SB 125-LEGISLATIVE MEMBERS OF AGDC BOARD  1:03:31 PM CO-CHAIR TALERICO announced that the first order of business is CS FOR SENATE BILL NO. 125(RES), "An Act adding legislative nonvoting members to the board of directors of the Alaska Gasline Development Corporation." 1:04:15 PM SENATOR MIA COSTELLO, Alaska State Legislature, paraphrased from her sponsor statement, written as follows [original punctuation provided]: Senate Bill 125 amends state law by adding two legislators as ex-officio (nonvoting) members to the Board of Directors of Alaska Gasline Development Corporation (AGDC). As the AKLNG project moves forward, the State of Alaska will face increasingly complex financing and policy decisions. AGDC is the state's primary representative in the project and will be a focal point for these discussions in the coming years. It is essential the state have a transparent, clear decision making process in place. Senate Bill 125 helps accomplish this by giving all parties a seat at the table. The AGDC Board of Directors currently consists of five public members appointed by the Governor and two commissioners of state departments. The commissioners for the Department of Revenue and Department of Natural Resources are prohibited from serving on the board. Having legislators participate in an advisory, nonvoting capacity adds experience and continuity to the board. Legislators understand the type of budget decisions that will be needed to meet the state's cash calls for a gasline project, and would be helpful for discussions on project financing. Senate Bill 125 will also increase collaboration on the project as any contract over two years in duration must be ratified by the Legislature. SENATOR COSTELLO stressed that the importance of the gasline cannot be understated. Alaskans are following this project and during the last session the legislature received updates from AGDC. She described it as a generational project, one of the largest engineering projects in the world, and said this bill will help facilitate communication and teamwork between the legislature and the AGDC Board and move this important project forward. Given the importance of the project, she said there is a need for transparent and clear decision making and the best way to make these decisions is to give all parties a seat at the state's table. Having legislators will provide perspective, institutional knowledge, and continuity; for example, six of the seven AGDC board seats turned over during the past year. The precedent in legislators serving on the board is that legislators currently serve on over a dozen state boards and commissions, including the Knick Arm Bridge Authority, the Alaska Aerospace Corporation, and the Alaska Seafood Marketing Institute. Each of those boards has two legislators as nonvoting ex officio members and serving as nonvoting members alleviates any constitutional concerns. The AGDC's mission and authority has expanded greatly during the past six years and has evolved to be the focal point of state decision making on developing liquefied natural gas on behalf of the state. It is important that the structure of organizations such as this are able to adapt to the types of decision making needed for a project of this magnitude. Legislators understand the type of budgeting decisions necessary to meet the state's cash calls and it would be helpful to have two legislators there to listen and participate in those discussions. Legislators at the table also lets policy makers better understand the ADGC Board's view of the business decisions facing the state. She reiterated that the gasline is one of the most important projects the legislature has before it and this bill promotes further cooperation, teamwork, and collaboration between the members of the ADGC Board and the legislature. 1:08:35 PM REPRESENTATIVE SEATON asked how the sponsor addresses the prohibition of legislators holding dual offices under the constitution and legislative members being in the executive branch. SENATOR COSTELLO responded that the bill was amended to require that legislators would not be paid per diem or receive any sort of financial benefit. When looking at the separation of powers among the branches, it is the judicial branch that would weigh in as to whether or not there is a constitutionality issue. She reminded the members of the precedent of members sitting on boards and corporations and if that is an issue, it may be something that is taken up as a group. REPRESENTATIVE SEATON put forth that many of the topics that would be discussed would require confidentiality. He asked whether the legislators would be expected to sign confidentiality statements and how would they share information back to the legislature. SENATOR COSTELLO responded that she is aware of only one member of the AGDC Board, currently, that has signed a confidentiality statement and, therefore, if it is not an issue for the current members on the board she does not see why it would be an issue for ex officio members. 1:11:01 PM REPRESENTATIVE JOSEPHSON asked whether members of the Alaska Aerospace Development Corporation and Alaska Seafood Marketing Institute (ASMI) are appointed by the executive branch. SENATOR COSTELLO answered that she is uncertain but believes they are appointed by the leadership in the House and Senate. REPRESENTATIVE JOSEPHSON inquired whether there are any competing legal opinions from any source. SENATOR COSTELLO responded that under [South Carolina v. Public Interest Foundation and Edward D. Sloan v. South Carolina Transportation Infrastructure Bank, 379 S.C. 160, 169, 666 S.E.2d 236, 241 (2008)], the court decided in favor of ex officio members who serve in the legislature also serving on the board. State courts are currently split on the issue, she said. 1:12:23 PM REPRESENTATIVE SEATON surmised that in the event the appointees are challenged, it would probably go through a long legal process. He asked whether that would mean ADGC would either be at risk at having any of its decisions overturned or would not be able to make any decisions until the lawsuit was resolved. SENATOR COSTELLO reiterated that these ex-officio members would be nonvoting and if this bill were to pass, any decision made by the board would be made by the voting members of the board and not the two listening participating members who are there simply to have a seat at the table. The spirit in which the bill has been offered is for cooperation and communication, so she does not see why that would be an issue. 1:13:33 PM REPRESENTATIVE JOSEPHSON referred to how the AGDC has evolved, and asked whether the board in its present iteration happened in 2013 as part of Senate Bill 21. He further asked whether part of the argument is that that section of Senate Bill 21 needs reform. WESTON EILER, Staff, Senator Mia Costello, Alaska State Legislature, offered his belief that Representative Josephson is referring to the changes that were made to the Alaska Gasline Development Corporation with passage of Senate Bill 138 in 2014. That bill outlined and structured the Alaska Gasline Development Corporation (AGDC) as it is currently arranged. 1:14:44 PM REPRESENTATIVE HERRON inquired about the catalyst and need for this legislation. SENATOR COSTELLO answered that last session it became evident that the communication and transparency amongst the interested parties could be improved. The impetus for this bill is to help with communication and certainly if there were two legislators sitting on this board as ex officio listening and participating members it would add to the conversation. She said she has heard from members of the legislature, currently sitting on other boards and corporations, that their participation is viewed as aiding the discussion and an asset to the corporation. 1:15:58 PM REPRESENTATIVE JOSEPHSON recalled that Representative Tarr and he attended an ADGC meeting with a number of senators. He asked whether there is any reflection in attendance by the 60 legislators of interest in those meetings as they are happening. SENATOR COSTELLO replied there is extreme interest in what is happening at AGDC board meetings. However, the board goes into executive session that cannot be attended by anyone else, and as the people's branch of government it is incumbent upon the legislature to be there. She noted the concerns focusing mainly on the role of the legislature and its participation, but pointed out that the role and scope of the project is of such magnitude it warrants a legislative view. 1:18:06 PM CO-CHAIR TALERICO commented it would appear that with the nonvoting, uncompensated capacity this does not appear to be advisory as much as the legislature having a communication line open for better transparency and communication between the legislature and the board. He asked whether that was the sponsor's intent with this legislation. SENATOR COSTELLO responded yes. She said it is common worldwide for corporations to have what would be considered viewing participating members who do not vote but are there as part of the discussion and listening. 1:19:05 PM REPRESENTATIVE TARR said she does not have a problem with adding legislators because the role would be nonvoting members. However, she noted, if the board goes into executive session and the legislative members are able to participate, there is no mechanism for that information to be shared with other legislators. In the event the legislative members were participating and there was a clear communication breakdown, whether or not there is a way to make it a greater asset for the legislature in the sense that it could then, perhaps through executive session of the legislature, learn the information. SENATOR COSTELLO answered that the ex officio nonvoting legislative participants would be under the same guidelines as the rest of the board so would not necessarily be able to share the information. She described it as a confidence building effort to have the legislative branch in those meetings. 1:20:42 PM [CSSB 125(RES) was held over.]