02/01/1996 09:10 AM Senate FIN

                                                                               
  SPONSOR SUBSTITUTE FOR SENATE JOINT RESOLUTION NO. 14                        
                                                                               
       Proposing amendments  to the  Constitution of  the                      
       State  of  Alaska  relating  to  confirmation   of                      
       appointments of  public  members who  serve  on  a                      
       board  or  commission involved  with  managing the                      
       assets of the Alaska permanent fund.                                    
                                                                               
                                                                               
  [Tape malfunction.  The following portion of the meeting was                 
  not  recorded.  Minutes  reflect transcription  of shorthand                 
  notes.]                                                                      
                                                                               
  Co-chairman Halford directed that SSSJR 14 be brought on for                 
  discussion  and explained that while the original resolution                 
  applied  to  a number  of  public corporations,  the sponsor                 
  substitute deals  only with the  permanent fund  board.   He                 
  noted  the inherent irony  in the fact  that the legislature                 
  confirms   appointments  to   the  board   of  barbers   and                 
  hairdressers but does  not confirm appointment of  those who                 
  oversee  management  of  the  state's  $15  billion  savings                 
  account.                                                                     
                                                                               
  Senator Donley voiced  his belief that the  broader reach of                 
  the  original  resolution  was  worth  consideration.     He                 
  expressed need for a legal opinion covering all corporations                 
  that  manage  state  assets.    He  also noted  need  for  a                 
  definition of  "state asset" and recommended  first defining                 
  the term and then passing the resolution.  He suggested that                 
  a state assets consists  of tangible property or a  block of                 
  money under a particular agency's control.                                   
                                                                               
  Senator Rieger advised he was  comfortable with the original                 
  version  of  the  resolution  but   concurred  in  need  for                 
  statutory definition of "state asset."                                       
                                                                               
  JIM  BALDWIN,  Assistant   Attorney  General,   Governmental                 
  Relations  Section,   Dept.  of   Law,  again  came   before                 
  committee.  He confirmed that the sponsor substitute narrows                 
  the scope of the original resolution and stressed that  some                 
  public corporations have corporate rather than state assets.                 
  The power of  appointment is  an executive branch  function.                 
  The  resolution goes  beyond the constitutional  division of                 
  powers between the branches.                                                 
                                                                               
                                                                               
  Co-chairman Halford  explained that  he simplified SSSJR  14                 
  because   of  difficulties  and   questions  raised  by  the                 
  original.  A  super majority is needed  to achieve consensus                 
  for a  constitutional amendment.   He  then queried  members                 
  regarding  whether the  resolution should  address only  the                 
  permanent fund board or other major corporations that handle                 
  "billions of dollars  in state  assets" and operate  totally                 
  outside  the appointment  and  confirmation  process.    Co-                 
  chairman Frank  voiced support  for the  original.   Senator                 
  Donley reiterated  need for  a legal  opinion defining  what                 
  constitutes  a state  asset versus  a corporate asset.   Co-                 
  chairman Frank suggested that it would be difficult to infer                 
  that a state-owned  corporation does  not consist of  state-                 
  owned assets.  Senator Donley concurred but noted that there                 
  may be  instances where  provisions within  the articles  of                 
  incorporation insulate the state from lawsuits  or liability                 
  for actions of the public corporation.                                       
                                                                               
  Senator Zharoff inquired  concerning the current  definition                 
  of "cause."  Mr.  Baldwin informed members that removal  for                 
  cause  generally  involves the  offense  of  moral turpitude                 
  unless removal for  incompetence or  inattention to duty  is                 
  expressly stated.  Application differs  from board to board.                 
  The  permanent  fund statute  states  that the  governor may                 
  remove  a trustee by merely  stating his reasons in writing.                 
  That is, in essence, an at-pleasure appointment.                             
                                                                               
  In the course  of further  discussion of for-cause  removal,                 
  Mr. Baldwin referenced a past  conflict between 39.05.080 (a                 
  general right to remove at pleasure) and appointments to the                 
  board of  fisheries.   The legislature  subsequently removed                 
  the ambiguity.   Mr. Baldwin  concurred that if  the statute                 
  for a  particular board  is silent, everyone  serves at  the                 
                                                                               
                                                                               
  pleasure of the governor.                                                    
                                                                               
  When again queried by the  Co-chairman regarding whether the                 
  resolution should  be restricted  to the  permanent fund  or                 
  cover  a  number  of   public  corporations,  Senator  Randy                 
  Phillips voiced support for broad application.  Both Senator                 
  Zharoff and Senator Donley reiterated need for definition of                 
  "state asset."   Co-chairman  Halford acknowledged that  the                 
  definition   is  inherent  in   expanded  coverage   of  the                 
  resolution.    He then  directed  that SSSJR  14  be further                 
  reviewed  by himself,  Senator  Donley, and  Senator Rieger.                 
  SSSJR 14 was thus held in subcommittee.