR WIELECHOWSKI replied that the 1.7 tcf of gas is
estimated to last eight years at current use. While there is a
dispute over how much gas Alaska has to fill its needs,
Southcentral now doesn't have enough. Agrium cannot operate in
the winter because a spike of natural gas is needed then for
Enstar consumers and businesses. He stated:
Some people say that we don't have a shortage. I guess
I would like to point to the fact that we have
consumers who aren't using as much gas as they would
like to and I would also point to the fact that we've
had increases of 97 percent - supply and demand.
1:55:42 PM
CHAIR ELLIS asked for his suggested amendments.
SENATOR WIELECHOWSKI responded that he has three amendments.
AMENDMENT 1
On page 2, line 12: after "many benefits to the
state," replace the existing clause with "the state
must have as a priority the availability of affordable
gas to meet the needs of its people."
1:56:48 PM
SENATOR BUNDE asked if the state could subsidize the cost of gas
for people in Southcentral, how would "affordable" be defined.
SENATOR WIELECHOWSKI replied when people are making choices
between paying rent, buying food or buying gas. He repeated that
prices have increased 97 percent.
CHAIR ELLIS asked Senator Wielechowski to think about this point
for a CS and asked him to go on to the next amendments.
SENATOR WIELECHOWSKI went on.
AMENDMENT 2
On page 2, line 15: after "attorney general" add "in
coordination with the Department of Natural
Resources,"
AMENDMENT 3
On page 2, line 17: replace "termination" of the
license with "non-renewal" of the license.
1:58:26 PM
SENATOR BUNDE saw a potential financial penalty to the state
from terminating someone's license and he also wanted to know if
there would be possible litigation involved in non-renewal of a
license.
BARBARA WILLIAMS, Alaska Public Interest Research Group
(AKPIRG), related how some families couldn't afford gas at all
because they needed to eat. Some people who qualify for energy
assistance aren't getting it because of the numbers of people
who live in their households. Her own gas price has doubled. She
concluded saying she wants affordable gas for all Alaskans.
SENATOR BUNDE asked if natural gas should be added to welfare
benefits.
MS. WILLIAMS replied yes.
2:02:44 PM
PAUL KENDALL, Anchorage resident representing himself, supported
SJR 4. He advocated establishing an Energy Bill of Rights for
single-family homeowners and residential dwellings stating the
four essential needs: clean air, clean water, a balanced
environment and energy. He said a raise in energy prices
translates many times over into the prices people pay for the
four essentials.
He said they need a "true and actual impact cost
accounting....at the wellhead of where that gas comes in at." He
reasoned that public utilities were set up so that the public
has to have some secure position beyond normal capitalism or
free enterprise.
MR. KENDALL suggested adding language saying that all
information has to be made available to the general public. Now
the companies say the information is proprietary and many
companies have a history of manipulating the price for their own
welfare.
He also said he heard that a private company put in an offer to
purchase Enstar and he thought allowing that would be a terrible
mistake. When that happens a company can seal its records and
you'll never get to distribution networks, points and profit
additions without a major legal undertaking. He also said he
wanted to know more about the hydrogen production and if it is
being generated where it is sent.
2:09:34 PM
SENATOR BUNDE said he didn't want Mr. Kendall to have any
illusions that this is just a resolution and has no force of
law.
2:10:06 PM
PAT LUBY, Advocacy Director, AARP, said he has no expertise in
gas issues, but if SJR 4 could help bring down heating costs for
older and younger Alaskans, he would welcome it. He said the
Enstar increase in January hit many of his members hard and it
has additional increase proposals before the RCA at this time.
He said that consumers in the Lower 48 often do pay more for
their gas, but their constituents are unaware of that and don't
care. They're worried about what they have to pay each month.
Alaska has a means-tested welfare program that does include
utilities called the Low Income Home Energy Assistance Program
(LIHEAP) and both Senators have been very good about increasing
the federal emergency funding for that in the past.
CHAIR ELLIS held SJR 4 for a CS.
SB 121-CRUISE SHIP DISCHARGE
2:12:22 PM
SENATOR ELLIS, announced SB 121 to be up for consideration.
SENATOR ELTON, sponsor of SB 121, explained that it restores the
alternate compliance discharge quota calls that were codified by
the legislature in 2004 in HB 522. It passed the Senate 20 to 0
and the House 40 to 0. He explained that they are having to do
this again because of a simple oversight. Passage of the cruise
ship initiative last year inadvertently repealed the provisions
of law enacted in HB 522. That's not a problem that was
instigated by the sponsors of the initiative.
The initiative sponsor submitted the initiative and received the
petition books well before HB 522 was "a twinkle in the eye". He
said the initiative sponsors understand the situation and do not
object to SB 121.
SENATOR ELTON said the proposed CS is simple and is an attempt
to deal with language in the title that is very broad. They
wanted to make sure that everyone understood that this is to
replicate HB 522 and deals with small cruise ship vessels only.
CHAIR ELLIS agreed with tightening the title.
SENATOR BUNDE mentioned that he thought technically this would
change a law passed by initiative and the legislature is
forbidden to change those for two years.
SENATOR ELTON replied that is true, but he thought this would be
considered a technical change not a substantive change to the
initiative.
SENATOR BUNDE said he thought lawyers would have something to
say about that.
2:15:14 PM
BRYCE BROCKWAY, Vice Present, Operations, Cruise West, said they
are American-owned and operated and have seven small vessels and
visit many small towns throughout Alaska since 1946. He said
Cruise West supported SB 121.
2:17:03 PM
CAPTAIN MICHAEL JONES, Linblad Expositions, said they operate
two small passenger vessels in Southeast Alaska since 1989. The
company is U.S. owned and its vessels are U.S. built and crewed.
They supported SB 121 and its intent to reinstate the Small
Vessel Compliance Program from HB 522.
CHAIR ELLIS thanked them for testifying and said he would have a
CS for the next meeting.
SENATOR ELTON didn't know of any opposition. The language of HB
522 was thoroughly vetted when it was passed.
There being no further business to come before the committee,
CHAIR ELLIS adjourned the meeting at 2:20:04 PM.
| Document Name | Date/Time | Subjects |
|---|