Legislature(2005 - 2006)BUTROVICH 205
04/26/2006 08:30 AM Senate JUDICIARY
| Audio | Topic |
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| Start | |
| SB316 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 316 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 316-COURT REVIEW OF STRANDED GAS DECISION
8:45:00 AM
CHAIR RALPH SEEKINS announced SB 316 to be up for consideration.
LARRY OSTROVSKY, Chief Assistant Attorney General, Department of
Law (DOL), introduced himself.
8:46:03 AM
SENATOR GRETCHEN GUESS stated her confusion on page 3, lines 6-7
was the intent behind the findings and determinations relied on
by the Legislature. She asked whether these were the final
findings and if the chapter should refer back to 430(a)(3),
which states the commissioner's findings.
CHAIR SEEKINS stated his dilemma was that it appears that the
commissioner goes through the entire process of developing a
contract, gathers information, analyzes it and comes up with his
final findings. So now there are several findings; whether or
not it complies with the law, whether or not it meets the best
financial interest of the state.
MR. OSTROVSKY interjected those two would be incorporated into
one finding.
CHAIR SEEKINS stated those two things have to be determined.
SENATOR GUESS countered that was implied but .430(a)(3) states
what is to be determined is whether the proposed contract and
amendments meet the requirements and purposes of the Chapter.
CHAIR SEEKINS agreed.
SENATOR GUESS said fiscal interest is not mentioned. It is
implied but not specified.
CHAIR SEEKINS said .430(b) would indicate that the commissioner
has to have a contract that is in the long-term fiscal interest
of the state.
SENATOR GUESS asserted that is just the hurdle to submit the
contract to the governor.
CHAIR SEEKINS referred to .400(a)(1-2) and said the commissioner
has to make preliminary findings and a determination that the
proposed contract terms are in the long-term fiscal interest of
the state.
SENATOR HOLLIS FRENCH agreed.
CHAIR SEEKINS said along with that, as soon as the commissioner
makes the preliminary finding under .310(f), the entire body of
information other than the information that is required to be
kept confidential becomes a public document.
8:52:35 AM
MR. OSTROVSKY said that is correct but the Stranded Gas
Development Act (SGDA) says it becomes a public document subject
to whatever privileges might exist under law.
CHAIR SEEKINS said at this point even the documents that might
not agree with the commissioner's final findings are public
documents under the Public Information Act.
8:54:04 AM
SENATOR FRENCH referred to the public documents and said it was
important to keep in mind the difference between those and the
"universe of information you can acquire through the discover
process when challenging a finding."
CHAIR SEEKINS asked Mr. Ostrovsky the distinction between the
two.
MR. OSTROVSKY said with respect to certain documents, for
example attorney-client privilege, there would be no difference.
CHAIR SEEKINS asked about internal memorandums.
MR. OSTROVSKY said that would be part of the public documents.
CHAIR SEEKINS asked about a memorandum from the DOL to the
commissioner.
MR. OSTROVSKY responded ordinarily that would not be
discoverable.
8:56:00 AM
SENATOR FRENCH asked who would decide what is discoverable.
MR. OSTROVSKY responded, "A judge."
SENATOR FRENCH asked what, besides documents, could be
discoverable.
MR. OSTROVSKY replied depositions and testimony.
SENATOR FRENCH recognized that testimony and depositions is
something the committee has not explored but could be very
informative.
MR. OSTROVSKY responded normally that type of discovery is not
used in administrative challenges because the court looks to the
record to see where the record supports the decision. The burden
is on the agency to show that the record supports the decision.
CHAIR SEEKINS posed a hypothetical situation of two opposing
models and asked whether both of the models would be made public
documents.
MR. OSTROVSKY said he didn't see why not although there could be
problems with confidentiality. In that case the court could
fashion a protective order for the confidential data.
9:00:04 AM
CHAIR SEEKINS reference AS 40.25.110 and read the statute.
Sec. 40.25.110. Public records open to inspection and
copying; fees.
(a) Unless specifically provided otherwise, the
public records of all public agencies are open to
inspection by the public under reasonable rules during
regular office hours. The public officer having the
custody of public records shall give on request and
payment of the fee established under this section or
AS 40.25.115 a certified copy of the public record.
(b) Except as otherwise provided in this section,
the fee for copying public records may not exceed the
standard unit cost of duplication established by the
public agency.
(c) If the production of records for one
requester in a calendar month exceeds five person-
hours, the public agency shall require the requester
to pay the personnel costs required during the month
to complete the search and copying tasks. The
personnel costs may not exceed the actual salary and
benefit costs for the personnel time required to
perform the search and copying tasks. The requester
shall pay the fee before the records are disclosed,
and the public agency may require payment in advance
of the search.
(d) A public agency may reduce or waive a fee
when the public agency determines that the reduction
or waiver is in the public interest. Fee reductions
and waivers shall be uniformly applied among persons
who are similarly situated. A public agency may waive
a fee of $5 or less if the fee is less than the cost
to the public agency to arrange for payment.
(e) Notwithstanding other provisions of this
section to the contrary, the Bureau of Vital
Statistics and the library archives in the Department
of Education and Early Development may continue to
charge the same fees that they were charging on
September 25, 1990, for performing record searches,
and may increase the fees as necessary to recover
agency expenses on the same basis that was used by the
agency immediately before September 25, 1990.
Notwithstanding other provisions of this section to
the contrary, the Department of Commerce, Community,
and Economic Development may continue to charge the
same fees that the former Department of Commerce and
Economic Development was charging on July 1, 1999, for
performing record searches for matters related to
banking, securities, and corporations, and may
increase the fees as necessary to recover agency
expenses on the same basis that was used by the former
Department of Commerce and Economic Development
immediately before July 1, 1999.
(f) Notwithstanding other provisions of this
section to the contrary, the Board of Regents of the
University of Alaska may establish reasonable fees for
the inspection and copying of public records,
including record searches.
(g) Notwithstanding other provisions of this
section to the contrary, the board of directors of the
Alaska Railroad Corporation may establish reasonable
fees for the inspection and copying of public records,
including record searches.
(h) Notwithstanding other provisions of this
section to the contrary, the judicial branch may
establish by court rule reasonable fees for the
inspection and copying of public records, including
record searches.
(i) Electronic information that is provided in
printed form shall be made available without codes or
symbols, unless accompanied by an explanation of the
codes or symbols.
CHAIR SEEKINS said Senator French was, "getting more into
interrogatories more than he is discoverable documents." He
asked Senator French whether he meant to indicate
interrogatories.
SENATOR FRENCH said he was talking about "strictly paper." The
point is discovery is a broader inquiry than a public records
inquiry.
CHAIR SEEKINS agreed. If all the public documents, models,
analysis, and working paper were public documents; they are
public as soon as the commissioner makes his preliminary
findings, he reiterated.
MR. OSTROVSKY interrupted to say the universe of public
documents is broader. Under the SGDA, the commissioner releases
all the extra reports but there is a universe of documents that
become public record.
SENATOR GUESS said she interprets (f) to be much narrower than
"every public document" because anyone could say certain
discussions or documents weren't relevant to the decision.
CHAIR SEEKINS opined if it weren't something that was relevant
to the conversation, it wouldn't have been confidential.
MR. OSTROVSKY said normally all documents in state government
are public records but some documents are covered by privilege.
The Stranded Gas Development Act puts a layer of protection on
certain documents for a limited period of time to allow
negotiations to go forward. Those are the documents that reflect
and incorporate state strategy. The commercial documents do not
necessarily lose their confidentiality but the Act outlines that
those documents are public records once a contract is
negotiated.
9:06:07 AM
CHAIR SEEKINS asked whether language in the Act should clearly
state that all of the documents are public.
MR. OSTROVSKY said there is a limited protection for a limited
time. Once there is a proposed contract that disappears.
CHAIR SEEKINS noted once the findings become preliminary the
public comment and legislative review period commences with a
minimum of 30 days.
MR. OSTROVSKY said that is correct.
CHAIR SEEKINS continued during that 30 days, any person that
wants to could get copies of the documents.
MR. OSTROVSKY informed the committee the commissioner is under
the affirmative duty to release all of the documents under
.410(2) and the Legislature is also able to see those.
CHAIR SEEKINS asked, "The Legislature is allowed to see the
confidential documents that would not be public records?"
MR. OSTROVSKY said yes.
CHAIR SEEKINS assumed there was a responsibility on the part of
the Legislature to keep the documents confidential.
MR. OSTROVSKY agreed.
CHAIR SEEKINS stated his concern that a person could challenge
the preliminary findings based on discovering some documents
that they believe should have been used in determining the
contact but weren't.
9:09:54 AM
SENATOR FRENCH said the reason he asked Mr. Ostrovsky about the
final findings was to let everybody know that was the trigger to
which people could present a challenge.
CHAIR SEEKINS mentioned after the legislative review and public
comment, the commissioner submits his final findings. Under
current law, he has to determine whether the contract meets the
requirements of the law and also determine that the contract is
in the long-term fiscal interest of the state.
MR. OSTROVSKY reminded the committee that after the public
comment period, the commissioner might need to renegotiate the
contract. At that point in time it becomes a "final agency
decision."
SENATOR GUESS asked the difference between "final findings and
determinations" and "final agency decision."
MR. OSTROVSKY said none. The final agency decision is what a
person would file an appeal from. Findings and determinations
are final agency decisions.
9:15:06 AM
CHAIR SEEKINS reminded the committee that in 1998 the
Legislature called "time out" and inserted themselves into the
process. The Legislature now becomes the final body to determine
whether or not it meets the requirements of the Chapter.
SENATOR GUESS said the law currently reads such that the
Legislature gets the contract to review but not the final
findings and determination.
CHAIR SEEKINS said he could not imagine that they wouldn't get
the final findings.
9:18:22 AM
CHAIR SEEKINS asked what other information the Legislature is
allowed to look at other than the commissioner's findings.
MR. OSTROVSKY said, "Whatever it chooses to look at." The
Legislature often hires its own experts.
CHAIR SEEKINS said the information brought to us by the expert
would constitute a recommendation.
MR. OSTROVSKY agreed.
CHAIR SEEKINS asked whether the findings of the commissioner
would be any more than that.
MR. OSTROVSKY said essentially no.
9:20:15 AM
CHAIR SEEKINS said, "That's our dilemma."
SENATOR GUESS didn't see the dilemma. It's a decision, she
staetd.
CHAIR SEEKINS said, "Our decision is not challengeable unless
it's unconstitutional."
SENATOR GUESS said she thought the committee was more concerned
about the timing issue.
CHAIR SEEKINS said, "You're right." He asked whether the law
should be able to say, "the Legislature can't consider the
contract because the findings and recommendations are going to
be in litigation."
SENATOR GENE THERRIAULT said the commissioner's power and right
to ignore the law is different than the Legislature's power to
[indisc] the law.
9:23:37 AM
CHAIR SEEKINS referred to .430(a)(3) and read:
(3) make final findings and a determination as to whether
the proposed contract and any proposed amendments prepared under
(2) of this subsection meet the requirements and purposes of
this chapter.
He said it wasn't certifying that they meet; it is as to
"whether" they meet.
SENATOR GUESS noted that is a final agency decision.
9:27:11 AM
SENATOR GUESS asked Mr. Ostrovsky whether certification is a
term of art in statute.
MR. OSTROVSKY said, "Not that I'm aware of."
JIM BALDWIN, Attorney, said there are instances where duties are
[indisc] in terms of certification. It is usually associated
with taking an oath.
CHAIR SEEKINS asked Mr. Baldwin whether the commissioner is
required to certify that his findings are correct and complete.
MR. BALDWIN replied the commissioner would have to note whether
or not changes would need to be made to the Act.
9:30:12 AM
SENATOR GUESS countered if the final findings aren't
challengeable, (if the legislative approval of the contact is
the final say), why have the Stranded Gas Act at all?
MR. BALDWIN said it is important to keep in mind the complete
picture of the SGDA and what is worth challenging at the end of
the day. A person will always have the constitutional right to
challenge a contract.
SENATOR GUESS said everyone on the committee would take the
constitutionality issue off the table. Nobody wants to slow the
process down but the question is whether to take away the
public's ability to challenge.
CHAIR SEEKINS asked Mr. Baldwin whether a law could be passed to
specify a block of time for a right to challenge something on a
constitutional basis.
MR. BALDWIN responded that would have the potential of being
challenged. However, there are instances where the court has
limited things for review, such as redistricting of the state
where the court requires that constitutional issues be brought
within 60 days.
9:36:08 AM
SENATOR FRENCH agreed with Mr. Baldwin. In the civil arena the
courts can limit a person's constitutional challenges.
CHAIR SEEKINS commented the committee has come down to the final
question of whether or not the challenge to the final agency
decision could be moved to the final step of the process.
MR. OSTROVSKY reported the DOL believes that because the
Legislature retained a role in the process, the agency decision
under SGDA becomes but a component of the final contract.
Hypothetically speaking, the Legislature's decision could be
independent of the commissioner's.
9:40:00 AM
SENATOR FRENCH said if it is broader then there is no harm or
imposition on the system to allow a full challenge to the
commissioner's findings. He said the main concern of the
committee is whether or not there could be a court case against
their finding. The final findings and determination is a term of
art that the courts are comfortable working with, but the final
findings and determination of the Legislature is brand new, he
said, and he expressed concern with how a judge would proceed on
a legal challenge.
MR. OSTROVSKY replied the DOL would consider the final findings
of the commissioner just a step in the process but not a final
step. The challenge would be at the end of the process, he
indicated.
SENATOR FRENCH said he was concerned about a "kink in the
system." There is still an executive act function once the
Legislature is finished and so in order to minimize the amount
of challenges that can be brought, he wanted to make sure the
committee establishes the correct place for a challenge.
9:45:38 AM
CHAIR SEEKINS agreed that the challenge should take place after
the execution of the contract.
9:50:57 AM
SENATOR THERRIAULT added that nobody knows how long the Supreme
Court would take to make a decision on the challenge. He asked
whether the contract could go forward while the court decides.
MR. OSTROVSKY replied the court would remand the commissioner's
findings.
CHAIR SEEKINS suggested the language, "any challenge to the
findings and determination forwarded by the commissioner or the
Legislature can not delay consideration of the contract."
SENATOR THERRIAULT added the contract would still be able to be
forwarded to the Legislature to begin their process.
9:53:49 AM
SENATOR HUGGINS said the point is "is the threshold of
constitutionality too high?"
SENATOR GUESS asked the reason for maintaining the Stranded Gas
Development Act. If the contract is good to go, why bother going
through the process of amending the Act, she asked.
MR. OSTROVSKY responded it was all part of the process. The SGDA
requires the administration with something they normally aren't
required to do when they present something to the Legislature.
He said there is a purpose for it.
CHAIR SEEKINS called a brief recess at 10:06:00 AM.
10:20:35 AM
CHAIR SEEKINS called the committee back to order. He informed
the committee that he was going to ask the drafter of the bill
to clarify the language that any challenge can't delay
consideration of the contract by the Legislature and that the
contract is challengeable for only 120 days after execution of
the contract.
SENATOR GUESS questioned when the challenge would happen. The
current language doesn't allow for a challenge before the review
of the Legislature.
CHAIR SEEKINS referred the committee to section .410(2) in the
Act and said he wants that language to line up with Section 2 of
the bill.
10:26:30 AM
JOMO STEWART, Fairbanks, testified in opposition to the bill. He
said it is a bad bill and it would not serve the purpose the
committee is seeking. The record shows that the Legislature was
invited into the process by the Administration in 1998 yet was
not required to participate. It chose to do so and that is not
an "abomination" as it has been referred as several times in
this committee. It is an established practice to have the
Legislature involved in issues involving resource development.
10:30:32 AM
MR. STEWART continued it has been stated several times in
committee that the Legislature has some kind of final power over
the contract and that is not the case. The final decision of
whether or not the contract is in the best interest of the state
and should be carried further is under the governor's authority.
He encouraged the committee to bury the bill.
10:37:32 AM
SENATOR HUGGINS asked Mr. Ostrovsky to comment on the pending
suit in reference to the gas pipeline.
MR. OSTROVSKY replied the Port Authority has filed an anti-trust
action in federal court against British Petroleum and Exxon
Mobil but did not elaborate.
CHAIR SEEKINS held the bill in committee.
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