Legislature(2005 - 2006)

05/06/2005 08:12 AM Joint BUD

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08:12:08 AM Start
08:12:53 AM Ferc Order No. 2005 || Scr15
08:26:16 AM Other Committee Business
08:37:50 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
        JOINT COMMITTEE ON LEGISLATIVE BUDGET AND AUDIT                                                                       
                          May 6, 2005                                                                                           
                           8:12 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Gene Therriault, Chair                                                                                                  
Representative Ralph Samuels, Vice Chair                                                                                        
Senator Bert Stedman                                                                                                            
Senator Lyda Green                                                                                                              
Senator Lyman Hoffman                                                                                                           
Representative Mike Chenault                                                                                                    
Representative Mike Hawker                                                                                                      
Representative Beth Kerttula                                                                                                    
Senator Gary Wilken, alternate                                                                                                  
Representative Kevin Meyer, alternate                                                                                           
MEMBERS ABSENT                                                                                                                
Senator Ben Stevens                                                                                                             
Representative Pete Kott                                                                                                        
Representative Reggie Joule, alternate                                                                                          
COMMITTEE CALENDAR                                                                                                            
FERC ORDER NO. 2005                                                                                                             
OTHER COMMITTEE BUSINESS                                                                                                        
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
DONALD C. SHEPLER, Counsel                                                                                                      
Legislative Budget and Audit Committee                                                                                          
Washington, D.C.                                                                                                                
POSITION STATEMENT: Explained the Federal Energy Regulatory                                                                     
Commission (FERC) regulations governing the conduct of open                                                                     
seasons for Alaska natural gas transportation projects.                                                                         
JOE BALASH, Staff to Senator Therriault                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Offered information about Senate Concurrent                                                                
Resolution 15.                                                                                                                  
ACTION NARRATIVE                                                                                                              
CHAIR  GENE THERRIAULT  called the  Legislative Budget  and Audit                                                             
Committee meeting to  order at 8:12:08 AM.   Senators Therriault,                                                             
Stedman,  Hoffman, Wilken,  and Representatives  Samuels, Hawker,                                                               
Kerttula, and Meyer  were present at the call to  order.  Senator                                                               
Green and Representative  Chenault arrived as the  meeting was in                                                               
^FERC ORDER NO. 2005                                                                                                          
SCR 15-LB&A TO LITIGATE GAS PIPELINE CASE                                                                                     
8:12:53 AM                                                                                                                    
CHAIR THERRIAULT announced that the  only order of business would                                                               
be Senate  Concurrent Resolution  (SCR) 15, which  authorizes the                                                               
Joint Committee  on Legislative  Budget and  Audit to  enter into                                                               
litigation  regarding the  Federal  Energy Regulatory  Commission                                                               
(FERC) Order  No. 2005.   The fore mentioned order  contained the                                                               
regulations  for conduct  regarding the  open season  methodology                                                               
for the gas pipeline.                                                                                                           
8:13:19 AM                                                                                                                    
JOE   BALASH,  Staff   to   Senator   Therriault,  Alaska   State                                                               
Legislature, turned to the memorandum  from Legislative Legal and                                                               
Research  Services,  which  lays  out the  rationale  behind  the                                                               
aforementioned  resolution.    He relayed  that  the  Legislative                                                               
Budget and  Audit Committee, similar to  Legislative Council, has                                                               
the statutory  authority to  sue in the  name of  the legislature                                                               
between sessions.   Chevron filed  its complaint in  the district                                                               
court  of appeals  in Washington  D.C., on  April 8,  2005, hence                                                               
there is 30  days to intervene, which places the  date on [May 8,                                                               
2005].   He offered that the  delegation of the authority  to the                                                               
committee was necessary.                                                                                                        
8:14:41 AM                                                                                                                    
CHAIR THERRIAULT opined  that the committee could  have taken the                                                               
action without  the resolution  if the court  period to  file had                                                               
gone into  the interim,  but while  the legislature  is available                                                               
the statutes require the legislature to prompt the action.                                                                      
8:15:06 AM                                                                                                                    
DONALD  C.   SHEPLER,  Counsel,  Legislative  Budget   and  Audit                                                               
Committee, characterized  this as a technical,  legal, procedural                                                               
matter that  has to  be filed no  later than [May  9, 2005].   He                                                               
explained that  the committee participated  in the FERC  rule and                                                               
those proceedings  have moved  on to the  court of  appeals; this                                                               
motion makes  the committee a  party to  that appeal so  that the                                                               
committee can continue to take  whatever action is appropriate to                                                               
maintain the  standing of the FERC  order.  With the  approval of                                                               
the  committee, Mr.  Shepler said  that he  was prepared  to file                                                               
this in the D.C. circuit on May 9, 2005.                                                                                        
CHAIR THERRIAULT  inquired as  to when the  next decision  in the                                                               
legal proceeding may come.                                                                                                      
MR. SHEPLER reminded the committee  that FERC issued its order on                                                               
February  9, 2005,  to  become  effective 90  days  after it  was                                                               
published in  the federal register,  which he estimated to  be in                                                               
mid-May.   He related that a  number of parties have  filed for a                                                               
rehearing  of  the FERC  order  and  FERC  has taken  that  under                                                               
advisement.  He related his belief  that once FERC meets [May 18,                                                               
2005,] the commission might address  the rehearing request.  Once                                                               
FERC acts on  rehearing, it's expected that others  would seek to                                                               
appeal or possibly  ask for further rehearing to  the extent that                                                               
FERC might  make changes.   He suspected that  the aforementioned                                                               
situation might  "start the clock"  for more appeals  being filed                                                               
in the court of appeals.   He highlighted that under D.C. circuit                                                               
rules, once the Legislative Budget  and Audit Committee is made a                                                               
party to the Chevron appeal the  committee becomes a party to all                                                               
of  the appeals  that are  subsequently filed,  appealing in  the                                                               
same order.   Therefore, once  the motion to intervene  is filed,                                                               
the committee will  then be party to all the  proceedings that go                                                               
into the court  of appeals.  The federal statute  under Order No.                                                               
2005 provides  that all appeals  from any FERC action  under that                                                               
statute have to be lodged  in the Washington, D.C., circuit court                                                               
of appeals and the court  has to treat the appeals expeditiously.                                                               
After  the intervention  a  provision of  time  within which  the                                                               
respondent, FERC,  has to file  in order  to dismiss the  case on                                                               
whatever grounds it  may seek to do.  Thereafter,  the court will                                                               
establish a  briefing schedule  for the  appeal, which  will most                                                               
likely be established  after the other appeals to be  filed in 60                                                               
days  after the  order on  rehearing comes  out.   At some  point                                                               
within the next 90 days, there  ought to be established some sort                                                               
of briefing  schedule for all of  the appeals of Order  No. 2005,                                                               
he  added.   The  requirement that  the  judicial proceedings  be                                                               
expedited will [require] formal arguments  on the appeal and then                                                               
a  decision.   The  exact  timeline  is undetermined  because  it                                                               
depends upon the  court's briefing schedule.   However, some time                                                               
within this  month the FERC  will dispose of the  pending request                                                               
for hearing,  after which parties  can then proceed to  the court                                                               
of appeals if they so choose, he added.                                                                                         
8:21:34 AM                                                                                                                    
REPRESENTATIVE  SAMUELS asked  what the  range of  finality dates                                                               
might be.                                                                                                                       
MR. SHEPLER estimated that the final  finality will be at the end                                                               
of year.                                                                                                                        
8:21:58 AM                                                                                                                    
CHAIR THERRIAULT  related his opinion  that other than  filing in                                                               
order to  get placement in  the court proceedings,  the committee                                                               
may choose  to take no further  action in the filing  but it will                                                               
receive all of the action brought to the court.                                                                                 
MR. SHEPLER  replied that  the committee is  not obligated  to do                                                               
anything.   Since there  was no appeal  filed, because  the order                                                               
was perceived  as favorable, the  committee has no right  to file                                                               
any  briefs.   However,  by  being  an intervener  the  committee                                                               
becomes  a  party  to  the   case  and  will  receive  copies  of                                                               
everything that is filed in  the court proceedings on this appeal                                                               
and all  subsequent appeals for  Order No.  2005.  He  added that                                                               
the committee can only take actions if it's an intervener.                                                                      
8:23:16 AM                                                                                                                    
CHAIR THERRIAULT  related his  understanding that  intervening on                                                               
this  case  automatically makes  the  committee  a party  to  any                                                               
subsequent  legal challenges  brought  forth by  any  party.   He                                                               
asked  if the  aforementioned is  because the  court consolidates                                                               
all of the appeals cases.                                                                                                       
MR.  SHEPLER  answered  that  Court Rule  15(b)  states  that  an                                                               
intervener in  a proceeding is  [automatically] an  intervener in                                                               
all subsequently  filed appeals for  the Court of Appeals  in the                                                               
same  case.   He related  his belief  that any  subsequent appeal                                                               
would  be  consolidated into  one  oral  argument and  one  court                                                               
appeal decision.                                                                                                                
8:24:26 AM                                                                                                                    
REPRESENTATIVE  SAMUELS moved  that  the  Legislative Budget  and                                                               
Audit Committee authorize  Mr. Shepler to file the  motion in the                                                               
U.S. Court  of Appeals for  the District of Columbia  Circuit and                                                               
to authorize  the Chair to order  further motions to be  filed by                                                               
the Legislative  Budget and Audit  Committee attorney  during the                                                               
interim on the same subject.                                                                                                    
CHAIR THERRIAULT, in response to  Mr. Shepler, clarified that the                                                               
Legislative Budget and Audit Committee  would intervene on behalf                                                               
of the legislature.                                                                                                             
MR.  SHEPLER noted  then,  in  that case,  the  draft [motion  to                                                               
intervene] may need  to be reworded.  He said  he assumed that he                                                               
would have the purview to do so.                                                                                                
CHAIR THERRIAULT confirmed that.                                                                                                
8:25:27 AM                                                                                                                    
A roll  call vote was  taken.  Senators Hoffman,  Stedman, Green,                                                               
Wilken,  and Therriault,  and Representatives  Samuels, Chenault,                                                               
Hawker,  Kerttula, and  Meyer voted  in  favor of  the motion  to                                                               
authorize Mr.  Shepler to file  the motion  in the U.S.  Court of                                                               
Appeals for  the District of  Columbia Circuit and  authorize the                                                               
Chair to  order further  motions to be  filed by  the Legislative                                                               
Budget  and  Audit  Committee  during the  interim  on  the  same                                                               
subject.  Therefore, the motion passed by a vote of 10-0.                                                                       
^OTHER COMMITTEE BUSINESS                                                                                                     
8:26:16 AM                                                                                                                    
MR. BALASH  related that next  Wednesday the committee  will meet                                                               
to  provide  updates  and feedback  regarding  what  the  federal                                                               
agencies  have done  in preparation  for  the receipt  of a  FERC                                                               
certificate  on  the  Natural  Gas  Pipeline Act  of  2004.    He                                                               
explained that  FERC was vested  with the  coordination authority                                                               
to oversee the  permitting and certification of  the pipeline and                                                               
will be speaking  about the status of regulations  on the federal                                                               
loan guarantees.                                                                                                                
8:28:09 AM                                                                                                                    
SENATOR  WILKEN requested  that  the Chair  issue  a request  for                                                               
proposals (RFP)  in order  to "slow down  a train  that's running                                                               
down the  tracks and  it's rolling  over our  efforts ...  to put                                                               
forth a high school qualifying  exam that is valid and reliable."                                                               
He  reminded  the committee  that  the  new qualifying  exam  was                                                               
implemented  in  April  and  was   panned  across  the  state  as                                                               
inadequate  and  not a  good  measurement  of the  third  through                                                               
eleventh grade  students.   He recalled that  House Bill  146 was                                                               
when  the  legislature   started  the  work  on   a  high  school                                                               
qualifying  exam  and  approximately  $20 million  was  spent  to                                                               
develop a test.   In 2001, the federal  government instituted the                                                               
No Child  Left Behind (NCLB).   In December  2003, a new  RFP was                                                               
issued and  a new test was  started but it has  since been rushed                                                               
into existence and was administered in  April of this year.  As a                                                               
result of the April test, the  commissioner is setting up the cut                                                               
scores for the tests in October.   He related his belief that the                                                               
test is flawed in compilation,  content, administration, and does                                                               
not reflect an  adequate sampling of the population  on which the                                                               
cut scores should  be based.  He requested the  Chair to slow the                                                               
test down and write the  commissioner a letter requesting that he                                                               
wait [to establish the cut scores].   He further requested that a                                                               
third party assess the situation.                                                                                               
SENATOR  WILKEN read  aloud  a letter  from  his school  district                                                               
explaining  how difficult  the tests  were.   The letter  related                                                               
that normally these type of tests  take between 2 to 3 hours, but                                                               
this test took 5  to 6 hours a day.   Furthermore, the tests were                                                               
3 day  tests and the  math was on the  third day when  the fourth                                                               
graders were exhausted.   The letter went on to  relate that some                                                               
of the  questions had no  correct answers; the  reading questions                                                               
were in  the math books;  test books were collated  backwards and                                                               
thus some  students took the test  in reverse order.   The fourth                                                               
through  ninth graders  had  two test  booklets  that were  11x19                                                               
inches, one of which was the  question book and the other was the                                                               
answer book.   Furthermore, imbedded  into the test  were between                                                               
15 to 39 new  questions that were the basis of  the next level of                                                               
the  test,  although those  questions  haven't  been verified  or                                                               
validated.  He opined that the test has failed.                                                                                 
SENATOR  WILKEN  turned  to  the report  he  requested  from  the                                                               
department  and  showed  the  committee  how  unintelligible  the                                                               
report  was because  it  was a  photo file,  which  is unable  to                                                               
change font  sizes.   The aforementioned is  the typical  kind of                                                               
frustration that  one experiences when  trying to deal  with this                                                               
issue.  He offered his belief  that the state is rushing headlong                                                               
into millions  of dollars in  lawsuits.  Furthermore,  the school                                                               
boards are  going to  be overwhelmed  from parents  with children                                                               
who are  spending 6  to 7  hours daily,  3 days  a week  taking a                                                               
cumbersome test.   He  asked the  Chair to  help slow  down these                                                               
tests so the tests in October  aren't based on a very bad picture                                                               
of where they're at today.                                                                                                      
8:35:17 AM                                                                                                                    
SENATOR GREEN  explained that she  doesn't disagree,  but pointed                                                               
out  that there  are two  Health, Education  and Social  Services                                                               
Standing Committees  and a House  Special Committee  on Education                                                               
[that can address this matter].   This is a policy issue not just                                                               
a  Legislative Budget  and  Audit Committee  position.   All  the                                                               
parties should be  involved, she opined.  She asked  if there was                                                               
a  crossover between  the high  school qualifying  exams and  the                                                               
grade level exams.                                                                                                              
SENATOR WILKEN  responded that  there are  two sections  and both                                                               
have  problems.   Additionally, there  are questions  imbedded in                                                               
8:36:18 AM                                                                                                                    
SENATOR  GREEN replied  there will  always be  questions imbedded                                                               
because that  is how they prepare  the next round of  tests.  She                                                               
opined that the committee needs to  be careful before a letter is                                                               
sent out.                                                                                                                       
8:36:37 AM                                                                                                                    
CHAIR THERRIAULT said he would  discuss the presented information                                                               
with  Senator Wilken  and the  Chairs of  the individual  Health,                                                               
Education and  Social Services Standing Committee  regarding what                                                               
action they need to take  versus what action this committee needs                                                               
to take.                                                                                                                        
8:37:10 AM                                                                                                                    
SENATOR  WILKEN said  he would  distribute the  earlier mentioned                                                               
letter  from  his  district  relating  the  problems  one  school                                                               
district had with the test.                                                                                                     
8:37:28 AM                                                                                                                    
SENATOR GREEN  encouraged members  to gather information  on this                                                               
matter  and   they  could  personally  write   opinions  and  ask                                                               
CHAIR  THERRIAULT  requested  that Senator  Wilken's  staff  make                                                               
packets with regard to what  is the pertinent information for all                                                               
members to consider.                                                                                                            
8:37:50 AM                                                                                                                    
There being no further business before the committee, the                                                                       
Legislative Budget and Audit Committee meeting was adjourned at                                                                 
8:37 a.m.                                                                                                                       

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