Legislature(2013 - 2014)SENATE FINANCE 532
03/10/2014 05:00 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB138 | |
| Presentation by Enalytica: | |
| SJR21 | |
| SB191 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | SJR 21 | ||
| = | SB 138 | ||
| = | SB 191 | ||
SENATE FINANCE COMMITTEE
March 10, 2014
5:21 p.m.
5:21:31 PM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 5:21 p.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
Senator Click Bishop
ALSO PRESENT
Nikos Tsafos, Partner, enalytica; Janak Mayer, Partner,
enalytica; Heather Shadduck, Staff, Senator Pete Kelly;
Suzanne Armstrong, Staff, Senator Kevin Meyer; Senator
Peter Micciche.
SUMMARY
SJR 21 CONST. AM: MEMBERSHIP OF JUDICIAL COUNCIL
CSSJR(FIN) 21 was REPORTED out of committee with
a "do pass" recommendation and with a previously
published fiscal impact note: FN1(GOV) and with a
fiscal impact note from the Alaska Court System.
SB 138 GAS PIPELINE; AGDC; OIL & GAS PROD. TAX
SB 138 was HEARD and HELD in committee for
further consideration.
SB 191 GENERAL OBLIGATION BOND FUND TRANSFER
CSSB 191(FIN) was REPORTED out of committee with
a "do pass" recommendation and with a zero fiscal
note from the Department of Revenue.
Presentation by enalytica
SENATE BILL NO. 138
"An Act relating to the purposes of the Alaska Gasline
Development Corporation to advance to develop a large-
diameter natural gas pipeline project, including
treatment and liquefaction facilities; establishing
the large-diameter natural gas pipeline project fund;
creating a subsidiary related to a large-diameter
natural gas pipeline project, including treatment and
liquefaction facilities; relating to the authority of
the commissioner of natural resources to negotiate
contracts related to North Slope natural gas projects,
to enter into confidentiality agreements in support of
contract negotiations and implementation, and to take
custody of gas delivered to the state under an
election to pay the oil and gas production tax in
kind; relating to the sale, exchange, or disposal of
gas delivered to the state under an election to pay
the oil and gas production tax in kind; relating to
the duties of the commissioner of revenue to direct
the disposition of revenues received from gas
delivered to the state in kind and to consult with the
commissioner of natural resources on the custody and
disposition of gas delivered to the state in kind;
relating to the authority of the commissioner of
natural resources to propose modifications to existing
state oil and gas leases; making certain information
provided to the Department of Natural Resources and
the Department of Revenue exempt from inspection as a
public record; making certain tax information related
to an election to pay the oil and gas production tax
in kind exempt from tax confidentiality provisions;
relating to establishing under the oil and gas
production tax a gross tax rate for gas after 2021;
making the alternate minimum tax on oil and gas
produced north of 68 degrees North latitude after 2021
apply only to oil; relating to apportionment factors
of the Alaska Net Income Tax Act; authorizing a
producer's election to pay the oil and gas production
tax in kind for certain gas and relating to the
authorization; relating to monthly installment
payments of the oil and gas production tax; relating
to interest payments on monthly installment payments
of the oil and gas production tax; relating to
settlements between producers and royalty owners for
oil and gas production tax; relating to annual
statements by producers and explorers; relating to
annual production tax values; relating to lease
expenditures; amending the definition of gross value
at the 'point of production' for gas for purposes of
the oil and gas production tax; adding definitions
related to natural gas terms; clarifying that credit
may not be taken against the in-kind levy of the oil
and gas production tax for gas for purposes of the
exploration incentive credit, the oil or gas producer
education credit, and the film production tax credit;
making conforming amendments; and providing for an
effective date."
5:22:23 PM
^Presentation by enalytica:
NIKOS TSAFOS, PARTNER, ENALYTICA, began a PowerPoint
presentation titled "Cash Calls and Cash Flows & Impact on
Oil Revenues" and spoke to slide 4 titled "SOA's Cash Calls
and Off-Ramps" (copy on file). He related that the slide
was a base case, while the next slide was a stress-case. He
pointed out that the slide had 4 groups of bars that
included the pre-FEED, FEED, construction, and online
stages; all of the numbers were cumulative with the
exception of the online numbers, which was an annual
number. He stated that the green on the slide assumed the
project without TransCanada and no debt. The yellow still
assumed no TransCanada, but also that 70 percent of the
state's share would be financed with debt. The red
reflected an option that had TransCanada with the buyback
and was structured with Alaska having 40 percent of the 25
percent of the treatment plant and the pipeline. He
reported that the blue-purple reflected a scenario in which
TransCanada had 100 percent of the interest in the pipeline
and the state only had a 25 percent share in the
liquefaction. He pointed out that the first thing that came
to mind was that the construction part stood out as far as
the costs of the project, but noted that each one of the
slide's scenarios had a range between the different
options. He stated that in the first phase, the estimate of
costs was somewhere between $55 million to $150 million and
observed that without TransCanada, the state could be
spending about $500 million; that figure could be coming
down around $250 million to $330 million. He concluded that
the difference between the 2 numbers was what TransCanada
would be paying as part of the FEED study.
Ms. Tsafos continued to address slide 4 and related that
the key thing to remember before construction was
represented in the stop lights on the bottom of the slide.
He related that at the end of the pre-FEED study, the state
and its partners had 3 options. 1 option was to abandon the
project if the numbers did not work at the end of the pre-
FEED study; the state would have to reimburse TransCanada
because it would have been paying the state's share on the
project thus far. He relayed that a second option was to
adjust the state's share by selling down some of its equity
if it did not want as much of a share as it initially
thought. He stated that the third option was represented by
the green light, which meant that the state would proceed
with the project and authorize the next set of funding,
which was reflected by the bar-grouping on the top of $486
million, $486 million, $417 million, and $266 million. He
stated that at the end of the FEED phase, which lasted
about 2-3 years, there were again 3 possible pathways; at
this point, the project could be still be abandoned and the
state would still liable to compensate TransCanada for what
it spent on the state's behalf, plus interest. He relayed
that the state could also still adjust its equity share to
25 percent, something lower, or something higher. He noted
that the state could also move on with the project as is at
this point too. He stated that once the project reached the
construction phase, the cash outlays would be significantly
bigger and were estimated to be almost $12 billion if you
assumed no TransCanada and no debt; the cost estimates fell
in each scenario to $3.5 billion to $5 billion. He
concluded that at construction and FID were reach, it was
generally too late to abandon the project; however, the
state's share could still be adjusted at any point
Mr. Tsafos continued to speak to slide 4 and recalled a
discussion in committee several weeks prior of the
Queensland Curtis LNG project in Australia about how its
equity ownership had changed over time. He added that
during the construction phase, the state would be
responsible for covering whatever its share of the
project's costs were; if the project costs rose at this
point, the state would have to cover whatever share of
equity it had settled on. He stated that a plus regarding
the project was that the annual online revenues were
estimated at a range of $2.9 billion to almost $4 billion
counting only gas. He pointed to the green category on the
slide and noted that the state generated the most revenue
in that category because it did not have to repay any debt;
if the state chose that same scenario but took on debt, the
$500 million or so difference was the interest that the
state would be paying back its lenders. He stated that the
deltas in the scenarios with TransCanada were what the
state would be paying back to that company. He concluded
that the chart was slightly busy, but that it was a
compelling visual display of the all the different phases,
cash commitments, and variations that depended on the type
of partnership the state chose, as well as how it
structured its financing. He reiterated that the slide
represented a base-case.
5:29:59 PM
Mr. Tsafos addressed slide 5 titled "Stress Testing SOA's
Cash Calls and Revenues." He related that the slide was the
stress-case and was intended to show what a bad scenario
would look like. He stated that in general, there were 3
things that enalytica thought most impacted the economics
of LNG projects; the first was that the project would cost
more. Higher than expected costs affected the economics
because it required more money up front, but it also
required a higher repayment if debt was taken on; it
represented a capital expenditure stress. He stated that
the second most likely thing to impact the project's
economics was the assuming a much lower sales price. He
observed that the slide used $7 per million British thermal
units (/MMBTU), which really was a stress-case because
there was almost no LNG flowing to Japan and Korea as low
$7/MMBTU; it was way outside of market conditions. He
stated that the last major potential impact to the project
was utilization and offered that the way to view this
aspect was the impact of one-off events, such as having to
shut down the plant for 2 to 3 months. He stated that the
idea that a project would only run at 80 percent was
unlikely and that the plays that usually ran below 100
percent utilization tended to do so because of insufficient
gas; this also occurred because a play was diverting the
gas to the local market. He added that it was unlikely that
SB 138's project would not have access to enough gas or
have a big enough local market to result in under
utilizations.
Mr. Tsafos continued to address slide 5 and related that
under-utilization did not usually occur because of design
reasons. He stated that the slide was meant as a one-year
rather than a 25-year stress test. He pointed to the four
clusters of bars and number on the slide and stated that
the first and third groups were the same as the previous
slide's base cases. He added that pre-FEED and FEED were
excluded from the slide because cost escalation in those
areas would probably not make or break the economics of the
project. He stated that the first 2 clusters showed what a
25 percent higher capex would do to the cash calls; the
cash calls increased from $11.8 billion in the first
groupings to $14.7 billion in the no debt/no TransCanada
scenario. In the slide's other cases, the call calls
increased $1.2 billion with the buyback from TransCanada,
which was reprinted in the first yellow bars; the delta was
little less than $1 billion if TransCanada owned 100
percent of pipeline.
5:33:39 PM
Mr. Tsafos continued to discuss slide 5 and spoke to the
revenue side. He stated that the stress-case was additive
and related that higher costs, lower prices, and lower
utilization were happening at the same time. He offered
that the stress-case represented a perfect storm in LNG
terms. He noted that on the right side of the slide, the
green bars went from about $4 billion to $1.6 billion in
the no TransCanada/no debt case. The estimated revenues
ranged from the $3.5 billion to a little under $1 billion
in the no TransCanada/leveraged debt scenario and $3.2
billion. The revenue ranged from $3.2 billion to $700
million in the TransCanada with buyback option. He noted
that the lowest-case revenue projection for the state was
$2.9 billion to $500 million. He stated that the slide's
numbers underscored the point that LNG projects generally
did not lose money; however, investing the equivalent $14
billion or $15 billion in order to annually get $1.6
billion back was not a wise investment given the time value
of money. He offered that under the stress-case, the state
would still not be cash-flow negative even in the lowest
revenue case and would not be at the point where state
reserves were needed for obligations on the project. He
concluded that the scenario would have to be worse than the
parameters on the stress test. He stated that quite a bit
had to go wrong for the project to not produce positive
revenue, but that the core point was that maybe the state
would earn a smaller return if things went wrong.
5:37:15 PM
Co-Chair Kelly inquired if Senator Dunleavy's question from
earlier in the day had been answered. Senator Dunleavy
replied that he was going through some notes currently and
was still processing the issue.
JANAK MAYER, PARTNER, ENALYTICA, added some insight into
slide 5. He related that all of the cases that involved
some form of debt, which were all of them but the green
ones, assumed that the net cash flows after the yearly debt
payments on both the principle and interest had been paid.
Senator Dunleavy inquired if $7 was the low price
assumption in the stress-case. Mr. Tsafos replied in
affirmative and inquired if Senator Dunleavy did not think
that was low enough.
Senator Dunleavy inquired what the price of LNG was
currently. Mr. Tsafos replied that the answer depended on
the location. Senator Dunleavy inquired what the lowest
was that he was aware of. Mr. Tsafos replied that the
lowest currently was Henry Hub, which would probably be
about $5/MMBTU, but that it was not a relevant price for SB
138's project. He thought that off the top of his head,
there were 3 contracts that were signed in the early 2000s
that had met the $7/MMBTU; the rest of LNG, which was 70
percent of the market, traded at way higher than $7/MMBTU.
He stated for example that if you took a low Henry Hub
price of $3/MMBTU and included all the cheapest costs
infrastructure costs as a contract, the gas would still be
above $7/MMBTU by the time it got to Asian markets. He
commented that a sustained environment of $7/MMBTU would
probably price out 30 percent to 70 percent the LNG supply.
He surmised that a price of $7/MMBTU would wipe out gas
markets in East Africa, Western Canada, a lot of the Lower-
48, and Russia; there was not much supply out there that
could continue to flow to keep the price that low. He
admitted that it was possible that the price could go lower
than $7/MMBTU and that it was 15 years prior; however, in
terms of where the market was now, $7/MMBTU made a good
stress-case.
5:41:50 PM
Senator Dunleavy requested a brief AT EASE.
5:41:53 PM
AT EASE
5:46:20 PM
RECONVENED
5:46:37 PM
Co-Chair Meyer thought that $7/MMBTU as the worst case was
legitimate and noted that Henry Hub was between $3/MMBTU
and $5/MMBTU. He stated that there were several contracts
back in 2000s that were at $7/MMBTU, but thought that there
was less supply at that time. He noted that gas was being
discovered everywhere. He expressed concerns that there was
a lot supply for the gas market and hoped that there was
enough demand to meet it. He additionally hoped that gas
would be coming from high-cost areas that Alaska's gas
could compete with. He thought that there was a supply and
demand graph somewhere in the charts. He hoped that gas
never reached $7/MMBTU again, but thought that it was a
good number to use.
Co-Chair Kelly requested an explanation of the supply and
demand graph that Co-Chair Meyer had referenced.
Mr. Tsafos responded that enalytica saw demand increasing.
He stated that the key part to understand on the supply and
demand chart was that the graph was based on what was
contracted and what was preliminary contracted and that
there was a grab for what was in effect up for grabs. For
the project's window, which was the early to mid-2020s,
there was no one else marketing to that timeframe. He
stated that one of the key benefits of the project was its
timing and lack of competing supply that was not
speculative. He related that there was a supply and demand
chart, but because the project was further out, there was
not much competing supply.
5:49:16 PM
Co-Chair Kelly inquired where the tab was. Vice-Chair
Fairclough replied that it was a chart that showed the
Asian markets; it had gas sales somehow between $10/McF and
$17/McF. She noted that she had seen the chart in the
Senate Resources Committee.
Mr. Mayer related that the chart was in the initial
presentation enalytica had given in the Legislative Budget
and Audit Committee.
Co-Chair Kelly stated that there were staff who could find
the proper chart and requested that the presentation
continue.
5:50:23 PM
Mr. Mayer spoke to slide 6 titled "In Kind W/Equity Offers
More Downside Protection." and related that it was a
revised version of a slide that was previously presented to
the committee. He relayed that the slide was created to
show lower price levels and that Co-Chair Meyer had
requested that the slide show prices down to the $10/MMBTU;
however, it went as low as $8/MMBTU because it was easier
to model that way. He related that the green line
represented the status quo and that Alaska continued to
move forward and was able to tax the project by value at
the well head and the net of costs stayed at the 35 percent
profit-based tax; the slide showed the scenario regarding
total cash over the life of the project to state at a range
of different prices. He reported that the red and yellow
represented going in kind with equity at a 20 percent or 25
percent share. He stated that if the project went ahead
with the current structure at the current price range of
$15/MMBTU-$18/MMBTU, the economics would look pretty good;
it would be even better if you took into account the time
value of money. He noted that when you looked at the
project at lower prices, the value of being the taxing
authority fell away quickly because most of a taxing
entity's value lied in the fixed claims embodied by
tariffs; those claims were fixed, so as the LNG price went
down the impact of them was to magnify the impact of the
falling price on the value to the state. He stated that the
status quo in value looked good at current LNG prices, but
looked less so in the case of lower LNG prices;
correspondingly, the opposite was true of what happened to
producers and the federal government.
5:53:30 PM
Mr. Mayer addressed slide 7 titled "SOA Equity Leads to
Higher Gov't Take on Average" and stated that it had been
shown in committee before; it showed the overall government
take and the division of cash within the different stake
holders. The slide also revised the producer wedge of the
slide to emphasize that there were 3 separate producers. He
thought that it is reasonable to assume that the state
would be capturing 25 percent of the value of the project
and that most of the value would go to the producers. He
related that the slide showed that in all cases, the value
to the state was much more than a quarter of the total
value of the project. He stated that the y-axis of the
charts showed the overall percentage split of cash flows to
the project. He stated that if the green and blue bars were
added, the total undiscounted government take of the state
and the federal government could be seen; with the current
structure and conditions, that figure stayed around 50
percent. He reminded that the 50 percent was looking at
government take across the entire project and not just the
upstream components and that as a result, it was expected
that the number would be much lower to equivalent oil
numbers in previous year where only upstream, which was the
most heavily taxed component, was taken into account. He
stated that the current structure and LNG prices provided
good value to the state.
Mr. Mayer continued to address slide 7 and related that in
the in kind or equity scenario, the overall proportion of
the value coming to the state was higher; particularly in
the 25 percent equity case, the state would be receiving
substantially more than a 25 percent share of the overall
project. He stated that the green area on the slide was
much closer to all 3 producers in the 25 percent case; the
share of the state's value of this scenario was much closer
to all 3 producers combined
5:57:12 PM
Mr. Mayer addressed slide 8 titled "Impact of Gas CAPEX on
Oil Revenues" and recalled that there had been a previous
question regarding the impact of upstream capital spending
on gas, and especially what impact it had on production tax
revenues from oil. He stated that as SB 138 was currently
written and gas moved to a gross-based tax for which there
were no deductions of costs, all costs on upstream spending
for oil and gas were deductible against the profit-based
tax on oil. He offered that there had been a question of
how much of an impact upstream costs associated with
developing the gas project could have on the revenues that
the state would otherwise receive in the years during the
development of oil and that the answer it depended on how
much upstream capital was spent; however, slide 8 assumed a
$3 billion base-case and a higher case of $4.5 billion. He
stated that generally speaking, depending on the upstream
spending, between $250 million and $350 million would be
reduced from the revenues that the state would otherwise
forecast having in those years as a result of the costs
being written against the oil tax liability. He noted that
the slide included production tax and royalty, but none of
the other elements, such as state income tax and property
tax; additionally, it was conceivable that there would be a
further impact on state income tax but that would depend on
how depreciation of the capital on project worked and
whether producers had been able to claim depreciation for
some of those assets before the liquefactions project began
running. He stated that in other analyses that enalytica
had conducted of the project that showed a higher total
state impact than the slide depicted because there was
conservative estimated impact of upstream spending on the
state income tax; however, enalytica was specifically asked
on slide 8 about what the impacts would be on revenues that
came specifically from royalties and production tax from
oil.
6:00:06 PM
Senator Dunleavy inquired if there were any changes to the
legislation that enalytica would advise. Mr. Tsafos replied
that he would probably start by maxing out the tax to get
to 25 percent equity and work down if he decided over time
that he did not want as much. He opined that it would be
useful having more clarity regarding AGDC and whether the
state would be spending money in parallel for an LNG
project and in-state line, as well as how coordinated those
two expenditures and streams were. He furthered that he
would like to see how those two streams of cash were
related. He stated that when looking at the fiscal notes,
there was some money for consultants in the bill and
offered that this was a great opportunity for the state to
formulate a permanent staff with great gas and LNG
expertise.
Mr. Mayer agreed with all of Mr. Tsafos' points, but added
that he would want assurances on understanding what the
envisioned process was in terms of the contractual
negotiation process, what executive session briefings would
look like and how often they would be likely to occur. He
thought that when the end result came, the only way that
the involved partners would be comfortable with agreements
had been reached was through regular feedback. He relayed
that it was critical that everyone was comfortable with how
things were likely to play out.
6:04:01 PM
Mr. Tsafos added that another thing that was not
necessarily a thing to change but something that needed to
be understood well was that if the project were to get
stalled, the state might still be compensating TransCanada
for the study expenses. He expressed that he would like to
understand the termination clauses of the Memorandum of
Understand and determine whether the state would still be
on the liable for costs if the project was terminated but
not by the state. He thought that it was one thing to say
that if the state kicked out a partner, it would be
responsible reimbursing that entity for costs, but wondered
what would happen if the project fell apart through no
fault of the state's.
Senator Dunleavy inquired if enalytica would vote for or
against the bill if it was his position. Mr. Meyer was not
trying to be evasive, but did not want to step over the
line of advising policy versus analysis; however, he
thought that it was clear when looking at the fundamental
problems and challenges of getting a project moving that
large export project was in the best interests of Alaska,
there were a number of challenges in making that happen,
and that there were a limited number of days to resolve
those difficulties. He stated that regardless of what broad
structure was chosen, enalytica felt that the core
principles had ways of addressing those problems that made
a lot of sense. He observed that when enalytica had brain
stormed on other ways to solve the project's problems, it
was able to come up with a few but none that were
compelling better.
6:06:43 PM
Mr. Tsafos stated that in his experience at PFC energy he
had studied or worked on a number of LNG projects. He
related that a lot projects gave him a bad gut reaction
that they would not happen; however, that was not the
reaction he had after spending a month and half in Juneau.
He stated that there was not an aspect that enalytica had
seen that was insurmountable.
Senator Dunleavy noted that it was a large project that
would build a pipeline great distances. He recalled that
Alaska had had earthquakes in the past and spoke about a
recent quake in 2002 on the eastern side of the state. He
assumed that there was insurance somewhere in the market
for large-scale projects and inquired if that was correct.
Mr. Meyer replied that generally, insurance was available
for most risks including catastrophic ones like
earthquakes; however, insurance markets became less
efficient with a projects as big as $65 billion. He
expounded insurance markets became less and less efficient
the bigger the capital expenditures were; even more so,
when a high magnitude outcome in terms of the cash at right
and the low probably of outcome were combined. He relayed
that knowing what the right price was for that insurance
and finding and that be an efficiently-priced product would
be the difficulty regarding obtaining insurance for the
project. He stated all of the questions in terms of
understanding the magnitude of that risk and how it would
be best mitigated would represent a discussion that the
partners would need to understand during the FEED process.
He concluded that FEED was a time for very detailed things
to be known at the most minute level.
6:09:17 PM
Senator Dunleavy inquired if the committee could get a list
in writing of suggestions and recommendation of what
enalytica would advise as the state worked though the
project. Co-Chair Kelly acknowledged the request.
Vice-Chair Fairclough believed that each of the items that
the consultants had raised had already been brought to the
chairman's attention. She thought that Senator Dunleavy had
previously met with the consultants and had asked similar
questions and thought that the chairman was aware of each
of those issues.
6:10:20 PM
SB 138 was HEARD and HELD in committee for further
consideration.
6:10:27 PM
AT EASE
6:17:06 PM
RECONVENED
SENATE JOINT RESOLUTION NO. 21
Proposing amendments to the Constitution of the State
of Alaska to increase the number of members on the
judicial council and relating to the initial terms of
new members appointed to the judicial council.
6:17:54 PM
Co-Chair Kelly MOVED to ADOPT the proposed committee
substitute for SJR 21, Work Draft 28-LS1364\O (Wallace
3/10/14) as a working document. There being NO OBJECTION,
it was so ordered.
HEATHER SHADDUCK, STAFF, SENATOR PETE KELLY, explained the
change in the new CS and related that it could be found on
page 2 on lines 1 and 2. She explained that the original
version of the bill stated that the judicial council shall
act by a concurrence of a majority of its members who were
participating in a vote; this had been changed in the
current CS to say that the judicial council shall act by a
majority vote of a quorum of at least seven members. She
added that this was the only change in the new version of
the bill.
6:19:21 PM
Co-Chair Kelly thought that the Alaska State Constitution
was a very fine document, but like all things worldly it
was not perfect. He offered that one of the things that the
founding fathers of the constitution had gotten wrong was
the judicial council wrong; their desire was to de-
politicize it, but he felt that had not occurred. He
recalled testimony that had indicated that it was very rare
that the people's will as represented through non-public
members on the judicial council was overridden; it was a
rare occurrence. He clarified that four times in the last
two years, public member who were appointed by the governor
and confirmed by the legislature had been overridden by
attorney members of the council who not confirmed by the
legislature or appointed by any elected officials in the
state; furthermore, the Supreme Court Justice, who was the
tie break in these situations, would usually side with the
attorney members to forward nominations to the governor. He
noted that attorney members of the council had great power,
but were not required to go through a confirmation hearing
like other state board and councils. He thought something
needed to be addressed in the constitution to prevent a tie
from happening where public members were being overruled by
people who had never stood before the public for
confirmation.
Co-Chair Kelly related that the resolution would increase
the number of public members to six and keep three attorney
members; it would also increase the required quorum to 7.
Hew related that the addition of public members and the
quorum of 7, there would never be a scenario where the
public was against the attorneys and the justice had to
break a tie against the people. He added that in Article 4,
Section 8 of the state's constitution, it stated that
appointments to the council should be made with due
consideration to area representation and without regard to
political affiliation. He offered that the problem was that
there had been no real way to represent vast areas of the
state with so few members and thought that the addition of
the members would give the council a shot at regional
diversity. He assumed that members had their packets a list
of the public and non-public members of the council. He
requested a brief AT EASE.
6:24:12 PM
AT EASE
6:24:24 PM
RECONVENED
6:24:29 PM
Co-Chair Kelly noted that the state constitution stated
that there shall be regional diversity on the judicial
council. He noted that the attorney members were mostly
from Juneau, Ketchikan, Fairbanks, and anchorage and there
were never any rural members; there were a few non-attorney
rural members, but the last two instances of that was in
1987 and 1916 before that. He did not think that anyone was
trying to keep rural members off the judicial council, but
that naturally, most of the attorney members would be from
urban areas. He asserted that with the current number of
members on the council, it could not maintain the regional
diversity that the constitution called for.
Co-Chair Meyer observed that there was a small fiscal note
attached to the bill that was associated with having a
larger judicial council.
6:26:25 PM
Co-Chair Kelly MOVED to REPORT CSSJR 21 out of committee
with individual recommendations and the accompanying fiscal
notes.
6:26:42 PM
Co-Chair Meyer questioned which version of the legislation
Co-Chair Kelly had moved.
6:26:49 PM
AT EASE
6:27:38 PM
RECONVENED
6:27:45 PM
Co-Chair Kelly MOVED to REPORT CSSJR 21 out of committee
with individual recommendations and the accompanying fiscal
notes. There being NO OBJECTION, it was so ordered.
6:28:07 PM
CSSJR(FIN) 21 was REPORTED out of committee with a "do
pass" recommendation and with previously published fiscal
impact note: FN1(GOV) and with a fiscal impact note from
the Alaska Court System.
6:28:11 PM
AT EASE
6:29:19 PM
RECONVENED
SENATE BILL NO. 191
"An Act relating to the authority to transfer money
from the general fund to general obligation bond
construction funds or accounts; and providing for an
effective date."
6:29:37 PM
Vice-Chair Fairclough MOVED to ADOPT the proposed committee
substitute for SB 191, Work Draft 28-LS1483\N (Wallace
3/7/14) as a working document. There being NO OBJECTION, it
was so ordered.
SUZANNE ARMSTRONG, STAFF, SENATOR KEVIN MEYER, related that
there had been a title change to the bill to reflect the
authority of the Legislative Budget and Audit Committee and
when it was necessary to approve the transfer of funds from
the General Fund to the construction funds; additionally,
it was clarified on page 1, line 12 that the commissioner
of the Department of Administration shall obtain approval
of the transfer of funds. She stated that on page 2, line 8
it was clarified that the commissioner of the Department of
Administration shall notify the Legislative Budget.
Co-Chair Meyer discussed the fiscal notes.
6:31:57 PM
Vice-Chair Fairclough MOVED to REPORT CSSB 191(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
6:32:18 PM
CSSB 191(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a zero fiscal note from the
Department of Revenue.
6:32:19 PM
AT EASE
6:32:35 PM
RECONVENED
6:32:38 PM
Co-Chair Meyer discussed the following meeting's agenda.
ADJOURNMENT
6:32:59 PM
The meeting was adjourned at 6:33 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SFIN, enalytica, Mar 5.pdf |
SFIN 3/10/2014 5:00:00 PM |
SB 138 |
| SJR21 work draft version O.pdf |
SFIN 3/10/2014 5:00:00 PM |
SJR 21 |
| CS SB191 work draft version N.pdf |
SFIN 3/10/2014 5:00:00 PM |
SB 191 |