02/12/1998 08:02 AM House STA

HJR 50 - PERMANENT FUND PUBLIC CORPORATION                                     
                                                                               
Number 0600                                                                    
                                                                               
VICE CHAIRMAN IVAN announced the next order of business is HJR 50,             
Proposing amendments to the Constitution of the State of Alaska                
relating to a public corporation established to manage the                     
permanent fund, sponsored by Representative James.                             
                                                                               
Number 0682                                                                    
                                                                               
PATRICK LOUNSBURY, Legislative Secretary to Representative James               
testified on behalf of Representative James, sponsor of HJR 50.  He            
said, "Before you again is HB 81 and HJR 50 relating to the board              
members of the permanent fund and how it related to their removal              
for cause or serving at the pleasure of the governor."  He said,               
"We have been over this extensively and have been working with the             
Department of Law to ensure that this is a proper piece of                     
legislation.  Something I just received yesterday was a dismissal              
letter from the governor to a particular board member and I believe            
that it further illustrates the point how politics, be them as they            
may, really should be taken out to the extent they can be from this            
process.  He read a line in the letter, 'I must be confident that              
the existing board will carry out its statutory duties consistent              
with my philosophy of government.  As for the existing board, I am             
not confident that it will act in a manner consistent with my                  
philosophy.'  Stating philosophy of government not philosophy of               
financial responsibility or best interests of the State of Alaska,             
and I would just like to submit that into the record."                         
                                                                               
MR. LOUNSBURY continued.  "I was talking with the Department of Law            
to see if we could get around an amendment to the constitution.  I             
believe that the founding fathers asserted that they would like to             
have a strong governor and I agree with that.  And any time we mess            
with the constitution we should really take care.  And we tried to             
come up with some language but I believe it would just still bring             
us back to point A, serving at the pleasure of the governor and                
will put us in the same position we are now where any governor that            
would come in could wipe out the board of the permanent fund.                  
Which, it being one of our best assets, I don't believe it to be a             
prudent course.  And, so what were doing here is for continuity for            
the board."                                                                    
                                                                               
MR. LOUNSBURY stated, "Another concern was removal for cause, how              
is that defined, what's the case log, could that just be a whole               
can of worms.  We believe that the bill, on page 3 where it states             
each board member has a fiduciary duty to the fund, and each member            
shall perform official actions, so in accordance to that duty, it              
covers the cause measure where if a member would break that                    
fiduciary responsibility, that could be cause and then could be                
removed by the governor."                                                      
                                                                               
MR. LOUNSBURY concluded HJR 50 will allow the process a little more            
accountability, the board members would also be subject to                     
confirmation of the legislature which is something that is not done            
at the moment.                                                                 
                                                                               
VICE CHAIRMAN IVAN asked for an at ease to obtain a quorum.                    
                                                                               
TAPE 98-17, SIDE A                                                             
Number 0001                                                                    
                                                                               
HJR 50 - PERMANENT FUND PUBLIC CORPORATION                                     
                                                                               
Number 0010                                                                    
                                                                               
VICE CHAIRMAN IVAN stated the next order of business is HJR 50,                
Proposing amendments to the Constitution of the State of Alaska                
relating to a public corporation established to manage the                     
permanent fund, sponsored by Representative James.                             
                                                                               
Number 0020                                                                    
                                                                               
REPRESENTATIVE HODGINS made a motion to move HJR 50 with individual            
recommendations and attached fiscal note.  Hearing no objection,               
HJR 50 passed out of the House State Affairs Standing Committee.