Legislature(2001 - 2002)
05/06/2002 05:15 PM Senate RES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
CSHB 302-ALASKA GAS CORPORATION
CHAIRMAN JOHN TORGERSON called the Senate Resources Committee
meeting to order at 5:15 p.m. and announced CSHB 302(FIN) to be
up for consideration. He said that he intended to take testimony
on the bill today but would hold it in committee since the
committee would be making a policy call.
REPRESENTATIVE JIM WHITAKER, sponsor of HB 302, said the bill
establishes the Alaska Gas Corporation. The intent of the
legislation is to keep a range of options available to the state
with regard to the eventual taking of natural gas to market. The
private sector is interested in that project but the sincerity of
that effort has been questioned from time to time. He believes
it would be advantageous for the state to keep this option viable
and to progress it.
CHAIRMAN TORGERSON asked Representative Whitaker if he intends to
replace the initiative with this legislation.
REPRESENTATIVE WHITAKER said it is not his intent to use this
bill to replace the initiative. That subject is under the purview
of the Lieutenant Governor. He introduced this bill several
months prior to the initiative. However, once the initiative was
filed, he asked for a legal opinion about whether the bill and
initiative are substantially similar. According to the legal
opinion, they are, so whether or not it replaces the initiative
would be the Lieutenant Governor's call. He said he has not
contacted her about the matter.
CHAIRMAN TORGERSON questioned why there is no fiscal note from
the Legislative Affairs Agency (LAA) because the Commission would
be set up by the Legislature.
REPRESENTATIVE WHITAKER said it would, but assuming the Joint
Committee on Natural Gas Pipelines remains viable, it can be
argued that there would be no attendant fiscal note. However,
keeping that committee in place for this specific purpose would
require a fiscal note from LAA.
CHAIRMAN TORGERSON said that, in general, all of the Joint
Committee on Natural Gas Pipelines hired experts will be finished
at the end of session. He said the committee might need to take a
different direction and have engineering staff on board for this
proposal.
CHAIRMAN TORGERSON told members that Representative Whitaker has
submitted an amendment to extend the Joint Committee on Natural
Gas Pipelines until January 31, 2004.
SENATOR WILKEN asked if the Alaska Gas Corporation is analogous
to anything that exists today.
REPRESENTATIVE WHITAKER replied an analogy could be made to the
existing port authority, although that is a rough one, since the
subject matter is the only similarity. He said a better analogy
is to the operations of the Alaska Permanent Fund Corporation.
The Corporation functions in an ownership role. He did not
envision the maintenance, operation, building, and engineering
functions being attendant to state functions. He envisioned them
as private sector functions under contract to the Alaska Gas
Corporation.
SENATOR WILKEN asked how it would differ from the Alaska Railroad
Corporation (ARRC).
REPRESENTATIVE WHITAKER replied that ARRC is far beyond what he
would envision. The ARRC has been subject to criticism for being
somewhat cumbersome, bureaucratic and inefficient. Those
criticisms may have merit. On the other hand, the Permanent Fund
Corporation's ownership role provides a much more efficient
model.
SENATOR WILKEN asked him to explain why a copy of the Petrie
Parkman Report is in members' packets and what it means in
relation to the sentence on page 2.
REPRESENTATIVE WHITAKER replied that he found the report
interesting for a number of reasons. Different participants wrote
it in sections. Those sections written by the Administration
seemed to be quite negative with regard to state ownership, but
he came to the conclusion that state ownership would result in a
substantial return to the state, the magnitude of which is
indeterminate. He also concluded that an 8 to 18% reduction in
tariff is possible, if not probable, given state ownership and
its ability to provide for financing as well as tax relief
relative to the determination of the tariff.
SENATOR TAYLOR asked when the bill was filed.
REPRESENTATIVE WHITAKER said it was filed at the beginning of the
first session of this legislature. He extrapolated that the
reason it is moving now is because it is being viewed as the
lesser of two evils, meaning it and the initiative.
SENATOR TAYLOR asked how it differs from SB 221.
REPRESENTATIVE WHITAKER replied that he hadn't read that bill.
CHAIRMAN TORGERSON asked if the bill still called for design,
construction, operating and maintenance to be vested within the
powers of the corporation.
REPRESENTATIVE WHITAKER replied that is correct.
CHAIRMAN TORGERSON asked Commissioner Condon, Department of
Revenue, if he had any comments.
COMMISSIONER CONDON indicated that he would answer questions.
[There were none.]
CHAIRMAN TORGERSON thanked Representative Whitaker and held CSHB
302(FIN) in committee.
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