Legislature(1999 - 2000)
05/12/1999 03:45 PM Senate RES
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SENATE RESOURCES COMMITTEE
May 12, 1999
3:45 p.m.
MEMBERS PRESENT
Senator Rick Halford, Chairman
Senator Robin Taylor, Vice Chairman
Senator Pete Kelly
Senator Jerry Mackie
Senator Lyda Green
Senator Georgianna Lincoln
MEMBERS ABSENT
Senator Sean Parnell
COMMITTEE CALENDAR
HOUSE CONCURRENT RESOLUTION NO. 12 am
Relating to the state's interest in oil and gas company mergers and
establishing a Joint Special Committee on Mergers as a joint
committee of the legislature.
PREVIOUS SENATE COMMITTEE ACTION
HCR 12 - No previous Senate action.
WITNESS REGISTER
Tom Wright
Legislative Aide to Representative Brian Porter
Alaska State Capitol
Juneau, AK 99081-1182
POSITION STATEMENT: Testified for the sponsor of HCR 12
Ted Popely
House Majority Counsel
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Discussed a provision of HCR 12
ACTION NARRATIVE
TAPE 99-34, SIDE A
Number 001
CHAIRMAN HALFORD called the Senate Resources Committee meeting to
order at 3:45 p.m. All members were present except Senator
Parnell. The committee took up HCR 12.
HCR 12-JOINT SPECIAL COMMITTEE ON MERGERS
Tom Wright, Legislative Aide to Speaker Brian Porter, sponsor of
HCR 12, explained that the measure establishes a joint committee on
mergers to study issues related to the proposed merger of BP Amoco
and ARCO. The Federal Trade Commission (FTC) will begin its own
investigation of the merger in the near future therefore input from
state officials needs to be developed within the next few months.
The joint committee will closely examine both state and federal
laws that influence the acquisition. The primary issues that need
to be reviewed are: revenues generated through oil production and
transport; employment opportunities for Alaskans; environmental
impacts; future oil and gas exploration and development; the sale
of natural gas from the North Slope; and fostering a healthy
competitive environment for the industry in Alaska. The joint
committee will meet during and between sessions of the 21st
legislature and will be terminated when the 22nd legislature
convenes.
SENATOR TAYLOR cited page 3, line 7, and asked why the legislature
needs a committee to determine whether or not we should require the
divestiture of oil and gas leases that are in excess of the
allowable amount under Alaska statute. He expressed concern that
the legislature will be creating a committee to decide whether
state law should be enforced.
CHAIRMAN HALFORD said he thought divestiture of assets, other than
leases, could be required.
TED POPELY, legislative counsel to the Senate and House Majority,
agreed that the terms of the resolution indicate divestiture in
general; it does not necessarily limit divestiture to the acreage
that is referenced in statute.
SENATOR TAYLOR asked what the timeline is for approval of the
merger by the companies and the FTC, and whether the legislature
can wait until the next session before it acts.
CHAIRMAN HALFORD replied the Hart-Scott-Rodino filing, which is a
filing before the FTC, will be submitted within the week. That
filing has a 30 day window. The information is highly confidential
and consists of the business plans for the companies in the years
to come. A second filing virtually always occurs after the
companies meet with the FTC. He noted the FTC requests a huge
amount of information. In addition, the Administration has
assembled a team of lawyers, economists, and others to study the
merger. The timeline for approval is expected to take six to nine
months. The legislature is unlikely to get access to the
information submitted to the FTC in the first filing without
concurrence of the companies. The executive branch is likely to
file a lawsuit based on Alaska antitrust law for discovery. He
noted the first difficulty will be gathering and sorting
information and that a legislative committee will have the power to
subpoena, although he does not want to take that route.
SENATOR TAYLOR expressed concern that some of these matters may be
resolved and concluded before the legislature has an opportunity to
act.
CHAIRMAN HALFORD stated that the legislature, as a sovereign, may
have the powers to respond if the actions are detrimental to the
state.
Number 125
SENATOR LINCOLN referred to page 3, line 3, which reads, "and take
whatever other actions may be appropriate to ensure that the best
interest of the state is protected." She questioned what role the
Administration will play in this process if the joint committee is
comprised of legislators only.
CHAIRMAN HALFORD indicated the Administration will lead the
process, and will probably be spending two to three times as many
resources in terms of research. The Administration has promised to
give the legislative branch any information it obtains as long as
it does not breach confidentiality, however the Administration has
recommended that the legislature run a parallel process so that it
has a format from which to operate and obtain independent
professional advice. Two sides of the merger issue need to be
investigated: the legal aspect and the economic aspect.
SENATOR LINCOLN asked why members from the Administration will not
be sitting on the joint committee.
CHAIRMAN HALFORD replied he does not think the Administration wants
the legislature directly involved in its efforts. It will
cooperate as far as providing the joint committee with information.
SENATOR LINCOLN asked if the joint committee will be taking action.
CHAIRMAN HALFORD replied the joint committee can only make
recommendations to the legislature.
SENATOR LINCOLN disagreed because of the language she referenced
earlier on page 3, line 3. She noted HCR 12 has no fiscal note and
asked how the joint committee will be funded.
CHAIRMAN HALFORD said the committee will be funded by the
Legislative Council. He repeated that the Administration wants to
maintain some independence from the legislative branch while it
does its investigation.
SENATOR MACKIE noted in the past the legislature has discouraged
participation by the Administration in joint activities.
SENATOR TAYLOR maintained that there is good reason for the
separation. There is an important distinction between the role the
Administration can play through the Attorney General's office and
the role the legislature can play. In addition, someone will have
to take responsibility for access to proprietary information.
SENATOR MACKIE asked if the process outlined in HCR 12 will allow
for, and protect, the issues of discovery and information that can
be shared.
CHAIRMAN HALFORD said yes, however the level of confidentiality may
be required by the companies if they control the details of the
Hart-Scott-Rodino filing. The companies might allow review of that
information with the condition that the information cannot even be
discussed, making it difficult to draw conclusions from the
information, or the companies might limit access to information to
the lawyers involved in the case.
SENATOR MACKIE moved HCR 12 from committee with individual
recommendations. Without objection, the motion carried. CHAIRMAN
HALFORD adjourned the meeting at 3:55 p.m.
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