Legislature(1997 - 1998)
04/24/1997 08:35 AM House RES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
JOINT HOUSE SPECIAL COMMITTEE ON OIL AND GAS/
HOUSE RESOURCES STANDING COMMITTEE
April 24, 1997
8:35 a.m.
OIL & GAS MEMBERS PRESENT
Representative Mark Hodgins, Chairman
Representative Scott Ogan
Representative Norman Rokeberg
Representative Joe Ryan
Representative Con Bunde
Representative Tom Brice
Representative J. Allen Kemplen
OIL & GAS MEMBERS ABSENT
All members present
RESOURCES MEMBERS PRESENT
Representative Bill Hudson, Co-Chairman
(Representative Scott Ogan, Co-Chairman)
Representative Joe Green
Representative Irene Nicholia
Representative Reggie Joule
RESOURCES MEMBERS ABSENT
Representative Beverly Masek, Vice Chair
Representative Ramona Barnes
Representative William K. ("Bill") Williams
Representative Fred Dyson
COMMITTEE CALENDAR
* HOUSE BILL NO. 250
"An Act establishing a North Slope Gas Commercialization Team to
develop recommendations regarding a North Slope gas project; and
providing for an effective date."
- MOVED CSHB 250(O&G) OUT OF COMMITTEE
(* First public hearing)
PREVIOUS ACTION
BILL: HB 250
SHORT TITLE: NORTH SLOPE GAS COMM. TEAM
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
04/14/97 1099 (H) READ THE FIRST TIME - REFERRAL(S)
04/14/97 1100 (H) OIL & GAS, RESOURCES, FINANCE
04/14/97 1100 (H) FISCAL NOTE (REV)
04/14/97 1100 (H) GOVERNOR'S TRANSMITTAL LETTER
04/22/97 (H) RES AT 8:30 AM BUTROVICH RM 205
04/22/97 (H) O&G AT 8:30 AM BUTROVICH RM 205
04/22/97 (H) MINUTE(O&G)
04/22/97 (H) MINUTE(RES)
04/24/97 (H) RES AT 8:30 AM BUTROVICH RM 205
04/24/97 (H) O&G AT 8:30 AM BUTROVICH RM 205
WITNESS REGISTER
WILSON L. CONDON, Commissioner
Department of Revenue
P.O. Box 110400
Juneau, Alaska 99811-0400
Telephone: (907) 465-2300
POSITION STATEMENT: Presented HB 250 on behalf of the department
and the Administration.
ACTION NARRATIVE
TAPE 97-20, SIDE A
Number 0001
CHAIRMAN MARK HODGINS called the Joint House Special Committee on
Oil and Gas/House Resources Standing Committee meeting to order at
8:35 a.m. Present at the call to order from the House Special
Committee on Oil and Gas were Representatives Hodgins, Rokeberg,
Ryan, Brice and Ogan. Representatives Kemplen and Bunde joined the
meeting at 8:37 a.m. and 8:50 a.m., respectively. From the House
Resources Standing Committee, Representative Joule joined the
meeting shortly after the call to order, and Representatives Green,
Hudson and Nicholia joined the meeting at 8:38 a.m., 8:39 a.m. and
8:55 a.m., respectively. Representative Ogan is a member of both
committees.
HB 250 - NORTH SLOPE GAS COMM. TEAM
CHAIRMAN HODGINS announced the purpose of the joint meeting was to
hear House Bill No. 250, "An Act establishing a North Slope Gas
Commercialization Team to develop recommendations regarding a North
Slope gas project; and providing for an effective date." He
advised there was a proposed committee substitute.
Number 0021
REPRESENTATIVE SCOTT OGAN made a motion to adopt as a work draft
version 0-GH0110\F, Chenoweth, 4/23/97. There being no objection,
the committee substitute was before the House Special Committee on
Oil and Gas.
Number 0036
CHAIRMAN HODGINS briefly discussed changes in the committee
substitute. It reduced the size of the North Slope
Commercialization Team. In addition, it set up a deadline of
January 12, 1998, and a sunset provision for that same date.
Number 0046
WILSON L. CONDON, Commissioner, Department of Revenue, came forward
to present the bill on behalf of the department and the
Administration. The original version was intended to address a
couple of specific issues in terms of proceeding, as the
legislature indicated it wanted the Administration to proceed, as
a consequence of passage of CSHCR 1(WTR) this year. He said to
move the proposal along as that resolution contemplated, a lot of
work needs to be done by the executive branch in working with
various interested private parties.
COMMISSIONER CONDON said to expedite that process, they believe it
is important to make absolutely clear how the public records act
and the public meetings act would apply to that work effort. That
is the main problem the bill addresses. They believe it is
important, with respect to records made available to the executive
branch to pursue this work, that they clearly be authorized by the
legislature to receive information and documents that can be
maintained in a confidential status. Although they believe they
currently have that authority, it is not crystal clear.
Number 0099
COMMISSIONER CONDON said the public meetings act is designed to
deal with a "particular kind of animal that gets created in the
government process," a deliberative body that deliberates and
votes, or an advisory body that is constituted to make
recommendations as a consequence of a deliberative process. He
stated, "And unfortunately, what happens from time to time is that
folks get together and give themselves names, and then the question
of whether or not the public meetings act applies gets litigated."
He cited an example that occurred while he was working in the
Office of the Attorney General.
COMMISSIONER CONDON noted that provisions of the public meetings
act requiring advance notice and imposing procedural requirements
are appropriate for a deliberative body that will take testimony or
vote. However they do not fit well with "a bunch of people that
you're hoping will work expeditiously to get a job done." Putting
notices in journals and buying advertisements in newspapers around
the state in order to meet and get work done is not what they
expect from a group of executive branch people who are "tasked"
with putting together the kind of package that the legislative
resolution contemplates.
COMMISSIONER CONDON said what the Governor's proposed bill and the
committee substitute do, on this front, are the same. They
identify a group of people who have a specific job to do and make
it clear how the public records act and the public meetings act
apply to that particular job. With respect to proposed changes in
the committee substitute, the Administration still favors the more
expanded list of participants proposed in the original bill. He
advised that the time frames changed in the committee substitute
are fine.
Number 0159
COMMISSIONER CONDON discussed the fiscal note, which totals
$238,000. First of all, they believe it is important to continue
using Dr. Pedro van Meurs as they put this package together.
Commissioner Condon referred to a visit here by Dr. van Meurs,
whose specialty is advising governments that are trying to
structure their fiscal system to best position themselves in the
oil and gas market in the world today. As Dr. van Meurs has
conducted a study focusing on this project, Commissioner Condon
believes it makes sense to continue to use him.
COMMISSIONER CONDON advised that the state would really be buying
Dr. van Meurs' time; they do not contemplate another study but
putting together a package. He believes Dr. van Meurs' advice in
putting that together and his availability to come and talk about
what the state has and has not done, and to explain to the
legislature "where we are on the map," is important. They estimate
that several days a month of Dr. van Meurs' time over a year, plus
the cost of bringing him up here to work "with you and with us,"
would cost $75,000.
Number 0195
COMMISSIONER CONDON stated, "We believe that, somewhere along the
line, you and we are going to want to have a focused, responsible
socioeconomic study that asks and answers the question, or puts the
information on the table, I think is a better way to put it, with
respect to the fiscal modifications that we might be proposing.
How does that line up with respect to the costs that a project like
this would impose on the transportation, governmental and social
infrastructure that would have to be maintained for a construction
project like this?"
COMMISSIONER CONDON continued, "We all are fearful that a
socioeconomic study focused on a large project like this could
become a black hole in terms of spending a lot of money. I
believe, and our fiscal note is based on that belief, that it makes
sense to plan to do that now and do it in a very focused way. And
we believe we can do that in terms of what this fiscal note
contains. It's a figure of $75,000 to do that."
Number 0221
COMMISSIONER CONDON said a temporary staff person has been working
full time for a good part of this year doing analytical work
pertaining to this project. They would like to keep him on staff
until next year. Again, they have made an investment in that
person and his work; they believe it would be cost-effective to
continue to make use of what he knows and can do. The amount in
the fiscal note reflecting the cost of keeping him on, in a
temporary status, is $50,000.
COMMISSIONER CONDON advised that the last item in the fiscal note
is travel. He said to the extent they must deal with commercial
parties, "they can come to us just as well as we can go to them."
However, staff in Anchorage and Juneau must get together from time
to time. It is not yet cost-effective to use video conferencing
for a small number of people. In addition, they hope to interest
the federal government in taking steps to help promote this
project.
COMMISSIONER CONDON said the entity that walks away with "the most
money in their jeans" as a consequence of this project is the
federal treasury, which can make relatively small up-front
adjustments that would dramatically change the economics of the
project. Trying to interest them in doing that is very much in
their interest and the state's. But to do so requires travel to
Washington, D.C., which they believe is absolutely necessary.
Number 0270
REPRESENTATIVE JOE GREEN asked whether the estimate of one year was
predicated on the estimated amount of work. He further asked
whether that could be compressed into one-half year because of the
sunset provision.
COMMISSIONER CONDON replied, "It is my belief that if we come
forward with this package, that members of the legislature are
going to want to spend some, and maybe a significant amount of,
time with Dr. van Meurs if we have used him to help put this
together. And so by the time we think about the likely legislative
deliberations that would go on with respect to this package, it
really takes it out to a full year."
COMMISSIONER CONDON said they are very hopeful the work would be
done to bring before the legislature at the beginning of the
session. It is entirely possibly the legislature would take care
of it in the first couple of weeks. However, his own experience
has been that things like this often take time.
Number 0293
REPRESENTATIVE GREEN said his concern was not so much with the
amount of time or money relating to Dr. van Meurs. He asked
whether the hope of having it by the first of the session is
strong.
COMMISSIONER CONDON replied, "Yes, it is a very strong hope. It
depends on, as we work through, whether what we bring to you is an
agreement among representatives of the state and representatives of
the commercial parties. And if what's expected from us at that
point is an agreement, then we can't make other people agree. On
the other hand, in terms of getting our own work done, we'll have
it done."
Number 0307
REPRESENTATIVE BILL HUDSON said he has seen little about potential
changes in the federal tax structure or other federal changes. He
asked whether Commissioner Condon had held preliminary discussions
with the congressional delegation in that regard.
COMMISSIONER CONDON indicated although they had held fairly
extensive discussions, he did not want to say much about them.
Number 0321
REPRESENTATIVE TOM BRICE asked about the appropriateness of
charging this team to also make recommendations to the federal
delegation, as well as trying to have some of those changes dealt
with in the current congress. He suggested it was necessary to get
the ball rolling as soon as possible.
Number 0332
COMMISSIONER CONDON replied, "We agree that it's important to move
now, and we intend to do so."
REPRESENTATIVE BRICE stated, "I see a lot of charges for this
commercialization team, and some of those charges deal with the
state issues. I don't see where you're being, or asking to be,
authorized to go to congress on some of this stuff too, and whether
or not this is the appropriate vehicle for that."
COMMISSIONER CONDON responded, "I believe we have the authority to
do that, although it's not spelled out here." He said this hooks
up to the job the executive branch has been told to do.
Number 0349
REPRESENTATIVE CON BUNDE asked how spending another $238,000 would
change what the Administration is already "tasked" to do.
Number 0354
COMMISSIONER CONDON replied, "You have asked us to move this matter
along on a fast track. And in terms of the resources that are
available to do that, we don't have, and here I am the commissioner
of Revenue, which is hardly, under normal circumstances, what you
would think of as the center of an effort to try to bring a gas
project into being. And the only reason that it's centered in the
Department of Revenue is because it happens to be something that
I'm very interested in and know a fair amount about."
COMMISSIONER CONDON continued, "We don't have the resources in our
department's budget ... to pay for the continued service of Dr. van
Meurs, and I think that that is ... every bit as important for the
legislative deliberations on this as it is for the work that the
executive would do. Similarly, I think that moving now to do a
socioeconomic study, if we get in and do a good job and do it
efficiently, we're likely to get what we want for something like
the amount I've talked about, rather than spending a half a million
dollars or a couple of million dollars, which is what I think it
might well turn into if we do it a couple of years down the line."
He said that is a judgment call. In terms of travel, again, the
kind of traveling that goes to get this job done is not budgeted
for him or his staff.
Number 0379
REPRESENTATIVE BUNDE commented that the bill and increased funding
are predicated on speeding up the process. He suggested if they
were less concerned about that, normal state functions could be
used.
Number 0385
COMMISSIONER CONDON said Representative Bunde was partially
correct. In terms of the temporary staff position, their own staff
could do that over a longer time. In terms of having an outside
consultant like Dr. van Meurs, which he believes is necessary, that
money must be spent somewhere along the line. Similarly, a
socioeconomic study is something the staffs of several agencies
could do over time. However, he believes it will be treated as
more credible if done by a contractor. In his experience with
energy project proposals and developments, they had always turned
to an outside contractor to pull that sort of thing together.
Number 0401
REPRESENTATIVE GREEN asked whether they ran the chance that either
bill infringes upon jurisdictional boundaries. Although passed by
the legislature, they direct members of the executive branch to
act.
COMMISSIONER CONDON stated his belief that it is perfectly
appropriate for the legislature to "tell the executive to go get a
job done."
Number 0409
REPRESENTATIVE GREEN noted that it does not request something of
the Governor but specifies parts of his staff. Although a great
idea, he wonders whether it is treading on thin ice.
COMMISSIONER CONDON replied that there is a point where
micromanaging crosses over into the realm of the executive. "I
just don't think that's true here," he stated.
Number 0416
REPRESENTATIVE REGGIE JOULE referred to the make-up of the team.
He asked Commissioner Condon to address how the difference between
the two bill versions may affect the outcome.
COMMISSIONER CONDON replied that it is a judgment call. The two
commissioners in the Governor's bill that were removed in the
committee substitute are from the Department of Labor and the
Department of Commerce and Economic Development (DCED). The
commissioner of the former was included because of the shared
policy goal between the executive and legislative branches to try
to maximize opportunities for Alaskan hire. If that commissioner
is not included, they will still turn to the commissioner to pursue
that objective.
COMMISSIONER CONDON said they are talking about promoting the
export of an Alaska resource into a foreign market; that area has
been the responsibility, over the last couple of decades, of the
DCED, which is therefore included. If that commissioner is not on
the task force, they would still turn to the DCED for their
expertise and contribution.
COMMISSIONER CONDON acknowledged having too many people in the
process could slow it down. He said he understands that judgment
call. Although he did not know whether that was the consideration
for the committee substitute, it was a consideration in drafting
the bill.
Number 0450
CHAIRMAN HODGINS asked how focused the socioeconomic study would be
and on what areas.
COMMISSIONER CONDON replied that it should pull together the
material and allow legislators and interested citizens to weigh the
costs and benefits of making changes in the fiscal system against
the effects of a large construction project. It should take
maximum advantage of what happened when the oil pipeline was
constructed and what people want to happen differently this time.
If that information is pulled together correctly, then citizens and
legislators can decide whether it is worth it.
Number 0473
CHAIRMAN HODGINS asked whether anyone else wished to testify. He
suggested keeping the fiscal note as-is, as any adjustments could
be made in the House Finance Committee.
Number 0482
REPRESENTATIVE BRICE stated his wish, given the focus of the
committee substitute on Alaskan hire and the safety of Alaskan
workers, to discuss whether the commissioner of the Department of
Labor should be added back in. He asked whether there was a
particular reason that department was removed.
CHAIRMAN HODGINS replied that their philosophy was keeping the team
as small and concise as possible, understanding that, as
Commissioner Condon said, they will utilize other departments for
needed information. The emphasis was on getting the agreement,
finding out who the producers and players were, and going forward.
This will come back for review with the legislature, and there will
be time for interaction between other departments.
Number 0501
REPRESENTATIVE BRICE agreed the smaller the team, the more
successful they will be. He advised that he would not offer an
amendment to add back the commissioner of the Department of Labor
but would bring it up at another time. He stated that to have a
good representation of Alaskan workers on this team, it is
important to consider adding the Department of Labor, specifically
as an advocate to hire Alaskan workers and use Alaskan businesses.
Number 0511
CHAIRMAN HODGINS suggested there would be plenty of opportunity to
make those adjustments in the future.
Number 0513
CO-CHAIRMAN OGAN said they need to know they have a project and
that the players are identified before negotiating labor
agreements. At the appropriate time, they would be brought into
the loop.
REPRESENTATIVE HUDSON commented that if they were trying to put
together a team that can analyze the Alaskan hire situation or
major public policy changes, such as changes in state or federal
tax structures, it would be wise to think of the Alaska Industrial
Development and Export Authority (AIDEA), because this is the kind
of thing they do.
REPRESENTATIVE HUDSON stated, "And I think, Mr. Chairman, somewhere
before we're done here, there ought to be at least somebody from
the House and somebody from the Senate on an ad hoc basis, not
necessarily a part of the ongoing day-to-day, but so that the
legislature, who is ultimately going to have to vote on the public
policy issues here, as to whether or not it's in our best interest
to make these recommendations to the full body next year, that we
have a representation as it develops." He advised that those were
issues he and Co-Chair Ogan could look at in the House Resources
Standing Committee.
Number 0530
CHAIRMAN HODGINS stated, "We looked at the idea of having just such
a structure of ad hoc or actual members of the legislature sitting
on this. And we felt that there should be a division, a separation
of powers. The Administration would come forward with their
recommendations and we as a legislature will hear it." He
indicated as chairman, he intends to hold meetings of the House
Special Committee on Oil and Gas through the interim "and to be a
monitor and a focus for a public forum for what is going on with
the negotiations and with the commercialization team."
REPRESENTATIVE HUDSON responded that he had suggested ad hoc
members because the legislature would not be at the table. He
expressed the hope that this would remain an open issue.
Number 0541
CO-CHAIRMAN OGAN made a motion to move the committee substitute, 0-GH0110\F, Ch
Oil and Gas, with the attached fiscal note and individual
recommendations. He asked unanimous consent.
Number 0544
REPRESENTATIVE BUNDE objected. He stated, "As I indicated by my
earlier remarks, I don't see anything that this committee is going
to do that couldn't be accomplished through the regular legislative
process. Certainly the socioeconomic study is something that ought
to take place in committee and through the legislative process.
The only reason in this day and age of cutting budgets to spend
this extra money is if you buy into the notion that it's an extreme
time limit here. I do not. I think these are not bananas that
will go overripe and have to be thrown away. I think our gas will
increase in value in the foreseeable future, and I don't agree that
we have to spend money and rush to judgment."
Number 0552
CO-CHAIRMAN OGAN stated his desire that the House Finance Committee
scrutinize the fiscal note and address the spending. "And I hope
they make that absolutely minimum," he added.
Number 0556
CHAIRMAN HODGINS requested a roll call vote. Voting for moving
CSHB 250(O&G) out of committee were Representatives Brice, Ryan,
Ogan and Hodgins. Voting against it was Representative Bunde.
Representatives Kemplen and Rokeberg were absent. So CSHB 250(O&G)
moved out of the House Special Committee on Oil and Gas.
ADJOURNMENT
Number 0562
CHAIRMAN HODGINS adjourned the Joint House Special Committee on Oil
and Gas/House Resources Standing Committee meeting at 9:18 a.m.
| Document Name | Date/Time | Subjects |
|---|