Legislature(2015 - 2016)BARNES 124
04/04/2016 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB125 | |
| HB372 | |
| HB299 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 125 | TELECONFERENCED | |
| += | HB 372 | TELECONFERENCED | |
| + | HB 299 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 125-LEGISLATIVE MEMBERS OF AGDC BOARD
3:23:01 PM
CHAIR OLSON announced that the first order of business would be
CS FOR SENATE BILL NO. 125(RES), "An Act adding legislative
nonvoting members to the board of directors of the Alaska
Gasline Development Corporation."
3:23:31 PM
SENATOR MIA COSTELLO, Alaska State Legislature, speaking as the
sponsor, informed the committee [HCS CSSB 125(RES)] is a bill
that strengthens and diversifies the board of directors (board)
for the Alaska Gasline Development Corporation (AGDC), which is
the state's primary representative in the Alaska LNG project,
and will be the focal point for policy decisions in the coming
years. She said the bill would facilitate communication and a
teamwork approach between the board and the legislature by
adding three legislators as nonvoting members to the board, one
from the Senate, one from the House, and one from either
minority caucus. The bill also ensures the original intent of
the legislature by reserving four out of the five public seats
on the board for appointees with expertise in natural gas,
pipeline construction, finance, project management, or other
relevant experience. Senator Costello stated that having
legislators on a board as important as AGDC would provide
perspective, institutional knowledge, and continuity. She read
from a memorandum provided in the committee packet from
Legislative Legal Services, Legislative Affairs Agency, dated
3/30/16, and signed by Emily Nauman, as follows [in part]:
Given the split in how other states treat nonvoting
legislative members, perhaps nothing can be relied
upon to divine the outcome in this state.
SENATOR COSTELLO then referred to a ruling in South Carolina in
2013 that upheld legislators having an ex-officio role on state
boards and commissions [document not provided]. She opined that
legislators serving in nonvoting positions alleviates
constitutional concerns, and pointed out that precedent has been
established by the fact that legislators currently serve on
state boards and commissions, including state corporations such
as the Knik Arm Bridge and Toll Authority, the Alaska Aerospace
Corporation, the Alaska Seafood Marketing Institute, the Alaska
Commission on Postsecondary Education, the Alaska Health Care
Commission, the Alaska Criminal Justice Commission, and the
Alaska Tourism Marketing Board. She urged for the committee's
support.
3:27:07 PM
WESTON EILER, staff to Senator Mia Costello, Alaska State
Legislature, on behalf of Senator Costello, paraphrased the
sectional analysis for SB 125, Version S, as follows: [original
punctuation provided]
Section 1: Amends AS 31.25.020(a), (Alaska Gasline
Development Corporation), Governing body. Adds a
member of the House, appointed by the Speaker, a
member of the Senate, appointed by the Senate
President and a member of the minority caucus jointly-
appointed by the presiding officers, as nonvoting
members to the AGDC Board.
Section 2: Amends AS 31.25.020(b), (Alaska Gasline
Development Corporation), Governing body. Requires
four of the five public board members to have
qualifications in natural gas pipeline construction,
operation and marketing; finance; large project
management; or other expertise and experience relevant
to the corporation.
Section 3: Amends AS 31.25.020(d), (Alaska Gasline
Development Corporation), Governing body. States
legislative members of the board may not be reimbursed
or compensated by AGDC for their service on the board
and related costs.
Section 4: Adds new subsection AS 31.25.020(e),
(Alaska Gasline Development Corporation), Meetings of
the board. Specifies legislative members of the board
may participate in all board activities except voting.
Legislative members may not be excluded from executive
sessions, and may not be appointed for a term longer
than two years.
Section 5: Amends AS 31.25.030(a), (Alaska Gasline
Development Corporation), Meetings of the board.
Conforming language outlining that only voting members
of the AGDC Board may be selected to serve as chair,
secretary or treasurer. Also defines a quorum as a
majority of voting members of the board.
Section 6: Amends AS 31.25.040(a), (Alaska Gasline
Development Corporation), Administration of affairs;
program directors. Conforming language that Sectional
Analysis - SB 125 2 allows only voting members of the
board to manage the assets and business of the
corporation and that voting members will delegate
supervision of the administration of the corporation
to the executive director.
MR. EIHER noted that conforming changes are also found in
Sections 7, 8, and 9, and Section 11 provides an immediate
effective date.
3:29:14 PM
REPRESENTATIVE JOSEPHSON directed attention to a memorandum
provided in the committee packet from the Department of Law
(DOL) dated 3/20/16, that referred to AGDC as an executive
branch entity. He then directed attention to a table provided
in the committee packet by Senator Costello entitled,
"Legislative Membership on State of Alaska Boards and
Commissions" and asked whether the entities listed thereon were
executive branch agencies.
MR. EILER deferred to Legislative Legal and Research Services on
the definition, and opined the entities complied on the list are
a variety of capacities in which legislators, as nonvoting
members, advise the functions of the administration through
commissions, independent state corporations, divisions, and
departments of state government, "by which the legislature is
advising the administration, and the overall process of state
government."
REPRESENTATIVE LEDOUX inquired as to any boards and commissions
on which legislators serve that are identical - legally - to the
corporate structure of AGDC.
MR. EILER offered to provide additional information comparing
state corporations; he added that there are many similarities
between state corporations involved in large projects, and
legislators are serving in a nonvoting, ex-officio manner on
boards of directors that make business decisions.
REPRESENTATIVE JOSEPHSON referred to another memorandum (memo)
[document not provided] dated 12/7/15 in which Emily Nauman, an
attorney for Legislative Legal and Research Services, concluded
that the proposal related to the bill was likely not
constitutional; however, in the 3/30/16 memo she said it may not
be constitutional when " ... speaking to nonvoting membership
...." He asked for the basis for her change in position.
3:34:51 PM
MR. EILER recalled that the issue of "voting legislative
members" was the subject of an earlier Legislative Legal and
Research Services memo.
REPRESENTATIVE JOSEPHSON remarked:
... legislative lawyers on the seventh of December
were inclined to say, "This proposal, broadly
speaking, doesn't, is not consistent with the
constitution." Last week, the same attorney said,
"Well, it may very well be consistent with the
constitution." And I'm asking, whether you know ...
what the difference is.
MR. EILER offered to research previous Legislative Legal and
Research Services opinions on this matter. He acknowledged that
voting legislative members "would run into conflict, with
regards to the constitutional issues." He directed attention to
page 4 of the memo dated 3/30/16, which read [in part]:
What is clear is that the issue of nonvoting
legislative members on executive branch boards is
unsettled. ... I do not believe the risk is great
enough that I would advise removing the legislative
board members from the bill.
REPRESENTATIVE LEDOUX suggested the committee address questions
directly to Ms. Nauman in this regard.
3:37:12 PM
The committee took an at ease from 3:37 p.m. to 3:39 p.m.
3:40:00 PM
EMILY NAUMAN, Attorney, Legislative Legal Counsel, Legislative
Legal and Research Services, Legislative Affairs Agency,
directed attention to page 3 of a memo dated 12/7/15 [document
not provided], and pointed out that she noted ex-officio members
may possibly reduce the infringement on executive branch powers,
thereby lessening the constitutional issues. The main point of
the 12/7/15 memo addressed legislative members serving on the
AGDC board that would be voting and participating in officer
selection and other duties. The 3/30/16 memo deals with
legislative members who are ex-officio and nonvoting members.
Ms. Nauman opined that a court opinion is needed to determine
whether nonvoting legislative members are unconstitutional.
REPRESENTATIVE JOSEPHSON said the aforementioned attorney
general's opinion relies upon 1968 and 1976 State of Alaska
decisions, and on several attorney's general opinions (AGOs).
He said AGO's are presumptively law and asked whether Ms. Nauman
does not rely on state opinions "as sort of an overall
jurisprudential analysis."
MS. NAUMAN said correct. She added that there is no AGO that
addresses nonvoting legislative members seated on boards and
commissions.
REPRESENTATIVE KITO questioned the need for legislative
representation on the AGDC board because legislators can attend
any AGDC meeting, and request and receive information from the
corporation. Furthermore, if legislative members do not have
the ability to vote, he inquired as to the role of legislative
board members.
SENATOR COSTELLO reminded the committee of the importance of the
gasline project to Alaska's future. Recently, there has been a
high turnover of AGDC board members, and members of the
legislature have held a long interest in the project, and
developed the project's guiding documents. She acknowledged
that legislative members can attend meetings, except the board
meetings often go into executive sessions that exclude members
of the legislature. She opined service on the AGDC board is no
different than that on the Alaska Seafood Marketing Institute or
the Alaska Travel Industry Association boards. Senator Costello
restated the intent of the bill is to foster communication,
cooperation, and trust, and legislative members are needed on
the board to represent the people of Alaska and advise the
corporation.
3:45:08 PM
REPRESENTATIVE KITO turned to the following concerns:
legislative members in attendance during executive sessions; the
continuity of the board; the qualifications of the board
members. He pointed out that legislators are lay leaders and
although his personal expertise is in engineering, he would not
presume to understand the technicalities of, for example, a gas
liquefaction plant, and cautioned that "we're relying on lay
legislators like ourselves that might not have technical
expertise in natural gas pipelines to be that continuity." In
addition, legislators could be called on by the board to
participate in decisions whenever necessary. He pointed out
that although a legislative member of the board could
participate in an executive session, he/she would be unable to
share information with the full legislature, which calls into
question the benefits thereof. Representative Kito restated his
question as to the role of the legislative board member.
SENATOR COSTELLO said legislators have to decide whether to
"agree ... with the premise of the bill which is the people's
branch has a seat at the table, no matter if that table is
inside a locked door or outside in the public view." Regarding
the value, she recalled that the legislature passed [Senate Bill
138, passed in the Twenty-Eighth Alaska State Legislature] - the
guiding structure for the project - and legislators are
interested in further participation in the project.
CHAIR OLSON stated his and other members' concern with the
current structure of the board, which has board members with
experience limited to serving on the Alaska Gasline Port
Authority. He reviewed the qualities of two unsuccessful
appointees to the AGDC board, and said legislators want to see
legislative members on the board because " ... the direction
that it may be going may not be the direction that was
envisioned by the bulk of the people that got the ball rolling."
REPRESENTATIVE HUGHES expressed strong support for the provision
of the bill that requires expertise and experience. She
inquired as to the nature of executive sessions, and asked for
the reasons the AGDC board would go into executive session.
MR. EILER advised that AGDC is exempt from many parts of the
Administrative Procedure Act, except for the open meetings law.
He deferred to AGDC.
3:51:36 PM
REPRESENTATIVE HUGHES asked whether the bill sponsor can assure
the committee that if there are nonvoting legislative members on
the board, the board would remain apolitical.
SENATOR COSTELLO pointed out that the legislature votes on the
appointments of members of the board, except for the
commissioners. She remarked:
I would like to see the people's branch be represented
there. Whether you see that as political ... I see it
as only adding value to, to the board, and adding some
depth in terms of the history of the legislation, the
history of the project.
REPRESENTATIVE HUGHES then asked whether the sponsor is
confident that if during executive sessions with legislative
board members present, the other AGDB board members would be
free to "lay things out on the table."
SENATOR COSTELLO opined that all board members would follow
guidelines and procedures.
REPRESENTATIVE JOSEPHSON inquired as to the laws related to when
executive branch officials can listen to legislative executive
sessions; for example, whether they can attend an executive
session of a Legislative Budget and Audit (JBUD) committee
meeting.
SENATOR COSTELLO declined to answer.
MS. NAUMAN said she was not aware of any law that allows a
member of the executive branch to sit in on a legislative
committee executive session. In further response to
Representative Josephson, she restated her answer.
REPRESENTATIVE JOSEPHSON questioned whether other commissions
and boards such as the Alaska Aerospace Corporation, Department
of Military & Veterans' Affairs, and the Knik Arm Bridge and
Toll Authority, Department of Transportation & Public
Facilities, have been challenged by a claim that legislators
should not serve.
SENATOR COSTELLO said, "Not that I am aware."
3:57:16 PM
CHAIR OLSON was told that Commissioner Sheldon Fisher,
Department of Administration, was invited to the last
Legislative Council meeting executive session but declined to
attend at the direction of the governor.
REPRESENTATIVE KITO advised that Legislative Council and
Legislative Budget and Audit committees have the ability to
invite any individual, but an individual must be invited to
participate in executive sessions.
CHAIR OLSON understood that any member of the House and Senate
can attend, but not participate in, an executive session.
REPRESENTATIVE LEDOUX asked whether the committee would hear
testimony from the administration in opposition to the bill.
She gave her history of serving on the Aerospace Corporation
board of directors.
3:59:56 PM
CHAIR OLSON opened public testimony.
4:00:22 PM
REPRESENTATIVE LIZ VAZQUEZ, Alaska State Legislature, reminded
the committee that the board is not set up as part of the
executive branch - reporting directly to the governor - but is
set up as an independent corporation and is exempt from
personnel and procurement regulations, and statutes that pertain
to the rest of the state. She opined AGDC is only required to
comply with the open meetings law; in fact, if a legal decision
rendered in the state were found, it would relate to an entity
closer to or within the executive branch, as opposed to AGDC,
which is "totally distinct."
4:01:53 PM
CHAIR OLSON, after ascertaining that no one further wished to
testify, closed public testimony.
REPRESENTATIVE COLVER expressed his concern that with a
constitutional issue outstanding, AGDC board actions may be
subject to litigation, and "cloud business that we expect AGDC
to do." He read from the Constitution of the State of Alaska,
Article II, Section 5, as follows [in part]:
No legislator may hold any other office or position of
profit under the United States or the state.
REPRESENTATIVE COLVER continued, noting that AGDC is supposed to
look and act like a business, and should not be encumbered with
politics.
CHAIR OLSON advised that there are "at least a dozen other
boards, similar boards, and to the best of my knowledge, we've
never had that issue arise ...."
REPRESENTATIVE KITO questioned the benefit of adding members to
a board that is operating. Adding three additional members,
especially legislative members whose appointments will change
every two years, does not provide continuity. He said the bill
is not necessary.
REPRESENTATIVE JOSEPHSON stated the following concerns: 1.)
memos written by Legislative Legal Services that cite two other
states are persuasive authority, however, the memo written by
the Department of Law cites actual state authority on dual
office holding and separation of powers, and is supported by
three AGO statements; 2.) turnover on the board due to legal
requirements of residency; 3.) politicizing of the agency; 4.)
the inability of legislative board members to share executive
session comments; 5.) constitutionality; 6.) possible
litigation. He said he was a "no vote."
REPRESENTATIVE HUGHES gave her experience serving on the board
of directors of the Alaska Travel Industry Association, and said
the addition of legislative members to the AGDC board could
improve communications.
4:09:34 PM
REPRESENTATIVE HUGHES moved to report [HCS CSSB 125(RES],
Version 29-LS1250\S, out of committee with individual
recommendations and the accompanying fiscal notes.
4:09:44 PM
REPRESENTATIVE JOSEPHSON objected.
4:10:26 PM
A roll call vote was taken. Representatives Tilton, Hughes,
LeDoux, Colver, and Olson voted in favor of HCS CSSB 125(RES).
Representatives Kito and Josephson voted against it. Therefore,
HCS CSSB 125(RES) was reported out of the House Labor and
Commerce Standing Committee by a vote of 5-2.