Legislature(1995 - 1996)
04/22/1996 03:08 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.