Legislature(2013 - 2014)BARNES 124
04/04/2014 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearings:|| Alaska State Board of Public Accountancy|| Alcoholic Beverage Control Board|| State Board of Registration for Architects, Engineers, and Land Surveyors|| State Assessment Review Board|| Board of Barbers and Hairdressers|| Board of Chiropractic Examiners|| Board of Dental Examiners|| Alaska Gasline Development Corporation Board of Directors|| Alaska Labor Relations Agency|| Board of Marine Pilots|| Board of Marital and Family Therapy|| Board of Certified Direct-entry Midwives|| Board of Nursing|| Board of Examiners in Optometry|| Board of Pharmacy|| State Physical Therapy and Occupational Therapy Board|| Board of Certified Real Estate Appraisers|| Real Estate Commission|| Regulatory Commission of Alaska|| Board of Social Work Examiners|| Board of Veterinary Examiners|| Workers' Compensation Appeals Commission|| Alaska Workers' Compensation Board | |
| Alaska Gasline Development Corporation Board of Directors | |
| State Assessment Review Board | |
| HB370 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 370 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 4, 2014
3:25 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Lora Reinbold, Vice Chair
Representative Mike Chenault
Representative Bob Herron
Representative Dan Saddler
Representative Andy Josephson
MEMBERS ABSENT
Representative Charisse Millett
Representative Craig Johnson
COMMITTEE CALENDAR
CONFIRMATION HEARING(S):
Alaska State Board of Public Accountancy
Leslie Schmitz - Anchorage
- CONFIRMATION ADVANCED
Alcoholic Beverage Control Board
Robert Klein - Anchorage
Marvin Yoder - Palmer
- CONFIRMATION(S) ADVANCED
State Board of Registration for Architects, Engineers, and Land
Surveyors
Luanne Urfer - Anchorage
Brian R. Hanson - Anchorage
Donald (John) Christensen - Seward
- CONFIRMATION(S) ADVANCED
State Assessment Review Board
Bernard Washington - Anchorage
- CONFIRMATION ADVANCED
Board of Barbers and Hairdressers
Jeannine Jabaay - Anchorage
Derrick Slaughter - Anchorage
Glenda Ledford - Wasilla
- CONFIRMATION(S) ADVANCED
Board of Chiropractic Examiners
Christine Hill - Anchorage
Dr. Walter Campbell - Palmer
- CONFIRMATION(S) ADVANCED
Board of Dental Examiners
Dr. Thomas Wells - Anchorage
- CONFIRMATION ADVANCED
Alaska Gasline Development Corporation
Board of Directors
Albert Bolea - Big Lake
Dave Cruz - Wasilla
Drue Pearce - Anchorage
Richard Rabinow - Houston, Texas
John Burns - Fairbanks
- CONFIRMATION ADVANCED
Alaska Labor Relations Agency
Willard Askren - Big Lake
Dr. Lynne Curry - Anchorage
- CONFIRMATION(S) ADVANCED
Board of Marine Pilots
Richard Erickson - Ketchikan
- CONFIRMATION ADVANCED
Board of Marital and Family Therapy
JoAnn Young - Anchorage
- CONFIRMATION ADVANCED
Board of Certified Direct-Entry Midwives
Jennifer Swander - Seward
- CONFIRMATION ADVANCED
Board of Nursing
Erin Evans - Eagle River
Mary (Jennie) Grimwood - Cordova
Carrie Miller - Juneau
- CONFIRMATION(S) ADVANCED
Board of Examiners in Optometry
Dr. Damien Delzer - Fairbanks
Eric Lingle - Douglas
- CONFIRMATION(S) ADVANCED
Board of Pharmacy
William (Bill) Altland - Craig
Anne Gruening - Juneau
- CONFIRMATION(S) ADVANCED
State Physical Therapy and Occupational Therapy Board
Dr. Ilona Farr - Anchorage
Dr. Joseph Kennedy - Nome
Mary (Melissa) Robinson - Moose Pass
- CONFIRMATION(S) ADVANCED
Board of Certified Real Estate Appraisers
David Derry - Kenai
Alfred Ferrara - Anchorage
- CONFIRMATION(S) ADVANCED
Real Estate Commission
Cynthia Cartledge - Anchorage
- CONFIRMATION ADVANCED
Regulatory Commission of Alaska (RCA)
Robert Pickett - Wasilla
- CONFIRMATION ADVANCED
Board of Social Work Examiners
Laura Thiesen - Glenallen
Danielle LaFon - Fairbanks
Tina Walter - Kenai
- CONFIRMATION(S) ADVANCED
Board of Veterinary Examiners
Dr. Teresa Beck - Palmer
Dr. James Hagee - Chugiak
- CONFIRMATION(S) ADVANCED
Workers' Compensation Appeals Commission
Philip Ulmer - Eagle River
- CONFIRMATION ADVANCED
Alaska Workers' Compensation Board
Julie Duquette - Fairbanks
David Kester - Anchorage
Michael O'Conner - Anchorage
Donna Phillips - Girdwood
Mark Talbert - Wasilla
Zebulon Woodman - Fairbanks
- CONFIRMATION(S) ADVANCED
HOUSE BILL NO. 370
"An Act relating to employer drug testing; requiring the Alaska
Workers' Compensation Board to adopt regulations relating to the
prescription of controlled substances to employees; and limiting
the prescription of controlled substances to employees."
- MOVED CSHB 370(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 370
SHORT TITLE: AWCB CONTROLLED SUBSTANCE PRESCRIPTIONS
SPONSOR(s): LABOR & COMMERCE
03/03/14 (H) READ THE FIRST TIME - REFERRALS
03/03/14 (H) L&C, JUD
03/19/14 (H) L&C AT 3:15 PM BARNES 124
03/19/14 (H) Heard & Held
03/19/14 (H) MINUTE(L&C)
03/26/14 (H) L&C AT 3:15 PM BARNES 124
03/26/14 (H) Heard & Held
03/26/14 (H) MINUTE(L&C)
04/04/14 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
ALBERT BOLEA, Appointee
Alaska Gasline Development Corporation (AGDC) Board of Directors
Big Lake, Alaska
POSITION STATEMENT: Testified as appointee to the AGDC board.
RICHARD RABINOW, Appointee
Alaska Gasline Development Corporation Board of Directors
Houston, Texas
POSITION STATEMENT: Testified as appointee to the AGDC board.
BERNARD WASHINGTON, Appointee
State Assessment Review Board (SARB)
Anchorage, Alaska
POSITION STATEMENT: Testified as an appointee to SARB.
KONRAD JACKSON, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified during the confirmation hearings
on behalf of the committee, Representative Kurt Olson, Chair.
ANNA LATHAM, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Recapped the proposed committee substitute,
HB 370, Version C, on behalf of the committee.
DON ETHERIDGE, Lobbyist
Alaska State AFL-CIO
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 370.
BARBARA HUFF TUCKNESS, Director
Governmental and Legislative Affairs
Teamsters Local 959
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 370, Version C.
ACTION NARRATIVE
3:25:19 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:25 p.m. Representatives
Saddler, Herron, Josephson, Reinbold, and Olson were present at
the call to order. Representative Chenault arrived as the
meeting was in progress.
3:25:58 PM
CHAIR OLSON advised members that the committee will not be
taking up the referral from the Board of Certified Real Estate
Appraisers for Brit Szymoniak during the confirmation hearings
today. Her appointment will be taken up at a later date to
allow members an opportunity to review her resume.
^CONFIRMATION HEARINGS:
^Alaska State Board of Public Accountancy
^Alcoholic Beverage Control Board
^State Board of Registration for Architects, Engineers, and Land
Surveyors
^State Assessment Review Board
^Board of Barbers and Hairdressers
^Board of Chiropractic Examiners
^Board of Dental Examiners
^Alaska Gasline Development Corporation Board of Directors
^Alaska Labor Relations Agency
^Board of Marine Pilots
^Board of Marital and Family Therapy
^Board of Certified Direct-Entry Midwives
^Board of Nursing
^Board of Examiners in Optometry
^Board of Pharmacy
^State Physical Therapy and Occupational Therapy Board
^Board of Certified Real Estate Appraisers
^Real Estate Commission
^Regulatory Commission of Alaska
^Board of Social Work Examiners
^Board of Veterinary Examiners
^Workers' Compensation Appeals Commission
^Alaska Workers' Compensation Board
CONFIRMATION HEARINGS:
Alaska State Board of Public Accountancy
Alcoholic Beverage Control Board
Board of Registration Architects, Engineers, & Land Surveyors
State Assessment Review Board
Board of Barbers and Hairdressers
Board of Chiropractic Examiners
Board of Dental Examiners
Alaska Gasline Development Corporation Board of Directors
Alaska Labor Relations Agency
Board of Marine Pilots
Board of Marital and Family Therapy
Board of Certified Direct-Entry Midwives
Board of Nursing
Board of Examiners in Optometry
Board of Pharmacy
State Physical Therapy and Occupational Therapy Board
Board of Certified Real Estate Appraisers
Real Estate Commission
Regulatory Commission of Alaska
Board of Social Work Examiners
Board of Veterinary Examiners
Workers' Compensation Appeals Commission
Alaska Workers' Compensation Board
3:25:43 PM
CHAIR OLSON announced that the first order of business would be
confirmation hearings for of the various boards and commissions.
He noted that Dennis Mandell was appointed to the State
Assessment Review Board but has withdrawn his name from
consideration.
3:26:36 PM
REPRESENTATIVE REINBOLD moved to advance the confirmations for
appointees referred to the House Labor and Commerce Standing
Committee for consideration to the joint session of the House
and Senate for consideration.
CHAIR OLSON objected for the purpose of discussion.
^Alaska Gasline Development Corporation Board of Directors
Alaska Gasline Development Corporation Board of Directors
3:26:59 PM
CHAIR OLSON stated that a list of appointees was distributed to
all members on February 7 2014, February 27, 2014, and on March
27, 2014. His office received three requests to have the
following appointees available for questions: Albert Bolea and
Richard Rabinow, Alaska Gasline Development Corporation Board of
Directors, and Bernard Washington, State Assessment Review
Board.
3:27:17 PM
ALBERT BOLEA, Appointee, Alaska Gasline Development Corporation
(AGDC) Board of Directors introduced himself.
CHAIR OLSON thanked him for his previous service.
3:27:55 PM
REPRESENTATIVE JOSEPHSON noted Mr. Bolea's impressive career in
the oil and gas industry. He related his understanding that Mr.
Bolea was the president of BP Transportation and Chairman of the
Alyeska Pipeline Service Company from 2001-2007. He further
understood Mr. Bolea began working for BP Exploration (Alaska)
Inc. in 1988 and he returned to Alaska five years ago and has
been contributing to the University of Alaska [College of
Business and Public Policy] as a Distinguished Adjunct Professor
of Leadership. He appreciated Mr. Bolea's willingness to
volunteer his time and share his knowledge and experience with
the state. He said he has several questions related to the AGDC
responsibilities under the governor's gasline proposal and any
real or perceived conflicts with his career as a BP executive.
First, he asked what the AGDC's responsibilities would be if the
large diameter gasline moves forward under the governor's bill
[SB 138], the memorandum of understanding [MOU], and the heads
of agreement [HOA].
MR. BOLEA answered that the Alaska Gasline Development
Corporation Board, on behalf of the state, will represent the
state's ownership interest in the large diameter pipeline,
including participating in all joint venture operations with the
other partners, the operator. Generally, the AGDC board will
provide governance over the operation of the [proposed] pipeline
through the commission and operating phases.
REPRESENTATIVE JOSEPHSON asked what situation might arise in
which the state's financial interests differ from TransCanada
and the producers' interests.
MR. BOLEA responded that if the partnership is formed under the
bill before the legislature [SB 138], the interests should be -
for the most part - aligned. Under this arrangement, the state
would have "a seat at the table," an ownership interest, and the
other operators and owners have an interest. Some pieces are
not yet complete and consistent, and the AGDC board would focus
its interest on any misalignments that arise. He stated that
for the most part he doesn't see any conflicts or misalignments
in what is being proposed.
3:30:36 PM
REPRESENTATIVE JOSEPHSON asked for his perspective on any types
of decisions or oversight that AGDC can exercise to protect
Alaska's financial interest.
MR. BOLEA answered that as a board, the AGDC will vote on
various stages of the project, on the state's interest as to
whether the project is even sanctioned from the front end
engineering stages (FEED), decisions that come to the pipeline
owners as it progresses through the gate process, and on key
decisions on behalf of the state through open season.
3:31:37 PM
REPRESENTATIVE JOSEPHSON asked how the Alaska public could feel
comfortable knowing the public's interest is being strongly
defended by AGDC when members previously held high level
executive positions with the three major oil companies. He
acknowledged a good argument exists that huge experience comes
with the backgrounds [of the appointees]. However, he
emphasized his desire to have AGDC's board members biased
towards Alaska - certainly within the law and good ethics. He
asked whether that is a perspective Mr. Bolea shares with him.
MR. BOLEA said, "I am an Alaskan. I own real estate and I have
a house in Big Lake. I vote there. I go to church there ...."
He stated that he was not a full-time resident in Alaska for
only 4 of the last 24 years. He said BP is a great company and
he values his experiences with the company; however, he left BP
seven years ago. He indicated he has no financial interest or
stock in the company. He emphasized that he is committed to
this project because he believes in it. He thinks [the project]
would be great for Alaska, it represents Alaska's future, and he
wants to be part of that future. He concluded that his interest
and Representative Josephson's are completely aligned.
3:33:29 PM
REPRESENTATIVE JOSEPHSON asked whether he thinks that just as he
has had seven years away from the industry that there is some
value in the separation, not that it needs to be statutory.
MR. BOLEA said that he hasn't considered it and the board
members he knows are individuals of the highest integrity. He
suggested that the focus should be on whether [the legislature]
trusts the individuals and their demonstrated integrity and not
specifically their backgrounds when making the decision.
3:34:27 PM
REPRESENTATIVE SADDLER asked him how many times the Alaska
Gasline Development Corporation board has met.
MR. BOLEA answered that the AGDC unofficially met in October
2013, and the board has met every month thereafter, except for
December and has also held some teleconferences mid-week.
Initially, the board focused on getting organized with
significant effort placed on understanding its governance role
and developing the process to assure the state that decisions
being made by management are being made using the highest
possible standards. The AGDC has divided itself into committees
based on areas of expertise, including commercial, technical,
audit committees, along with a fourth committee. These
committees' roles are to assist staff, and have met. For
example, if staff needs specific expertise, they will call the
committee, which will convene and assist the staff to the extent
it needs help. However, decisions are not made at the committee
level, but by are made by the board. Thus the board provides
leadership in terms of governance and performance management
through the governance model established by the board. The AGDC
also provides technical and commercial assistance based on
individual areas of expertise. The legislature has given the
AGDC lots to work on in terms of identifying goals. It's been
an experience to keep the [AGDC] focused on the small diameter
pipeline, but also to contribute to the legislature's efforts in
terms of the large diameter pipeline. He admitted it was a bit
more than he had initially envisioned.
3:37:06 PM
REPRESENTATIVE HERRON acknowledged the AGDC has been in effect
for several months. He asked what surprised him and what he
perceives as the immediate 60-day challenges.
MR. BOLEA answered that he was initially pleasantly surprised by
the composition of the board and was stunned at how well the
skill set was considered. He related that the two commissioners
bring a lot to the board, but the private sector members were
well thought out regionally and in terms of background. He
offered his belief that it is without a doubt the AGDC is the
highest quality board he ever served on. He commended the
governor in thinking through the types of decisions, the
expertise necessary, and the quality of the leadership the AGDC
would need. He was also surprised by Mr. Dan Fauske and his
team and he concluded he would put them against any team,
including his BP Exploration Alaska teams. He said, "This is an
amazing group of people who are being steered by a very
impressive leader." He turned to challenges and offered that
all big projects have technical issues and nothing ever goes
exactly according to plan. Being mature and nimble enough to
take the right interventions when things aren't going according
to plan represents the challenges for either the small diameter
pipeline or the large diameter pipeline. The parties must deal
with vagaries in terms of terrain, the supply chain in terms of
cost, mobilizing the workforce, and addressing stakeholder
interests, which will be huge.
MR. BOLEA said, "We have to be incredibly thoughtful that
everyone involved in the state has a seat at the table and that
we're dealing with all the interests that need to be considered.
It's no small task."
3:40:35 PM
REPRESENTATIVE HERRON remarked that John Burns, the Alaska
Gasline Development Corporation's chair, is a friend of many
Alaskans. He asked how Mr. Bolea perceives the expectations the
chair has of him.
MR. BOLEA offered his belief that the AGDC's chair wants him to
bring his insights about how big projects are managed, how oil
and gas companies make decisions, how the [board] aligns itself
constructively with the project, and ensure it has the
appropriate staff with the right level of expertise within the
organization. He offered his belief that Mr. Burns is drawing
on his expertise in the career he has had in the industry. He
said he respects Mr. Burns, who understands the individual
expertise and capabilities of the people on the team, and he is
leveraging them. He agreed that is what Mr. Burns should be
doing.
3:42:12 PM
REPRESENTATIVE REINBOLD said she was impressed with his
community service and his state, national, and international
education. She asked why he is interested in serving.
MR. BOLEA stated that he has not been a big supporter of a
gasline project in the past five years. He stated that he was
on the periphery as an executive of BP during Governor
Murkowski's "big push" with the [Trans-Alaska Pipeline System]
owners many years ago. He said he left that somewhat depressed
since it seemed like such a perfect opportunity and acknowledged
that there were many reasons it didn't work. He compared this
project to the previous project and said it is "night and day."
He was impressed when the legislature passed HB 4 and so
inspired that he wanted to be involved and believes he has
something to contribute. He said that legislative leadership
wants this to happen, that the governor has provided leadership,
and several commissioners have been "way out in front" trying to
make something happen. He concluded that it was time for him to
do the same. He agreed he could retire and sit back, but he
would like to be a part of something that makes a difference in
the state. He said, "This is the moment; this is the time; the
forces are aligned; and we have quality leadership at all
levels. I'm inspired and I want to be a part of it."
3:46:06 PM
REPRESENTATIVE REINBOLD thanked him. She offered her belief
that there are huge risks and huge rewards for the state.
3:46:19 PM
CHAIR OLSON related the legislature's definition of mega
projects are ones in excess of $1 billion. He asked him for an
approximate number of mega projects he has been directly
involved in during his career.
MR. BOLEA answered he has been directly involved in two projects
from the design to the start-up phase. As an executive level
manager, he has been involved in lots of projects during his
career in which he had direct responsibility for making the
projects run successfully. In response to a question, he agreed
he is a golf enthusiast.
CHAIR OLSON noted that Richard Rabinow was online, and he has
already been appointed to the AGDC board.
3:49:01 PM
REPRESENTATIVE JOSEPHSON acknowledged that Mr. Rabinow has had
an impressive oil and gas industry career. He referred to his
resume, noting he joined Exxon Company, U.S.A. in 1968 and
retired as President of ExxonMobil Pipeline Company (EMPCo). He
appreciated Mr. Rabinow's willingness to serve and share his
expertise with Alaska. He pointed out considerable discussion
surrounds his Texas residency, although he said he wasn't going
to cover that aspect today. He expressed an interest in the
AGDC's responsibilities under the governor's gasline proposal
and asked whether the state or citizens should have any real or
perceived concern about conflicts with his ExxonMobil career.
MR. RABINOW, Appointee, Alaska Gasline Development Corporation
(AGDC) Board of Directors, responded that questions about
conflicts are always appropriate. First, he said he stands on
his personal integrity and has demonstrated it. He has been
retired for 12 years from ExxonMobil without any ties to Exxon
or ExxonMobil Corporation. Further, he has done many other
things in the intervening years. He suggested that people can
observe what he has done and how he has conducted himself. He
further suggested that people who do so will come away feeling
comfortable that he has demonstrated a high level of integrity
and they should not be concerned about his career.
3:50:42 PM
REPRESENTATIVE JOSEPHSON asked for his perspective on AGDC's
primary responsibilities if the large diameter gasline moves
forward to pre-FEED and FEED.
MR. RABINOW offered his belief that the most immediate challenge
AGDC faces is really a two-pronged responsibility. Although the
question was directed at the large [diameter gasline], he said
the AGDC also has a responsibility to continue to develop the
[Alaska Stand Alone Gas Pipeline] ASAP line - the small line -
and to understand the benefits and costs. At the same time the
AGDC must be on a separate track to bring the same level of
understanding and knowledge of cost and benefits, with regard to
participating with the industry in a large gasline. Despite the
agreements that have been "hammered out", there will be many
more ongoing commercial considerations that will need to be
considered, including costs. He said he views AGDC as having a
responsibility to the legislature and ultimately to the
executive branch. The AGDC must be able to compare the two
projects on an equal footing in terms of the relative cost,
benefits, issues, risks, and challenges to allow the board to
make recommendations to the legislature and the executive
branch, which of course will ultimately be better for Alaska.
Further, the AGDC must be able to demonstrate the basis for its
recommendation. He cautioned that it is not just what the AGDC
needs to do with the large diameter pipeline but its continuing
responsibility with the ASAP line, as well.
3:52:48 PM
REPRESENTATIVE JOSEPHSON remarked that he found that
interesting. Although HB 4 would represent the "marching
orders," it isn't something he has heard stated in any
committee. He asked for his understanding of when the decision
will be made to put "the small diameter files away" and the
large diameter gasline is determined to be the project.
MR. RABINOW answered that he wasn't aware of any timeline or
date. He recalled he recently discussed this with John Burns
[Chair, AGDC] and Dan Fauske, [President, AGDC] along with the
commissioners of DNR and DOR, at several board meetings. He
said he feels very strongly that both gaslines need to move
forward on a parallel track. He related that ASAP is out in
front by a year or two, perhaps, as compared to the larger
project. He emphasized the importance to step back and consider
what is best for Alaskans and to do so will necessitate
performing significant analysis to make the appropriate
comparisons. He has also been considering whether the right
answer will be to provide natural gas to Alaskans in Fairbanks
or Southcentral Alaska at the cheapest rate or if is it better
to realize the natural resource so all Alaskans can benefit from
the revenue and services derived from it. He offered his belief
that uncertainty exists at this point on how these two projects
will balance out. He emphasized that any large project always
has more than one alternative. In order to make an ultimate
decision on whether to sanction a project, each alternative
needs to be developed far enough so decision-makers feel
comfortable that the costs, benefits, issues, and risks are
understood and they are in a position to make the decision to go
down that path.
3:55:57 PM
REPRESENTATIVE JOSEPHSON acknowledged that Mr. Rabinow is
knowledgeable about pipeline development projects. He said it
just seems that at this point this governor or future governors
are going to want the more than $3 billion in revenue that
Commissioner Rodell has discussed to materialize. He asked
whether the significant potential revenue would create
overwhelming pressure for AGDC to accept the large pipeline.
MR. RABINOW acknowledged that perhaps it would be; however, both
the legislature and administration must consider the financial
implications for each - the capital requirements - depending on
the type of structure and funding that the AGDC on behalf of the
state owns, the role of the gas treatment on the North Slope,
the pipeline itself, the LNG facility, and the capital
contributions. He concluded that all of these considerations
can have a huge impact on the state and its ability to fund
these different alternatives to realize the benefits.
3:57:21 PM
REPRESENTATIVE JOSEPHSON indicated the Alaska public wants to
feel that Alaska's interests are being strongly defended by its
agencies and commissions. He asked what assurances can be given
that the important positions held with ExxonMobil Corporation
during his career provide him the means and skills to help the
AGDC, but that he now represents Alaska's citizens.
3:58:15 PM
MR. RABINOW acknowledged he is not an Alaskan citizen, which is
a disadvantage. On the other hand, in his record as a six-year
leader of ExxonMobil Corporation and as chair of Association of
Oil Pipelines, his peers recognized his leadership on an
industry basis. In that capacity he did not represent
ExxonMobil, but the group made changes to the liquid pipeline
industry that significantly improved the operating performance
that reduces spills and safety incidents in the pipeline.
Further, since his retirement from ExxonMobil 12 years ago, he
has been involved in a number of other activities, including
three studies with the National Academy of Science. He said he
was able to demonstrate independence and consider the merits of
these pipeline studies. He emphasized that he was able to
demonstrate that he was not wed to a company or that it
influenced how he considered the problems. He indicated this
effort involved objectivity, data, and analysis and ultimately
his integrity. He said, "I have to stand on my personal
integrity and many people can vouch for that."
3:59:59 PM
REPRESENTATIVE JOSEPHSON remarked that within the law and with
good ethics and without treating the state's partners in this
prospective plan as enemies in any way, he wants AGDC members
who love Alaska and are biased towards Alaska's interests. He
asked whether Mr. Rabinow will be that kind of person and if he
will be thinking of the 720,000 Alaskans when he makes his
decisions.
MR. RABINOW answered absolutely. He said there is no question
of that. His goal in participating in the AGDC process is to
make sure that the AGDC does its work carefully and thoughtfully
and in any agreements reached that the AGDC is writing and
negotiating the documents in a way that is most favorable for
the State of Alaska and its citizens.
4:01:03 PM
REPRESENTATIVE SADDLER asked him to describe the application
process with special emphasis on any financial disclosure.
MR. RABINOW answered that he met Dave Norton, DNR, about 20
years ago at Alyeska Pipeline Service Company. Last May, Mr.
Norton attended an offshore technology conference held in
Houston. He suggested that Mr. Norton had been working on some
pipeline integrity projects and thought perhaps Mr. Rabinow
might be of assistance, although they did not connect on that
project. However, about four weeks later Mr. Norton notified
him of a call for nominations for positions on the AGDC board
and knowing his background Mr. Norton thought [Mr. Rabinow]
would be a good candidate. He investigated the position,
discussed it with a number of people, and decided he was willing
to put his name forward. He submitted a resume and was later
contacted to provide a list of people that he had been
associated with that the governor's office could contact. The
list was broad since he has had association with Alaska during
Trans-Alaska Pipeline System (TAPS). He acknowledged he knows
former attorney general Bruce Botelho since they negotiated some
things related to TAPS. The governor arranged to speak with him
and asked questions, some very similar to the questions he is
being asked today, including why he was interested in the
position. He related that he was required within 30 days go
through the standard submission of financial information. He
had previously done so last year, which was updated a few weeks
ago. This brings him to the current process, which is the
confirmation process.
4:04:23 PM
REPRESENTATIVE SADDLER asked whether the financial disclosure
give him any reason to decide not to pursue the nomination.
MR. RABINOW answered no. He said he serves on another
government corporation in Houston, Texas, involved with the City
of Houston. Additionally, for each of his three assignments
with the National Academy of Science, he has had to submit to
financial disclosure and conflict of interest. He concluded
that he has done so several times during his retirement and he
did not have any issue in doing so again.
4:05:09 PM
REPRESENTATIVE HERRON asked about anything in his career "bucket
list" that he didn't get a chance to do.
MR. RABINOW related that he did not have a foreign assignment.
He was once asked if he would consider a foreign assignment,
expressed a willingness to do so, which must have been the "kiss
of death" because he never went abroad.
MR. RABINOW related that in his 34 years with his Exxon career,
he held 17 different jobs, covering a wide range of areas. He
said his experience gave him a very broad perspective of
different aspects of the business, which has enabled him to gain
a better overall experience not only for pipelines, but also for
energy and how energy fits into all communities.
4:07:05 PM
REPRESENTATIVE HERRON asked what has been his biggest surprise
and what will be the largest challenge the AGDC faces over the
next couple of months.
MR. RABINOW said he had not fully appreciated how much work was
done prior to the AGDC board being formed. The board held its
first formal board meeting in Anchorage in October and he spent
two days meeting with each of the key people to better
understand them and their challenges. He said he came away
being hugely impressed with the caliber of people Dan Fauske and
Joe Dublar were able to put together on the ASAP project. He
said it was very impressive and he felt the team would hold up
well against any industry team. He reiterated his assessment on
the quality of team, their breadth, and the progress they made
thus far. In terms having been involved in large projects, he
appreciated the challenges and the importance of doing the
necessary homework so that when the project is sanctioned it
will go forward and be brought in on schedule and on budget. He
said he was unsure of whether the AGDC fully appreciates these
challenges. He said that many people remember TAPS and its
construction, and he acknowledged problems were encountered,
noting the TAPS project was a much smaller project than the
proposed big pipeline project. He emphasized that the [AGDC]
needs to think long and hard about how to organize it. He
concluded that it's really the combination of efforts taken by
the producers, TransCanada, AGDC, and the state to make
decisions and organize the project in a collaborative way to be
sure the project is developed properly so their efforts deliver
a project that is on budget and on schedule.
4:10:18 PM
REPRESENTATIVE HERRON acknowledged that he doesn't know him
although he became a household name in Alaska. He admired his
polished response to the concerns from people around the state.
He asked whether he understood the reaction.
MR. RABINOW answered that at the time he submitted his name for
consideration he didn't appreciate questions that would arise as
to whether he was an Alaska resident or non-resident. He said
he never thought about residency but felt this is an area where
he could make a contribution. He related his understanding that
the original issue of residency was raised in another board. He
said he could certainly appreciate the feelings Alaskans have
about this. He stated that if someone with good qualifications
is available, that it seems sensible and perfectly reasonable
for people to prefer an Alaskan serve on the board.
REPRESENTATIVE HERRON responded that besides himself, many
others appreciate his stance, defend his appointment, and are
working to make certain the confirmation happens.
MR. RABINOW thanked Representative Herron.
4:12:21 PM
CHAIR OLSON asked approximately how many megaprojects he has
been responsible for during his career.
MR. RABINOW answered that he has been involved in two or three
specifically; however, many, many projects that wouldn't fall
into megaprojects in terms of the dollar; however, they were
megaprojects in terms of the environmental and technical
challenges. In fact, projects of a few hundred million dollars
have been just as complicated, he said. For instance, he has
been involved in a project under 5,000 feet of water in the Gulf
of Mexico and the Exxon Valdez oil spill response. He
acknowledged that people don't normally think of oil spill
response as a megaproject and certainly Exxon would have been
happy to never face such an event, but he did play a significant
role in the response effort.
4:13:29 PM
REPRESENTATIVE REINBOLD thanked him. She stated that oil and
gas is the "bread and butter" in Alaska. She said she wants the
best and brightest overseeing the projects. She said it looks
like he is a Penn State graduate.
MR. RABINOW said that he earned his undergraduate degree at
Lehigh University and has a [Massachusetts Institute of
Technology] MIT graduate degree. He said he holds a Master's
degrees in Mechanical Engineering in Management from MIT and a
Bachelor's of Science degree from Lehigh University.
REPRESENTATIVE REINBOLD lauded his credentials. She asked why
he was interested in the AGDC Board of Directors.
MR. RABINOW answered that the governor asked the same question.
He responded that he had a wonderful, broad career. He said he
is not a golfer, but wants to do things that are interesting and
challenging and give back and contribute, whether it is through
the National Academies' [Transportation Research Board] (TSB)
studies he has been involved with or the Houston First
Corporation that managed the convention center and theaters in
which the symphony, opera, and ballet perform, or for activities
with business connotations. He related that he has a unique
background, that it's fun to contribute and be able to help
achieve results, in this case for the citizens of Alaska, but in
each of his endeavors to be able to give back after having been
so fortunate in having had a wonderful career.
REPRESENTATIVE REINBOLD thanked him for his willingness to
serve.
^State Assessment Review Board
State Assessment Review Board
CHAIR OLSON brought up the next confirmation hearing: Bernard
Washington, Appointee to the State Assessment Review Board.
4:16:55 PM
BERNARD WASHINGTON, Appointee, State Assessment Review Board
(SARB), offered to take questions.
REPRESENTATIVE JOSEPHSON stated he is acquainted with Mr.
Washington. He noted his community service work, including
serving on the United Way board, Anchorage Health and Human
Services, the Foraker Group, and at Conoco Phillips as one of
its economists. He thanked him for his willingness to serve the
state on the SARB board. He related that one of the primary
duties in reviewing appointments is to be certain that
appointees have qualifications required by law. In the case of
the SARB, the statute requires each board member to be
knowledgeable about assessment procedures. He referred to an
attorney general opinion from 1986 that says the requirements
also should reflect experience with government tax function. He
asked whether Mr. Bernard meets the qualifications.
4:18:23 PM
MR. WASHINGTON answered yes. He stated that he has testified in
front of the SARB in previous positions. He advised that he
conducted the assessment from the oil companies' perspective for
some of the facilities. He said he is an analyst, an economist,
and he performs the analysis, which he has done in the past.
4:18:51 PM
REPRESENTATIVE JOSEPHSON asked what he would say to Alaskans who
express concern whether his long history with Arco,
ConocoPhillips Alaska, Inc., and Alyeska Pipeline Service
Company will make it difficult for him to independently consider
tough valuation questions and represent the people of Alaska.
MR. WASHINGTON answered that first and foremost he is an
Alaskan. He has lived in Alaska for 30 plus years. He believes
in Alaska and cares about the people as witnessed by his
participation in United Way, Foraker Group, and as treasurer of
Beans Café. He indicated he has had opportunities to leave the
state with oil companies, but has elected to stay here. His
commitment is in Alaska, he said.
4:19:40 PM
REPRESENTATIVE JOSEPHSON referred to a recent article in the
Columbia Journalism Review that raised issues about the
appropriateness of him working at Alaska Public Radio Network
given his potential work with the SARB board. He asked for his
thoughts on the issue.
MR. WASHINGTON said the issue was the matter of a conflict;
however, he manages the finances but does not select stories and
is not involved in the news. He did not view his current
employment as being a conflict or one that would impede his
participation with the SARB.
4:20:43 PM
REPRESENTATIVE JOSEPHSON asked about valuation programs. He
asked whether he has reviewed the Alaska Supreme Court decision
issued on February 19, 2014.
MR. WASHINGTON answered that he reviewed the case but did not
get into the details or the underlying assumptions.
4:20:54 PM
REPRESENTATIVE JOSEPHSON said the owners of Trans-Alaska
Pipeline System argued that the economic life of the pipeline
was shorter than the Alaska Supreme Court concluded [BP
Pipelines (Alaska) Inc. v. State of Alaska, Alaska Supreme
Court, No. 6867 (Supreme Court Nos. S-14095/14116/14125),
February 19, 2014, ¶200-586]. He asked, in the event the Alaska
Supreme Court enters a rule of law, whether Mr. Washington would
follow that rule of law.
MR. WASHINGTON answered yes, most definitely.
4:21:19 PM
REPRESENTATIVE JOSEPHSON read from [BP Pipelines (Alaska) Inc.
v. State of Alaska, Alaska Supreme Court, No. 6867 (Supreme
Court Nos. S-14095/14116/14125), February 19, 2014, ¶200-586],
as follows: "But in this case, the primary value of the
pipeline is its ability to monetize Alaska North Slope oil
reserves because the companies collecting tariffs are closely
affiliated with the companies paying tariffs." He asked if when
he meets with SARB whether he would say this is what the Alaska
Supreme Court has ruled and we must follow that.
MR. WASHINGTON said, "That would be my position."
4:22:09 PM
REPRESENTATIVE JOSEPHSON said that when the case went to trial,
the industry argued that the Trans-Alaska Pipeline System was
worth only $850 million whereas the local government said it was
$11.57 billion. He asked whether there is any way for the SARB
to analyze these valuation questions so there is less disparity
or if this is just a product of the adversarial system.
MR. WASHINGTON answered that there is a way to find that "sweet
spot" which goes into analyzing the underlying assumptions used
by all parties and testing those assumptions for reasonableness
and coming up with the appropriate answer. He reiterated that
his answer is yes.
REPRESENTATIVE JOSEPHSON said that in the same case the pipeline
owners indicated that the pipeline should be assessed at a fair
market value as measured by tariff income rather than use value
as measured by replacement costs. He asked whether he has any
thoughts on that ruling.
MR. WASHINGTON answered that he must go with the ruling and [the
SARB] must follow what the court says.
4:23:47 PM
REPRESENTATIVE JOSEPHSON said that the Alaska Supreme Court
agreed the trial court could not properly value a fair market
value for the Trans-Alaska Pipeline System or for shipping
capacity on the pipeline partially since there wasn't anything
comparable to TAPS. He asked whether that made sense to him.
MR. WASHINGTON agreed TAPS is a unique project. He acknowledged
the process for an assessment is based on "comparables." For
example, in the housing market the assessor considers the
comparable sales in the area to arrive at a value for a house.
In the case of TAPS, comparables do not exist so it makes it
much more difficult to assess the overall value of the asset.
Therefore, it is necessary to examine other aspects of the
pipeline, including the projected throughput and the life of the
project. He concluded that it does present a problem.
4:24:56 PM
REPRESENTATIVE HERRON asked him to gauge his learning curve.
MR. WASHINGTON stated that he didn't expect what he encountered
during the application process. He offered his belief that his
background and analytical abilities will help him and the SARB
achieve a level of understanding fairly quickly.
4:25:47 PM
REPRESENTATIVE HERRON asked him to describe the most
misunderstood aspect about the job for laymen who will depend on
his decisions.
MR. WASHINGTON offered that people don't understand an
assessment is based on analysis of underlying values and
variables. He suggested that if a person does a good job
understanding the variables, analyzing those variables, and
developing a reasonable approach, the assessment falls from that
process. He related that often people think that someone
decides it is worth a certain value and moves forward.
4:26:40 PM
REPRESENTATIVE REINBOLD noted he had earned his University
Bachelor of Science Mining Engineering degree from Penn State
and Masters of Business Administration (MBA) from Pepperdine
University.
MR. WASHINGTON agreed.
REPRESENTATIVE REINBOLD also noted his interest in the Alaska
Permanent Fund Corporation and the Regulatory Commission of
Alaska (RCA). She thanked him for his interest. She asked him
why he is interested in serving on the SARB.
MR. WASHINGTON responded that as an Alaskan, he needs to give
back. This wonderful state gives everyone so much, for example,
it gives Alaskans an annual dividend from the Alaska Permanent
Fund. Alaska is one of the most spectacular places to live. He
emphasized his belief that Alaskans must give back to the state
and he can serve the state with his skill set. He related that
this is his first foray into state service. He has previously
chaired commissions for the Municipality of Anchorage. He said
that both he and the state can benefit from his skill set.
REPRESENTATIVE REINBOLD absolutely agreed. She thanked him for
his willingness to serve.
4:28:24 PM
KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State
Legislature, on behalf of the House Labor and Commerce Standing
Committee, Representative Kurt Olson, Chair, indicated that all
committee members have had an opportunity to review the
appointees' resumes. Committee members have asked to have three
appointees available for questions and these appointees have
testified today. He then read the names of the appointees
referred to the House Labor and Commerce Standing Committee.
4:32:12 PM
MR. JACKSON reminded members that signing the reports regarding
appointments to boards and commissions in no way reflect
individual members' approval or disapproval of the appointees,
and that the nominations are merely forwarded to the full
legislature for confirmation or rejection.
4:33:12 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on the confirmation hearings.
REPRESENTATIVE JOSEPHSON said he will sign the document although
he is currently unsure of his position on Mr. Rabinow.
CHAIR OLSON assured members that signing the reports regarding
appointments to boards and commissions in no way reflect
individual members' approval or disapproval of the appointees.
4:34:08 PM
CHAIR OLSON removed his objection. [The committee treated it as
though a motion had been moved to advance the confirmations of
the appointees to a joint session of the House and Senate for
consideration.] There being no further objection, the
confirmations were advanced.
4:34:27 PM
The committee took an at-ease from 4:34 p.m. to 4:36 p.m.
HB 370-AWCB CONTROLLED SUBSTANCE PRESCRIPTIONS
4:36:01 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 370, "An Act relating to employer drug testing;
requiring the Alaska Workers' Compensation Board to adopt
regulations relating to the prescription of controlled
substances to employees; and limiting the prescription of
controlled substances to employees."
4:36:17 PM
ANNA LATHAM, Staff, Representative Kurt Olson, Alaska State
Legislature, on behalf of the House Labor and Commerce Standing
Committee, Representative Kurt Olson, Chair, offered to explain
the changes in Version C.
REPRESENTATIVE REINBOLD moved to adopt the proposed committee
substitute (CS) for HB 370 labeled 28-LS1379\C, Wallace, 4/3/14
as the working document.
CHAIR OLSON objected for the purpose of discussion.
4:36:49 PM
MS. LATHAM explained that the original version of HB 370 gave
employers the ability to perform random drug testing for
schedule I controlled substances after they have been prescribed
as the result of a workers' compensation claim for more than 90
days. Some concerns were expressed about the follow-up of test
results. The following language was added to Version C, in
Section 1, that the employer could test only for the controlled
substance and what would happen as a result of the tests, such
that a negative test result may result in the denial of future
payments by the employer or insurer for the controlled substance
but not in any other adverse employer action. A positive test
result for the prescribed control substance may not result in an
adverse employment action or the denial of prescription
benefits. Page 2, lines 11-14, adds language that an employer
may not be liable for future payments of a controlled substance
listed in schedule IA prescribed to an employee under this
section if the employee received a negative test result. She
reiterated that Version C specifies in writing some "follow
through" for the test results.
CHAIR OLSON asked to put on the record that he has been working
with a number of stakeholders, including Don Etheridge.
4:38:06 PM
DON ETHERIDGE, Lobbyist, Alaska State AFL-CIO, offered his
thanks for the opportunity to work with the sponsor and improve
HB 370. He said, "And we are totally happy with what you've
done on it."
4:39:14 PM
REPRESENTATIVE HERRON understood the meaning of "positive" and
"negative" in terms of drug testing. Typically when an employee
is given a drug test and it comes back positive, it means
something was found; and if the drug test comes back negative it
means that the person is clean - that no drugs were found. He
wanted to clarify in this context it is just the opposite.
MS. LATHAM acknowledged that Representative Herron is correct.
The intent of the testing is to determine whether an employee is
taking the drugs that were prescribed as a result of a workers'
compensation claim. The testing is the opposite of how it
normally would be under the employer testing policy subsection
(c) and (d) [of AS 23.10.620].
4:40:18 PM
BARBARA HUFF TUCKNESS, Director, Governmental and Legislative
Affairs, Teamsters Local 959, said the Teamsters Local 959
(Teamsters) had some initial concerns with HB 370. She believes
the majority of workers they represent are subject to property
safety programs and on the job safety programs that help reduce
workers' compensation costs, but workers sometimes sustain
injuries that require prescriptions. She said, "Sometimes we
have bad players and ... that may be the case." She has not
seen those figures, but if this bill gets to the root of that
particular problem, the Teamsters are supportive. She said the
Teamsters believe that the changes made will not negatively
impact injured workers in need of these prescriptions.
CHAIR OLSON acknowledged that was the intent.
4:42:04 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 370. He then removed his
objection to the adoption of Version C.
REPRESENTATIVE REINBOLD moved to report the proposed committee
substitute (CS) for HB 370, Version C, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no further objections, CSHB 370(L&C) was reported
from the House Labor and Commerce Standing Committee.
4:43:04 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:43 p.m.
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