Legislature(2005 - 2006)CAPITOL 120
06/05/2006 10:00 AM House JUDICIARY
| Audio | Topic |
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| Start | |
| SB2002 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| SB2002 | |||
| HB2004 | |||
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
June 5, 2006
10:20 a.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Tom Anderson
Representative John Coghill
Representative Pete Kott
Representative Peggy Wilson
Representative Les Gara
Representative Max Gruenberg
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Mark Neuman
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 2002(JUD)
"An Act conferring original jurisdiction on the Alaska Supreme
Court for the purpose of providing judicial review of a contract
executed under the Alaska Stranded Gas Development Act, and
setting the time in which a final agency decision of the
commissioner of revenue made under that Act, the
constitutionality of a law authorizing a contract enacted under
that Act, or the enforceability of a contract executed under a
law authorizing a contract enacted under that Act must be
legally challenged and by whom; and providing for an effective
date."
- MOVED HCS CSSB 2002(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 2004
"An Act relating to the Alaska Stranded Gas Development Act,
including clarifications or provision of additional authority
for the development of stranded gas fiscal contract terms;
making a conforming amendment to the Revised Uniform Arbitration
Act; relating to municipal impact money received under the terms
of a stranded gas fiscal contract; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 2002
SHORT TITLE: GAS PIPELINE CONTRACT: COURT JURISDICTION
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
05/31/06 (S) READ THE FIRST TIME - REFERRALS
05/31/06 (S) JUD
06/02/06 (S) JUD AT 8:30 AM BUTROVICH 205
06/02/06 (S) Moved CSSB 2002(JUD) Out of Committee
06/02/06 (S) MINUTE(JUD)
06/02/06 (S) JUD RPT CS 1DP 3NR NEW TITLE
06/02/06 (S) DP: SEEKINS
06/02/06 (S) NR: FRENCH, THERRIAULT, HUGGINS
06/04/06 (S) TRANSMITTED TO (H)
06/04/06 (S) VERSION: CSSB 2002(JUD)
06/04/06 (H) READ THE FIRST TIME - REFERRALS
06/04/06 (H) JUD
06/05/06 (H) JUD AT 10:00 AM CAPITOL 120
WITNESS REGISTER
JAMES L. BALDWIN, Attorney at Law
Juneau, Alaska
POSITION STATEMENT: During discussion of SB 2002, responded to
questions as counsel to the Office of the Attorney General.
ACTION NARRATIVE
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting to order at 10:20:54 AM. Representatives
McGuire, Kott, Wilson, Gara, and Coghill were present at the
call to order. Representatives Gruenberg and Anderson arrived
as the meeting was in progress. Representative Neuman was also
in attendance.
SB 2002 - GAS PIPELINE CONTRACT: COURT JURISDICTION
10:21:07 AM
CHAIR McGUIRE announced that the only order of business would be
CS FOR SENATE BILL NO. 2002(JUD), "An Act conferring original
jurisdiction on the Alaska Supreme Court for the purpose of
providing judicial review of a contract executed under the
Alaska Stranded Gas Development Act, and setting the time in
which a final agency decision of the commissioner of revenue
made under that Act, the constitutionality of a law authorizing
a contract enacted under that Act, or the enforceability of a
contract executed under a law authorizing a contract enacted
under that Act must be legally challenged and by whom; and
providing for an effective date."
REPRESENTATIVE WILSON moved to adopt CSSB 2002(JUD) as the work
draft. There being no objection, CSSB 2002(JUD) was before the
committee.
CHAIR McGUIRE, noting that a representative from the Alaska
Court System (ACS) was available to answer questions but that no
one wished to testify, closed public testimony on SB 2002.
CHAIR McGUIRE referred to Amendment 1, which read [original
punctuation provided]:
page 1 line 10 delete "A person may not bring an
insert "No"
page 1 line 13 following "section" insert "may be
brought"
The committee took an at-ease from 10:24 a.m. to 10:25 a.m.
REPRESENTATIVE GARA noted that one view that has been propounded
is that the courts won't have to review certain issues if the
legislature has already done so. However, his research
indicates that when the Alaska Stranded Gas Development Act was
passed, the question was raised regarding whether the
legislative role provided for in that Act was even
constitutional. One view was that the governor gets to execute
"things" while the legislature only gets to pass laws, and thus
the whole idea of the legislature confirming or stopping the
governor from signing the contract might violate the separation
of powers clause. If that's the case, and there is neither
legislative review nor any court review, then what review is
there, he queried. According to a memorandum from Legislative
Legal and Research Services, he relayed, there is a still a
question regarding whether legislative confirmation, agreement,
approval, or disproval of the contract is constitutional, and
the prevailing thought in that office is that such would violate
the [Alaska State] Constitution.
REPRESENTATIVE GARA went on to say:
That's the point that ... if we have this sort of
shell game where maybe the governor doesn't like our
answer and then says, "Well, I don't have to listen to
your answer because your answer is irrelevant under
the [Alaska State] Constitution," and then we don't
get to review and the courts don't get to review, then
all of a sudden this is a one branch government, and
that's a big problem. ...
REPRESENTATIVE WILSON pointed out that the second paragraph in
the aforementioned memorandum draws attention to the fact that
the legislature does have inherent powers over the fiscal
matters of the state.
10:27:17 AM
REPRESENTATIVE GRUENBERG, asking that all of his proposed
amendments be altered to conform to CSSB 2002(JUD), made a
motion to adopt Amendment 1 [text provided previously]; that
alteration will result in having the first part of Amendment 1
apply to page 1, line 12, and the second part apply to page 1,
line 13, at the beginning of the line.
REPRESENTATIVE WILSON objected.
REPRESENTATIVE GRUENBERG offered his understanding that this
change comes at the request by Mr. Baldwin. He then [made a
motion to amend] Amendment 1 such that the language on page 2,
lines 6-8, also be deleted, thus eliminating proposed AS
43.82.440(b). [Amendment 1 was treated as amended.]
CHAIR McGUIRE asked whether there were any further objections to
Amendment 1 [as amended]. There being none, Amendment 1 [as
amended] was adopted.
The committee took an at-ease from 10:30 a.m. to 10:32 a.m.
CHAIR McGUIRE referred to Amendment 2, which read [original
punctuation provided]:
page 2 line 1 delete "the state and the other"
insert "all"
REPRESENTATIVE GRUENBERG, clarifying that Amendment 2 should
instead alter the language on page 2, line 5, made a motion to
adopt Amendment 2.
CHAIR McGUIRE objected for the purpose of discussion.
REPRESENTATIVE GRUENBERG clarified further that the language to
be inserted via Amendment 2 should be, "all the".
JAMES L. BALDWIN, Attorney at Law, as counsel to the Office of
the Attorney General, offered his belief that the administration
doesn't have a problem with Amendment 2.
CHAIR McGUIRE removed her objection, and asked whether there
were any further objections to Amendment 2 as altered in the
aforementioned fashions. There being none, Amendment 2 was
adopted.
10:34:47 AM
REPRESENTATIVE GRUENBERG [made a motion to adopt] Conceptual
Amendment 3 as altered to say [original punctuation provided]:
page 2 line 8. Add the following sentence"
"As used in this subsection, "contract" is the
contract developed under AS 43.82.020."
MR. BALDWIN said the administration doesn't think that
Amendment 3 is necessary, though it is not injurious to the
administration.
REPRESENTATIVE GRUENBERG said he simply want's to clarify which
contract is being referred to in SB 2002.
REPRESENTATIVE WILSON offered her understanding that
Amendment 1, as amended, deleted subsection (b), which ended on
page 2, line 8.
REPRESENTATIVE GRUENBERG clarified that the language being added
via Conceptual Amendment 3 would constitute a new
subsection (b).
CHAIR McGUIRE asked whether there were any objections to
Conceptual Amendment 3. There being none, Conceptual
Amendment 3 was adopted.
10:37:51 AM
REPRESENTATIVE GARA made a motion to adopt Conceptual
Amendment 4, labeled 24-GH2054\A.1, Bailey, 6/1/06, which read:
Page 1, line 1, following "Act":
Delete "increasing the time period for
legislative and public comment on a proposed contract
and preliminary findings and determinations under the
Alaska Stranded Gas Development Act,"
Page 1, following line 6:
Insert a new bill section to read:
"* Section 1. AS 43.82.410 is amended to read:
Sec. 43.82.410. Notice and comment regarding the
contract. The commissioner shall
(1) give reasonable public notice of the
preliminary findings and determination made under
AS 43.82.400;
(2) make copies of the proposed contract,
the commissioner's preliminary findings and
determination, and, to the extent the information is
not required to be kept confidential under
AS 43.82.310, the supporting financial, technical, and
market data, including the work papers, analyses, and
recommendations of any independent contractors used
under AS 43.82.240 available to the public and to
(A) the presiding officer of each house of
the legislature;
(B) the chairs of the finance and resources
committees of the legislature; and
(C) the chairs of the special committees on
oil and gas, if any, of the legislature;
(3) offer to appear before the Legislative
Budget and Audit Committee to provide the committee a
review of the commissioner's preliminary findings and
determination, the proposed contract, and the
supporting financial, technical, and market data; if
the Legislative Budget and Audit Committee accepts the
commissioner's offer, the committee shall give notice
of the committee's meeting to the public and all
members of the legislature; if the financial,
technical, and market data that is to be provided must
be kept confidential under AS 43.82.310, the
commissioner may not release the confidential
information during a public portion of a committee
meeting; and
(4) establish a period of at least 90 [30]
days for the public and members of the legislature to
comment on the proposed contract and the preliminary
findings and determination made under AS 43.82.400."
Page 1, line 7:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill sections accordingly.
REPRESENTATIVE GARA remarked that Amendment 4 must be conceptual
for the purpose of allowing the drafter to conform it to CSSB
2002(JUD). He explained that he doesn't believe that 30 days is
adequate time for the public to review the proposed Alaska
Stranded Gas Fiscal Contract ("ASGF Contract"); rather, having a
minimum of 90 days for public review would be a better public
policy.
REPRESENTATIVE GRUENBERG asked to be listed as a co-sponsor of
Conceptual Amendment 4.
REPRESENTATIVE COGHILL opined that HB 2004 would be a better
vehicle for the language of Conceptual Amendment 4.
REPRESENTATIVE GRUENBERG opined that the change proposed by
Conceptual Amendment 4 stands for such an important principal
that it ought to be included in SB 2002 even if similar language
is also inserted into other bills.
REPRESENTATIVE GARA expressed a preference for including the
proposed language in SB 2002.
REPRESENTATIVE GARA, noting a typographical error, made a motion
to amend Conceptual Amendment 4 such that the word, "Delete"
would be replaced with the word, "Insert". There being no
objection, the amendment to Conceptual Amendment 4 was adopted.
10:44:13 AM
A roll call vote was taken. Representatives Gruenberg and Gara
voted in favor of Conceptual Amendment 4, as amended.
Representatives McGuire, Coghill, Wilson, Kott, and Anderson
voted against it. Therefore, Conceptual Amendment 4, as
amended, failed by a vote of 2-5.
10:45:02 AM
REPRESENTATIVE KOTT made a motion to adopt Conceptual
Amendment 5, to delete "120" from page 2, line 4, and insert
"60".
REPRESENTATIVE GARA objected. He opined that 60 days will not
be a sufficient amount of time for someone to bring an action,
and recounted some of the steps that should be taken beforehand
by the person bringing the action and his/her attorney.
REPRESENTATIVE GRUENBERG referred to Alaska Rules of Civil
Procedure Rules 11 and 95(b) - the latter pertaining to
penalties for violating the former - and offered his
understanding that those rules have been imposed, though perhaps
not often.
CHAIR McGUIRE offered her belief that Rule 11 is either not
enforceable or is simply not enforced. Although most lawyers
are diligent and try to include a reasonable basis for their
claims, the reality is that very often complaints contain
boilerplate language intended to preserve any claim that might
be made. Furthermore, she opined, by the time a contract such
as the ASGF Contract would be executed, significant discussion
will have already occurred; therefore, having a 60-day statute
of limitations is not unreasonable, particularly given that a
significant amount of time will have already passed, and those
that intend to file litigation will be well aware of the issues.
She indicated that the 120-day statute of limitation period is
too long, will create uncertainty, and become a burden. She
offered her belief that the rules of the court favor fairness,
and so she doesn't anticipate that any court of law in Alaska
will reject information or claims that may arise later in the
process.
REPRESENTATIVE GARA again opined that reducing the statute of
limitations to 60 days will preclude legitimate suits from being
filed by regular citizens because good lawyers will require time
to research whether a particular claim is valid. He noted that
60 days is only one-twelfth of the time that is currently
provided for simpler types of cases.
10:56:48 AM
MR. BALDWIN offered his belief that the "notice pleading" system
Alaska has will alleviate a large part of the burden that
Representative Gara has concerns about, and said that the point
of having a short statute of limitations period is to encourage
people to [file claims early] rather than waiting until a "choke
point" in the project is at hand. He noted that other types of
claims also have short statute of limitations periods, simply as
a matter of public policy, and encouraged the committee to
change the statute of limitations period to 60 days.
REPRESENTATIVE ANDERSON surmised that the question could be
viewed as, "Are we restricting rights as we make this policy on
the 60 day versus other [amounts] of time?" He opined that a
60-day statute of limitations period will not infringe on
someone's substantive rights; rather, it's really a timing issue
specifically. He also opined that shorter statute of
limitations periods for things like redistricting and election
law challenges are appropriate. So in terms of public policy,
it's important to consider the potential cost and harm that can
occur as a result of dilatory litigation. He concluded, "At the
end of the day, we really have to come [up] with a number that's
parallel to other administrative timelines, and I think this
fits. ..."
11:03:12 AM
REPRESENTATIVE GARA again remarked on how long it can take a
credible private attorney to decide whether to even take on a
case.
MR. BALDWIN offered his understanding that if a potential client
has a deadline, a lawyer does what he/she can to decide that
question quickly.
REPRESENTATIVE GARA said it is very common to research a case
before taking it and common to take more than a month performing
such research. He said he wants the regular citizen to be able
to represent his/her own interests.
REPRESENTATIVE GRUENBERG predicted that those who bring a suit
will be in a far weaker financial position than those defending
against such litigation. Once a suit is filed, the case can't
be dismissed without either an order of the court or a
stipulation of the parties, and a party can't withdraw itself
from the suit without the court's permission. So once a lawyer
signs a pleading, he/she is "in" for the duration and will be
arrayed against some of the biggest corporations in the entire
world. An attorney in such a case will take it on as a type of
a public interest case, and will be paid, if at all, only a
modest amount. Hence it will be very difficult to assemble
anyone willing to take on such a case in order to protect
someone's constitutional rights.
CHAIR McGUIRE noted that there is only a difference of 60 days
between the language currently in the bill and what it could be
changed to via Conceptual Amendment 5.
REPRESENTATIVE GRUENBERG said that to ensure that the
constitution is followed, it will take more than 60 days to
determine whether a suit should be filed and whether one has the
resources to litigate a case.
CHAIR McGUIRE recalled that there have been other discussions in
the House Judiciary Standing Committee regarding what the right
number of days is for a statute of limitations, and surmised
that for each type of case, regardless of how long the period
is, there will likely be someone who falls outside of what's
provided for. The committee is attempting to strike a balance
between the need to resolve issues surrounding this important
project quickly and the need to provide the public with an
opportunity to challenge aspects of the project. She reiterated
her belief that 60 days will be sufficient because that
timeframe begins after the contract is executed, which will
itself be after an extensive public comment period and
legislative hearings as well as extensive press coverage; "this
is not something that is going to creep up and surprise
individuals ...."
11:12:53 AM
REPRESENTATIVE GRUENBERG argued, however, that there is a
difference between knowing about an issue and assembling members
of a litigation team, the shear logistics of which won't work
for one person to do [in 60 days].
CHAIR McGUIRE noted that the laws they pass on the various gas
pipeline issues will be laws that exist beyond the current
administration, and so it is important to set up a structure
that will encourage people to come to the table and build a gas
pipeline, and although there will be challenges to any contract
that's entered into, the legislature must provide a specific
timeframe after which challenges will not be allowed in order to
give the parties to the contract some certainty that they can
proceed with the project.
REPRESENTATIVE GRUENBERG clarified that his point is that the
120-day figure was arrived at by the conservative members of the
Senate, and so in order to avoid the delay of a conference
committee, they should consider retaining that figure.
REPRESENTATIVE WILSON offered her belief that a 60-day statute
of limitations period will be sufficient because "regular"
attorneys won't even consider taking on such litigation.
REPRESENTATIVE COGHILL, surmising that those who are interested
in bringing a challenge have probably already begun amassing
information from as far back as a year ago, said he has been
convinced that the commencement of an action is an easy task,
and that once the action is commenced, it is not as if it will
die when that 60-day period is up; instead, an action need only
be commenced within that timeframe, which he considers to be
adequate.
11:20:41 AM
REPRESENTATIVE GARA, on the issue of media coverage, suggested
that that will not be sufficient to inform the average citizen
of what he/she needs to know in order to determine whether a
challenge should be brought. He said that if left at 120 days,
there is some chance that a regular citizen will be able to
enter into the process, whereas 60 days does more to guarantee
that fewer people will be able to participate in the process,
leaving challenges to be brought only by special interest
groups.
REPRESENTATIVE COGHILL opined that the 120-day statute of
limitations was sufficient when it pertained to a contract that
the governor could enter into without any public input, whereas
the proposed ASGF Contract is different in that it will have
public input and legislative review.
CHAIR McGUIRE, too, remarked on the fact that Alaska is a
"notice pleading state" rather than a "code pleading state."
REPRESENTATIVE GRUENBERG predicted that the challenges will come
from those who feel that the legislature is giving its taxing
power away for the next 30-45 years, those that will be most
concerned that the state is getting its fair share of taxes over
the next 30-45 years. He surmised that those who will be most
concerned with this issue will be the tax payers [of Alaska]
because Conceptual Amendment 5 proposes to decrease the time in
which tax payers can find someone to represent them in a
challenge.
REPRESENTATIVE COGHILL relayed that even before the regular
session started in January he'd heard lawyers saying that they
would be prepared to bring a suit should the contract contain
items they don't favor, and even some regular citizens have
indicted to him that they are already studying the issues
involved.
11:26:27 AM
A roll call vote was taken. Representatives Anderson, Coghill,
Kott, McGuire, and Wilson voted in favor of Conceptual
Amendment 5. Representatives Gara and Gruenberg voted against
it. Therefore, Conceptual Amendment 5 was adopted by a vote of
5-2.
REPRESENTATIVE GARA asked for a copy of the "talking points"
that the administration has provided other members of the
committee.
CHAIR McGUIRE agreed to provide him with a copy.
11:27:33 AM
REPRESENTATIVE KOTT moved to report CSSB 2002(JUD), as amended,
out of committee with individual recommendations and the
accompanying zero fiscal notes. There being no objection, HCS
CSSB 2002(JUD) was reported from the House Judiciary Standing
Committee.
REPRESENTATIVE GRUENBERG indicated that in the committee report
he would be recommending that the bill be amended.
ADJOURNMENT
The House Judiciary Standing Committee was recessed at 11:28
a.m. to a call of the chair. [The meeting was never
reconvened.]
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