Legislature(2007 - 2008)BUTROVICH 205

04/13/2007 05:30 PM Senate JUDICIARY


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05:35:02 PM Start
05:35:13 PM SB104
06:10:55 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 104 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Heard & Held
-- Invited Testimony --
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         April 13, 2007                                                                                         
                           5:35 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Hollis French, Chair                                                                                                    
Senator Bill Wielechowski                                                                                                       
Senator Gene Therriault                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Lesil McGuire                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 104                                                                                                             
"An  Act  relating  to  the   Alaska  Gas  line  Inducement  Act;                                                               
establishing  the   Alaska  Gas  line  Inducement   Act  matching                                                               
contribution fund;  providing for  an Alaska Gas  line Inducement                                                               
Act coordinator; making conforming  amendments; and providing for                                                               
an effective date."                                                                                                             
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 104                                                                                                                  
SHORT TITLE: NATURAL GAS PIPELINE PROJECT                                                                                       
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/05/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/05/07       (S)       RES, JUD, FIN                                                                                          
03/14/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/14/07       (S)       Heard & Held                                                                                           
03/14/07       (S)       MINUTE(RES)                                                                                            
03/16/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/16/07       (S)       Heard & Held                                                                                           
03/16/07       (S)       MINUTE(RES)                                                                                            
03/19/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/19/07       (S)       Heard & Held                                                                                           
03/19/07       (S)       MINUTE(RES)                                                                                            
03/21/07       (S)       RES AT 3:30 PM SENATE FINANCE 532                                                                      
03/21/07       (S)       Heard & Held                                                                                           
03/21/07       (S)       MINUTE(RES)                                                                                            
03/21/07       (S)       RES AT 5:30 PM SENATE FINANCE 532                                                                      
03/21/07       (S)       Heard & Held                                                                                           
03/21/07       (S)       MINUTE(RES)                                                                                            
03/22/07       (S)       RES AT 4:15 PM FAHRENKAMP 203                                                                          
03/22/07       (S)       Heard & Held                                                                                           
03/22/07       (S)       MINUTE(RES)                                                                                            
03/23/07       (S)       RES AT 1:30 PM BUTROVICH 205                                                                           
03/23/07       (S)       Heard & Held                                                                                           
03/23/07       (S)       MINUTE(RES)                                                                                            
03/24/07       (S)       RES AT 1:00 PM SENATE FINANCE 532                                                                      
03/24/07       (S)       Heard & Held                                                                                           
03/24/07       (S)       MINUTE(RES)                                                                                            
03/24/07       (S)       RES AT 3:00 PM SENATE FINANCE 532                                                                      
03/24/07       (S)       Heard & Held                                                                                           
03/24/07       (S)       MINUTE(RES)                                                                                            
03/26/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/26/07       (S)       Heard & Held                                                                                           
03/26/07       (S)       MINUTE(RES)                                                                                            
03/27/07       (S)       RES AT 3:00 PM BUTROVICH 205                                                                           
03/27/07       (S)       Heard & Held                                                                                           
03/27/07       (S)       MINUTE(RES)                                                                                            
03/28/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/28/07       (S)       Heard & Held                                                                                           
03/28/07       (S)       MINUTE(RES)                                                                                            
03/29/07       (S)       RES AT 5:00 PM BUTROVICH 205                                                                           
03/29/07       (S)       Heard & Held                                                                                           
03/29/07       (S)       MINUTE(RES)                                                                                            
03/30/07       (S)       RES AT 1:30 PM BUTROVICH 205                                                                           
03/30/07       (S)       Heard & Held                                                                                           
03/30/07       (S)       MINUTE(RES)                                                                                            
03/31/07       (S)       RES AT 12:00 AM BUTROVICH 205                                                                          
03/31/07       (S)       Heard & Held                                                                                           
03/31/07       (S)       MINUTE(RES)                                                                                            
04/01/07       (S)       RES AT 11:00 AM BUTROVICH 205                                                                          
04/01/07       (S)       Moved CSSB 104(RES) Out of Committee                                                                   
04/01/07       (S)       MINUTE(RES)                                                                                            
04/02/07       (S)       RES RPT CS  6AM   SAME TITLE                                                                           
04/02/07       (S)       AM: HUGGINS, GREEN, STEVENS, STEDMAN,                                                                  
                         WIELECHOWSKI, WAGONER                                                                                  
04/02/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/02/07       (S)       Moved Out of Committee 4/1/07                                                                          
04/02/07       (S)       MINUTE(RES)                                                                                            
04/04/07       (S)       JUD AT 2:45 PM BELTZ 211                                                                               
04/04/07       (S)       Heard & Held                                                                                           
04/04/07       (S)       MINUTE(JUD)                                                                                            
04/11/07       (S)       JUD AT 1:30 PM BUTROVICH 205                                                                           
04/11/07       (S)       Heard & Held                                                                                           
04/11/07       (S)       MINUTE(JUD)                                                                                            
04/11/07       (S)       JUD AT 5:30 PM BUTROVICH 205                                                                           
04/11/07       (S)       Heard & Held                                                                                           
04/11/07       (S)       MINUTE(JUD)                                                                                            
04/12/07       (S)       JUD AT 3:30 PM BUTROVICH 205                                                                           
04/12/07       (S)       Public Testimony 5:30 pm to 7:00 pm                                                                    
04/13/07       (S)       JUD AT 1:30 PM BUTROVICH 205                                                                           
04/13/07       (S)       JUD AT 5:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
William Walker, General Counsel and Project Manager                                                                             
Alaska Gas line Port Authority                                                                                                  
411 4th Avenue, Suite 200                                                                                                       
Fairbanks AK  99701                                                                                                             
POSITION STATEMENT:                                                                                                           
                                                                                                                                
Clark Bishop, Commissioner                                                                                                      
Department of Labor                                                                                                             
Anchorage, AK                                                                                                                   
POSITION STATEMENT:                                                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  HOLLIS   FRENCH  called  the  Senate   Judiciary  Standing                                                             
Committee meeting to order at 5:35:02  PM. Present at the call to                                                             
order were  Senator Wielechowski,  Senator Therriault,  and Chair                                                               
French.                                                                                                                         
                                                                                                                                
              SB 104-NATURAL GAS PIPELINE PROJECT                                                                           
                                                                                                                              
5:35:13 PM                                                                                                                    
CHAIR FRENCH announced the consideration  of SB 104. He said that                                                               
the first item on the agenda for  the evening is to hear from Mr.                                                               
Walker from  the Port  Authority. He  would talk  about antitrust                                                               
issues in general as well as his particular experience.                                                                         
                                                                                                                                
5:35:54 PM                                                                                                                    
WILLIAM M.  WALKER, General Counsel  and Project  Manager, Alaska                                                               
Gas line  Port Authority ("Port  Authority") said he is  happy to                                                               
discuss the  Port Authority's experience on  the antitrust issue,                                                               
but he would speak carefully since it's a legal matter.                                                                         
                                                                                                                                
CHAIR FRENCH  reminded members that  the Port Authority  brief on                                                               
this  topic  appears  under  tab  12  of  the  AGIA  binder.  The                                                               
complaint was filed in U.S.  district court against Exxon and BP.                                                               
He opined  that it's  an excellent recitation  of the  history of                                                               
the gas  line including the  problems that have  been encountered                                                               
in trying to develop a gas line.                                                                                                
                                                                                                                                
MR. WALKER  explained that  the Port  Authority has  been working                                                               
since 1999 to put together  a viable, competitive and financeable                                                               
project. The last  step that's needed is the  acquisition of gas.                                                               
As  part  of  that  the  Port Authority  submitted  an  offer  to                                                               
purchase gas  in April  2005. Quite soon  it became  evident that                                                               
the offer wouldn't even be  engaged. That left the Port Authority                                                               
with  few choices,  particularly in  light of  the fact  that the                                                               
administration at  that time wasn't  very supportive.  He relayed                                                               
that  the Port  Authority directed  him  to lay  out the  options                                                               
regarding antitrust action  against the producers as  a result of                                                               
the  collective refusal  to sell  gas. After  reviewing the  data                                                               
with David Boies  a determination was made that there  was a very                                                               
good antitrust claim and so the  action was filed in Fairbanks on                                                               
December 19, 2005.  ExxonMobil and BP responded with  a motion to                                                               
dismiss, which was successful on the standing issue.                                                                            
                                                                                                                                
5:39:00 p.m.                                                                                                                    
CHAIR FRENCH  asked him to  remind the public what  that standing                                                               
issue means.                                                                                                                    
                                                                                                                                
MR. WALKER explained that the  standing issue said that in filing                                                               
the action the  Port Authority was trying to  bypass the Stranded                                                               
Gas  Development  Act (SGDA)  process.  Clearly  that wasn't  the                                                               
idea, he said. We did not  and do not believe that it's necessary                                                               
to file  an application  with the  SGDA to build  a gas  line. We                                                               
believe  it  was  an  option   but  it  wasn't  exclusive  so  we                                                               
respectfully disagreed with the judge on that issue, he said.                                                                   
                                                                                                                                
MR. WALKER  said they  filed a  request for  reconsideration. "We                                                               
were the only  ones that applied twice. We applied  once and were                                                               
told  to withdraw  then we  were asked  by the  administration to                                                               
apply  a second  time  and  we did,  so  that's  really what  the                                                               
stumbling  block  for   us  was."    He  added   that  the  judge                                                               
acknowledged the  change in political  climate and said  it might                                                               
remove   the   standing  issue   if   the   legislature  or   the                                                               
administration gave its blessing.                                                                                               
                                                                                                                                
MR. WALKER  explained that at about  the same time that  the Port                                                               
Authority headed  into the ninth  circuit court with  its appeal,                                                               
the former  administration took  back Pt.  Thomson. He  said that                                                               
the Palin administration has upheld  that action and so with this                                                               
new day  and the  desire to  focus on  building a  project rather                                                               
than on  the ninth circuit,  the board authorized him  to dismiss                                                               
the appeal and he has done that.                                                                                                
                                                                                                                                
5:41:34 PM                                                                                                                    
CHAIR  FRENCH referenced  page 5  of the  complaint and  read the                                                               
following by Lee Raymond, then CEO for ExxonMobil:                                                                              
                                                                                                                                
     Then  you  have  these  competing  pipeline  proposals,                                                                    
     which  is  fine if  that's  what  you  to do.  But  the                                                                    
     reality  is,  nobody  is  going  to  build  a  pipeline                                                                    
     without  the producers.  You and  I know  how pipelines                                                                    
     get built.  The pipeline goes  to the bank. The  guy at                                                                    
     the  bank says,  what  are  you going  to  put in  your                                                                    
     pipeline? Gas. Do you own the  gas. No, I don't own the                                                                    
     gas. Well,  who does  own the  gas, and  do you  have a                                                                    
     commitment  from them  that they  are going  to put  it                                                                    
     through  the pipeline?  Well, no,  we don't  have that.                                                                    
     Then [says  the bank] I  don't think I'm going  to give                                                                    
     you much money to build a pipeline.                                                                                        
                                                                                                                                
CHAIR  FRENCH   asked Mr.  Walker if  that's the  essence of  his                                                               
case.                                                                                                                           
                                                                                                                                
MR. WALKER  said Mr.  Raymond made  that particular  statement at                                                               
about the time  the Port Authority was trying to  buy gas so that                                                               
statement was  a significant  deciding point.  It was  clear that                                                               
more of the same process wasn't going to be productive.                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI  noted  that  Exxon  testified  before  the                                                               
resources committee saying  that the only way a  pipeline will be                                                               
built  is if  the  producers  build it.  He  asked  if that's  an                                                               
accurate  assessment  and if  statements  like  that would  be  a                                                               
violation of the U.S. antitrust laws.                                                                                           
                                                                                                                                
MR. WALKER  stated that  he firmly  disagrees with  the statement                                                               
that only the  producers can build a pipeline.  Worldwide the way                                                               
pipelines  are built,  financed, and  owned is  contrary to  that                                                               
because  it's  unusual  for  producers  to  be  in  an  ownership                                                               
position. With regard  to the second question he said  it takes a                                                               
number of considered  efforts for a violation  of antitrust laws.                                                               
Although  the Port  Authority wasn't  successful in  the standing                                                               
issue, it does  stand behind the facts that  were asserted there,                                                               
he said.  "Beyond that…we have  read the leases, we've  looked at                                                               
the  law as  far  as the  obligations under  the  leases, and  we                                                               
believe the  reasonable expectation of profit  is the threshold."                                                               
He said we  don't believe the producers can be  forced to build a                                                               
pipeline and  that's probably not  a good idea anyway,  but there                                                               
is  an obligation  to  market. We  were looking  at  the duty  to                                                               
market  the  gas  available, particularly  the  Prudhoe  Bay  gas                                                               
that's being re-injected, he stated.                                                                                            
                                                                                                                                
SENATOR WIELECHOWSKI asked if the  producers could validly refuse                                                               
to participate in an open season on this project.                                                                               
                                                                                                                                
MR. WALKER  said we  believe that  if an  open season  includes a                                                               
volume  that's approved  and  available and  if  it's within  the                                                               
limits of the  current off-take on the North  Slope, then there's                                                               
an obligation  for the producers  to participate.  Their response                                                               
may be conditional,  but the leases don't allow them  to sit back                                                               
and  wait  for the  timeframe  that  works  best for  them.  "The                                                               
leases…need  to  be  developed  at  such  point  that  there's  a                                                               
reasonable expectation  of profit." Stating  that that is  a term                                                               
of art that has been addressed  by the courts, he opined that one                                                               
thing that's  been misunderstood  for decades  here in  Alaska is                                                               
that we felt  we had to compete with every  project on the planet                                                               
and  that we  had to  be the  most profitable  as well.  But that                                                               
isn't  the law  and that  isn't what  the leases  say; reasonable                                                               
expectation of profit is the threshold, he stated.                                                                              
                                                                                                                                
SENATOR WIELECHOWSKI  asked if the  court has given  a definition                                                               
for what  is a reasonable  expectation of profit. Also,  how does                                                               
the profitability  of this project  compare to others  around the                                                               
world?                                                                                                                          
                                                                                                                                
MR. WALKER explained that the  courts in Alaska haven't addressed                                                               
a  definition, but  he'd  be  happy to  ask  their Texas  special                                                               
counsel to  give his perspective  on that  in writing. As  far as                                                               
how this  project compares  to others, he  said we  believe we're                                                               
absolutely competitive.  For instance, other places  where gas is                                                               
at tidewater  have a 22-27  day shipping time while  this project                                                               
would  have   a  5-6  day   shipping  time.  Also,   the  ambient                                                               
temperature  here  is  40  degrees  rather  than  90  degrees  so                                                               
liquefaction is  30-40 percent more  efficient here.  Beyond that                                                               
he would point  out that this project doesn't have  to beat every                                                               
other  LNG project.  It simply  needs to  be competitive  to make                                                               
sure the market wants the product.                                                                                              
                                                                                                                                
SENATOR  THERRIAULT  noted that  when  the  U.S. government  went                                                               
through  a  process  to  pick a  project  from  the  over-the-top                                                               
option,  the overland  option  down the  Alcan  Highway, and  the                                                               
tidewater   option,  the   Carter  administration   selected  the                                                               
overland option.  He asked if  he knows  the history that  led to                                                               
that decision.                                                                                                                  
                                                                                                                                
MR. WALKER  explained that there  was strong competition  for all                                                               
three options and  Alaska united and fought hard for  the line to                                                               
come  through   the  state.  Although  the   commissioners  spoke                                                               
favorably about that  route because there would  be no regulatory                                                               
unknowns  and there  would  be no  aboriginal  claims and  rights                                                               
issues from  a different  country, the  ultimate decision  was to                                                               
run  the line  through Canada.  Part  of that  decision was  that                                                               
there would be  no producer ownership of the  line. For financial                                                               
reasons  those  regulations  were   modified  during  the  Reagan                                                               
administration  and some  producer  ownership  was allowed.  That                                                               
financing issue might not be completely gone, he added.                                                                         
                                                                                                                                
MR. WALKER  said he really can't  say why the Canadian  route was                                                               
selected  because the  federal  government's  testimony was  very                                                               
favorable for an all Alaska line.                                                                                               
                                                                                                                                
SENATOR WIELECHOWSKI said he doesn't  understand the rationale at                                                               
that time to have no producer ownership in the line.                                                                            
                                                                                                                                
MR. WALKER said he believes the  concern related to the amount of                                                               
control  the  producers  already  had  on  the  market  and  that                                                               
increasing  it  might  have  a   chilling  affect  on  additional                                                               
exploration  and development  in Alaska.  It was  more a  concern                                                               
about market and basin control, he stated.                                                                                      
                                                                                                                                
SENATOR WIELECHOWSKI  asked if he's  referring to the  ability to                                                               
impact tariffs.                                                                                                                 
                                                                                                                                
MR. WALKER said  it was the tariff and exploration.  The idea was                                                               
to  ensure the  ability to  have  maximum exploration  of gas  in                                                               
Alaska.                                                                                                                         
                                                                                                                                
5:56:10 PM                                                                                                                    
CHAIR FRENCH summarized that the  Port Authority tried to buy gas                                                               
and couldn't  so they brought a  lawsuit against Exxon and  BP on                                                               
Sherman  antitrust action.  The suit  was dismissed  for lack  of                                                               
standing and the judge said:                                                                                                    
                                                                                                                                
       The defendants would seemingly not be able to hold                                                                       
      these gas reserves forever without making reasonable                                                                      
     and good faith efforts to develop them.                                                                                    
                                                                                                                                
CHAIR FRENCH  commented that  that was  a bit  of a  legal nugget                                                               
that came your way during the process.                                                                                          
                                                                                                                                
MR.  WALKER  agreed and  said  the  Port Authority  thought  that                                                               
submitting  an offer  to purchase  gas would  begin a  productive                                                               
process.  When we  brought participants  from the  marketplace as                                                               
part of  the offer we expected  it would be taken  more seriously                                                               
than it was, he stated.                                                                                                         
                                                                                                                                
SENATOR WIELECHOWSKI asked if it  would benefit the state to have                                                               
a declaratory  judgment action now  saying that they would  be in                                                               
default if they don't show up for an open season.                                                                               
                                                                                                                                
MR. WALKER cautioned  that from the market  standpoint that might                                                               
start a more  lengthy process than might be  productive. That's a                                                               
decision you'll  have to make,  he said. Although there  needs to                                                               
be some understanding  of what constitutes a  failed open season,                                                               
he  is encouraged  that  the  tenor of  discussion  is that  this                                                               
committee wouldn't be  comfortable with no response  and a failed                                                               
open season.                                                                                                                    
                                                                                                                                
5:58:22 PM                                                                                                                    
CHAIR FRENCH  announced the  next item on  the agenda  is project                                                               
labor agreements by Commissioner Click Bishop.                                                                                  
                                                                                                                                
5:58:35 PM                                                                                                                    
COMMISSIONER  DESIGNEE  CLICK  BISHOP, Department  of  Labor  and                                                               
Workforce Development, delivered a  PowerPoint presentation.                                                                    
                                                                                                                                
What is a Project Labor Agreement (PLA)?                                                                                        
                                                                                                                                
   · A PLA is a comprehensive collective bargaining agreement                                                                   
     that  sets  the terms  and  conditions  of employment  on  a                                                               
     project, for that project only.                                                                                            
                                                                                                                                
   · A PLA is a collective bargaining agreement that is                                                                         
     negotiated  between  the  licensee,  or its  agent,  and  an                                                               
     appropriate entity  setting out the terms  and conditions of                                                               
     employment  on the  project, typically  including wages  and                                                               
     benefits,   and  setting   out   other  working   conditions                                                               
     including   no-strike,   no  lockout   provisions,   dispute                                                               
     resolution procedures,  and the use of  hiring facilities in                                                               
     the state.                                                                                                                 
                                                                                                                                
   · Contractors come under that umbrella. All contractors,                                                                     
     union  or  nonunion  who  are interested  in  bidding  on  a                                                               
     project must follow the terms  and conditions set out in the                                                               
     PLA.                                                                                                                       
                                                                                                                                
6:01:02 PM                                                                                                                    
CHAIR FRENCH recognized Senator Joe Thomas in the audience.                                                                     
                                                                                                                                
CHAIR FRENCH  noted that  some interested  parties have  told him                                                               
that a  PLA would keep  nonunion workers from getting  a pipeline                                                               
job. He  asked if anything about  a PLA would exclude  a nonunion                                                               
worker from getting a job.                                                                                                      
                                                                                                                                
COMMISSIONER BISHOP said no.                                                                                                    
                                                                                                                                
SENATOR  THERRIAULT asked  him  to elaborate  on  how a  nonunion                                                               
worker would go about securing a job  on a project that has a PLA                                                               
and how a nonunion shop would bid on a job that has a PLA.                                                                      
                                                                                                                                
COMMISSIONER BISHOP  explained that today all  union hiring halls                                                               
are open  to nonunion workers to  go in and register  on any auto                                                               
work list for  employment. Under a PLA the only  thing that would                                                               
prohibit a  nonunion entity  from bidding a  project is  a desire                                                               
not to participate, he said.                                                                                                    
                                                                                                                                
SENATOR THERRIAULT asked if his workers  would have to go sign up                                                               
at the union  hall if his nonunion business submitted  a bid on a                                                               
project, or  would his  business just  have to  agree to  pay the                                                               
particular wage that's been negotiated. How does that work?                                                                     
                                                                                                                                
COMMISSIONER BISHOP said he can't  speak for organized labor, but                                                               
historically they  could "key  man" their people  in on  the pre-                                                               
hire bargaining agreement with the  union to assure that the shop                                                               
could bring in its workers.                                                                                                     
                                                                                                                                
SENATOR THERRIAULT asked if there's  a mechanism for his existing                                                               
workforce to  qualify so  that he wouldn't  have to  dismiss them                                                               
and hire from the names that are highest on the list.                                                                           
                                                                                                                                
COMMISSIONER BISHOP said there is  a mechanism but he can't speak                                                               
for each local union.                                                                                                           
                                                                                                                                
6:04:44 PM                                                                                                                    
COMMISSIONER BISHOP continued.                                                                                                  
                                                                                                                                
History of PLAs.                                                                                                                
   · Project Labor Agreements were first used in the 1930s and                                                                  
     currently they're used widely in the private and public                                                                    
     sectors.                                                                                                                   
                                                                                                                                
PLA Precedents.                                                                                                                 
   · Legal.                                                                                                                     
        · U.S. Supreme Court (Boston Harbor) 1933.                                                                              
        · Alaska Supreme Court (Laborers Local 942 v.                                                                           
          Lampkin) 1998.                                                                                                        
                                                                                                                                
   · PLA-based Public and Private Projects.                                                                                     
        · Grand Coulee and Hoover dams.                                                                                         
        · TAPS.                                                                                                                 
        · San Francisco BART.                                                                                                   
        · Puget Sound Transit.                                                                                                  
        · Sutter and Sunrise Power Plants in California.                                                                        
        · Seattle Airport.                                                                                                      
                                                                                                                                
6:05:48 PM                                                                                                                    
Why Have a PLA?                                                                                                                 
   · Stable workforce guaranteeing no strikes or lockouts.                                                                      
   · Meets project scheduling challenges.                                                                                       
  · Eliminates need to negotiate numerous separate contracts.                                                                   
   · Assures   consistent   terms    and   conditions   for   all                                                               
     contractors.                                                                                                               
   · It's a good vehicle for:                                                                                                   
        · Alaska hire.                                                                                                          
        · Apprenticeship opportunities.                                                                                         
        · Preference for underutilized groups.                                                                                  
                                                                                                                                
6:06:45 PM                                                                                                                    
CHAIR FRENCH commented that a lot  of the public thinks that once                                                               
unions  get involved  there might  be a  strike and  the pipeline                                                               
wouldn't  get  built. He  asked  how  a  PLA prevents  that  from                                                               
happening.                                                                                                                      
                                                                                                                                
COMMISSIONER BISHOP  said the two  sides can bind one  another by                                                               
agreeing in writing  that there won't be a strike  or lockout. To                                                               
his knowledge there hasn't been a  walkout or strike on any North                                                               
Slope projects since the inception of TAPS.                                                                                     
                                                                                                                                
CHAIR FRENCH  referenced page 9,  lines 16-18, of the  current CS                                                               
dealing with applicant requirements. He read the following:                                                                     
                                                                                                                                
               (16)       commit   to    negotiate,   before                                                                    
     construction,  a  project  labor agreement,  to  ensure                                                                    
     expedited  construction  and  labor stability  for  the                                                                    
     project by qualified residents of the state;                                                                               
                                                                                                                                
CHAIR FRENCH  asked if  he or members  of the  administration are                                                               
working on  a more exact  definition for project  labor agreement                                                               
within the context of AGIA.                                                                                                     
                                                                                                                                
COMMISSIONER BISHOP said yes.                                                                                                   
                                                                                                                                
CHAIR FRENCH asked him to forward  it to the committee as soon as                                                               
it's finalized.                                                                                                                 
                                                                                                                                
SENATOR  THERRIAULT posed  another  scenario. His  business is  a                                                               
union shop that pays its  employees, which are all year-around, a                                                               
union negotiated  wage. He  asked how  a PLA  that came  in might                                                               
impact that  type of  agreement if the  wage negotiated  with the                                                               
union  is different  than  the wage  that's  negotiated with  the                                                               
individual union shop. Which one prevails?                                                                                      
                                                                                                                                
COMMISSIONER  BISHOP said  that would  be subject  to negotiation                                                               
between the licensee and the labor entity.                                                                                      
                                                                                                                                
SENATOR THERRIAULT asked if local  302 could negotiate a wage for                                                               
hiring  out  of its  hall  that  would  carry  the day  for  that                                                               
particular business.                                                                                                            
                                                                                                                                
COMMISSIONER BISHOP said they could.                                                                                            
                                                                                                                                
SENATOR WIELECHOWSKI asked  if it's fair to say  that Davis Bacon                                                               
laws would apply on this project.                                                                                               
                                                                                                                                
COMMISSIONER  BISHOP  agreed  that   that  would  likely  be  the                                                               
benchmark for starters for negotiation.                                                                                         
                                                                                                                                
6:10:55 PM                                                                                                                    
CHAIR FRENCH recessed the committee until 10:00 a.m. tomorrow.                                                                  

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