Legislature(1995 - 1996)

04/22/1996 03:08 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 HB 345 - PENSION INVESTMENT BOARD PROCUREMENTS                              
                                                                               
 Number 972                                                                    
                                                                               
 CHAIRMAN KOTT announced the last order of business would be HB 345,           
 "An Act relating to the procurement of investment and brokerage               
 services by the Alaska State Pension Investment Board."  He said              
 the bill has been heard on two separate occasions where there was             
 conflicting testimony both in support or in opposition to the bill.           
 Chairman Kott indicated there is a proposed committee substitute,             
 Version K, Bannister, 4/10/96, which has been adopted.                        
                                                                               
 Number 1000                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG made a motion to move conceptual Amendment            
 1.  Delete on page 2, line 31, and on page 3, lines 1 through 6.              
 Renumber the following section accordingly.                                   
                                                                               
 CHAIRMAN KOTT said there is a motion to delete subsection (10) in             
 Section 2.  He said he would object for the purpose of discussion.            
                                                                               
 REPRESENTATIVE ROKEBERG said, "There were some questions about the            
 whole broad scope of what (indisc.).  Then there is judicial                  
 language about -- for example, `Without materially sacrificing                
 competency or performance.'  There was a question about defining              
 what that meant.  And also, without materially -- and the question            
 being materially increasing the cost to the board, which we had               
 testimony - really was the difference between retail and wholesale            
 purchase of large blocks of securities and the like.  Additionally,           
 Mr. Chairman, I think the intent of the bill is meritorious and               
 that language is set forth somewhat differently in subsection (11)            
 of the CS which is allegedly language from the Permanent Fund                 
 Dividend Program, recommending in-state investments and use of in-            
 state investment vehicles as much as possible, insofar as they're             
 consistent with investment policies established by the board.  So             
 the thrust of the bill is maintained in subsection (11), but the              
 ambiguities of the language as contained in subsection (10) can be            
 deleted, and then we can without bad conscience move this bill                
 along if that's (indisc.) - or we could take this under further               
 consideration."                                                               
                                                                               
 Number 1139                                                                   
                                                                               
 CHAIRMAN KOTT said if subsection 10 is removed, we would be left              
 with the status quo.  This is what the board is operating under               
 currently as far as their authority.  Chairman Kott then withdrew             
 his objection to the amendment.  He stated he had some problems               
 with the language "materially."  Increasing it causes some concern.           
 Chairman Kott said he doesn't know if there is anything else to               
 substitute that with.  Chairman Kott asked if there were further              
 objections.                                                                   
                                                                               
 REPRESENTATIVE ELTON said he really doesn't have an objection.  He            
 stated he thinks he'll probably vote for the amendment because it             
 does remove some language that can create a problem.  He said his             
 feeing about the bill, in total, whether the language is removed or           
 not is that he doesn't think it does anything at all.  By removing            
 Section 10, we've made sure it does nothing at all.  He said he               
 kind of objects to a bill that doesn't do anything.                           
 CHAIRMAN KOTT asked if there was an objection to the amendment.               
 Hearing none, Amendment 1 was adopted.                                        
                                                                               
 Number 1249                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG made a motion to move CSHB 345(L&C), as               
 amended, with individual recommendations and the accompanying                 
 fiscal note revisions.                                                        
                                                                               
 CHAIRMAN KOTT said there is a motion to move CSHB 345(L&C), as                
 amended, with individual recommendations and the accompanying                 
 fiscal note.                                                                  
                                                                               
 Number 1286                                                                   
                                                                               
 REPRESENTATIVE ELTON objected.  He said, "This committee                      
 substitute, when we got it, without the mandated level is --                  
 essentially does nothing.  That's the way I read the bill, but lets           
 say that it does do something that I'm missing.  I mean I almost              
 prefer having a 7 percent back in because if this does actually               
 mean something, I don't want them doing 50 percent.  So I guess I'm           
 going to vote `No' on moving this until somebody can tell us what             
 we're accomplishing by doing this.  I mean that's the big problem             
 I've got with this.  I think now it does nothing, but if we're                
 moving this along because it does do something, I don't want them             
 doing it at the 50 percent level rather than the 7 percent level."            
                                                                               
 CHAIRMAN KOTT said he thinks it makes a legislative statement that            
 we would like the board, in their investment strategies, to                   
 consider in-state investments to the extent that they're available            
 and have the same or higher expected yield with the same level of             
 risk.                                                                         
                                                                               
 REPRESENTATIVE ROKEBERG said there is "Findings and Purpose"                  
 language in the bill.                                                         
                                                                               
 Number 1398                                                                   
                                                                               
 REPRESENTATIVE KUBINA pointed out that he doesn't think the title             
 is appropriate any longer with the amendment that passed.                     
                                                                               
 REPRESENTATIVE ROKEBERG said he thinks the title is O.K. the way it           
 is.                                                                           
                                                                               
 CHAIRMAN KOTT said they could check with the drafter of the bill.             
                                                                               
 REPRESENTATIVE ELTON said he would maintain his objection.                    
                                                                               
 CHAIRMAN KOTT asked the secretary to please call the roll.                    
 Representatives Sanders and Elton were against the motion.                    
 Representatives Kubina, Rokeberg and Kott voted in favor of the               
 motion.                                                                       
 CHAIRMAN KOTT announced the bill didn't move.  He stated you need             
 four affirmative votes to move the bill.                                      
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 Number 1640                                                                   
                                                                               
 CHAIRMAN KOTT adjourned the House Labor and Commerce Committee                
 meeting at 3:33 p.m.                                                          
                                                                               

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