Legislature(1993 - 1994)
02/28/1994 09:15 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 322 - DELAYS OF OIL AND GAS LEASE SALES Co-chair Pearce directed that SB 322 be brought on for discussion. JIM EASON, Director, Division of Oil and Gas, Dept. of Natural Resources, came before committee. He explained that the legislation contains a simple but important amendment to Title 38. Current law includes a provision requiring that if the department places a sale on its five-year oil and gas leasing schedule, it must hold that sale within a quarter (90 days) of the quarter in which the sale was originally scheduled. That requirement was incorporated in 1978 amendments to leasing provisions. At the time amendments were made, industry expressed concern that, in spite of the five-year leasing schedule, a future commissioner might not follow through with oil and gas leasing. The industry would thus expend considerable time, effort, and moneys preparing for lease sales that would ultimately not be held. The 90-day requirement was included in statute to create pressure to continue a leasing program. Mr. Eason voiced his belief that the provision has long outlived its usefulness. The record since 1978 reflects an active leasing program supported by Democratic, Republican, and Independent administrations. Concerns that originally led to inclusion of the provision never materialized. Further, the balance of regulations and statutes that must be met make the leasing program more vulnerable to delays. The current effect of the provision provides opportunity for litigants to cause minor delays in the leasing program and ultimately win what cannot be won in litigation. If a litigant is successful in delaying a sale more than 90 days beyond its original quarter, the sale must again be noticed and placed on the five-year schedule for two full years. The proposed legislation deletes the 90-day requirement. It retains the provision that the commissioner may not hold the sale any earlier than would normally occur. Amendment of the statute also provides the commissioner a variable tool in situations where there are valid reasons for extending public comment to ensure that proceeding with the sale is in the state's best interest. That flexibility is needed. Mr. Eason urged passage of the bill. Discussion followed between Co-chair Pearce and Mr. Eason concerning the relationship between allowance for possible lease sale extension and coastal policy council legislation. Co-chair Frank inquired concerning possible need for an immediate effective date. Mr. Eason said that an immediate effective date would be most helpful since it would provide needed flexibility for upcoming sale 79 and increase options for dealing with litigation, should it occur. Co-chair Frank MOVED for adoption of an amendment providing for an immediate effective date. No objection having been raised, the amendment was ADOPTED. Co-chair Pearce called for additional testimony on the bill. None was forthcoming. Senator Kerttula MOVED for passage of CSSB 322 (Finance) with individual recommendations. No objection having been raised, CSSB 322 (Finance) was REPORTED OUT of committee with a zero fiscal note from the Dept. of Natural Resources. All members present signed the committee report with a "do pass" recommendation. Senators Jacko and Rieger were absent from the meeting and did not sign.
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