Legislature(2019 - 2020)CAPITOL 106
05/07/2019 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HJR5|| HJR6|| HJR7 | |
| HB139 | |
| Presentation(s): Permanent Fund 101 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HJR 5 | TELECONFERENCED | |
| += | HJR 6 | TELECONFERENCED | |
| += | HJR 7 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 139 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HJR 5-CONST. AM: SHJR 5-CONST. AM: STATE TAX; INTIATIVE HJR 6-CONST. AM.:PERMANENT FUND & DIVIDEND HJR 7-CONST AM:APPROP. LIMIT; RESERVE FUND 3:09:55 PM CO-CHAIR KREISS-TOMKINS announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 5, Proposing amendments to the Constitution of the State of Alaska prohibiting the establishment of, or increase to, a state tax without the approval of the voters of the state; and relating to the initiative process and HOUSE JOINT RESOLUTION NO. 6, Proposing amendments to the Constitution of the State of Alaska relating to the Alaska permanent fund and the permanent fund dividend and HOUSE JOINT RESOLUTION NO. 7, Proposing amendments to the Constitution of the State of Alaska relating to an appropriation limit; relating to the budget reserve fund and establishing the savings reserve fund; and relating to the permanent fund. CO-CHAIR KREISS-TOMKINS relayed a personal anecdote of his first meeting with Vic Fischer at the Conference of Young Alaskans. He asked Mr. Fischer to offer comments and insights to the House State Affairs Standing Committee regarding the Alaska State Constitution and the proposed amendments under HJR 5, HJR 6, and HJR 7. 3:13:29 PM VIC FISCHER testified as a former delegate to Alaska's Constitutional Convention. He responded to Representative Kreiss-Tomkins's anecdote. He then referred to an opinion editorial ("Op Ed") that he recently authored, published in the Anchorage Daily News and other local newspapers, entitled "The Alaska I helped build is under attack," which read in part as follows: As one of the founders of Alaska statehood, I am appalled by Gov. Mike Dunleavy's proposed budget, which drastically cuts funding for K-12 education and the university, and slashes health services for 213,000 Alaskans, half of them children. It reduces support for seniors and undermines the taxing authority of local governments across the state. The Alaska that I helped to build is under attack. When we wrote Alaska's Constitution in 1955-56 and achieved statehood in 1959, we established a structure of state and local government to provide essential services. Now, 60 years later, the ideals of statehood and our constitution are under assault by Gov. Dunleavy and his people. 3:18:57 PM MR. FISCHER relayed that when he reviewed the proposed constitutional amendments under HJR 5, HJR 6, and HJR 7, he thought back to his involvement in World War II - a war to protect democracy around the world. After the war he came to Alaska, which was a territory at the time, and became involved in the statehood movement. He ran and was elected to be a delegate to the constitutional convention. He said that the impetus to become a state was so that the residents of Alaska could be full-fledged citizens of the U.S. and control their own futures. The constitutional convention was initiated before statehood to demonstrate that the territory was mature enough to design a constitution that was as good as - and maybe better than - any other constitution in the U.S. 3:23:01 PM MR. FISCHER stated that the Alaska State Constitution was drafted over a period of 75 active days in session at the Fairbanks campus of the University of Alaska - the only campus of the university at that time. It was an excellent venue in that it was away from politics and special interests; the convention lacked partisanship; the elections were non-partisan; and there was no mention of political parties. They were working to build a foundation for the future of Alaska. The constitution was modeled after the U.S. Constitution; it was to be brief, easy to understand, and non-partisan, and it would provide the policies and structures for the future state of Alaska. He mentioned his collaboration and partnership with Jack Coghill, despite political differences. 3:26:41 PM MR. FISCHER expressed that the constitution is composed of concise, short, declarative statements of policy, process, and organization. He stated that the proposed amendments under HJR 5, HJR 6, and HJR 7 are atrociously written. For the original constitution, the Committee on Drafting and Style set the rules for how to write a constitution. The language in the proposed amendments is based in legislative drafting. He relayed his extensive experience in state government over the years and offered that "there is a time and place for everything." He maintained that the language in the proposed amendments does not belong in a constitution. 3:29:47 PM MR. FISCHER referred to HJR 5, which proposes a limitation on taxes by amending Section 1 of Article IX [of the constitution] - Finance and Taxation. He cited Section 1, which read in part, "The power of taxation shall never be surrendered." It is a solid policy statement; the proposed amendment would undermine the stated policy. He maintained that restrictions should not be put into the constitution based on "somebody's thinking today; it may be totally inappropriate 20 or 50 years hence." He said that the proposed amendments would shackle the legislature and impose the will and values of today on future generations. He continued by saying that the constitution has been in effect for 60 years and it works. He offered that there have been amendments to the constitution - some of them atrociously written - because there has been no process of style and drafting in consideration of policies versus legislation. He declared that HJR 7 is an insult to constitutional style drafting; "it just goes on and on and on with detailed legislative matter that may be totally inappropriate seven years from now, to say nothing of seventy years from now." 3:33:15 PM MR. FISCHER referred to Gordon Harrison's publication, entitled "Alaska's Constitution A Citizen's Guide." He suggested the House State Affairs Standing Committee invite Mr. Harrison to respond to the issues currently being discussed in the committee meeting. 3:34:33 PM GORDON HARRISON opined that the proposed spending limit under HJR 7 is particularly unwise, because the state has no idea what is in the future for Alaska. He mentioned an oil field in Texas - the largest in the U.S. - which had declined to the point it almost had been abandoned. Within the last few years it has revived and is now the largest oil field in the world. He declared, "Nobody foresaw that." He maintained that nobody can foresee the wild price swings in oil; the future is unpredictable. He offered that a spending limit, as proposed by HJR 7, is very unwise. He added that the spending limit already in law has not been effective. That spending limit was adopted at a time when spending was at record highs. Currently spending - by historic levels - is low. He concluded that a spending limit now would be overstated. 3:36:32 PM REPRESENTATIVE HOPKINS referred to constitutional changes in the past and asked for circumstances under which the legislature should propose amendments to the constitution. MR. FISCHER responded that the question to be answered is, Is it necessary to put something in the constitution? He gave an example: Article 8 is titled "Natural Resources." In 1955-56, there was no idea that Alaska would have "big" oil. Article 8 is the basis for the wealth of Alaska; it implemented policy directives with specific requirements; and one of the directives required public notice. He cited a lawsuit against the Department of Natural Resources (DNR) for issuing hundreds of permits for water rights and drill sites without public notice; each site was a separate issue; the case went to the Alaska Supreme Court [Moore v. State, 1976]. He quoted from the decision, which read in part, "No disposals or leases of state lands, or interests therein, shall be made without prior notice and other safeguards ...." He maintained that a short simple phrase or sentence represents constitutional law; otherwise the legislature will become involved in minutia, and future legislators will have to "clean up the mess." He stated that it is the legislature's responsibility to decide what constitutional amendments should go before the people for a vote; the constitution requires two-thirds vote of the membership of each house to do so. He asserted that it is not the governor's responsibility or the Alaska Supreme Court's responsibility to decide what goes before the people for a vote. He said, "Think of it in terms of not just one election or two elections; think of it that this is for your children, your grandchildren, and their grandchildren. 3:41:51 PM CO-CHAIR FIELDS referred to committee discussion of HJR 5 - the proposed constitutional amendment on taxation - which would deprive Alaskans of the authority to pass initiatives by requiring legislative approval of taxation passed by initiative. He asked for comment on the constitutional delegates' thinking on retaining the ability of the people to institute taxes through the initiative process. MR. HARRISION replied that the delegates were ambivalent about the initiative process. On the one hand, they granted the power [to the people]; however, on the other hand, they trusted the legislature to do the right thing in the long run. He said that they gave the legislature the authority to repeal an initiative in two years. MR. FISCHER asserted that the constitutional amendment under HJR 5, which would require approval by the legislature for an initiative to be enacted, would be unconstitutional. He stated that the initiative is the exercise of legislative power by the people. 3:44:44 PM REPRESENTATIVE STORY asked Mr. Fischer to comment on two issues. The first is that many people feel that currently the state is overspending, hence the proposed constitutional amendment under HJR 7. The second is that the constitutional convention gave great power to the governor for vetoing the work of the legislature. MR. FISCHER relayed that he was in the legislature in 1982 when the statutory formula for the permanent fund dividend (PFD) was adopted into law. He reiterated that to reference statute in the constitution, as proposed under HJR 6, is preposterous. He maintained that it is the responsibility of the legislature to abide by the constitution and its own laws; the legislature is not responsible for what happened four, three, or two years ago ignoring state laws. He said, "Don't make it worse by putting details like that into the constitution, because in one way or another, it's not going to work." He mentioned that if the state had these [proposed] amendments in the constitution during the construction of the Trans-Alaska Pipeline, state government would have been incapable of responding to the constant changes. MR. FISCHER offered that behind the proposals is a strategy of reducing the wealth of the people of Alaska; applied into the future, they would impoverish Alaska; it would be a downhill spiral. He said that the prohibition of a change in tax structure without a vote of the people - tax structures that were not created by a vote of the people but by the legislature - would freeze today's structure for the future. 3:49:29 PM MR. FISCHER relayed that Bob Bartlett played a larger role than anyone else in securing statehood for Alaska. Mr. Fischer read from his book, Alaska's Constitutional Convention, which quotes Bob Bartlett in his keynote address to the convention as follows [original punctuation provided]: This moment will be a critical one in Alaska's future history. Development must not be confused with exploitation at this time. The financial welfare of the future state and the well-being of its present and unborn citizens depend upon the wise administration and oversight of these developmental activities. Two very real dangers are present. The first, and most obvious, danger is that of exploitation under the thin disguise of development. The taking of Alaska's mineral resources without leaving some reasonable return for the support of Alaska governmental services and the use of all the people in Alaska will mean a betrayal in the administration of the people's wealth. The second danger is that outside interests, determined to stifle any development in Alaska which might compete with their activities elsewhere, will attempt to acquire great areas of Alaska's public lands in order NOT to develop them until such time as, in the omnipotence and the pursuance of their own interests, they see fit. MR. FISCHER relayed that a good example of the second concern is as follows: Point Thomson oil and gas field was discovered near the Arctic National Wildlife Refuge (ANWR), and ExxonMobil Corporation (Exxon) "sat on" the resource for 30 years because it had interests elsewhere. Governor Frank Murkowski threatened to cancel the leases unless it developed the resource. MR. FISCHER gave an example of the first caution that Mr. Bartlett gave to the convention: Senate Bill 21 [passed during the Twenty-Eighth Alaska State Legislature, 2013-2014, signed into law 5/21/13] reduced the state's revenue from oil extracted from the state's resources. "Every day, every week, every month, every year that people of Alaska are not getting a fair share of the oil [wealth] ...." He quoted former Governor Wally Hickel, who said, "It's our oil." Alaska should get a proper return. He maintained that if the constitutional amendment [under HJR 5] - relating to changes in taxes - is approved, it would freeze the existing tax structure and not allow future legislatures future actions. The barrier to change it would be huge; and therefore, the people of Alaska may not get their fair share of the resource taken. 3:54:49 PM CO-CHAIR KREISS-TOMKINS mentioned that Alaska's constitution provides a [veto] override threshold for budget bills and appropriation bills of three-quarters [vote] and an override threshold for non-appropriation bills of two-thirds. He said that most other states have a uniform override threshold regardless of the bills being policy or appropriations. He asked what the thinking was of the framers of the constitution in providing a different and higher threshold for overriding line item vetoes on appropriation bills versus non-appropriation bills. MR. FISCHER said that he does not know. He said that the quotation from the chairman of the Alaska Constitutional Convention Committee on the Executive Branch was that the delegates are putting together a constitution that includes a strong executive. The fiscal structure of the state dictates that appropriations and the budget are the legislature's responsibility; a strong governor has strong veto power. Mr. Fischer stated that he does not recall the issue being discussed on the floor of the constitutional convention and he didn't notice the distinction. He said that the convention wanted each branch of state government to be as strong and independent as possible - as effective as possible. He mentioned the proposed constitutional amendment [under SJR 3, relating to the membership of the Alaska Judicial Council] that would change the membership of the judicial council. He stated that the membership of the judicial council was designed in a very deliberate process to be a non-partisan, non-political, merit- based selection of judges and justices. The proposal to subject the attorney appointees to the legislative approval process would politicize the future judiciary of the State of Alaska. He maintained that the design of the judicial council was intentional, and he reiterated that the emphasis was on a strong legislature, a strong executive, and a strong judiciary. As a territory, Alaskans had no authority over themselves or the territory. 3:59:49 PM CO-CHAIR KREISS-TOMKINS asked for Mr. Fischer's advice for drafting a proposed constitutional amendment. He asked whether there have been amendments successfully incorporated into the constitution that are good examples of that style of drafting. MR. FISCHER replied that a process is needed along with a committee of reviewers. He offered that Gordon Harrison, who has studied the constitution, written about it, and worked for the legislature, knows the internal and external processes and could write [a constitutional amendment]. He emphasized that it is the responsibility of the legislature to put the amendment before the people - not the governor's responsibility. He said that in 2022, Alaskans will vote on the question, Shall there being a constitutional convention? In 1979, the legislature established a joint committee to prepare for the question in 1982; it sponsored research to provided information [to the voters]. He maintained that it would take work to provide the pros and cons and a decent foundation [for voters to make that decision]. 4:03:40 PM CO-CHAIR FIELDS expressed his appreciation for Mr. Fischer's testimony and perspective. [HJR 5, HJR 6, and HJR 7 were held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| Permanent Fund 101 APFC Presentation.pdf |
HSTA 5/7/2019 3:00:00 PM |
Permanent Fund 101 - APFC Presentation |