Legislature(1999 - 2000)
01/25/2000 01:37 PM Senate MER
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
JOINT SPECIAL COMMITTEE ON MERGERS
January 25, 2000
1:37 P.M.
MEMBERS PRESENT
Senator Rick Halford, Chairman
Representative Joe Green, Vice-Chairman
Senator Drue Pearce
Senator Johnny Ellis
Representative Beth Kerttula
Representative Brian Porter
Representative Jim Whitaker
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
Discussion of BP Amoco/ARCO merger
PREVIOUS ACTION
See the Joint Special Committee on Mergers minutes dated 6/11/99,
7/28/99, 9/24/99, 9/25/99, 11/18/99, 11/19/99, 1/12/00, and
1/18/00.
ACTION NARRATIVE
TAPE 00-09, SIDE A
Number 001
CHAIRMAN HALFORD called the Joint Committee on Mergers
meeting to order at 1:37 p.m. and said they had turned in the
required report of their activities to date. Part of the Committee's
charge was to recommend statutory changes, but there weren't any.
The Committee didn't know what the target was because of ongoing
negotiations. He proposed a discussion of where the Committee
wanted to go from here.
SPEAKER PORTER agreed and added that he thought an opinion
from the Committee would have limited effect on the FTC's overall
decision, although he wouldn't feel uncomfortable asking BP to
revisit their original commitment for exploration and development.
For the record he read the consultant's conclusion: "The only
adequate protection for the State of Alaska's interest and for the
protection of competition to require at least the sale of ARCO's
Alaskan operations as an integrated entity with an existing
management, employees, and organization to a large domestic oil
company that would after review, appear to be fully committed to
extending ARCO's past history and position in responsibly
developing Alaska's resources."
He said according to testimony from Kevin Meyers, President
ARCO Alaska, that ARCO's position is not going to stay the same
in any event - with or without the merger. He didn't think going
back to the status quo was possible. He didn't want to offer
something when they didn't know what negotiations were going on
now.
SENATOR ELLIS asked if he objected to forwarding the
consultant's conclusions to their colleagues.
SPEAKER PORTER said no, but he wouldn't recommend for the
merger, against the merger, or neutral; and didn't want to do
anything.
SENATOR ELLIS asked if he was making a specific proposal to
continue the work and during that ask the company to revisit the
commitment of $5 billion somewhere during the Charter.
SPEAKER PORTER said what he said before was the conclusion
of his general remarks.
CHAIRMAN HALFORD said the deadline for the report has been
met, but the resolution continued the Committee through this
session. He thought a continuing review of the proposals was
appropriate. It's a question of what people want as a conclusion or
step at this point.
Number 136
REPRESENTATIVE GREEN asked if they are going beyond what
was really expected of them if they go from a review to a proponent
position.
REPRESENTATIVE KERTTULA shared everyone's concerns
about having a complex moving target, but she thought under the
resolution, it wasn't just statutory changes they were supposed to
suggest. They were supposed to take appropriate actions to insure
the best interests of the State are protected. They could talk about
conditions and commitments from BP/ARCO and maybe a consent
decree. Given the interest of the public in the State, the Committee
should put together what they agree on as findings and add
suggestions as a result of the report.
SENATOR ELLIS agreed with Representative Kerttula saying that
they are a Special Committee on the merger, not the Charter. He
thought they should be decisive and make a recommendation.
Number 212
REPRESENTATIVE WHITAKER said he thought the Committee
was agreeing with their consultants by passing on their letter and the
consultant's report. He thought developing a consensus would be
difficult and could be divisive and send no message at all.
REPRESENTATIVE KERTTULA said she would agree if they are
agreeing with what the consultants were saying, but she didn't
understand that was what they were doing.
CHAIRMAN HALFORD stated that in sending the
recommendations on, they are obviously endorsing the general
package, although everything is moving at this point. He thought the
bottom line for Alaska was to get a vertically integrated competitor
in Alaska. It sounds like the Administration's efforts were trying to
get there. It sounds like the FTC's efforts are trying to get there,
also.
REPRESENTATIVE GREEN said he is concerned that if they
come up with suggestions that are counter to negotiations coming to
a closure, the Committee might just create a lot more problems. It
seems like the FTC would either ignore their suggestions or they
would "accept things back." If the suggestions were to be ignored,
they wouldn't have accomplished anything. If the Committee has no
legal standing, whatever they recommend would be after the fact.
CHAIRMAN HALFORD said if people want an update of the latest
legal information, they could have an executive session; but he
thought it was a policy question of whether they wanted to go on and
then, in what manner.
Number 252
SENATOR PEARCE shared Representative WHITAKER's
concerns about creating a situation where the Legislature ends up
either taking action or through it's inability to take action even
though it tried, sends an extremely mixed message in terms of
support of the Charter and of the merger. She noted that the
Committee members have confidential information that other
members are not privy to and cannot be made privy to. So there is
an unequal playing field in some respects which has led to some
misunderstandings on the part of other legislators in terms of what
the merger means to Alaska. There is no way those can be cleared
up, unfortunately.
She thought it might be good to leave things as they are now and
give the Committee a chance in the future to voice its opinion on
specific issues that may come up - since this is a moving target.
Rather than tying the Legislature up into knots that even it doesn't
understand, she would feel more comfortable if they left themselves
the clear opportunity to come out with a clear committee position at
a future date on some specific questions. There were no specific
questions before them right now.
Number 294
SENATOR ELLIS said he wanted to make sure there was a clear
understanding if they adopt the report and forward it on to their
colleagues and what that means. The consultants have said the
merger is a bad idea for documented reasons. That is what it would
mean to him and he wanted to know if thats what it meant to other
members of the special committee.
CHAIRMAN HALFORD said Senator Ellis opposed the merger,
but it would be easier for him if he knew what the real merger
proposal was right now. He has heard proposals he could
conceivably support from the rumor mill, but they represent the
virtual recreation of ARCO. If they get to that point, they have
gotten to a position he can support. That's prospective.
SENATOR PEARCE moved to take the Committee into executive
session since there was confidential information that they needed to
discuss.
At approximately 2:15 p.m. the Committee went into executive
session.
The Committee reconvened at approximately 3:43 p.m.
CHAIRMAN HALFORD announced the report had been delivered
to the presiding officers and as soon as the Committee had anything
definitive to act on, they would meet again. At this point, it is
apparent that of the proposals that are currently on the table, none
of them have the legs to be anything the FTC is considering that
seriously. The Committee needs something from them before they
go forward. He asked if there were any comments.
REPRESENTATIVE KERTTULA asked if they would definitely
meet again when they were at that point.
CHAIRMAN HALFORD answered "definitely." He adjourned the
meeting at 3:44.
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