Legislature(2015 - 2016)BARNES 124

03/30/2016 01:00 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 3/31/16 at 1:00 p.m. --
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+ Bills Previously Heard/Scheduled TELECONFERENCED
            SB 125-LEGISLATIVE MEMBERS OF AGDC BOARD                                                                        
1:03:31 PM                                                                                                                    
CO-CHAIR TALERICO announced  that the first order  of business is                                                               
CS  FOR SENATE  BILL  NO. 125(RES),  "An  Act adding  legislative                                                               
nonvoting  members  to  the  board of  directors  of  the  Alaska                                                               
Gasline Development Corporation."                                                                                               
1:04:15 PM                                                                                                                    
SENATOR MIA COSTELLO, Alaska  State Legislature, paraphrased from                                                               
her sponsor  statement, written as follows  [original punctuation                                                               
     Senate  Bill  125  amends  state   law  by  adding  two                                                                    
     legislators  as ex-officio  (nonvoting) members  to the                                                                    
     Board  of  Directors   of  Alaska  Gasline  Development                                                                    
     Corporation (AGDC).                                                                                                        
     As  the  AKLNG  project  moves forward,  the  State  of                                                                    
     Alaska  will face  increasingly  complex financing  and                                                                    
     policy   decisions.  AGDC   is   the  state's   primary                                                                    
     representative  in  the project  and  will  be a  focal                                                                    
     point for these discussions in  the coming years. It is                                                                    
     essential the state have  a transparent, clear decision                                                                    
     making  process   in  place.  Senate  Bill   125  helps                                                                    
     accomplish this  by giving  all parties  a seat  at the                                                                    
     The AGDC Board of  Directors currently consists of five                                                                    
     public  members  appointed  by  the  Governor  and  two                                                                    
     commissioners of  state departments.  The commissioners                                                                    
     for  the  Department  of   Revenue  and  Department  of                                                                    
     Natural Resources  are prohibited  from serving  on the                                                                    
     board. Having  legislators participate in  an advisory,                                                                    
     nonvoting  capacity adds  experience and  continuity to                                                                    
     the board.  Legislators understand  the type  of budget                                                                    
     decisions that will be needed  to meet the state's cash                                                                    
     calls for a  gasline project, and would  be helpful for                                                                    
     discussions on project financing.  Senate Bill 125 will                                                                    
     also  increase  collaboration  on the  project  as  any                                                                    
     contract over  two years in  duration must  be ratified                                                                    
     by the Legislature.                                                                                                        
SENATOR  COSTELLO stressed  that  the importance  of the  gasline                                                               
cannot be understated.   Alaskans are following  this project and                                                               
during  the last  session the  legislature received  updates from                                                               
AGDC.   She described it  as a  generational project, one  of the                                                               
largest engineering  projects in  the world,  and said  this bill                                                               
will  help  facilitate  communication and  teamwork  between  the                                                               
legislature and  the AGDC Board  and move this  important project                                                               
forward.  Given the importance of  the project, she said there is                                                               
a need  for transparent  and clear decision  making and  the best                                                               
way to make these decisions is to  give all parties a seat at the                                                               
state's  table.   Having  legislators  will provide  perspective,                                                               
institutional knowledge, and continuity;  for example, six of the                                                               
seven AGDC  board seats turned  over during  the past year.   The                                                               
precedent   in  legislators   serving  on   the  board   is  that                                                               
legislators  currently serve  on over  a dozen  state boards  and                                                               
commissions,  including  the  Knick  Arm  Bridge  Authority,  the                                                               
Alaska Aerospace  Corporation, and  the Alaska  Seafood Marketing                                                               
Institute.    Each  of  those   boards  has  two  legislators  as                                                               
nonvoting  ex officio  members and  serving as  nonvoting members                                                               
alleviates any  constitutional concerns.  The  AGDC's mission and                                                               
authority has expanded greatly during  the past six years and has                                                               
evolved  to  be the  focal  point  of  state decision  making  on                                                               
developing liquefied natural  gas on behalf of the state.   It is                                                               
important that  the structure of  organizations such as  this are                                                               
able  to adapt  to  the types  of decision  making  needed for  a                                                               
project of  this magnitude.   Legislators understand the  type of                                                               
budgeting decisions necessary to meet  the state's cash calls and                                                               
it would be  helpful to have two legislators there  to listen and                                                               
participate in those discussions.   Legislators at the table also                                                               
lets policy  makers better  understand the  ADGC Board's  view of                                                               
the business  decisions facing  the state.   She  reiterated that                                                               
the  gasline   is  one  of   the  most  important   projects  the                                                               
legislature  has  before  it  and   this  bill  promotes  further                                                               
cooperation, teamwork,  and collaboration between the  members of                                                               
the ADGC Board and the legislature.                                                                                             
1:08:35 PM                                                                                                                    
REPRESENTATIVE  SEATON  asked  how   the  sponsor  addresses  the                                                               
prohibition  of  legislators  holding   dual  offices  under  the                                                               
constitution  and  legislative  members being  in  the  executive                                                               
SENATOR COSTELLO responded  that the bill was  amended to require                                                               
that legislators would  not be paid per diem or  receive any sort                                                               
of financial benefit.   When looking at the  separation of powers                                                               
among the  branches, it is  the judicial branch that  would weigh                                                               
in as to whether or not  there is a constitutionality issue.  She                                                               
reminded  the members  of  the precedent  of  members sitting  on                                                               
boards  and corporations  and  if that  is an  issue,  it may  be                                                               
something that is taken up as a group.                                                                                          
REPRESENTATIVE  SEATON put  forth that  many of  the topics  that                                                               
would  be  discussed would  require  confidentiality.   He  asked                                                               
whether   the    legislators   would   be   expected    to   sign                                                               
confidentiality statements  and how would they  share information                                                               
back to the legislature.                                                                                                        
SENATOR COSTELLO responded  that she is aware of  only one member                                                               
of the AGDC  Board, currently, that has  signed a confidentiality                                                               
statement and, therefore,  if it is not an issue  for the current                                                               
members on the  board she does not  see why it would  be an issue                                                               
for ex officio members.                                                                                                         
1:11:01 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON asked  whether  members  of the  Alaska                                                               
Aerospace  Development Corporation  and Alaska  Seafood Marketing                                                               
Institute (ASMI) are appointed by the executive branch.                                                                         
SENATOR  COSTELLO answered  that  she is  uncertain but  believes                                                               
they are appointed by the leadership in the House and Senate.                                                                   
REPRESENTATIVE   JOSEPHSON  inquired   whether   there  are   any                                                               
competing legal opinions from any source.                                                                                       
SENATOR COSTELLO  responded that under [South  Carolina v. Public                                                             
Interest  Foundation  and  Edward  D.  Sloan  v.  South  Carolina                                                             
Transportation  Infrastructure  Bank,  379  S.C.  160,  169,  666                                                             
S.E.2d  236,  241 (2008)],  the  court  decided  in favor  of  ex                                                               
officio members who serve in  the legislature also serving on the                                                               
board.  State courts are currently split on the issue, she said.                                                                
1:12:23 PM                                                                                                                    
REPRESENTATIVE SEATON  surmised that in the  event the appointees                                                               
are  challenged,  it  would  probably go  through  a  long  legal                                                               
process.  He  asked whether that would mean ADGC  would either be                                                               
at risk  at having any of  its decisions overturned or  would not                                                               
be able to make any decisions until the lawsuit was resolved.                                                                   
SENATOR COSTELLO  reiterated that these ex-officio  members would                                                               
be nonvoting and if this bill  were to pass, any decision made by                                                               
the board  would be made by  the voting members of  the board and                                                               
not the two listening participating  members who are there simply                                                               
to have a  seat at the table.   The spirit in which  the bill has                                                               
been offered  is for cooperation  and communication, so  she does                                                               
not see why that would be an issue.                                                                                             
1:13:33 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  referred to  how the AGDC  has evolved,                                                               
and asked whether the board  in its present iteration happened in                                                               
2013 as  part of Senate Bill  21.  He further  asked whether part                                                               
of the  argument is  that that  section of  Senate Bill  21 needs                                                               
WESTON  EILER,   Staff,  Senator   Mia  Costello,   Alaska  State                                                               
Legislature, offered his belief  that Representative Josephson is                                                               
referring to  the changes  that were made  to the  Alaska Gasline                                                               
Development Corporation with passage of  Senate Bill 138 in 2014.                                                               
That bill outlined and structured  the Alaska Gasline Development                                                               
Corporation (AGDC) as it is currently arranged.                                                                                 
1:14:44 PM                                                                                                                    
REPRESENTATIVE HERRON  inquired about  the catalyst and  need for                                                               
this legislation.                                                                                                               
SENATOR  COSTELLO answered  that last  session it  became evident                                                               
that the  communication and  transparency amongst  the interested                                                               
parties could be improved.  The  impetus for this bill is to help                                                               
with communication  and certainly  if there were  two legislators                                                               
sitting on this  board as ex officio  listening and participating                                                               
members  it would  add to  the conversation.   She  said she  has                                                               
heard  from  members of  the  legislature,  currently sitting  on                                                               
other  boards  and  corporations,  that  their  participation  is                                                               
viewed as aiding the discussion and an asset to the corporation.                                                                
1:15:58 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON recalled  that Representative  Tarr and                                                               
he attended an ADGC meeting with  a number of senators.  He asked                                                               
whether  there  is  any  reflection   in  attendance  by  the  60                                                               
legislators of interest in those meetings as they are happening.                                                                
SENATOR COSTELLO  replied there  is extreme  interest in  what is                                                               
happening at AGDC  board meetings.  However, the  board goes into                                                               
executive session that cannot be  attended by anyone else, and as                                                               
the  people's  branch of  government  it  is incumbent  upon  the                                                               
legislature to be there.   She noted the concerns focusing mainly                                                               
on  the  role  of  the legislature  and  its  participation,  but                                                               
pointed out  that the role  and scope of  the project is  of such                                                               
magnitude it warrants a legislative view.                                                                                       
1:18:06 PM                                                                                                                    
CO-CHAIR  TALERICO  commented  it  would  appear  that  with  the                                                               
nonvoting,  uncompensated capacity  this  does not  appear to  be                                                               
advisory as much  as the legislature having  a communication line                                                               
open  for  better  transparency  and  communication  between  the                                                               
legislature  and  the board.    He  asked  whether that  was  the                                                               
sponsor's intent with this legislation.                                                                                         
SENATOR COSTELLO responded yes.   She said it is common worldwide                                                               
for  corporations  to  have  what  would  be  considered  viewing                                                               
participating members  who do not vote  but are there as  part of                                                               
the discussion and listening.                                                                                                   
1:19:05 PM                                                                                                                    
REPRESENTATIVE TARR said she does  not have a problem with adding                                                               
legislators  because   the  role  would  be   nonvoting  members.                                                               
However, she noted, if the  board goes into executive session and                                                               
the  legislative members  are able  to participate,  there is  no                                                               
mechanism  for   that  information   to  be  shared   with  other                                                               
legislators.     In  the  event  the   legislative  members  were                                                               
participating  and there  was  a  clear communication  breakdown,                                                               
whether or not there is a way to  make it a greater asset for the                                                               
legislature  in the  sense that  it could  then, perhaps  through                                                               
executive session of the legislature, learn the information.                                                                    
SENATOR  COSTELLO   answered  that   the  ex   officio  nonvoting                                                               
legislative participants  would be  under the same  guidelines as                                                               
the rest of  the board so would not necessarily  be able to share                                                               
the  information.   She  described it  as  a confidence  building                                                               
effort to have the legislative branch in those meetings.                                                                        
1:20:42 PM                                                                                                                    
[CSSB 125(RES) was held over.]                                                                                                  

Document Name Date/Time Subjects
CSHB 253 Version N.pdf HRES 3/30/2016 1:00:00 PM
HB 253
HB 282 Ver. P.PDF HRES 3/30/2016 1:00:00 PM
HB 282
HB 282 Sponsor Statement.pdf HRES 3/30/2016 1:00:00 PM
HB 282
HB 282 Sectional Analysis.pdf HRES 3/30/2016 1:00:00 PM
HB 282
HB282-LEG-OP-02-04-16.pdf HRES 3/30/2016 1:00:00 PM
HB 282
AGDC Board Members.pdf HRES 3/30/2016 1:00:00 PM
HB 282
2015 12 07 Legal Memo - Leg Members AGDC Board.pdf HRES 3/30/2016 1:00:00 PM
HB 282
SB 125 Sponsor Statement.pdf HRES 3/30/2016 1:00:00 PM
SB 125
SB 125 Fiscal Note.pdf HRES 3/30/2016 1:00:00 PM
SB 125
SB 125 (RES) Version P.pdf HRES 3/30/2016 1:00:00 PM
SB 125
CS HB 253 Amendments Ver. N Packet.PDF HRES 3/30/2016 1:00:00 PM
HB 253