Legislature(2005 - 2006)CAPITOL 120

07/24/2006 10:30 AM House JUDICIARY


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10:43:12 AM Start
10:43:28 AM HJR301
11:23:19 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HJR301 CONST. AM: LEG. APPROVAL OF GAS CONTRACTS TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE JUDICIARY STANDING COMMITTEE                                                                             
                         July 24, 2006                                                                                          
                           10:43 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Lesil McGuire, Chair                                                                                             
Representative John Coghill                                                                                                     
Representative Pete Kott                                                                                                        
Representative Peggy Wilson                                                                                                     
Representative Les Gara                                                                                                         
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Tom Anderson                                                                                                     
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 301                                                                                                  
Proposing amendments to the Constitution of the State of Alaska                                                                 
requiring legislative approval of certain state contracts for                                                                   
the development of natural gas resources.                                                                                       
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HJR301                                                                                                                  
SHORT TITLE: CONST. AM: LEG. APPROVAL OF GAS CONTRACTS                                                                          
SPONSOR(S): JUDICIARY                                                                                                           
                                                                                                                                
07/13/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
07/13/06       (H)       JUD, FIN                                                                                               
07/24/06       (H)       JUD AT 10:30 AM CAPITOL 120                                                                            
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JAMES CLARK, Chief of Staff                                                                                                     
Office of the Governor                                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During discussion of HJR 301, provided                                                                     
comments and responded to questions.                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  LESIL   McGUIRE  called   the  House   Judiciary  Standing                                                             
Committee  meeting  to order  at  10:43:12  AM.   Representatives                                                             
McGuire, Gara,  Wilson, Gruenberg, and  Kott were present  at the                                                               
call to  order.   Representative Coghill  arrived as  the meeting                                                               
was in progress.                                                                                                                
                                                                                                                                
HJR 301 - CONST. AM: LEG. APPROVAL OF GAS CONTRACTS                                                                           
                                                                                                                                
10:43:28 AM                                                                                                                   
                                                                                                                                
CHAIR McGUIRE announced that the  only order of business would be                                                               
HOUSE  JOINT  RESOLUTION NO.  301,  Proposing  amendments to  the                                                               
Constitution  of  the  State   of  Alaska  requiring  legislative                                                               
approval  of  certain  state contracts  for  the  development  of                                                               
natural gas resources.                                                                                                          
                                                                                                                                
CHAIR  McGUIRE indicated  that several  members of  the committee                                                               
wish to clarify  that the legislature has a role  in any contract                                                               
coming forward to build a  natural gas pipeline, and one proposal                                                               
to ensure that that clarification occurs  has come in the form of                                                               
HJR 301.   The goal  of this resolution  is to make  it eminently                                                               
clear  that   the  administration   respects  the  role   of  the                                                               
legislature  and  the  efforts  it has  put  into  reviewing  the                                                               
proposed Alaska  Stranded Gas  Fiscal Contract  ("ASGF Contract")                                                               
on behalf of constituents.                                                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG offered  that the goal of HJR  301 is to                                                               
ensure that  the legislature's constitutional  role "in  this" is                                                               
recognized.  He added, "I think  we all favor a good gas pipeline                                                               
-  it's important  for  the  state -  but  the  balance of  power                                                               
requires  that  both  the legislative  branch  and  the  governor                                                               
participate in that effort."                                                                                                    
                                                                                                                                
10:45:34 AM                                                                                                                   
                                                                                                                                
JAMES  CLARK, Chief  of Staff,  Office of  the Governor,  relayed                                                               
that  he has  been  the  chief negotiator  in  the ASGF  Contract                                                               
[discussions],  and  indicated   that  the  administration  takes                                                               
seriously  the point  raised by  the committee  as well  as other                                                               
legislators;  the   administration  respects  the  role   of  the                                                               
legislature, is  very cognizant  of it,  and has  been proceeding                                                               
all  along  under  the  notion that  the  legislature's  role  is                                                               
critical.  He added:                                                                                                            
                                                                                                                                
     We've said over and again that the [amendments to the                                                                      
       Alaska Stranded Gas Development Act] needed to be                                                                        
     passed to  give us the legislative  authorization to go                                                                    
     forward.  There's just no  doubt we've told people over                                                                    
     and [over] again that we  don't have the authority with                                                                    
     respect to fiscal certainty, and  we've made that clear                                                                    
     to the  producers, the public,  and to  the legislature                                                                    
     that we need  that authority from the  legislature.  So                                                                    
     we were  quite surprised by your  legislative counsel's                                                                    
     opinion  that there  was a  separation of  powers issue                                                                    
     such that we didn't have to come to the legislature.                                                                       
                                                                                                                                
     We of course rely on  our own attorney general for what                                                                    
     the law is  in this area, ... [and will  provide to the                                                                    
     committee] a  letter from the attorney  general which I                                                                    
     believe makes it  absolutely clear that we  see the law                                                                    
     as  requiring  legislative approval  and  ratification.                                                                    
     And  the governor  is aware  of the  attorney general's                                                                    
     opinion as is stated in  the last sentence of the first                                                                    
     paragraph  of the  letter and  in  the ...  penultimate                                                                    
     paragraph of  the letter.   We  - the  attorney general                                                                    
     and I -  have been participating in  these meetings and                                                                    
     made clear  to the governor  that the law  requires, as                                                                    
     he  thought it  did,  ... [the]  legislature's role  in                                                                    
     this.                                                                                                                      
                                                                                                                                
     And so  when we say we're  going to follow the  law, we                                                                    
     believe the law requires  that the legislature pass the                                                                    
     amendments,  which we'd  urge you  to pass  as soon  as                                                                    
     possible, and ratify the contract,  which we believe is                                                                    
     in the  interest of the  state given what the  gas line                                                                    
     will do for  us and what will happen to  us in terms of                                                                    
     revenue sources if  there is no gas line.   So with the                                                                    
     notion of  ... at  least our internal  analysis showing                                                                    
     [the Trans-Alaska  Pipeline System (TAPS)]  running dry                                                                    
     by  2030,  and  the  lead  time  it  takes  to  put  in                                                                    
     infrastructure of  this type, we  would urge us  all to                                                                    
     focus on  the amendments  and getting your  approval of                                                                    
     those amendments and moving on to ratification.                                                                            
                                                                                                                                
MR. CLARK concluded by saying that what is contained in the                                                                     
aforementioned letter by the attorney general is the working                                                                    
understanding of the administration "since day one."                                                                            
                                                                                                                                
10:49:39 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said  he  has  reviewed  the  attorney                                                               
general's letter,  he agrees  with Mr.  Clark's summation  of it,                                                               
and he takes the governor at his  word.  He asked that the letter                                                               
be disseminated to other members of the legislature, the press,                                                                 
and the public.  He went on to say, "And with that I don't see a                                                                
need for the resolution."                                                                                                       
                                                                                                                                
REPRESENTATIVE GARA said:                                                                                                       
                                                                                                                                
     Let's  be clear  about  this, Mr.  Clark, because  this                                                                    
     answer's a long time coming.   Are you committing to us                                                                    
     that if  the legislature  says, "No,  we want  a better                                                                    
     contract,"   if  a   court   says,   "You  don't   need                                                                    
     legislative approval,"  so that part is  irrelevant, if                                                                    
     we give  you the amendments  you want, the  law changes                                                                    
     you want,  so that you can  sign this contract -  so if                                                                    
     those three  things happen, we give  you the amendments                                                                    
     you want,  the legislature thinks the  contract doesn't                                                                    
     protect the people of the  state of Alaska, and a court                                                                    
     says  you don't  need legislative  approval -  will the                                                                    
     governor commit  not to  sign a  contract that  we have                                                                    
     rejected?                                                                                                                  
                                                                                                                                
MR. CLARK replied:                                                                                                              
                                                                                                                                
     We believe  that this contract  will go forward  to the                                                                    
     [Alaska Supreme  Court], and when  it does - as  we say                                                                    
     in the letter  - we don't want  legislative approval or                                                                    
     the lack thereof to be one  of the issues that comes up                                                                    
     before  the   [Alaska  Supreme  Court].     We  have  a                                                                    
     different view of ... how  separation [of] powers works                                                                    
     in this case than your  legislative counsel does, so we                                                                    
     are not going  to argue about the  legislature having a                                                                    
     role  here.  ... Again,  we  believe  that having  your                                                                    
     approval  will  help  us  before  the  [Alaska  Supreme                                                                    
     Court].                                                                                                                    
                                                                                                                                
     So what have we been  doing?  Actions speak louder than                                                                    
     words, and we have called  two special sessions.  If we                                                                    
     didn't think  we needed your approval  we wouldn't have                                                                    
     done that.   We wouldn't  have told everybody  at every                                                                    
     public meeting  that we don't have  authority under the                                                                    
     [Alaska  Stranded Gas  Development  Act]  to pass,  for                                                                    
     example, the  [production profits  tax (PPT)]  or grant                                                                    
     fiscal  certainty  on   oil  without  the  legislature.                                                                    
     We've been  very, very public  in saying what  we think                                                                    
     the legislative  role is, which is  consistent with the                                                                    
     letter  - as  Representative Gruenberg  has said  - and                                                                    
     we're  just  going to  continue  to  plow that  course;                                                                    
     we're going  to do everything  we can to work  with you                                                                    
     to persuade you that we have heard the public. ...                                                                         
                                                                                                                                
     We have  been out  going back with  our third  phase of                                                                    
     our public process, and we  have held hearings all over                                                                    
     the  state  ... to  inform  people  of areas  where  we                                                                    
     understand  the  legislature  wants changes.    One  of                                                                    
     those areas  is ... the  need to [have]  something with                                                                    
     respect to  fiscal certainty.   This  committee, before                                                                    
     the ...  [last special session] ended,  had a committee                                                                    
     substitute before  it that spoke  to those issues.   Of                                                                    
     course we're going  to work with you and  the public to                                                                    
     try to get a resolution so we can move on with this.                                                                       
                                                                                                                                
     I don't  think that our administration  has done enough                                                                    
     to explain to  the public the two futures  we have, one                                                                    
     without a gas  line and what happens  to state revenues                                                                    
     when we hit  2030 and the TAPS grinds  to halt; imagine                                                                    
     if you  will what Alaska  [will] be like  without [the]                                                                    
     TAPS  and what  would happen  if we  didn't have  those                                                                    
     revenues.  ... Last  week the  TAPS  put out  [638,000]                                                                    
     barrels of oil  ... [and] it's going down  at 6 percent                                                                    
     a year; we need to replace that revenue.                                                                                   
                                                                                                                                
     It  is just  the high  cost of  oil that's  masking the                                                                    
     decline that's  going on, and any  responsible official                                                                    
     that  sits in  the  governor's office  and sees  what's                                                                    
     going to  happen to our  revenue over time and  what we                                                                    
     need by  way of a budget  to run this state  fairly and                                                                    
     equitable for the people of  the state would just plead                                                                    
     with you to focus on getting  a gas line for the state,                                                                    
     and  if we  need to  make  changes to  make that  work,                                                                    
     we'll  work with  you to  make those  changes.   You've                                                                    
     been  responsible, we've  been responsible,  but Alaska                                                                    
     has to  have a gas line;  that will extend the  life of                                                                    
     [the] TAPS  for 20 years, give  us a chance to  be able                                                                    
     to do  the research and development  necessary to reach                                                                    
     the  heavy  oil  that  we think  is  about  13  billion                                                                    
     barrels (indisc.)  Prudhoe Bay, [and] we  can reach the                                                                    
     gas necessary  to keep that  gas line alive,  we think,                                                                    
     with the  potential for gas hydrates  for 50-100 years.                                                                    
     So we need the gas line.                                                                                                   
                                                                                                                                
10:55:11 AM                                                                                                                   
                                                                                                                                
CHAIR McGUIRE noted that the unique aspect of the ASGF Contract                                                                 
is that the governor and the administration decided to negotiate                                                                
it under the  Alaska Stranded Gas Development Act,  which has the                                                               
framework  to provide  certain incentives,  Payments  in Lieu  of                                                               
Taxes  (PILT),   and  other  things  that   are  traditionally  a                                                               
legislative  function.   So the  concern, she  surmised, is  that                                                               
because the  packet of legislation placed  before the legislature                                                               
will allow the  administration to negotiate a  contract under the                                                               
terms  of  the Alaska  Stranded  Gas  Development Act,  the  ASGF                                                               
Contract  could be  disapproved by  the legislature  and yet  the                                                               
governor  or  administration  could  still  go  forward  with  it                                                               
despite that  disapproval.  Ordinarily  the governor  enters into                                                               
many  contracts, but  the ASGF  Contract is  a very  specific and                                                               
unique contract - the magnitude of  it, the fact that it provides                                                               
for PILT and that takes  away the legislature's historic powers -                                                               
and this has  raised the concern of the  House Judiciary Standing                                                               
Committee.  She added:                                                                                                          
                                                                                                                                
     We  just wanted  it clear  on the  record ...  that our                                                                    
     work here is important and  that it will be recognized.                                                                    
     Certainly  ... there  are members  that  have felt  ...                                                                    
     [that]  digging  in,  rolling  up  their  sleeves,  and                                                                    
     working on  the [Alaska  Stranded Gas  Development Act]                                                                    
     amendments wouldn't  really be  worth their time  if at                                                                    
     the end of the day their role wasn't envisioned.                                                                           
                                                                                                                                
MR. CLARK indicated that the  administration believes that having                                                               
legislative approval  is the law,  and that  the administration's                                                               
position  before the  Alaska Supreme  Court will  be enhanced  by                                                               
having that  approval.  He  said he  is not sure  why Legislative                                                               
Legal  and Research  Services  has a  different  opinion on  this                                                               
issue.                                                                                                                          
                                                                                                                                
10:57:51 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GRUENBERG   said  he  agrees  with   Mr.  Clark's                                                               
comments  regarding the  pipeline and  the need  to continue  [to                                                               
pursue]  a solid  and  foreseeable [source  of  revenue] for  the                                                               
state.  However,  he remarked, he has  seen circumstances wherein                                                               
a   governor  has   signed  an   agreement  despite   legislative                                                               
disapproval, and that precedent disturbs  him and was the impetus                                                               
for  having HJR  301  drafted.   He offered  his  belief that  AS                                                               
43.82.435  requires   legislative  authorization,  and   that  by                                                               
signing that  provision into law  the governor was  agreeing that                                                               
any contract developed under the  Alaska Stranded Gas Development                                                               
Act must be brought to the  legislature and that the Act binds or                                                               
estops the  executive branch from  taking a position  contrary to                                                               
that statute.  He said he  is glad to see that the administration                                                               
is taking that view as well,  that the governor will defer to the                                                               
legislature.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOTT  expressed  doubt  that  the  aforementioned                                                               
contract that was signed without  legislative approval was of the                                                               
same magnitude  as the ASGF  Contract.   He said that  in viewing                                                               
the  attorney general's  letter,  he  agrees with  Representative                                                               
Gruenberg that  HJR 301  is no longer  necessary, though  that is                                                               
not to  say that perhaps that  issue shouldn't be taken  up again                                                               
at  a later  point in  time.   He  said  he has  no qualms  about                                                               
believing  what  the administration  has  said  via that  letter.                                                               
Furthermore,  should  the  administration  act  contrary  to  the                                                               
position  stated  in  that  letter,  the  legislature  still  has                                                               
recourse  via the  filing of  an  injunction through  Legislative                                                               
Council.                                                                                                                        
                                                                                                                                
11:02:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WILSON  said   she  agrees  with  Representatives                                                               
Gruenberg and Kott.   She noted that going forward  with the ASGF                                                               
Contract  will require  funds, and  the  legislature has  control                                                               
over  that.   With regard  to the  administration, she  added, "I                                                               
trust what they say is actually what they will do."                                                                             
                                                                                                                                
MR. CLARK concurred on the issue of funds.                                                                                      
                                                                                                                                
REPRESENTATIVE GARA said:                                                                                                       
                                                                                                                                
     I know it's  a complex question, but this is  the one I                                                                    
     want  the  answer to:    Assume  the legislature  says,                                                                    
     "No,"   assume  the   courts  say,   "You  don't   need                                                                    
     legislative approval,"  and assume we've now  given you                                                                    
     all the  amendments you need  to make this  contract "a                                                                    
     go"  - the  governor's sitting  there at  his desk  and                                                                    
     he's  deciding whether  or not  to  sign this  contract                                                                    
     anyway now that he  realizes legislative approval's not                                                                    
     required -  will the governor  commit to not  sign that                                                                    
     contract,  and  will  the  governor  commit,  then,  to                                                                    
     negotiate  and try  [to] ...  correct the  problems the                                                                    
     legislature's identified.   That's  the question.   You                                                                    
     may  have intended  to answer  that, but  I heard  some                                                                    
     wiggle room.                                                                                                               
                                                                                                                                
MR. CLARK stated:                                                                                                               
                                                                                                                                
     What   you're  talking   about  is   inconsistent  with                                                                    
     Article IX,   Section   4,   [of   the   Alaska   State                                                                    
     Constitution]  which  requires  a  legislative  act  to                                                                    
     provide  exemptions  necessary  ...   to  give  us  the                                                                    
     authority for  fiscal certainty.   Fiscal  certainty is                                                                    
     one  of the  key  elements  of the  deal,  so ...  your                                                                    
     hypothetical  doesn't  hold  water;  ... it  is  not  a                                                                    
     construct that  could occur, just based  upon a reading                                                                    
     of Article  IX, Section 4.  ... We need  your approval,                                                                    
     we want your  approval, and ... we're  very anxious for                                                                    
     this committee to move forward  on the [Alaska Stranded                                                                    
     Gas  Development  Act]   amendment  package  and  other                                                                    
     matters that are pertinent to this legislation. ...                                                                        
                                                                                                                                
     If we don't have a  legislative action [in] the form of                                                                    
     an exemption, we ... can't  get fiscal [certainty], and                                                                    
     without fiscal certainty we don't  have a contract.  So                                                                    
     in some  form or other we  have got to come  up with an                                                                    
     amendment that you approve [of]  that allows for fiscal                                                                    
     certainty;  that's what  we will  take  to the  [Alaska                                                                    
     Supreme Court]  as our rationale for  our justification                                                                    
     for getting  fiscal certainty.   Now, that's  not going                                                                    
     to  be  the end  of  the  question before  the  [Alaska                                                                    
     Supreme  Court],  but  if there  is  ...  nothing  that                                                                    
     amounts to  legislative approval for  fiscal certainty,                                                                    
     we see ourselves in a very difficult (indisc).                                                                             
                                                                                                                                
11:08:05 AM                                                                                                                   
                                                                                                                                
CHAIR  McGUIRE  surmised  that   Representative  Gara  is  merely                                                               
pointing out  that the courts  have surprised the  legislature in                                                               
the  past and  that  the court  system is  a  separate branch  of                                                               
government.  Given those points,  just suppose the Alaska Supreme                                                               
Court says that the legislature  does not have a constitutionally                                                               
mandated  role  with regard  to  the  ASGF  Contract.   Will  the                                                               
governor go ahead and sign it anyway?                                                                                           
                                                                                                                                
MR. CLARK  said that  hypothetical is  so remote  and so  at odds                                                               
with how the  administration is reading the law that  he does not                                                               
want to  continue discussing the  issue.   He stated that  if the                                                               
legislature  doesn't move  forward with  the Alaska  Stranded Gas                                                               
Development  Act amendments,  the administration  won't sign  the                                                               
ASGF Contract.  He added:                                                                                                       
                                                                                                                                
     If  the [Alaska  Supreme Court]  were to  come up  with                                                                    
     something  shocking and  completely at  odds, obviously                                                                    
     we'd sit  down and  talk with you  and figure  out what                                                                    
     we'd do;  we are  not unmindful  of the  important role                                                                    
     the  legislature  plays  here under  any  circumstances                                                                    
       because of what Representative Wilson brought up,                                                                        
     namely the power of the purse strings.                                                                                     
                                                                                                                                
CHAIR McGUIRE  relayed that many  members of the  legislature are                                                               
trained to think  about the unexpected, and so if  the goal is to                                                               
recognize the role  and the power of the legislature,  one has to                                                               
anticipate  that there  might be  many roadblocks  along the  way                                                               
[towards building  a gas  pipeline], and  so the  questions being                                                               
asked pertain to how far the  administration is willing to go [to                                                               
ensure that the  legislature has a role].  She  surmised that the                                                               
administration is  willing to only  as far as  the aforementioned                                                               
attorney general's letter  and does not want to  speak further on                                                               
this issue, regardless that the questions are fair ones.                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG  noted that the  legislature disapproved                                                               
of the Exxon Valdez oil  spill settlement but the governor signed                                                               
it  anyway.    The  issue  of  whether  legislative  approval  is                                                               
constitutional  will  apply  to  contracts other  than  the  ASGF                                                               
Contract, he  remarked, but  he is  simply attempting  to ensure,                                                               
via HJR  301, that the  ASGF Contract doesn't get  signed without                                                               
legislative approval  regardless of who  the next governor  is or                                                               
who  the  next  year's  legislators   will  be.    Representative                                                               
Gruenberg  said  he  appreciates Representative  Kott's  comments                                                               
pointing out that the courts are there if necessary.  He added:                                                                 
                                                                                                                                
     I would anticipate  that if this governor  were to sign                                                                    
     the  contract without  legislative  approval, that  any                                                                    
     lawsuit  would  involve  the  legislature  as  a  party                                                                    
     weighing in  on just this issue.   And in the  court of                                                                    
     public opinion  I have no  doubt that the  public wants                                                                    
     the balance of power to be in full play here.                                                                              
                                                                                                                                
11:14:43 AM                                                                                                                   
                                                                                                                                
MR. CLARK predicted that if the  legislature were to agree to "an                                                               
amendment package"  and agree  to ratify  the contract  that came                                                               
out  of   that  amendment  package   -  and  assuming   that  the                                                               
administration had  successfully negotiated any changes  with the                                                               
producers - the contract would be  signed within 60 days of that.                                                               
And  currently one  could then  bring a  lawsuit within  120 days                                                               
regarding  the constitutionality  of "the  Act,"  and then  there                                                               
will be  a period  of a  year in which  the Alaska  Supreme Court                                                               
could  [make  a  determination]  while  the  administration  goes                                                               
forward with  the planning  phase of  the [project].   In  such a                                                               
lawsuit,  if  the Alaska  Supreme  Court  decides that  the  ASGF                                                               
Contract  violates the  Alaska State  Constitution, it  will also                                                               
outline why.  At that  point the administration, the legislature,                                                               
and the  producers can then  review that opinion and  decide what                                                               
steps to  take next.   Getting a gas line  is so critical  to the                                                               
state,  he opined,  that it  would be  irresponsible to  lose the                                                               
chance to get a  gas line contract in place.   With that in mind,                                                               
he  surmised,  the  administrative  branch  and  the  legislative                                                               
branch  will have  to  consult with  each other  if  there is  an                                                               
adverse  ruling  from  the  Alaska Supreme  Court  about  how  to                                                               
proceed.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GARA again repeated his question.                                                                                
                                                                                                                                
MR. CLARK reiterated his responses.                                                                                             
                                                                                                                                
CHAIR  McGUIRE offered  her observation  that the  administration                                                               
has answered that question  as much as it is ever  going to.  She                                                               
added:    "Turning  our  eye  toward  the  [Alaska  Stranded  Gas                                                               
Development Act] amendments, ... I  think that's where it will be                                                               
incumbent upon this  committee to see what type  of amendments we                                                               
want to  approve ..., what that  contract is going to  look like,                                                               
... [so as  to ensure] that what comes out  of here reflects what                                                               
we envision ... as part of a contract."                                                                                         
                                                                                                                                
11:23:19 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KOTT pointed  out that  if Representative  Gara's                                                               
hypothetical example were  to play out -  the legislature rejects                                                               
the contract,  the legislature's authority to  approve a contract                                                               
is challenged and shot down,  and the governor signs the contract                                                               
without  legislative   approval  -  nothing  would   prevent  the                                                               
legislature from  calling itself into special  session and taking                                                               
this proposed constitutional  amendment up at that  time in order                                                               
to put the issue before the voters.                                                                                             
                                                                                                                                
CHAIR  McGUIRE   mentioned  that  Representative   Gruenberg  has                                                               
received   and  distributed   a   series   of  memorandums   from                                                               
Legislative Legal  and Research Services regarding  impairment of                                                               
contracts,  and  that  the legislature  could  call  itself  into                                                               
special  session with  the goal  of repealing  the entire  Alaska                                                               
Stranded  Gas  Development Act,  though  doing  the latter  could                                                               
raise the  question of whether  [that] legislative action  was in                                                               
fact  an  impairment  of  a  contract  that  had  [already]  been                                                               
negotiated.                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA  yet again asked:   "If the  legislature says                                                               
no,  and a  court said  you didn't  need our  approval, will  you                                                               
agree not to go ahead with the contract?"                                                                                       
                                                                                                                                
MR. CLARK reiterated that the  administration would first need to                                                               
see  any such  court opinion  and then  the administration  would                                                               
consult with  the legislature  because there is  no way  to avoid                                                               
working with the  legislature on this contract  and any resulting                                                               
project.   He  concluded by  saying  that if  the Alaska  Supreme                                                               
Court    stipulates   any    constraints   regarding    how   the                                                               
administration is to work with  the legislature on these matters,                                                               
then   the  administration   will   have  to   follow  the   law.                                                               
Acknowledging    Representative    Kott's   comments    regarding                                                               
introducing  a constitutional  amendment  later if  it is  deemed                                                               
necessary,  Mr. Clark  expressed  a preference  for dealing  with                                                               
such an issue only if and when it actually arises.                                                                              
                                                                                                                                
[HJR 301 was held over.]                                                                                                        
                                                                                                                                
[Following  was a  brief discussion  regarding how  the committee                                                               
would be proceeding on a different bill.]                                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Judiciary Standing Committee meeting was adjourned at 11:29 a.m.                                                                

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