Legislature(1999 - 2000)
03/29/2000 02:00 PM House FIN
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HOUSE JOINT RESOLUTION NO. 52
Proposing an amendment to the Constitution of the State
of Alaska relating to certain public corporations.
REPRESENTATIVE JEANNETTE JAMES, SPONSOR spoke in support of
HJR 52. She referred to previous legislation, which she
sponsored regarding legislative confirmation of the Alaska
Permanent Fund Corporation Board. She clarified that she
became interested in the issue because of the elimination
and reappointment of board members at the beginning of new
administrations. She maintained that a board which manages
one of the biggest assets of the state should not be "wiped
out one day and a whole new set of folks put in the next
day." She noted that members were replaced due to a
difference in philosophy: they were of the wrong party. She
tried to tie elimination of Board members to cause. She has
no complaints regarding individual board members. She
explained that the Department of Law informed her that the
observed that the Alaska Permanent Fund Corporation Board is
not in the Constitution. Boards of existing public
corporations are not in statute. She concluded that a
constitutional amendment was needed to include the Alaska
Permanent Fund Corporation Board and other boards and
commissions into statute. She stressed that her intent is to
provide continuity.
Representative James noted that HJR 52 adds to existing
language in Alaska's Constitution, which currently provides
for legislative confirmation of all boards or commissions,
which are the head of a principal department or a regulatory
or quasi-judicial agency. The legislation adds governing
entities of a public corporation established by law, which
manage significant state assets as defined by law. She gave
examples of affected agencies: Alaska Industrial Development
and Export Authority (AIDEA), Alaska Science and Technology
Foundation, Alaska Housing Finance Corporation (AHFC),
Alaska Railroad corporation (ARRC), and Alaska Aerospace
Development Corporation.
Representative James added that the legislation also states
that: "With respect to public corporations, the legislature
may by law exclude the applicability of this section to a
public corporation." She concluded that the legislation
would allow confirmations and establish in law how the
appointments could be withdrawn or replaced. She pointed out
that the legislature confirms the boards of hairdressers and
others that do not handle huge state funds. The legislation
is permissive. She maintained that the founding fathers did
not "have a clue that we would amass so much money in so
many public corporations in this state."
Vice Chair Bunde questioned if a ballot question would
result in the perception that the legislature is trying to
get more control over the Permanent Fund. Representative
James responded that her other legislation failed because it
specifically identified the Alaska Permanent Fund
Corporation Board. She reiterated that the legislation
mentions all public corporations and added that the general
population has more knowledge of these corporations. She
concluded that the legislation would have more support.
Representative J. Davies suggested that the provision to
exclude a corporation be eliminated. He agreed that these
corporations are more important to the state of Alaska than
the Board of Hairdressers. Representative J. Davies
suggested that the language on page 1, lines 12 - 15 be
deleted.
Co-Chair Therriault stressed that it is impossible to
foretell what new boards would be created and questioned if
the legislature should have the latitude to decide which
boards should have legislative participation. Representative
J. Davies responded by questioning if the exclusion should
pertain to other boards.
Representative Grussendorf noted that there are some boards
that are not confirmed by the legislature. He did not recall
of any problems with boards outside of legislative
oversight. He questioned the affect of requiring legislative
approval. He maintained that governors pick the best people
for the job and felt that legislative confirmation could
result in politicizing the appointments.
Representative James stated that she did not care if
legislative approval is required. She clarified that her
concern is to prevent the ability of a board from being
eliminated all at one time. She explained that the
legislature could not protect the elimination of a board
unless it was confirmed. She stressed that the issue is what
needs to be done to prevent appointees from being removed
from their duties before their term is up. She pointed out
that legislators respond to the public. She maintained that
legislative action is based on constituent input. She stated
that she would be happy to skip the confirmation process.
She reiterated that the issue is to prevent the elimination
of the entire board. She stressed that it is a serious issue
when it affects the Alaska Industrial Development and Export
Authority (AIDEA), Alaska Housing Finance Corporation
(AHFC), or the Alaska Permanent Fund Corporation boards.
Representative Austerman referred to page 8. Representative
James noted that law defines public corporations.
In response to a question by Representative G. Davis,
Representative James explained that all of the licensing
boards are regulatory. She noted that the Department of Law
indicated that public corporation do not fall under current
statutes. Representative G. Davis questioned if the law
could be changed to make them fit. Representative James did
not know if it would be possible.
Representative Phillips expressed sympathy with the intent,
but stated that she agreed with Representative Grussendorf.
(TAPE CHANGE, HFC 00 - 88, SIDE 2)
Representative Phillips stated that she was uncomfortable
with "the legislative body having the intelligence, and the
wherewith all, and the financial knowledge to make a
decision on the confirmation of the Permanent Fund Board."
Representative James pointed out that the legislature could
not eliminate the board at one time since terms are
staggered. She stated that she would be happy to consider
alternatives. She observed that most of the people that are
chosen for the Permanent Fund Board are people of high
credibility and quality and are very intelligent, and
probably can do a perfectly good job. She acknowledged that
staff is available to advise new members, but stressed that
members are not just there for looks and high visibility,
but to do a job.
Representative J. Davies questioned if Representative James
had explored another way of putting the section in the
Constitution without requiring appointments.
Representative James explained that the only way the
legislature can make rules and regulations regarding public
corporation is through confirmation of appointments.
Representative J. Davies asked if "with respect to public
corporations, its members can only be removed as provided by
law" would solve the problem. Representative James stated
that she had not asked the Department of Law that specific
question.
Vice Chair Bunde observed that most confirmations are
perfunctory. He stressed that the confirmation process is
viewed as a safety value. Representative James observed that
appointments by an administrator, such as the governor,
should be made with the best interest of the job in mind,
but that without oversight the process could be used to
advance friends.
Representative James noted that the following boards would
be affected:
Alaska Aerospace Development Corporation
Alaska Industrial Development and Export Authority
Alaska Railroad corporation (ARRC)
Alaska Seafood Marketing Institute (ASMI)
Alaska Science and Technology Foundation
Commission on Postsecondary Education
Alaska Housing Finance Corporation (AHFC)
Alaska Mental Health Trust Authority
Alaska Municipal Bond Bank Authority
Alaska Permanent Fund Corporation
Alaska State Pension Investment Board
Representative Grussendorf stressed that members that have
been removed from the Permanent Fund Corporation Board were
replaced with good people. They are picked for their
knowledge and expertise. He stressed that problems could
occur, as legislators become concern with issues such as
regional representation.
Vice Chair Bunde MOVED to delete "with respect to public
corporations, the legislature may by law exclude the
applicability of this section to a public corporation."
Representative James stated that she did not have a
preference on the language. Co-Chair Therriault felt that
the latitude should be retained.
Vice Chair Bunde stressed that members could be changed
every two years with the amendment. He pointed out that
there has not been a need to change the membership of the
Permanent Fund Board over the past 25 years.
A roll call vote was taken on the motion.
IN FAVOR: Moses, Williams, Bunde, Davies, Davis
OPPOSED: Foster, Grussendorf, Phillips, Austerman,
Therriault
Co-Chair Mulder was absent from the vote.
The MOTION FAILED (5-5).
Representative Foster MOVED to report CSHJR 52 (JUD) out of
Committee with the accompanying fiscal note. Representative
Grussendorf OBJECTED.
Representative Austerman stated that he shares some of
Representative Grussendorf concerns, but that he would not
vote to hold the bill in committee.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Moses, Austerman, Bunde, Davis, Foster,
Kohring, Williams, Therriault
OPPOSED: Grussendorf
Co-Chair Mulder was absent from the vote.
The MOTION PASSED (9-1).
CSHJR 52 (JUD) was REPORTED out of Committee with "no
recommendation" and a fiscal impact note by the Office of
the Governor, published 2/18/00.
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