Legislature(2005 - 2006)SENATE FINANCE 532
07/14/2006 09:00 AM Senate SPECIAL COMMITTEE ON NATURAL GAS DEV
| Audio | Topic |
|---|---|
| Start | |
| SB3001 | |
| SB3002 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB3001 | TELECONFERENCED | |
| += | SB3002 | TELECONFERENCED | |
SB 3002-STRANDED GAS AMENDMENTS
JIM CLARK, Chief Negotiator, Office of the Governor, said that
he wanted to talk about the Stranded Gas Amendments that are
before the committee.
CHAIR SEEKINS asked if he meant SB 3002.
MR. CLARK replied yes.
He explained that the administration hopes to incorporate what
they learn during the public comment period with the will of the
committee and the thoughts of the administration to formulate a
more comprehensive Committee Substitute.
10:46:39 AM
JIM BALDWIN, Outside Counsel, Department of Law, briefly
described sections 1-5 of SB 3002.
Section 1 contains an amendment to the purpose clause of the
Stranded Gas Act, to remove a provision that would restrict the
state's ability to propose terms related to the taxation of oil.
MR. BALDWIN explained that Section 2 creates the fiscal
structure to receive municipal impact funds [$125 million in
municipal impact funds]. It relates to how the money is received
into the state treasury and how it is made available for
appropriation by the legislature. Sections 3,4, and 5 are
amendments that were proposed during the second special session
and were the product of recommendations received from the
Municipal Advisory Group.
He said that the state also needs conforming amendments to the
Stranded Gas Act in order to make the contract provisions
consistent with the SGDA.
10:50:55 AM
Some of the subject matter included in the version that DOL
introduced during the last special session related to the
interaction of the contract with other agreements that are in
effect by law.
10:52:08 AM
CHAIR SEEKINS said that his intent is to hold the bill and work
on it after the committee returns on July 24.
MR. CLARK noted that he hopes to come back to the committee at
that time with ideas on how this might be fashioned in a way
that is consistent with what the committee has already done.
CHAIR SEEKINS commented that they would probably discuss project
labor agreements.
MR. CLARK said that is another point the governor raised in his
speech and an issue they will be discussing as they put the
contract together. He pointed out that the fiscal agreement with
the producers is not the right spot for a project labor
agreement; the entity that will enter into that agreement will
be the LLC, and the appropriate person(s) to undertake the
negotiations are the contractors to the LLC.
10:55:23 AM
CHAIR SEEKINS said the Alaska hire features in the Stranded Gas
Act are very important to members of the Legislature and to the
governor.
10:55:56 AM
SENATOR WILKEN referred to a memo from Phillip C. Gildan of
Greenberg Traurig, dated July 13, with his initial reaction to
SB 3002, and suggested that might be a place to start when the
committee returns on July 24. He asked Mr. Clark when the LLC
might be available, as he does not see how the contract can
proceed until they have seen the entity agreements.
MR. CLARK replied that the administration thinks the LLC is long
overdue, and that he will be talking to the producers about
that.
10:59:16 AM
CHAIR SEEKINS said he also has concerns about the integration
clause in the contract. This contract requires legislative
approval in order for the administration to execute it; but
according to the reading of an attorney in Fairbanks, once it
has been executed it can be amended without legislative
approval.
11:00:22 AM
MR. CLARK replied that he would make sure that is clarified. He
feels that there are things in the contract the executive body
ought to be able to change, but there are also key functions,
like tax rates, that the executive body should not be able to
change without legislative approval.
At ease 11:01:42 AM to 11:02:25 AM
SENATOR WILKEN asked Mr. Griffin if the committee is supposed to
get an update on the Lukens study [Market Analysis and Alaska
Price Model by Lukens Energy Group, October 26, 2004] on gas
prices and capacity management issues.
MR. GRIFFIN replied yes, he will check on that and report back.
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