Legislature(2005 - 2006)BUTROVICH 205

04/22/2006 09:30 AM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Continued from 04/20/06 --
Heard & Held
Moved CSSB 313(JUD) Out of Committee
Moved CSSB 48(HES) Out of Committee
Moved CSHB 446(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
          SB 316-COURT REVIEW OF STRANDED GAS DECISION                                                                      
11:08:38 AM                                                                                                                   
CHAIR RALPH SEEKINS announced SB 316 to be up for consideration.                                                                
He said the intent today was to discuss proposed language so                                                                    
that the bill could move forward. The committee did not expect                                                                  
to move the bill out but the chairman hoped to do constructive                                                                  
work on it. He said his draft would allow the Legislature to                                                                    
view the contract and would allow a public citizen to challenge                                                                 
the findings and determinations provided that the Legislature                                                                   
authorized and approved the signing of the contract. If the                                                                     
committee agreed on the draft, he would have it drawn up into a                                                                 
committee substitute (CS) to be considered on the following                                                                     
hearing date.                                                                                                                   
11:10:31 AM                                                                                                                   
CHAIR SEEKINS said as he reads the original bill, the challenge                                                                 
could be made at the point where the decision was made to                                                                       
execute the contract. There was nothing for the court to                                                                        
consider until an action on the contract was made.                                                                              
It appears that the Senate Judiciary Standing Committee is                                                                      
trying to put one more step into the process before there could                                                                 
be a judicial review, he stated. Any challenger to the contract                                                                 
would legitimately try to determine whether or not the contract                                                                 
was in the best fiscal interest of the state. The only party                                                                    
that could possibly challenge a contract while it was in the                                                                    
middle of the process would be someone who wanted to "high-                                                                     
center" the contract and halt the process for political or                                                                      
private reasons, which should not be allowed. The opportunity                                                                   
for any challenge should be at the end of the process.                                                                          
11:12:41 AM                                                                                                                   
CHAIR SEEKINS said he was also concerned that there be plenty of                                                                
opportunity to view the body of evidence that the commissioner                                                                  
used to come to his conclusion. For example, currently the                                                                      
commissioner has not released any preliminary findings and as a                                                                 
result, none of the body of evidence, including the contract                                                                    
currently under consideration, is a public document except for                                                                  
the proprietary information identified in Section 310.                                                                          
SENATOR GENE THERRIAULT said there is a category of documents                                                                   
that are part of the deliberative process that can also be                                                                      
CHAIR SEEKINS said his concern was that every document that                                                                     
would be discoverable in a legal challenge should be made                                                                       
11:15:16 AM                                                                                                                   
CHAIR SEEKINS directed the committee's attention to the current                                                                 
Stranded Gas Act (SGA), page 21, line 8, and the term                                                                           
"supporting financial, technical, market data." He said that                                                                    
indicated that only the documents supporting a particular                                                                       
decision are required to be disclosed. He passed out his                                                                        
untitled draft and proposed that word "supporting" would be                                                                     
deleted, thereby broadening the amount of documents that would                                                                  
be discoverable.                                                                                                                
SENATOR HOLLIS FRENCH noted there are two clear definitions of                                                                  
the word "support." A government lawyer would lose his argument                                                                 
that the only documents that get released are the ones favoring                                                                 
his client. He said every single word is subject to contrasting                                                                 
CHAIR SEEKINS asserted the importance of transparency and                                                                       
inclusion regarding consideration of any contract.                                                                              
SENATOR FRENCH pointed out in the same paragraph it states the                                                                  
documents "considered by the commissioner" would be submitted                                                                   
with the final findings and determination. A clever federal                                                                     
government lawyer could contend that many of the documents were                                                                 
not "considered," he stated.                                                                                                    
CHAIR SEEKINS replied that the Legislature could only hold the                                                                  
commissioner to those things that he actually considered.                                                                       
11:21:00 AM                                                                                                                   
CHAIR SEEKINS said the intent was to make the bill as clear as                                                                  
possible and to allow someone to examine the body of documents                                                                  
that the commissioner used to come up with the final findings                                                                   
and determination. At that point, the Legislature goes to work                                                                  
and it becomes their responsibility to examine the contract to                                                                  
ensure that it meets the terms of the SGA.                                                                                      
11:24:52 AM                                                                                                                   
CHAIR SEEKINS asked the committee whether they were in agreement                                                                
regarding the steps they want the process to go through.                                                                        
They would make sure that the body of evidence that the                                                                         
commissioner used to come up with his preliminary findings is                                                                   
made public at the point that the preliminary findings are                                                                      
signed. Then there would be a period of time of at least 30 days                                                                
for the legislative and public review. Then the commissioner                                                                    
would close off public comment and within 30 days prepare a                                                                     
summary of the public comment and legislative comment. He would                                                                 
consolidate the body of evidence together and bring it to the                                                                   
governor along with the contract. The governor would then                                                                       
forward all of that to the Legislature.                                                                                         
11:27:07 AM                                                                                                                   
SENATOR FRENCH interrupted to ask whether the committee was                                                                     
operating under the new [untitled] draft.                                                                                       
CHAIR SEEKINS said yes and read Section 43.82.430 as follows:                                                                   
Sec. 43.82.430.  Final findings, determination, and proposed                                                                    
amendments; execution of the contract.                                                                                          
     (a) Within 30 days after the close of the public comment                                                                   
period under AS 43.82.410(4), the commissioner of revenue shall                                                                 
     (1) prepare a summary of the public comments received in                                                                   
response to the proposed contract and the preliminary findings                                                                  
and determination;                                                                                                              
     (2) after consultation with the commissioner of natural                                                                    
resources, if appropriate, and with the pertinent municipal                                                                     
advisory group established under AS 43.82.510, prepare a list of                                                                
proposed amendments, if any, to the proposed contract that the                                                                  
commissioner of revenue determines are necessary to respond to                                                                  
public comments;                                                                                                                
     (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.                                                                                                                   
     (b) After considering the material described in (a) of this                                                                
section and securing the agreement of the other parties to the                                                                  
proposed contract regarding any proposed amendments prepared                                                                    
under (a) of this section, if the commissioner determines that                                                                  
the contract is in the long-term fiscal interests of the state,                                                                 
the commissioner shall submit the contract to the governor.                                                                     
SENATOR FRENCH noted for the people watching on television that                                                                 
the chairman was reading the statute as it currently stands and                                                                 
is suggesting no change to AS 43.82.430.                                                                                        
CHAIR SEEKINS agreed and said he just wanted to make it clear.                                                                  
He read Section 435 as he proposed in his draft CS.                                                                             
Sec. 43.82.435.  Legislative authorization.                                                                                     
    (a) The governor may transmit a contract developed under                                                                    
this chapter to the legislature together with a request for                                                                     
authorization to execute the contract.                                                                                          
     (b) Concurrent with the submission of the contract and                                                                     
request for authorization to execute the contract to the                                                                        
legislature, the governor shall:                                                                                                
          (1) submit the commissioner's final findings and                                                                      
determinations and the financial, technical, market data,                                                                       
including work papers, analyses, and recommendations of any                                                                     
independent contractors used under AS 43.82.240, that were                                                                      
considered by the commissioner to make the final findings and                                                                   
determinations to the legislature; and                                                                                          
SENATOR FRENCH interrupted to ask to whom the final findings and                                                                
determinations would be submitted.                                                                                              
CHAIR SEEKINS said to the Legislature. He continued reading his                                                                 
proposed language to the committee and clarified that there                                                                     
would be 120 days after the execution of the contract for                                                                       
someone to be able to bring a challenge.                                                                                        
11:31:43 AM                                                                                                                   
SENATOR CHARLIE HUGGINS reported that Chair Seekins' CS would                                                                   
satisfy the concerns of his constituents.                                                                                       
SENATOR GUESS agreed with Senator Huggins. She asked whether the                                                                
law authorizing the contract is what would be challenged.                                                                       
CHAIR SEEKINS explained that the challengeable part would be                                                                    
that the contract entered into was not cohesive to the long-term                                                                
fiscal interest of the state.                                                                                                   
SENATOR FRENCH compared Chair Seekins' proposed Section 440 with                                                                
the current AS 43.82.440 and said, "it looks as if a person                                                                     
could challenge the enforceability of a contract executed under                                                                 
a law authorizing the contract."                                                                                                
11:34:10 AM                                                                                                                   
CHAIR SEEKINS agreed to add that into his CS.                                                                                   
SENATOR FRENCH reiterated his earlier concern with changing the                                                                 
focus of the legal contest from the findings and determination                                                                  
of the commissioner to the findings and determinations forwarded                                                                
to the Legislature. He said he could not know for a certainty                                                                   
that the committee wasn't "shrinking" the amount of discoverable                                                                
CHAIR SEEKINS said he has struggled over that because it is                                                                     
difficult to challenge the actions of the Legislature in passing                                                                
a law. If the Legislature were to determine that the contract                                                                   
did not meet the requirements of the law, they could still                                                                      
accept it because a new law would authorize it.                                                                                 
SENATOR HUGGINS said he heard Senator French say that the                                                                       
language of the proposed CS denotes a narrowing of things that                                                                  
would be available for people to challenge.                                                                                     
SENATOR FRENCH agreed that was his concern.                                                                                     
CHAIR SEEKINS said that it was not his intent to narrow the                                                                     
scope of the challenge but to properly place it.                                                                                
11:37:05 AM                                                                                                                   
CHAIR SEEKINS asserted under the old law there was a clumsy                                                                     
situation that would allow a "high-centering" of a contract. He                                                                 
advised the committee that he would submit his CS to the                                                                        
drafters for their review and bring the bill up again. He held                                                                  
SB 316 in committee.                                                                                                            

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