Legislature(2001 - 2002)
04/20/2001 01:50 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 158-REPORT:STATE PARTICIPATE IN NAT GAS PIPE. Number 1260 CO-CHAIR MASEK announced that the next order of business would be CS FOR SENATE BILL NO. 158(RES) am, "An Act directing the commissioner of revenue to prepare a report to the legislature relating to the state's participation in owning or financing a gas pipeline project; and providing for an effective date." After much discussion, it was determined that HCS CSSB 158(O&G), version 22-LS0744\O, was before the committee. Number 1407 SENATOR JOHN TORGERSON, Alaska State Legislature, testified on behalf of the Senate Resources Committee, the sponsor of SB 158. Senator Torgerson pointed out that there has been much discussion as to whether "we" should take ownership interest in a pipeline. This legislation establishes the parameters for a study in order to determine whether the aforementioned is appropriate or not. The legislation also [requires] review of whether the state should participate in financing the project, and if so, in what capacity. Furthermore, the legislation requests that the Department of Revenue review the risks to the state when taking ownership. On page 3, beginning on line 2, is language that specifies that the department shall contract with a qualified person or firm. Since the desire is to do this in a timely manner, procurement under AS 36.30 is impracticable. The legislation requires that the contractor or its representative meet with the chairs of the "committees that have legislative jurisdiction over natural resources". Furthermore, it is stipulated that [the legislature] should have access to all the data that is collected. Senator Torgerson pointed out that the legislation specifies that the report shall be submitted to the legislature no later than January 31, 2002. SENATOR TORGERSON pointed out that the House Special Committee on Oil and Gas (HO&G) deleted the reference to standing committee so that it, as a special committee dealing with natural resources, could be included in this process. There was also an amendment on the Senate floor, which added language requesting a report that would study the possibility of natural gas distribution within the state, by additional pipeline facilities connected to population centers of the state. That language was taken out because the fiscal note went from $210,000 to approximately $500,000. Since that floor language dealt with an engineering question and the bill is a financing bill, the language was deleted. Therefore, the successful bid will first have to determine the location of the population centers and then make a determination regarding the size of the pipe and its cost to be laid. Number 1597 REPRESENTATIVE GREEN provided the committee with the following amendment: Page 3, line 9, following "chair the": Insert "Alaska Legislative Council and the" He explained that the chair of the Legislative Council would be added to those people who will be informed by this study because Legislative Council will be conducting a study during the interim. SENATOR TORGERSON related his first reaction that with that amendment there would be too many bosses. Although he understood that Representative Green wants a copy of the report, he pointed out that the legislation is referring to the firm actually meeting with the committee chairs and providing progress reports. REPRESENTATIVE GREEN pointed out much is being done now in regard to the legislature being prepared when the operators provide [the legislature] with their analysis of the gas pipeline. Legislative Council wants to be prepared and "have equal horsepower to guide us in what we think is best for the state," he said. Representative Green expressed the need "for continuity of review." Number 1745 SENATOR TORGERSON said that he believes that the [House and Senate] Resources Committees will have more meetings on gas line issues than Legislative Council. He expressed the need to make the determination as to whether Legislative Council is going to take the lead on gas line issues so that there isn't duplication of effort. Senator Torgerson remarked that he hadn't envisioned Legislative Council taking the lead with natural gas issues. REPRESENTATIVE GREEN contended that this [amendment] in no way attempts [to place Legislative Council] in the lead. He pointed out that during the interim unforeseen issues will arise. Those issues will likely require expertise that isn't available in the legislature or the state. Legislative Council has its own budget and if necessary, it could pay to secure the necessary legal, economic, and engineering experts. SENATOR TORGERSON remarked that although he believes everyone should obtain copies of the report, he wasn't sure how many people should meet with the contractor. Therefore, he thought Representative Green's language may be more appropriate on page 3, subsection (3), which discusses progress reports. Number 1884 REPRESENTATIVE FATE inquired as to how the studies would be done. He asked if the study embodied in SB 158 and the study by Legislative Council would be parallel studies. REPRESENTATIVE GREEN explained that he envisions Legislative Council contracting with unaffiliated experts as it did on the Joint Committee on Mergers. This is intended to ensure there is an unbiased view of the situation or issue. He recalled that when Legislative Council contracted with unaffiliated experts during the merger situation, significantly different conclusions were reached [by the unaffiliated experts and the task force]. Although he doubted that would be the case with this issue, he wanted to be sure that the power to do what is right for the state is available. Representative Green clarified that he wasn't saying that there should be additional bosses. SENATOR TORGERSON agreed that there may be some studies that one might want to do. However, somewhere during the process it will have to be determined who is hiring for what in order to avoid duplication. He related his view that this looks like a duplicate effort. However, he wasn't sure the amendment hurts anything. He noted that everyone is welcome at these meetings, which will be noticed as are all other meetings. Number 2026 REPRESENTATIVE GREEN noted that this legislation directs the commissioner of the Department of Revenue, who is chosen by the governor, to prepare this report. He recalled that when this was done before, the legislature didn't become [involved] in the [details] of what was going on and that is what he wanted to avoid. Representative Green asked, "Even though the chairs are kept abreast, will they know that the commissioner's review has gone into the depths that I feel are necessary? They don't necessarily have the horsepower on their own right to do that, whereas the Leg Council does." SENATOR TORGERSON pointed out that the amendment is speaking to the contractor not to the commissioner. REPRESENTATIVE GREEN related his belief that if the amendment was put in paragraph (3), then a report from the commissioner may be different if all Legislative Council received was a progress report and had no input on it. CO-CHAIR MASEK related her belief that the language on page 3, paragraph (2), seems to cover Representative Green's issue. REPRESENTATIVE GREEN clarified that he is making an analogy to the group that met regarding the merger. He explained: We thought we were probably knowledgeable enough on our right that we would have been able to understand, either object, agree, disagree, whatever. At least I found and I would say that my, at that time, cohort on the committee found that ... it's like studying a book of medicine and then going to a surgeon. That people that are experts in ... those three fields specifically, you need them working for you not working for someone else and reporting to you. There is a significant difference; that's the problem with just getting a report or ... progress reports. REPRESENTATIVE GREEN specified that Legislative Council's involvement would not supersede anything that this group of people would do. Representative Green reiterated that he is merely suggesting that Legislative Council be advised of what's going on as it happens because it may help uncover something that "we" want to know. He said that he wanted to prevent something not being uncovered. CO-CHAIR MASEK said that she felt that the merger issue was a different issue. Number 2218 SENATOR TORGERSON related his understanding of Representative Green's concern that if, during the process, the legislature finds that it is receiving faulty information because the contractor is working for the Department of Revenue rather than the legislature, the legislature may have to do its own report. Therefore, he further understood that Representative Green would be more up to speed on the issue or could look "through that" as the report is being reviewed if he was one of the people that received the report. REPRESENTATIVE GREEN agreed and added, "And ... had the horsepower to do it." SENATOR TORGERSON pointed out that Legislative Council always has the horsepower to do it. Again, Senator Torgerson remarked that he wasn't sure that Representative Green's amendment hurt anything. However, he interpreted the amendment to say that he couldn't do his job and thus has to have Legislative Council look over him. On the other hand, Senator Torgerson commented that everyone should be involved in the process, to which he didn't object. CO-CHAIR MASEK said that every legislator has the ability and right to participate in ongoing state issues. Although she acknowledged the need for legislators to be involved with this issue, she wasn't sure how this amendment fit. SENATOR TORGERSON reiterated that the amendment doesn't seem to hurt the bill. Furthermore, he noted that he sits on Legislative Council and he or another member of one of the Resources Committees could be designated [as a representative of Legislative Council]. Although he contended that the amendment would create some complication, he said that he didn't object to its addition into the bill. Number 2330 REPRESENTATIVE FATE pointed out that SB 158 has one more committee of referral. Therefore, if the amendment was moved [and adopted], then it would allow Senator Torgerson and the Senate Resources Committee time to review this. SENATOR TORGERSON agreed that he could then make any objections in the next committee of referral, the House Finance Committee. CO-CHAIR MASEK noted that she had a bit of a problem with the amendment because it seems to cause additional time and effort to gather people for meetings. TAPE 01-37, SIDE B REPRESENTATIVE GREEN posed a situation in which the two co- chairs and two chairs didn't like the direction of the report. He asked what Senator Torgerson would do in such a situation. SENATOR TORGERSON remarked that he didn't know what the data would be. He highlighted the fact that in the past, the problem has been that [the legislature] hasn't had the data. Therefore, the bill requires [the committees] to meet and review the data that is building the report. He stressed that the data will be available throughout the process, and furthermore there will be periodic meetings with the contractor. REPRESENTATIVE GREEN pointed out that the data will be presented by a contractor who is selected by the commissioner as opposed to a contractor selected by the legislature. SENATOR TORGERSON interjected, "Well, lets vote the bill down and do it all through Leg. Council ... if we want to have our own contractor." REPRESENTATIVE GREEN said, "That's not the point." He withdrew his amendment and said, "I think we're putting our head in [the] sand by not doing something like this." Number 2278 REPRESENTATIVE FATE moved to report HCS CSSB 158(O&G) out of committee with individual recommendations and the accompanying fiscal note. There being no objection, HCS CSSB 158(O&G) was reported from the House Resources Standing Committee.