04/15/2024 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB226 | |
| SB196 | |
| HB394 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | SB 196 | TELECONFERENCED | |
| += | HB 226 | TELECONFERENCED | |
| += | HB 378 | TELECONFERENCED | |
| + | HB 394 | TELECONFERENCED | |
| *+ | HJR 27 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 15, 2024
3:17 p.m.
MEMBERS PRESENT
Representative Jesse Sumner, Chair
Representative Justin Ruffridge, Vice Chair
Representative Mike Prax
Representative Dan Saddler
Representative Stanley Wright
Representative Ashley Carrick
Representative Zack Fields
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 226
"An Act relating to the Board of Pharmacy; relating to
insurance; relating to pharmacies; relating to pharmacists;
relating to pharmacy benefits managers; relating to patient
choice of pharmacy; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 196
"An Act relating to drug and alcohol testing by employers."
- HEARD & HELD
HOUSE BILL NO. 394
"An Act relating to the Regulatory Commission of Alaska and
regulation of the service of natural gas storage and liquefied
natural gas import facilities; relating to records of the
Regulatory Commission of Alaska; relating to rates established
by the Regulatory Commission of Alaska; and providing for an
effective date."
- HEARD & HELD
Presentation(s): Pensions and Economics of Retirement
- REMOVED FROM AGENDA
HOUSE BILL NO. 378
"An Act relating to theft; relating to organized retail theft;
establishing a statewide marketplace facilitator sales tax;
establishing the organized retail theft fund in the general
fund; and providing for an effective date."
- BILL HEARING CANCELED
HOUSE JOINT RESOLUTION NO. 27
Supporting trade policies for the United States that hold China,
Russia, and other countries accountable, reward leadership in
clean production standards, reward superior environmental
performance, support economic development, and support the
rebuilding of supply chains in the United States.
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 226
SHORT TITLE: PHARMACIES/PHARMACISTS/BENEFITS MANAGERS
SPONSOR(s): REPRESENTATIVE(s) SUMNER
01/16/24 (H) PREFILE RELEASED 1/8/24
01/16/24 (H) READ THE FIRST TIME - REFERRALS
01/16/24 (H) HSS, L&C, FIN
02/27/24 (H) HSS AT 3:00 PM DAVIS 106
02/27/24 (H) Heard & Held
02/27/24 (H) MINUTE(HSS)
02/29/24 (H) HSS AT 3:00 PM DAVIS 106
02/29/24 (H) Moved CSHB 226(HSS) Out of Committee
02/29/24 (H) MINUTE(HSS)
03/04/24 (H) HSS RPT CS(HSS) 6DP 1NR
03/04/24 (H) DP: SUMNER, RUFFRIDGE, MCCORMICK,
SADDLER, MINA, PRAX
03/04/24 (H) NR: FIELDS
03/06/24 (H) L&C AT 3:15 PM BARNES 124
03/06/24 (H) Scheduled but Not Heard
03/11/24 (H) L&C AT 3:15 PM BARNES 124
03/11/24 (H) Heard & Held
03/11/24 (H) MINUTE(L&C)
03/25/24 (H) L&C AT 3:15 PM BARNES 124
03/25/24 (H) Heard & Held
03/25/24 (H) MINUTE(L&C)
04/03/24 (H) L&C AT 3:15 PM BARNES 124
04/03/24 (H) <Bill Hearing Rescheduled to 04/05/24>
04/05/24 (H) L&C AT 3:15 PM BARNES 124
04/05/24 (H) -- MEETING CANCELED --
04/15/24 (H) L&C AT 3:15 PM BARNES 124
BILL: SB 196
SHORT TITLE: EMPLOYER DRUG AND ALCOHOL TESTING
SPONSOR(s): LABOR & COMMERCE
01/18/24 (S) READ THE FIRST TIME - REFERRALS
01/18/24 (S) L&C
03/08/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/08/24 (S) Heard & Held
03/08/24 (S) MINUTE(L&C)
03/20/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/20/24 (S) Moved SB 196 Out of Committee
03/20/24 (S) MINUTE(L&C)
03/22/24 (S) L&C RPT 4DP 1NR
03/22/24 (S) DP: BJORKMAN, BISHOP, GRAY-JACKSON,
MERRICK
03/22/24 (S) NR: DUNBAR
04/10/24 (S) TRANSMITTED TO (H)
04/10/24 (S) VERSION: SB 196
04/11/24 (H) READ THE FIRST TIME - REFERRALS
04/11/24 (H) L&C
04/15/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 394
SHORT TITLE: RCA REGULATE NATURAL GAS STORAGE FACILITY
SPONSOR(s): RESOURCES
03/20/24 (H) READ THE FIRST TIME - REFERRALS
03/20/24 (H) RES, L&C
04/01/24 (H) RES AT 1:00 PM BARNES 124
04/01/24 (H) <Bill Hearing Rescheduled to 04/03/24>
04/03/24 (H) RES AT 1:00 PM BARNES 124
04/03/24 (H) Heard & Held
04/03/24 (H) MINUTE(RES)
04/05/24 (H) RES AT 1:00 PM BARNES 124
04/05/24 (H) Moved HB 394 Out of Committee
04/05/24 (H) MINUTE(RES)
04/08/24 (H) RES RPT 4DP 3AM
04/08/24 (H) DP: SADDLER, MCCABE, WRIGHT, MCKAY
04/08/24 (H) AM: ARMSTRONG, MEARS, DIBERT
04/08/24 (H) L&C AT 3:15 PM BARNES 124
04/08/24 (H) Scheduled but Not Heard
04/15/24 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
SARENA HACKENMILLER, Staff
Representative Jesse Sumner
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Read the explanation of changes from CSHB
226(HSS) a proposed committee substitute, Version R, on behalf
of Representative Sumner, prime sponsor.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community & Economic Development
Anchorage, Alaska
POSITION STATEMENT: answered committee questions on HB 226
Version R.
SENATOR JESSE BJORKMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, read the sponsor
statement to SB 196.
TAIHYA THOMAS, Human Resources Manager
Barrow Utilities & Electric Coop
Barrow, Alaska
POSITION STATEMENT: Gave invited testimony in support of SB
196.
LAURA ACHEE, Staff
Senator Jesse Bjorkman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Senator Jesse Bjorkman, prime
sponsor, answered questions related to SB 196.
REPRESENTATIVE TOM MCKAY
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As chair of the House Resources Standing
Committee, sponsor, presented HB 394.
TREVOR JEPSEN, Staff
Representative Tom McKay
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of the House Resources Standing
Committee, sponsor, on which Representative McKay serves as
chair, gave a PowerPoint presentation on HB 394.
JOHN SIMS, President
Enstar Natural Gas
Anchorage, Alaska
POSITION STATEMENT: Answered committee questions on HB 394.
ROBERT DOYLE, Chair
Regulatory Commission of Alaska
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to HB 394.
BECKI ALVEY, Advisory Section Manager,
Regulatory Commission of Alaska
Anchorage, Alaska
POSITION STATEMENT: Answered committee questions related to HB
394.
DEREK NOTTINGHAM, Director,
Division of Oil & Gas, Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Answered committee questions related to HB
394.
ACTION NARRATIVE
3:17:42 PM
CHAIR JESSE SUMNER called the House Labor and Commerce Standing
Committee meeting to order at 3:17 p.m. Representatives Prax,
Ruffridge, Carrick, Fields, and Sumner were present at the call
to order. Representatives Saddler and Wright arrived as the
meeting was in progress.
HB 226-PHARMACIES/PHARMACISTS/BENEFITS MANAGERS
3:18:38 PM
CHAIR SUMNER announced that the first order of business would be
HOUSE BILL NO. 226, "An Act relating to the Board of Pharmacy;
relating to insurance; relating to pharmacies; relating to
pharmacists; relating to pharmacy benefits managers; relating to
patient choice of pharmacy; and providing for an effective
date." [Before the committee was CSHB 226(HSS).]
3:18:48 PM
REPRESENTATIVE RUFFRIDGE moved to adopt the proposed committee
substitute (CS) to HB 226, Version 33-LS0955\R, Wallace,
4/11/24, as a working document.
REPRESENTATIVE FIELDS objected for the purpose of discussion.
3:19:20 PM
SARENA HACKENMILLER, Staff, Representative Jesse Sumner, Alaska
State Legislature, on behalf of Representative Sumner, prime
sponsor, read the explanation of changes from CSHB 226(HSS) to
the proposed CS, Version R [included in committee packet], which
read as follows [original punctuation provided]:
Title Amends title removing reference to pharmacies,
pharmacists, and patient choice of
pharmacy. Adds reference to dispensing fees.
Section 1 No change.
Section 2 New section in this bill version. Amends
08.80.297(d)(2) - Prescription prices
available to consumer.
Moves the new definition of "pharmacy benefit manager"
to a new section added to the statute
later in the bill (AS 21.27.975).
Section 3 Previous section 2, no change.
Section 4 Previous section 3, no change.
Section 5 Previous section 4, no change.
Section 6 Previous section 5, no change.
Section 7 New section in this bill version. Amends
21.27.940 - Pharmacy audits;
restrictions.
Expounds on the requirements of pharmacy audits. This
section states that the requirements
under statutes of an audit do not apply when there is
suspected fraudulent activity.
Section 8 Modifies previous section 6, 21.27.945(b)
Drug pricing list; procedural
requirements.
In paragraph 5, modifies reference from "national drug
database pricing" to "national average
drug acquisition cost."
Prepared by the Office of Representative Sumner
4/5/2024 2
Section 9 Previous section 7, no change.
Section 10 Modifies previous section 8, amends
21.27.945 Drug pricing list; procedural
requirements.
Removes previous paragraph 3, "pharmacy acquisition
cost."
Section 9 under the original bill is removed.
Section 11 Modifies previous section 10 and adds a
fourth new section under AS 21.27.
Sec. 21.27.951. Patient choice of pharmacy.
In paragraph 2, the language defining "affiliate" is
removed. Previous version subsection
(b) removed and following subsection letters updated.
Subsection (d) (previous
subsection c) modified, requiring a specialty pharmacy
to provide documentation that it
holds a federal certification demonstrating its
ability to distribute specialty prescriptions.
Sec. 21.27.952. Patient access to clinician-
administered drugs.
Modifies paragraph 3; shifts previous paragraph 3 to
sub-paragraph "A" and adds subparagraph "B" that a
health insurer or pharmacy benefits manager may not
impose a
penalty for using an independent pharmacy. Removes
paragraph 7, following paragraphs
renumbered.
Sec. 21.27.954. Regulations relating to pharmacy
benefit manager claims,
grievances, activities, and appeals.
Adds a new section to statute regarding the regulation
of PBM claims and grievances.
This section ensures regulations and standards are in
place giving pharmacies the
opportunity for appropriate resolution of grievances,
independent reviews of PBM
activities, and requiring PBMs to hear pricing
appeals.
Sections 11, 12, and 13 under the original bill are
removed.
Section 12 New section in this bill version. Adds
two new sections under AS 21.27.
Sec. 21.27.960. Coverage for dispensing fees.
Allows the director to periodically review dispensing
fees by using surveys conducted by
the Department of Health under AS 47.07 and the
national average drug acquisition cost
(NADAQ) retail price survey conducted by the Centers
for Medicare and Medicaid
(CMS).
The director shall negotiate dispensing fees with
independent pharmacies and tribal
health pharmacy providers to ensure availability of
prescription medications. The director
may establish differential dispensing fees based on
community. The director shall set and
adjust dispensing fees and shall adjust dispensing
fees at least once every five years.
Prepared by the Office of Representative Sumner
4/5/2024 2
Sec. 21.27.975. Definitions.
This section takes all definitions previously listed
under AS 21.27.955 (repealed in
Section 15) and lists them here as well as adds new
definitions.
1. affiliate;
2. audit;
3. claim;
4. covered person (moved from AS 21.27.955);
5. drug (moved from AS 21.27.955);
6. extrapolation;
7. health care insurance plan (moved from AS
21.27.955);
8. independent pharmacy;
9. insurer;
10. list;
11. maximum allowable cost (moved from AS 21.27.955);
12. national average drug acquisition cost (moved from
AS 21.27.955);
13. network (moved from AS 21.27.955);
14. network pharmacy;
15. pharmacy;
16. pharmacy acquisition cost;
17. pharmacy benefits manager;
18. plan sponsor (moved from AS 21.27.955);
19. provider (moved from AS 21.27.955);
20. recoupment; and
21. wholesale acquisition cost (moved from AS
21.27.955).
Sections 15, 16, 17 and 18 under the original bill are
removed.
Section 13 Modifies previous section 14, amends
21.36.520 - Unfair trade practices.
Removes previous section 14 paragraphs 6-8 and updates
all following paragraph numbers.
Section 14 Previous section 19, no change.
Section 15 Previous section 20, no change.
Section 16 Modifies previous section 21.
Adds applicability to insurance policies in addition
to contracts. Updates referenced sections.
Section 17 Previous section 22, no change.
Section 18 Modifies previous section 23.
Updates referenced transition regulations number due
to section number changes in this version.
Prepared by the Office of Representative Sumner
4/5/2024 2
Section 19 Modifies previous section 24.
Updates referenced section number due to section
number changes in this version
3:20:35 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development (DCCED), in response
to a question from Representative Fields explained that the new
sections were added to Version R to separate an audit from a
criminal investigation.
3:22:09 PM
MS. HACKENMILLER concluded the explanation of changes [text
provided previously].
3:27:25 PM
REPRESENTATIVE FIELDS removed his objection to the motion to
adopt the proposed committee substitute (CS) to HB 226, Version
33-LS0955\R, Wallace, 4/11/24, as a working document. There
being no further objection, Version R was before the committee.
3:27:39 PM
REPRESENTATIVE FIELDS said he doesn't understand how rebates
work as mentioned in HB 226, Version R. He requested more
information on the topic in future meetings.
3:28:20 PM
REPRESENTATIVE CARRICK asked whether Version R added a
definition for independent pharmacies in the definitions
section.
MS. HACKENMILLER answered that there is a new definition in
Version R.
3:29:11 PM
REPRESENTATIVE FIELDS said that changing the definition is a
more cost-effective way for having a mechanism for pharmacy
coverage and added his belief that the new Section 12 is
essentially a new way of preserving pharmacy access.
REPRESENTATIVE CARRICK asked whether tribal health plans are
covered under an Employee Retirement Income Security Act (ERISA)
plan.
REPRESENTATIVE FIELDS answered no, tribal providers are not
ERISA participants.
REPRESENTATIVE CARRICK asked the bill sponsor how Version R
would affect tribal health plans.
3:30:29 PM
CHAIR SUMNER responded that there are many changes. He added
that they are likely to fall under the independent pharmacy
definition.
CHAIR SUMNER announced that HB 226 would be held over.
SB 196-EMPLOYER DRUG AND ALCOHOL TESTING
3:31:05 PM
CHAIR SUMNER announced that the next order of business would be
SENATE BILL NO. 196, "An Act relating to drug and alcohol
testing by employers."
3:31:33 PM
SENATOR JESSE BJORKMAN, Alaska State Legislature, as prime
sponsor, read the sponsor statement to SB 196 [included in
committee packet], which read as follows [original punctuation
provided]:
Senate Bill 196 would add oral fluid, or saliva, to
the statutory list of samples an employer may collect
from an employee for drug and alcohol testing. While
an employer could already choose to collect an oral
fluid sample instead of a urine or breath sample,
adding the collection of oral fluid in this section of
statute protects the employer from legal claims
related to drug or alcohol testing and subsequent
employment actions.
Collecting urine or breath samples for job-related
testing can have drawbacks. Using an oral fluid sample
mitigates the challenges of these other methods.
Collecting or testing a urine sample can require
taking the time to travel to an off-site facility, and
urine samples are susceptible to cheating unless the
sample collection is observed by another person.
In contrast, oral fluid is collected with a swab, can
be easily collected at the job site without needing a
restroom, and can be certain to be from the employee
without significantly invading their privacy. While
urine tests provide evidence of the use of a drug over
a longer window of time, oral fluid can show the
presence of drugs in a person's system more quickly
and at lower concentrations for some substances.
In addition to the lower barriers for collection and
testing, oral fluid testing may be lower in cost for
the employer than other methods. Together, these
attributes could allow for more frequent testing
leading to greater on-the-job safety for employees,
their coworkers, and members of the public.
The United States Department of Transportation
promulgated regulations in 2023 allowing employers to
collect and test oral fluid samples for commercial
driver's license holders, and requiring the use of
oral fluid testing for transgender and non-binary
people as same-gender observers are required for urine
sample collections. Public comment on the regulations
package suggests that the option for oral fluid
testing will be very well received by employees in
addition to the benefits it provides to employers.
3:33:05 PM
REPRESENTATIVE FIELDS asked whether an employer would still be
able to perform hair follicle testing under SB 196.
SENATOR BJORKMAN answered yes.
3:33:50 PM
TAIHYA THOMAS, Human Resources Manager, Barrow Utilities &
Electric Coop Inc, gave invited testimony in support of SB 196.
She shared information about drug and alcohol testing at her co-
op. She mentioned that during the COVID-19 pandemic, no one
signed up to be urine collectors, so it had to be shipped
because testing is required to keep status. She detailed how
unobtrusive oral swab testing is different compared to urine
samples and added that once oral testing becomes approved for
drivers with commercial driver's licenses (CDLs), there will
still be more work ahead to see other industries follow suit.
She noted that oral swab testing is cheaper and added that oral
testing did not exist when the safe harbor law was passed, so it
was never included in the law as a protected testing method.
She said SB 196 would cure this inconsistency and give employers
and employees the same rules and protections regardless of
testing method and urged committee members to support the
proposed legislation.
3:39:06 PM
REPRESENTATIVE CARRICK asked whether blood testing is ever used
for investigations.
SENATOR BJORKMAN answered that blood testing is a "safe harbor
option."
3:40:12 PM
LAURA ACHEE, Staff, Senator Jesse Bjorkman, Alaska State
Legislature, on behalf of Senator Jesse Bjorkman, prime sponsor
of SB 196 added that either urine or breath can be sampled by an
employer.
3:41:13 PM
REPRESENTATIVE FIELDS said he supported SB 196 and asked whether
other states have approved other testing methods like ones
proposed under SB 196.
SENATOR BJORKMAN responded that he could not answer that
question at this time.
3:42:10 PM
CHAIR SUMNER announced that SB 196 was held over.
HB 394-RCA REGULATE NATURAL GAS STORAGE FACILITY
3:42:29 PM
CHAIR SUMNER announced that the final order of business would be
HOUSE BILL NO. 394, "An Act relating to the Regulatory
Commission of Alaska and regulation of the service of natural
gas storage and liquefied natural gas import facilities;
relating to records of the Regulatory Commission of Alaska;
relating to rates established by the Regulatory Commission of
Alaska; and providing for an effective date."
3:42:46 PM
The committee took an at-ease from 3:42 p.m. to 3:51 p.m.
3:51:25 PM
REPRESENTATIVE TOM MCKAY, Alaska State Legislature, on behalf of
the House Resources Standing Committee, sponsor, read the
sponsor statement for HB 394 [included in the committee packet],
which read as follows [original punctuation provided]:
HB 394 is aimed at enhancing the energy security of
Southcentral Alaska by providing a clear regulatory
framework for third-party natural gas storage. This
bill was designed to establish a regulatory framework
that not only encourages the expansion of natural gas
and liquefied natural gas (LNG) storage facilities but
also ensures these critical pieces of energy
infrastructure operate efficiently and remain
economically viable.
HB 394 provides for the Regulatory Commission of
Alaska (RCA) to have clear oversight authority over
natural gas and LNG storage facilities, which will
bring stability and predictability to the sector and
make it more attractive to operators and investors. HB
394 defines principles for the determination of just
and reasonable rates, ensuring that operation costs,
tax incentives, and the fair market value of storage
assets are all considered. This approach aims to
foster fair pricing practices that benefit both
consumers and businesses.
This bill also introduces measures to protect
sensitive financial information, mandating
confidentiality for certain records. This move strikes
a balance between protecting commercial sensitivities
and fulfilling the need for regulatory transparency.
Additionally, the bill recognizes the complexities of
state and federal regulations by exempting LNG import
facilities that are already regulated by the federal
government from state oversight.
HB 394 is a necessary piece of legislation if the
state of Alaska wants to see third-party gas storage
from the private sector. I urge my colleagues of the
33rd legislature to join me in supporting this bill
which represents a decisive step towards reinforcing
Southcentral Alaska's energy infrastructure and
ensuring the well-being of our state.
3:55:30 PM
TREVOR JEPSEN, Staff, Representative Tom McKay, on behalf of the
bill sponsor, the House Resources Standing Committee, on which
Representative McKay serves as chair, began a PowerPoint
presentation, titled "HB 394 - RCA regulation of natural gas
storage facilities." He drew attention to slide 2, which
explained the changes proposed under HB 394 and intended
benefits. He moved to slide 3, which displayed active gas
storage facilities in Southcentral Alaska.
3:57:40 PM
REPRESENTATIVE FIELDS asked for clarification as to the
definition of the term "third party" in the context of slide 3.
MR. JEPSEN replied that HB 394 would address gas storage issues
for companies all throughout Southcentral Alaska.
3:58:50 PM
MR. JEPSEN continued to slide 4, which explained the logistics
and necessity of gas storage and gas storage facilities. He
moved to slide 5, which displayed a list of agency roles that
the Alaska Oil and Gas Conservation Commission (AOGCC),
Department of Natural Resources (DNR), and Regulatory Commission
of Alaska (RCA) all play in gas storage in Alaska. He concluded
the presentation on slide 6, which provided an overview of HB
394 and its policies as they relate to gas storage.
4:02:17 PM
REPRESENTATIVE FIELDS asked Mr. Sims about the fair market value
language in HB 394.
MR. JEPSEN explained that the language is to clarify to the
private industry about fair market value and make companies
aware that things are being considered other than just the point
of sale price.
REPRESENTATIVE FIELDS asked whether the price of gas has any
impact on cost of storage.
MR. JEPSEN answered that he believes that is so.
4:04:57 PM
JOHN SIMS, President, Enstar Natural Gas, proffered that the
challenge of gas pricing is determining when the price was set.
He added that the fluctuation of gas prices makes for a
challenge.
REPRESENTATIVE FIELDS asked for information about cost of
storage and further asked for a comparison about language of
legislation with or without fair market value language.
MR. SIMS replied that it would be difficult to compare such
language and explained how the gas storage rate was first set.
4:08:04 PM
REPRESENTATIVE CARRICK asked why HB 394 would make records
confidential when companies can already request confidential
records.
MR. JEPSON replied that companies must make the prices
confidential to attract business in Alaska.
4:09:10 PM
ROBERT DOYLE, Chair, Regulatory Commission of Alaska, stated
that the RCA is in support of HB 394 because it would convert a
legacy field into a storage facility.
REPRESENTATIVE CARRICK asked Mr. Doyle whether the current
confidentiality process is sufficient.
MR. DOYLE answered that the current system for confidentiality
records is sufficient and is based off of a "mighty mite"
standard that protects the confidentiality of records if there
is any chance of a breach of confidentiality in the process of
attaining said confidentiality.
4:12:05 PM
REPRESENTATIVE SADDLER pointed to Section 4 of HB 394 and asked
about the difference between a financial statement and a
financial assurance statement.
MR. DOYLE explained that it depends on how far a person wants to
go into the finance records and directed his answer to Becki
Alvey.
4:13:11 PM
BECKI ALVEY, Advisory Section Manager, Regulatory Commission of
Alaska, explained the differences between a financial statement
and a financial assurance statement. In response to a follow-up
question, she explained that a financial assurance agreement is
the agreement that is obtained when a third party backs a
financial investment of a company.
REPRESENTATIVE SADDLER asked how far the confidentiality of
records for companies would extend.
MR. DOYLE said that the committee is talking about S-
Corporations and would need to seek legal counsel to answer
Representative Saddler's question.
4:16:09 PM
REPRESENTATIVE MCKAY emphasized that Alaska is in need of
additional gas storage beyond current capacity and explained
that the confidentiality language is in the bill to retain
access to current and future storage opportunities.
4:16:44 PM
REPRESENTATIVE FIELDS asked Mr. Nottingham about confidentiality
agreements between the State of Alaska and gas companies.
4:17:33 PM
DEREK NOTTINGHAM, Director, Division of Oil & Gas, Department of
Natural Resources, answered that the purpose of the
confidentiality agreement is to show that the investing company
has the financial backing to support its investment. He added
that the Department of Natural Resources (DNR) is looking at
making sure said company could not leave the state high and dry
with old equipment and failed payments.
REPRESENTATIVE FIELDS asked why there are two different
confidentiality provisions under HB 394.
MR. NOTTINGHAM explained that there are current statutes that
protect the confidentiality of those records and explained how
HB 394 would affect those statutes.
REPRESENTATIVE FIELDS asked whether the language in HB 394 goes
further than existing statute surrounding confidentiality.
MR. NOTTINGHAM said he could not comment.
4:20:38 PM
REPRESENTATIVE RUFFRIDGE asked the bill sponsor if there is
enough storage during peak demand times in winter and asked how
the proposed legislation would get the state access to more gas
storage.
REPRESENTATIVE MCKAY replied that the state currently has access
to only one storage facility and added that the three Hillcorp
fields are not available until the company agrees with the
state. He reiterated that the goal of HB 394 is to prepare
Alaska for a possible need to import gas in the future.
REPRESENTATIVE RUFFRIDGE asked about repeal language in Section
5 of HB 394.
4:23:40 PM
MR. JEPSEN responded that current gas storage and transfer
action is regulated under Title 42 of Alaska Statute and the
repeal language being questioned is merely conforming language.
REPRESENTATIVE RUFFRIDGE clarified Mr. Jepson's answer and asked
about language in Section 5 and Section 7 of the bill.
MR. JEPSEN explained that Section 5 of HB 394 is referencing
language in Chapter 6, Title 42 of Alaska Statute.
REPRESENTATIVE RUFFRIDGE asked why the State of Alaska would
make North Slope natural gas different from that of the other
carriers.
MR. JEPSEN deferred the question to Becki Alvey.
4:26:20 PM
MS. ALVEY, in response to Representative Ruffridge, answered
that it is not unusual to see a specific definition or statute
relating to North Slope gas companies.
4:27:40 PM
REPRESENTATIVE MCKAY clarified that HB 394 is only related to
Cook Inlet gas companies, not North Slope companies.
REPRESENTATIVE RUFFRIDGE remarked that it seems out of line to
carve out a section of bill language for specific companies that
would not be impacted by the proposed legislation.
4:29:41 PM
MR. JEPSEN said that he would do more research to get a better
answer to the committee.
REPRESENTATIVE MCKAY explained that the state must regulate all
gas pipelines, regardless of their length, especially assuming
importation of LNG that could start in 2030.
MR. JEPSEN reiterated that HB 394 was created specifically for
Cook Inlet gas companies.
4:31:27 PM
REPRESENTATIVE RUFFRIDGE shared his understanding that HB 394
would prohibit certain companies from falling under the RCA's
Chapter 5 of Title 42 of Alaska Statute.
4:32:22 PM
REPRESENTATIVE CARRICK asked how many natural gas facilities in
Alaska would be exempt from Chapter 6 under HB 394.
MR. JEPSEN answered that there aren't many companies that would
be exempt and pointed to a current project in Cook Inlet that
would fall under the exemption section of the proposed
legislation.
4:35:24 PM
MS. ALVEY explained that Alaska Statute (AS) 42.06.630 currently
defines what a pipeline facility and pipeline carrier are as
defined by the pipeline act and explained how other statutes in
AS title 42 interact with each other and the proposed
legislation.
REPRESENTATIVE SADDLER asked for an example of a pipeline
facility operated by a pipeline carrier.
MS. ALVEY said that a pipeline facility is the facility where a
pipeline is operated by a pipeline carrier. In response to
follow-up questions, she said that a pipeline carrier is the
owner of the pipeline, while a pipeline facility is the place
where the pipeline operates.
4:38:07 PM
MR. SIMS used Harvest Midstream as an example of a pipeline
facility operated by a pipeline operator.
4:38:40 PM
REPRESENTATIVE FIELDS asked Representative McKay what the
definition of "fair return" is in statute.
MR. JEPSEN deferred the question to Robert Doyle.
4:39:24 PM
MR. DOYLE said that coming up with a fair and justifiable rate
is a process that would not be determined by legislation but
would be done by the RCA on the record.
REPRESENTATIVE FIELDS asked what the RCA sees as "revenue
requirements" and gave a hypothetical situation related to the
term.
MR. DOYLE explained that the company under scrutiny for its
pricing would have to justify the price before any regulatory
action is taken on setting a price.
REPRESENTATIVE FIELDS asked whether other ways to create storage
had been considered.
4:43:04 PM
MR. JEPSEN shared the bill sponsor's belief that crafting a
piece of legislation is the most prudent and effective method of
getting more private sector gas storage online.
4:43:41 PM
REPRESENTATIVE SADDLER commented that a fair rate is not
determined by legislation and asked Mr. Doyle if the RCA makes
allowable rate of return rate decisions and further questioned
what is considered "fair" by the RCA.
MR. DOYLE answered that there needs to be a utility that can be
viable over time and a good return margin to the ratepayer.
REPRESENTATIVE SADDLER said that the RCA is already doing that
and clarified the intent of his question.
4:46:35 PM
CHAIR SUMNER announced that HB 394 was held over.
4:47:04 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:47 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR27 Supporting Document_New Trade Regime Can Counter Chinese Supply Chain.pdf |
HL&C 4/15/2024 3:15:00 PM |
HJR 27 |
| HJR27 Supporting Document_Greenhouse Gas Lifecycle Assessment.pdf |
HL&C 4/15/2024 3:15:00 PM |
HJR 27 |
| HJR27 Sponsor Statement.pdf |
HL&C 4/15/2024 3:15:00 PM |
HJR 27 |
| SB196 Sponsor Statement Version A.pdf |
HL&C 4/15/2024 3:15:00 PM |
SB 196 |
| SB196 Sectional Analysis Version A.pdf |
HL&C 4/15/2024 3:15:00 PM |
SB 196 |
| SB196 Fiscal Note-DOLWD-WH 03.02.24.pdf |
HL&C 4/15/2024 3:15:00 PM |
SB 196 |
| SB 196 Support letters recevied as of 03082024.pdf |
HL&C 4/15/2024 3:15:00 PM |
SB 196 |
| AK House Labor and Commerce Slides 4.15.24.pdf |
HL&C 4/15/2024 3:15:00 PM |
HJR 27 |
| ASMA support HB 226 PBM.pdf |
HL&C 4/15/2024 3:15:00 PM |
HB 226 |
| URAC Comments on AK HB 226.pdf |
HL&C 4/15/2024 3:15:00 PM |
HB 226 |
| HB226 Explanation of Changes Ver. S to Ver. R.pdf |
HL&C 4/15/2024 3:15:00 PM |
HB 226 |
| R.pdf |
HL&C 4/15/2024 3:15:00 PM |
HB 226 |
| ANTHC HB226 LOS 4-17-24.pdf |
HL&C 4/15/2024 3:15:00 PM |
HB 226 |