Legislature(1995 - 1996)

02/14/1995 01:35 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                        FEBRUARY 14, 1995                                      
                            1:35 P.M.                                          
                                                                               
  TAPE HFC 95 -21, Side 2, #000 - #506.                                        
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark Hanley  called  the  House Finance  Committee                 
  meeting to order at 1:35 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kohring                         
  Co-Chair Foster               Representative Martin                          
  Representative Mulder         Representative Navarre                         
  Representative Brown          Representative Parnell                         
  Representative Grussendorf    Representative Therriault                      
  Representative Kelly                                                         
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Wilson Condon, Commissioner, Department of Revenue.                          
                                                                               
  SUMMARY                                                                      
                                                                               
       CONFIRMATION HEARING:                                                   
            Department of Revenue                                              
            Commissioner Designate Wilson Condon                               
                                                                               
  CONFIRMATION HEARING: DEPARTMENT OF REVENUE - WILSON CONDON                  
                                                                               
  WILSON   CONDON,   COMMISSIONER,   DEPARTMENT  OF   REVENUE,                 
  introduced himself to the House Finance Committee and stated                 
  his intent to fairly represent the people of Alaska.                         
                                                                               
  Representative  Navarre   asked  if  legislation   would  be                 
  provided by the Department which would address tax disputes.                 
  Mr. Condon replied  to date,  no legislative proposals  have                 
  been   submitted  addressing   that  concern.     He  added,                 
  nevertheless, unresolved oil and gas tax revenue matters are                 
  of concern for the Department.                                               
                                                                               
  Representative Kelly questioned  Mr. Condon's  participation                 
  in  the  Stanford  Law  School  Environmental  and   Natural                 
  Resources Advisory  Council, 1991-1994.  Mr.  Condon advised                 
  that  in  the  late  '60's,  when  he  was  in  law  school,                 
  environmental concerns and focus were in the fore front.  He                 
  noted  that  he  was one  of  the  founding  members of  the                 
  Environmental  Law  Society  at Stanford  Law  School.   The                 
  activities of that group included recruiting volunteers from                 
                                                                               
                                1                                              
                                                                               
                                                                               
  various citizen groups to pursue environmental issues.                       
                                                                               
  He continued,  the  second organization  in which  he was  a                 
  member was a group of advisors  who serve as citizen support                 
  and also an advisory  group to the law  school.  That  group                 
  would  advise on  curriculum and  changes made  in order  to                 
  better  prepare  lawyers  who  were interested  in  pursuing                 
  careers in those areas.                                                      
                                                                               
  Representative  Martin asked  if  Mr.  Condon would  support                 
  Governor Knowles  in disputes  over controversies  involving                 
  the Alaska Permanent  Fund Board  and the Alaska  Industrial                 
  Development and Export Authority (AIDEA)  Board.  Mr. Condon                 
  explained  that   his  responsibilities   with  the   Alaska                 
  Permanent  Fund Board  are fiduciary  related  and judgments                 
  would be made  for the best  interest of the Permanent  Fund                 
  Board.   He emphasized that  when interests of  the Governor                 
  were  not  be  in  align with  the  fund,  it  would  be his                 
  obligation to disagree with the Governor.                                    
                                                                               
  Although, the responsibility of AIDEA  Board members are not                 
  in a fiduciary  realm, consequently, being appointed  by the                 
  Governor,  would indicate that  board members  would support                 
  implementation of policies  that the Governor would  want to                 
  see occur.   Mr.  Condon stated  that he  would support  any                 
  decision made by the Governor in relationship to that board.                 
                                                                               
                                                                               
  Representative Martin questioned the settlement made between                 
  the  Department  of  Law  and   the  Department  of  Revenue                 
  regarding  back  oil  taxes and  the  existing  relationship                 
  between those departments.  Mr. Condon acknowledged over the                 
  past  few years,  the  departments have  been  able to  work                 
  together amiably in order  to bring closure to the  back tax                 
  disputes.    He  thought that  the  good  relationship would                 
  continue during the current Administration.                                  
                                                                               
  Mr. Condon explained the three large dispute cases currently                 
  being addressed by the State.  The first case involves Exxon                 
  and that the  remaining two cases  are confidential.   Those                 
  two cases  will generate  one eighth  the financial  revenue                 
  that  was  received  from  Exxon.   The  remaining  concerns                 
  regarding the oil and gas royalty issues are scheduled to go                 
  to trial, April,  1995.  Those issues relate to  gas and gas                 
  liquid production.   He commented that the trial  could take                 
  two months  in court,  although, he  hoped the matter  could                 
  settle  before  trial.   That would  be  the end  of royalty                 
  litigation.                                                                  
                                                                               
  Representative   Mulder   asked  Mr.   Condon's  perspective                 
  regarding the Mark Air proposal.  Mr Condon replied, that at                 
  this  date,  he does  not have  the information  provided by                 
                                                                               
                                2                                              
                                                                               
                                                                               
  AIDEA consultants.  He noted  that the Department's criteria                 
  would consider  if the  proposal was  feasible, and  if then                 
  that proposal would work, would it  provide jobs.  When that                 
  information has been  accumulated, then  a decision will  be                 
  made by the State to determine if the Department should take                 
  the risk of spending those funds.                                            
                                                                               
  Co-Chair   Foster  asked   Mr.  Condon   to   summarize  his                 
  publication  "Reforming the  Mining Laws  -  The Case  for a                 
  Leasing System"  (1971).   Mr. Condom  pointed out that  the                 
  paper was written when he was a third year law student.  The                 
  paper advocated  a leasing  system in-place-of  the location                 
  system for  mining.  He  admitted that he did  not know much                 
  about mining when the paper was written.                                     
                                                                               
  Co-Chair Foster  asked if  Mr. Condon  thought that  leasing                 
  could enhance  the mining industry  in Alaska.   Mr.  Condon                 
  answered  that  the Constitution  requires  that there  be a                 
  leasing system.  He concluded, there will be no revenue from                 
  the  mines,  if there  are no  mines.   People  must express                 
  interest  in mining  if mining  is to  be used as  a revenue                 
  generating source.                                                           
                                                                               
  Co-Chair Hanley  explained the standard  confirmation report                 
  form currently used does  not indicate a "for"  or "against"                 
  vote of the Committee.   He noted that the  Alaska Statute's                 
  require  that   there  be   a  hearing   on  all   appointed                 
  commissioners, but not  necessarily a vote.   Representative                 
  Navarre  suggested  sending  a recommendation  to  the other                 
  members of  the House  of Representatives,  inasmuch as  Mr.                 
  Condon is a qualified candidate for Commissioner of Revenue.                 
                                                                               
                                                                               
  Representative Martin agreed with Representative Navarre and                 
  offered a positive recommendation for Mr. Condon based  on a                 
  review of his qualifications.                                                
                                                                               
  Representative Martin MOVED a  consensus confirmation of Mr.                 
  Wilson Condon as Commissioner of  the Department of Revenue.                 
  There being NO OBJECTION, it was confirmed.                                  
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 2:05 P.M.                                           

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