Legislature(2003 - 2004)
03/02/2004 01:55 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 283(FIN)
An Act making an appropriation to reverse the deposit
of money available for appropriation in the general
fund at the end of fiscal year 2003 into the
constitutional budget reserve fund; making an
appropriation for investment management fees for the
constitutional budget reserve fund; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date.
Co-Chair Williams moved Amendment #1. (Copy on File).
Representative Croft OBJECTED for purpose of discussion.
At Ease: 3:01 p.m.
Reconvened: 3:04 p.m.
Representative Croft stated that there was interest in the
Minority Caucasus to give some Constitutional Budget Reserve
(CBR) money directly to the Alaska Natural Gas Pipeline
Development Authority (ANGDA). He warned against CBR money
going directly to the Department of Revenue for ANGDA needs.
He stressed that option is not something that the Minority
is interested in doing. Representative Croft warned passing
the request would endanger entire sweep bill.
Co-Chair Harris agreed with Representative Croft's statement
and requested to hear from the Department of Revenue, Steve
Porter.
STEVE PORTER, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE,
commented that the requested dollars would keep the project
moving forward. He spoke to the contracts for ANGDA for
research in the amount of $426 thousand dollars. He
addressed the socio-impact study beneficial to the ANGDA
project for understanding the impacts to municipalities.
Mr. Porter commented on the reasons for the money to go
through the Department of Revenue resulting from a funding
conflict. The expenses directly related to reimbursement
between Conoco Phillips, British Petroleum (BP) and EXXON
and their applications to the State are reimbursable.
Anything spent on responding to an application by
contractors can be reimbursed to do that. There is an
overlap for all those concerns. The Department is
attempting to determine how to allocate the money for the
contracts between the parties. He added that the Department
is trying to address issues relating to feasibility and
stated that they would like to use the analysis and the
questions that arise from it to do the research and assess
the risk.
Co-Chair Harris asked how much money would ANGDA need to
accomplish the items mentioned. Mr. Porter responded that
there are about $750 thousand dollars worth of contracts at
this time and with additional needed funding.
Co-Chair Harris pointed out that if Amendment #1 passed the
House Finance Committee and the House Floor, for
implementation, there would need to be a ¾ vote. He noted
that there would be a good chance that the reverse sweep
would not be adopted. He questioned if it would be better
to adopt the reverse sweep clean or accept the amendment.
Mr. Porter responded that if the addition of the amendment
does not pass in the sweep bill, the Department of Revenue
would go back to $3 million dollar request, which is the
preferred amount. He mentioned on the Stranded Gas Act,
requesting that it move forward. He concluded that the
Department would be willing to defer to the judgment of the
Legislature on timing.
Co-Chair Harris inquired how important was the reversed
sweep bill to the Department. Mr. Porter stated that they
do not want to stop the reverse sweep bill and if they
cannot get the ¾ majority, the Legislature should not put
the attachment on the bill.
Co-Chair Harris MOVED that the bill be HELD in Committee for
further deliberation.
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Vice Chair Meyer asked if there was a March 12 deadline
with the Mid America paperwork. Mr. Porter responded that
there is an impact statement needed that would not be ready
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for March 12 meeting as the contract is not yet available.
Vice Chair Meyer asked if the Supplemental budget was the
"other vehicle" referenced. Mr. Porter did not think so,
pointing out that there are a couple of other bills that
could be vehicles for the authority.
Representative Hawker asked if the Department had been in
discussion with the Alaska Natural Gas Pipeline Development
Authority Board regarding the structuring of the money. Mr.
Porter responded that there was a thorough discussion with
the Board and they passed a resolution in favor of providing
$3 million dollars for support of ANGDA and Stranded Gas.
Representative Hawker questioned if that meeting involved
both public and executive sessions. Mr. Porter acknowledged
that and noted it resulted in a unanimous resolution.
Representative Hawker admitted that he had heard different
interpretations of those sessions and that they had been
"spirited" and "cohesive". Representative Hawker asked how
Mr. Porter would characterize what lead to the resolution.
Representative Croft interrupted, requesting a Point of
Order. He asked if Representative Hawker was asking for
information of what had been said in Executive Session.
Representative Hawker asked to qualify his question,
recognizing that some of the sessions were in Executive
Session and others were in the public domain. He asked how
the nature of those discussions could be characterized. Mr.
Porter responded that the board members are a group of
strong-minded individuals and in the public sessions,
concerns had been openly discussed.
Representative Hawker asked if it was true that funding
through the Department of Revenue was not the Board's first
choice. Mr. Porter explained that before the best course of
action was defined that could have been true. Understanding
how the finances are, the proposed idea is the best course
of action.
Representative Hawker thought that the best course of action
would be direct funding rather than through the Department
of Revenue. He asked what the Department did that persuaded
the Board that funding through the Department of Revenue
would be the best course of action. Mr. Porter replied that
the Board saw that maximum value would be received by
administering through the Department of Revenue.
Representative Hawker understood that the relationship
between ANGDA and the Department of Revenue was not always
easy, but that they were attempting to work out their
differences. Mr. Porter stated from the Department's point
of view, they have always been interested in supporting the
viability of that project.
Representative Hawker asked if the ANGDA Board has reason to
fear that if the money were appropriated through the
Department of Revenue, would they then be able to access the
funds needed to do the work that they need to accomplish
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between now and June 30. He asked will there be adequate
resources for the Board. Mr. Porter replied that they do
have reason to "fear", as $1.6 million dollars may not be
sufficient.
Representative Hawker asked if the Department had $3 million
dollars, would they be able to assure the Board adequate
resources. Mr. Porter responded that with $3 million
dollars, the Department believes that they could have
adequate resources through the end of the year with enough
to ask the necessary questions for contracts to provide a
viable determination.
Representative Hawker expressed "grave concerns" with the
answers being provided by the Department of Revenue. Mr.
Porter commented that was a "different concern" from the one
originally presented. He did not see this as an issue.
Each project would either fund and benefit ANGDA or benefit
the industry. He suggested that he was being asked to
choose between ANGDA and oil, claiming that the real
question is how to distribute the cash. If the industry
receives a proportionate share, there would then be value to
everyone.
Representative Croft asked if Mr. Porter had ever told the
ANGDA Board that the only way to get significant money was
to support the $3 million dollar request. Mr. Porter did
not remember stating that.
Representative Croft pointed out that the Board was
historically an independent agency and that the tendency has
been to make that Board more dependant and wrapped into the
Department of Revenue. The funding for stranded gas is
okay. Representative Croft stated that there are many
appropriate uses for $2 million dollars but the fact that
Mr. Porter may need $2 million for the Stranded Gas Project
negotiations is very interesting. Representative Croft
noted that the Minority was interested in having an
independent look at those issues. If it is going to be
"dependant", then that is not something that the Minority is
willing to spend on. He warned that the proposed amendment
"threatens" the reversed sweep legislation.
Mr. Porter countered that the actual patrol of the Board has
not changed moving it to the Department of Revenue. The
move could change the Board's ability to spend on stranded
gas versus ANGDA and the ability to manage the way in which
the systems are billed out. The actual control over the
ANGDA Board has not changed. He added that Board is very
important to the State and they need to get to a place where
the public can believe that they are strong and viable.
Co-Chair Williams commented that the Committee has addressed
what the Board wants by passing the proposed amendment.
Vice Chair Meyer noted that the Senate had passed the bill
without the amendment. He asked if discussion had been
presented on the Senate side regarding the idea. He voiced
his concern with continual delays in passage of the bill.
Co-Chair Williams indicated that he had spoken with the
Senate leadership and that they indicated that they did not
have a problem with the language of the amendment.
Co-Chair Harris pointed out that the bill passed from the
Senate side was a "clean bill". The Minority has strictly
indicated interest only for ANGDA and nothing else. Since
that occurred, there has been many conversations. Co-Chair
Harris did not believe that there was ¾ vote available on
the Senate side to support the amendment. Co-Chair Harris
stressed that time is of the essence. He commented that he
would like to see that the bill kept clean.
TAPE HFC 04 - 39, Side A
(Tape Malfunction)
Vice Chair Meyer suggested that perhaps the amendment could
be passed through the supplemental.
Co-Chair Williams commented that the bill had sat in
Committee for three weeks and that no amendments had been
brought forward. Co-Chair Williams noted that it was not
his intent to move the bill from Committee at this time.
CS SB 283 (FIN) was HELD in Committee for further
consideration.
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