Legislature(1997 - 1998)
03/19/1998 10:10 AM House O&G
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 393 - DEVELOP STRANDED GAS RESOURCES Number 0068 CHAIRMAN HODGINS announced the committee would hear HB 393, "An Act relating to contracts with the state establishing payments in lieu of other taxes by a qualified sponsor or qualified sponsor group for projects to develop stranded gas resources in the state; providing for the inclusion in such contracts of terms making certain adjustments regarding royalty value and the timing and notice of the state's right to take royalty in kind or in value from such projects; relating to the effect of such contracts on municipal taxation; and providing for an effective date." He stated that the meeting will be short due to a floor session. He stated that the committee has previously adopted CSHB 393(O&G), version B and stated that there are several amendments. He asked Patrick Carter to present the committee's amendments. Number 0168 PATRICK CARTER, Legislative Assistant to Representative Hodgins, stated that Amendment 1, that the committee is addressing is 0- GH2006\B.6, Glover, 3/19/98. He stated that most of the changes are more word smithing. He stated that he would point out some of the substantive changes. Throughout the bill the term "enter into" is changed to "develop" because the executive branch is not entering into the contract, the legislature is authorizing them to develop the contract. He referred to page 10, line 20, delete "enters into a contract" and insert "submits a contract to the governor". He stated that on page 16, line 31, insert a new subsection to read: "(b) A contract developed under this chapter may provide for the assignment to or withdrawal of a qualified sponsor or member of a qualified sponsor group." He stated that on page 18, line 26, following "disclosure" insert "or is not in the long-term fiscal interests of the state". Number 0519 REPRESENTATIVE JOE RYAN asked what would be kept confidential that is not in the long-term fiscal interests of the state. He stated the legislature is conducting the public's business and he asked how would a public body keep things other than proprietary information confidential. MR. CARTER replied that there would be numerous aspects of the contract that would need to be kept confidential. He referred the question to Commissioner Condon. Number 0652 WILSON CONDON, Commissioner, Department of Revenue, replied that is a policy call that the legislature can make. It would permit the state to kept sensitive information to itself. He stated that there may be situations that the legislature will not want to disclose regarding the deal. Number 0732 MR. CARTER referred to page 20, lines 21-23, delete all material and insert "submit the contract to the governor." Page 21, lines 4-8, delete all material and insert "previously submitted a proposed contract to the governor, the". He stated that on page 21, line 9, delete "existing" and insert "currently proposed". He stated that on page 23, lines 2-3, delete "The commissioner may not execute a contract developed under this chapter and a" and insert "The governor may transmit a contract developed under this chapter to the legislature together with a request for authorization to execute the contract. A". Number 0864 REPRESENTATIVE RYAN asked why are we giving the governor the discretion on page 23, line 21-23. MR. CARTER replied that he believed it was in regards to a previous separation of power discussion. The governor submits the contract to the legislation for ratification but is not required by law to do so. REPRESENTATIVE RYAN stated that in Alaska there is a public trust and the legislature is the trustee of the resources that belong to the people. He stated that the primary duty of the trustee is to ensure the maximum benefit to the beneficiaries. He stated that to allow the Governor and the commissioner to enter into a contract without having the legislature's final approval on it, negates the legislative authority and power. It would allow the governor to dispose of the resource without the legislature's approval. He stated that he does not want to be a part of that. Number 0954 COMMISSIONER CONDON replied that if the result of this proposed amendment where to lead to that result he would agree. What the amendment does is it gives the Governor the discretion to not send the contract to the legislature "but it can not become effective unless the legislature -- the legislature retains the yes or no, no matter what -- this simply would authorize the governor, at the conclusion of this whole process to decide to stop but it would not result in a binding contract. No way the contract would be binding unless the Governor exercises his discretion and sends it to the legislature and the legislature authorizes the signing." REPRESENTATIVE RYAN stated that is now part of the public record and he would take his word for it. Number 1035 MR. CARTER stated that on page 24, line 22, delete "each of the affected municipalities" and insert "municipality". He stated that on page 26, lines 18-20, delete all material and insert "expects will be restricted from imposing a tax, or a portion of a tax, as a result of implementation of a contract developed under this chapter". He stated that the definition of economic proximity has been revised. He stated that page 27, line 11, delete "uneconomic or uncompetitive to develop" and insert "not being marketed due to prevailing cost or price conditions". He stated that on page 27, line 23, delete "with the commissioner of revenue under AS 43.82.010" and insert "approved by the legislature as a result of submission of a proposed contract developed under AS 43.82", this was duplicated through out the bill. Number 1222 REPRESENTATIVE CON BUNDE made a motion to adopt Amendment 1, 0- GH2006\B.6, Glover, 3/19/98. CHAIRMAN HODGINS asked if there was an objection. Hearing none Amendment 1 0-GH2006\B.6, Glover, 3/19/98 was adopted. Number 1299 REPRESENTATIVE RYAN stated that he had some amendments starting on Page 2, line 1 insert "alleged". CHAIRMAN HODGINS asked if he was going to follow his amendment list. REPRESENTATIVE RYAN stated that there is a problem as there are numerous committee substitutes that had been drafted and it is kind of confusing as there is a lack coordination. REPRESENTATIVE ROKEBERG asked if the amendment was to version B of the bill. REPRESENTATIVE RYAN replied that is correct. REPRESENTATIVE ROKEBERG stated that he is looking at Representative Ryan's cover page B.1 through B.5 and he can't find the amendment that Representative Ryan was speaking to. He stated that he objected to this as it is not in the proper format and he can not follow along. He stated that he can't track the amendments. REPRESENTATIVE RYAN stated that he could instead introduce his committee substitute and then explain it. REPRESENTATIVE ROKEBERG stated that he did not want to be argumentative but it is not in the proper form of an amendment and he can not debate the issues. Number 1638 CHAIRMAN HODGINS stated that time is running out and he asked if maybe, Representative Ryan could give a concept of the amendments. REPRESENTATIVE RYAN stated that he would have legal put it in the form of amendment and then they would proceed from there. CHAIRMAN HODGINS asked Representative Rokeberg if he wanted to present his amendments. Number 1674 REPRESENTATIVE ROKEBERG asked the committee to consider the memorandum from Legal Services regarding "periodic payments in lieu of taxes". He stated that his amendment is 0-GH2006\B.1. He stated that on page 24, line 17 of CSHB 393(O&G) he would insert a new section entitled "Sec. 43.82.505. Payments to economically affected municipalities." He stated that the concept is to create by definition two forms of municipalities; those that tax bases are affected and those that have other economic impacts as a result of the construction of the pipeline. Number 1809 CHAIRMAN HODGINS stated that it might be suggested that this would affect all communities. REPRESENTATIVE ROKEBERG referred to his proposed amendment on page 27, following line 2, of the committee substitute which would insert a new paragraph to read: "(6) "economically affected municipality" means a municipality the commissioner of revenue determines will be reasonably required to provide additional public services under the terms proposed in an application approved under AS 43.82. 140(a); the commissioner may consider historical data from construction of the trans-Alaska Pipeline System, and information submitted by a municipality in making the determination;" Number 1862 REPRESENTATIVE ROKEBERG stated that he would call his changes Amendment 2 and made a motion to adopt Amendment 2. Number 1871 REPRESENTATIVE TOM BRICE objected. Number 1882 CHAIRMAN HODGINS stated that he would leave that pending and hold CSHB 393(O&G) as the committee has run out of time.
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