05/04/2007 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB110 | |
| HJR16 | |
| HJR13 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 16 | TELECONFERENCED | |
| + | HJR 13 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 110 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
May 4, 2007
3:11 p.m.
MEMBERS PRESENT
Representative Kurt CHAIR OLSON, Chair
Representative Mark Neuman, Vice Chair
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Robert L. "Bob" Buch
Representative Berta REPRESENTATIVE GARDNER
MEMBERS ABSENT
Representative Jay Ramras
COMMITTEE CALENDAR
HOUSE BILL NO. 110
"An Act extending the termination date for the Regulatory
Commission of Alaska; and providing for an effective date."
- MOVED CSHB 110(L&C) OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 16
Opposing imposition of a milk tax on Alaskans.
- MOVED HJR 16 OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 13
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.
- MOVED CSHJR 13(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 110
SHORT TITLE: REGULATORY COM'N. REPORT/TIMELINES/EXTEND
SPONSOR(s): LABOR & COMMERCE
01/30/07 (H) READ THE FIRST TIME - REFERRALS
01/30/07 (H) L&C, FIN
03/16/07 (H) L&C AT 3:00 PM CAPITOL 17
03/16/07 (H) -- MEETING CANCELED --
04/13/07 (H) L&C AT 3:00 PM CAPITOL 17
04/13/07 (H) Heard & Held
04/13/07 (H) MINUTE(L&C)
05/04/07 (H) L&C AT 3:00 PM CAPITOL 17
BILL: HJR 16
SHORT TITLE: OPPOSING MILK TAX
SPONSOR(s): REPRESENTATIVE(s) LYNN
03/30/07 (H) READ THE FIRST TIME - REFERRALS
03/30/07 (H) L&C
05/04/07 (H) L&C AT 3:00 PM CAPITOL 17
BILL: HJR 13
SHORT TITLE: NATURAL GAS FOR STATE RESIDENTS
SPONSOR(s): REPRESENTATIVE(s) REPRESENTATIVE GARDNER
03/12/07 (H) READ THE FIRST TIME - REFERRALS
03/12/07 (H) O&G, L&C
04/12/07 (H) O&G AT 3:00 PM CAPITOL 120
04/12/07 (H) Heard & Held
04/12/07 (H) MINUTE(O&G)
04/19/07 (H) O&G AT 3:00 PM CAPITOL 120
04/19/07 (H) -- MEETING CANCELED --
04/26/07 (H) O&G AT 3:00 PM BARNES 124
04/26/07 (H) -- MEETING CANCELED --
05/03/07 (H) O&G AT 3:00 PM BARNES 124
05/03/07 (H) Moved CSHJR 13(O&G) Out of Committee
05/03/07 (H) MINUTE(O&G)
05/04/07 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS REGISTER
MARK JOHNSON, Commissioner
Regulatory Commission of Alaska (RCA)
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 110, answered
questions.
JANIS WILSON, Commissioner
Regulatory Commission of Alaska (RCA)
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 110, answered
questions.
ANTHONY PRICE, Commissioner
Regulatory Commission of Alaska (RCA)
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 110, answered
questions.
REPRESENTATIVE BOB LYNN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HJR 16.
DIRK MOFFATT, Staff
to Representative Bob Lynn
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HJR 16 on behalf of the sponsor,
Representative Lynn.
MARIO CASTILLO, Executive Director
The Dairy Trade Coalition
(No address provided)
POSITION STATEMENT: During hearing of HJR 16, answered
questions.
ACTION NARRATIVE
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:11:06 PM. Representatives
Olson, Neuman, Gatto, LeDoux, Buch, and Gardner were present at
the call to order.
HB 110-REGULATORY COM'N. REPORT/TIMELINES/EXTEND
3:11:06 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 110, "An Act extending the termination date for
the Regulatory Commission of Alaska; and providing for an
effective date."
3:11:41 PM
REPRESENTATIVE NEUMAN moved to adopt CSHB 110, Version 25-
LS0449\E, Kane, 4/3/07, as the working document. There being no
objection, Version E was before the committee.
CHAIR OLSON explained that Version E is a clean four-year
extension of the Regulatory Commission of Alaska (RCA) and
requires a two-year report card. The two-year report card
requirement is on page 2, lines 22-27. He noted that Version E
was negotiated with the governor's office and members from the
Senate have been involved.
REPRESENTATIVE NEUMAN related his understanding that page 2 also
includes changes to the timeline extensions for the RCA. He
requested clarification.
3:13:20 PM
MARK JOHNSON, Commissioner, Regulatory Commission of Alaska
(RCA), Department of Commerce, Community, & Economic Development
(DCCED), noted that the subject of timelines is addressed in HB
209. Mr. Johnson explained that existing timelines are in AS
42.05.175(a)-(e) as specified on page 2, line 25, of Version E.
He further explained that the language "and of the timeline
extensions made by the commission under AS 42.05.175(f)"
requires the RCA to report to the Legislative Budget and Audit
Committee those instances in which the RCA has extended a
statutory timeline. The language "and other performance
measures adopted by the commission" is a reference to
performance standards that are included in the RCA's operating
budget. Therefore, the audit would be of the RCA's performance
and these measures of performance made by the RCA and reported
to the legislature.
CHAIR OLSON related his understanding that the aforementioned is
already reported by the RCA in its annual report.
MR. JOHNSON replied that is correct, but noted that the timeline
extensions pursuant to AS 42.05.175(f) are required to be
reported quarterly.
3:16:22 PM
MR. JOHNSON, in response to Representative Neuman, replied that
the timelines referenced in AS 42.05.175(a)-(e) are for
different types of dockets that come before the RCA. He
specified that subsection (a) relates to applications,
subsection (b) relates to tariff filings that don't change a
revenue requirement, subsection (c) relates to tariff filings
that do change a revenue requirement, and subsection (d) relates
to formal complaints.
3:17:43 PM
REPRESENTATIVE GARDNER highlighted that what's new in Version E
on page 2, lines 22-27, isn't the timelines but rather an audit
of the annual report every two years. She asked then if there's
a fiscal note for the person who does the audit.
CHAIR OLSON related his understanding that the audit is
routinely done by [legislative auditors]. He mentioned that a
fiscal note can't be requested until the proposed committee
substitute (CS) has been adopted.
REPRESENTATIVE GARDNER inquired then as to what is new in
Version E if the timelines, the performance measures, and the
statutes are the same and the audit already occurs.
CHAIR OLSON indicated that the two-year report card, which isn't
a full audit, is the new piece.
REPRESENTATIVE GARDNER turned the committee's attention to
Section 3 on page 3, and related her understanding that the only
change in this section is a different due date for the annual
report. She requested an explanation of the differences of the
annual report.
3:19:48 PM
MR. JOHNSON noted he didn't draft the sections relating to the
annual report, although the language is different.
REPRESENTATIVE GARDNER requested that a copy of the existing
statute, AS 42.06.220, be given to members of the committee to
compare to the proposed statute.
The committee took a brief at-ease.
3:22:30 PM
MR. JOHNSON pointed out that Section 2 relates to the RCA's
general utility regulation authority while Section 3 relates to
pipeline regulation statutes. The sections refer to two
distinct bodies of law, which result in the two different
sections.
REPRESENTATIVE NEUMAN asked if any of the reports are given to
the legislature while it's in session.
MR. JOHNSON explained that currently, the RCA has an annual
report that must be filed by February 15th. He noted that
Section 2 advances that date to November 15th, and therefore the
legislature would have the opportunity to review the document
prior to the beginning of the session. In further response to
Representative Neuman, Mr. Johnson specified that the report is
a written document.
CHAIR OLSON recalled that typically every couple of years the
House Community and Regional Affairs Standing Committee will
invite the chair of the RCA to provide a brief update.
REPRESENTATIVE GARDNER opined that the language on page 2, lines
22-27, seems to be the same language as on line 3.
CHAIR OLSON asked if Representative Gardner would be comfortable
with the legislation moving from committee with the caveat that
the drafter would review that language.
REPRESENTATIVE GARDNER replied yes. She then inquired as to the
meaning of the differences in the report specified in Section 3,
page 3.
MR. JOHNSON related his understanding that the first sentence of
Section 3 is essentially the same as current law. The
differences are in the second sentence, which specifies
qualitative differences in the requirements of the current
annual report and the proposed report requirements. He pointed
out that current law specifies the following:
The report must contain information and data that bear
a significant relationship to the development and
regulation of oil or gas pipeline facilities in the
state and include an outline of the commission's
program for the development and regulation of oil or
gas pipeline facilities in the forthcoming year.
MR. JOHNSON characterized current law as a rather broad mandate.
He said he wasn't sure to what extent the RCA has pursued that.
Historically, what the RCA has submitted is more like what is
specified in the proposed new language.
REPRESENTATIVE GARDNER surmised then that Version E removes from
the report the requirements that data about the industries
regulated are included in addition to the outline of the RCA's
program for the coming year. She asked if that's the intent of
the sponsor.
MR. JOHNSON reiterated that the language that is proposed is
more reflective of the report the RCA currently submits to the
legislature.
REPRESENTATIVE GARDNER surmised then that the RCA hasn't been
providing the required report.
MR. JOHNSON said he wouldn't necessarily make that conclusion.
CHAIR OLSON interjected that the language under discussion is
language from the Senate that would "pick up the two-year
snapshot."
REPRESENTATIVE GARDNER said she didn't have a problem, but was
merely curious why the change would be made and what it really
means.
CHAIR OLSON opined that the change makes the statute conform to
what the RCA is currently doing.
3:30:24 PM
REPRESENTATIVE BUCH asked if this legislation concludes the
committee's business with the RCA for the year.
CHAIR OLSON replied yes.
REPRESENTATIVE GARDNER said she would appreciate comments on her
questions from other RCA commissioners.
3:30:48 PM
JANIS WILSON, Commissioner, Regulatory Commission of Alaska
(RCA), Department of Commerce, Community, & Economic Development
(DCCED), said she would address AS 42.06 in regard to the annual
report. She explained that the existing language discusses the
RCA outlining its programming for the development and regulation
of oil and gas pipeline facilities. When AS 42.06 was
originally enacted in 1972, the Alaska Pipeline Commission had a
role in helping in the development and regulation of oil and gas
pipeline facilities. At the time of the merger of the Alaska
Pipeline Commission to the Alaska Public Utilities Commission in
1981 the language addressing the development of oil and gas
pipeline facilities was removed, but this portion of the annual
report requirement wasn't changed. The RCA does not outline and
plan for the development of oil and gas facilities as it's not a
duty imposed on the RCA by the legislature. Therefore, the new
language in AS 42.06.220 simply conforms that section to what
should have been changed in 1981.
3:32:30 PM
ANTHONY PRICE, Commissioner, Regulatory Commission of Alaska
(RCA), Department of Commerce, Community, & Economic Development
(DCCED), informed the committee some of the language of the
annual report was [proposed] at the request of Pat Davidson,
Division of Legislative Audit, to ensure that the information on
the audit would be readily available to the Legislative Budget
and Audit Committee.
3:33:11 PM
REPRESENTATIVE NEUMAN moved to report CSHB 110, Version 25-
LS0449\E, Kane, 4/3/07, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 110(L&C) was reported from the House Labor
and Commerce Standing Committee.
The committee took an at-ease from 3:33 p.m. to 3:36 p.m.
HJR 16-OPPOSING MILK TAX
3:36:35 PM
CHAIR OLSON announced that the next order of business would be
HOUSE JOINT RESOLUTION NO. 16, Opposing imposition of a milk tax
on Alaskans.
REPRESENTATIVE BOB LYNN, Alaska State Legislature, sponsor of
HJR 16, began by thanking the committee for hearing HJR 16. He
informed the committee that HJR 16 is similar to legislation
that was introduced and heard [last session] but became stuck at
the end of the session.
3:37:37 PM
DIRK MOFFATT, Staff to Representative Bob Lynn, Alaska State
Legislature, explained that HJR 16 is a resolution opposing the
milk tax, which is the "Mandatory Dairy Promotion Assessment".
The milk tax was imposed on milk producers in 1983 to decrease
milk surplus by increasing demand. However, Alaska doesn't
produce enough milk to meet its demands. Therefore, Alaska was
excluded from the milk tax. Nothing has changed since 1983, and
therefore Alaska shouldn't be forced to promote outside surplus
milk from the Lower 48. Mr. Moffatt then drew attention to the
letter in opposition to the milk tax from Alaska's congressional
delegation to the U.S. Secretary of Agriculture. Mr. Moffatt
requested the committee oppose the milk tax and pass HJR 16 from
committee.
3:39:41 PM
REPRESENTATIVE GATTO inquired as to the percentage of milk that
is imported.
REPRESENTATIVE GARDNER answered about half.
MR. MOFFATT deferred to Mr. Castillo.
3:40:14 PM
MARIO CASTILLO, Executive Director, The Dairy Trade Coalition,
explained that The Dairy Trade Coalition is comprised of
consumers and agricultural business interests throughout the
U.S. The organization has affiliates in Alaska, including the
Alaska chapter of Women Involved in Farm Economics and the
Alaska Milk Coalition. In response to Representative Gatto's
question, Mr. Castillo offered to get the specific percentage of
milk imported into Alaska versus how much is produced in the
state.
3:43:07 PM
REPRESENTATIVE GATTO related his understanding that the purpose
of the milk tax was to increase the sale of milk by supporting
an advertising campaign. However, Alaska doesn't need the
advertising [as there is no surplus of milk in Alaska].
Representative Gatto opined that not paying the milk tax is a
good idea.
3:43:56 PM
REPRESENTATIVE LEDOUX moved to report HJR 16 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, it was so ordered.
The committee took an at-ease from 3:44 p.m. to 3:47 p.m.
HJR 13-NATURAL GAS FOR STATE RESIDENTS
3:47:16 PM
CHAIR OLSON announced that the final order of business would be
HOUSE JOINT RESOLUTION NO. 13, 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.
3:47:25 PM
REPRESENTATIVE LEDOUX moved to adopt proposed CSHJR 13, Version
25-LS0747\C, Bullock, 5/3/07, as the working document. There
being no objection, Version C was before the committee.
REPRESENTATIVE GARDNER, speaking as the sponsor of HJR 13,
related her understanding that most members of this committee
are aware of the need for ConocoPhillips Alaska, Inc.
("ConocoPhillips") and Marathon Oil Corporation to renew their
export license in order to continue exportation of the known gas
reserves in Cook Inlet. The purpose with HJR 13 is to serve as
a wake-up call and request that the attorney general and the
state participate in that decision in order to ensure that the
best interests of the state are considered. She noted that in
most respects the mere introduction of this resolution has
achieved the goal since the attorney general has intervened.
However, the memorandum dated April 29, 2007, from Kevin Banks,
Acting Director, Division of Oil & Gas, Department of Natural
Resources, relates the following: "The consideration of this
resolution by the committee is helpful and I believe the
resolution shows that State government is speaking with a
unified voice to assure that natural gas will continue to be
available to the domestic energy market in Southcentral Alaska."
Therefore, she indicated the need to proceed with the
resolution. She pointed out that the companion Senate
resolution has been modified, and those modifications are
reflected in Version C of HJR 16. Version C merely makes the
request to the U.S. Department of Energy. Representative
Gardner characterized the resolution as a holistic determination
regarding whether continuing to export Southcentral gas is good
for Alaska or not. She acknowledged that the aforementioned
isn't simple and one must keep in mind that it's very likely
that the facilities used to export gas could be very important
to provide gas for Southcentral Alaska in the future.
3:52:01 PM
BART WATSON, Staff to Representative Berta Gardner, Alaska State
Legislature, explained that Version C directs the resolution to
the U.S. Department of Energy rather than have the state make
its views known. The change is reflected in the first clause of
the title where the reference to the attorney general is changed
to the U.S. Department of Energy. The remainder of the title is
the same as the original version. He then pointed out there are
two minor clauses inserted on page 1, lines 8-11, which bring
HJR 13 in conformance with the Senate companion resolution. On
page 2, the first two "WHEREAS" clauses were inserted simply as
additions to flesh out the other clauses. Version C includes
two new provisions on page 2, lines 25-30 and on page 2, line 31
through page 3, line 3. The intent of the aforementioned two
provisions is to support the administration, which has requested
in its intervention. He reminded the committee that the
administration says that it supports the renewal of the export
license so long as the following three conditions are met: the
energy producers take reasonable steps to replace the reserves
depleted during the two-year extension; the contracts for the
utilities for natural gas be signed prior to approval of the
extension; and the liquefied natural gas (LNG) plant be open to
any new producers. Mr. Watson pointed out that the issue is
that if someone has a small, new find, it should be fairly easy
to place the gas. However, for a large find there may be no way
to get it to market because there isn't a large enough existing
market without exportation of the gas. He opined that one
reason to support the continued export of the gas is to ensure
that there is incentive for additional exploration.
3:57:31 PM
CHAIR OLSON mentioned that he would have opposed HJR 13 had it
come in prior to the cutoff time for federal testimony.
However, the original resolution was dated two days after the
cutoff for testimony to be submitted to the U.S. Department of
Energy.
3:58:29 PM
REPRESENTATIVE LEDOUX moved to report CSHJR 13, Version 25-
LS0747\C, Bullock, 5/3/07, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHJR 13(L&C) out of the House Labor and Commerce
Standing Committee.
3:59:20 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:59 p.m.
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