Legislature(2009 - 2010)CAPITOL 106

02/24/2009 08:00 AM STATE AFFAIRS


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08:08:46 AM Start
08:08:59 AM HB92
09:26:13 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 92 DIVEST INVESTMENTS IN SUDAN TELECONFERENCED
Moved CSHB 92(STA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HB  92-DIVEST INVESTMENTS IN SUDAN                                                                                            
                                                                                                                                
8:08:59 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  announced that the  only order of business  was HOUSE                                                               
BILL  NO. 92,  "An Act  relating  to certain  investments of  the                                                               
Alaska permanent fund, the state's  retirement systems, the State                                                               
of   Alaska  Supplemental   Annuity   Plan,   and  the   deferred                                                               
compensation  program for  state employees  in companies  that do                                                               
business  in  Sudan,  and   restricting  those  investments;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
8:09:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WILSON  moved  to adopt  the  proposed  committee                                                               
substitute (CS)  for HB 92,  Version 26-GH1049\R,  Cook, 2/23/09,                                                               
as a work draft.                                                                                                                
                                                                                                                                
REPRESENTATIVE JOHNSON objected.                                                                                                
                                                                                                                                
8:10:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN noted  that Version  R would  change the                                                               
divestment start  date from  December 31, 2009,  to 90  days from                                                               
the day the  bill passes.  In response to  Chair Lynn, he offered                                                               
his understanding  that the administration said  the change would                                                               
not be a problem.                                                                                                               
                                                                                                                                
8:11:54 AM                                                                                                                    
                                                                                                                                
PATRICK GALVIN,  Commissioner, Department of Revenue,  noted that                                                               
the language to which Representative  Petersen referred occurs on                                                               
page 2,  beginning on  line 14,  of Version  R.   Furthermore, he                                                               
confirmed that  the change  would not create  a hardship  for the                                                               
department.                                                                                                                     
                                                                                                                                
8:12:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  noted another change:   In the original                                                               
bill, on page  5, line 26, the language read,  "For actions taken                                                               
in compliance with AS 37.10.072  or inaction done in good faith."                                                               
Version R  changes that  language on  page 5,  line 28,  to, "For                                                               
actions  taken, or  inaction done  in good  faith, in  compliance                                                               
with AS 37.10.072."  Representative  Gruenberg explained that the                                                               
phrase  "or inaction  done in  good faith"  was moved  before the                                                               
reference  to  statute,  "so  that this  language  could  not  be                                                               
interpreted as a blanket immunization  for these boards and staff                                                               
and everyone else for any ... inaction done in good faith."                                                                     
                                                                                                                                
COMMISSIONER  GALVIN, in  response  to Representative  Gruenberg,                                                               
confirmed  that  the  administration  has no  problem  with  that                                                               
amendment.                                                                                                                      
                                                                                                                                
8:14:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON spoke  to  his objection.   He  explained                                                               
that amendments were turned in to  the chair's office a few hours                                                               
before  his  own  amendments, and  they  were  incorporated  into                                                               
Version R,  without a vote of  the committee.  He  said he thinks                                                               
the  amendments should  have been  addressed individually  by the                                                               
committee.  He  stated, "It makes every amendment  that I brought                                                               
in  a few  hours later  incongruent with  the bill,  and at  that                                                               
point a conceptual amendment."                                                                                                  
                                                                                                                                
8:16:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SEATON  outlined   two  legislative   procedures                                                               
surrounding  the adoption  of a  committee substitute  (CS).   He                                                               
stated that  he would  not like  to set the  precedent that  a CS                                                               
cannot be brought forward without  all points having been debated                                                               
in committee, because he said that is not standard procedure.                                                                   
                                                                                                                                
8:17:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  offered his understanding  that typically                                                               
changes made to the bill outside  of committee and brought to the                                                               
committee as a CS are brought as a sponsor substitute (SS).                                                                     
                                                                                                                                
8:18:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he  thinks the  amendments offered                                                               
by Representative  Petersen and  himself were pretty  well known,                                                               
and  he said  he  was not  under the  impression  that they  were                                                               
controversial.    Regardless  of  their timing,  he  opined  that                                                               
Representative Johnson's amendments are more controversial.                                                                     
                                                                                                                                
8:20:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON reiterated his philosophy.                                                                               
                                                                                                                                
CHAIR LYNN offered his understanding  that the administration was                                                               
contacted about the changes to the bill through Version R.                                                                      
                                                                                                                                
8:21:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WILSON  said  this  is  her  ninth  year  in  the                                                               
legislature and this is typical procedure.                                                                                      
                                                                                                                                
REPRESENTATIVE SEATON concurred.                                                                                                
                                                                                                                                
8:24:13 AM                                                                                                                    
                                                                                                                                
A  roll call  vote  was taken.    Representatives Wilson,  Gatto,                                                               
Gruenberg, Petersen, Seaton, and Lynn  voted in favor of adopting                                                               
the  committee substitute  (CS) for  HB 92,  Version 26-GH1049\R,                                                               
Cook, 2/23/09,  as a  work draft.   Representative  Johnson voted                                                               
against it.  Therefore, Version R was before the committee.                                                                     
                                                                                                                                
8:25:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON expressed  his full  support of  stopping                                                               
genocide  in   Darfur,  but  said   he  does  not   believe  this                                                               
legislation does  that.   He said  who owns  stock is  really not                                                               
relevant  to the  company  and  its operation.    He warned  that                                                               
investing  for  social  reasons  will  trigger  taxation  by  the                                                               
Internal Revenue Service (IRS).                                                                                                 
                                                                                                                                
8:28:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON moved  to adopt  Conceptual Amendment  1,                                                               
labeled 26-GH1049\A.2, Cook, 2/23/09, which read as follows:                                                                    
                                                                                                                                
     Page 1, line 4, following "investments;":                                                                                
          Insert "prohibiting the procurement of goods or                                                                     
     services  by the  state or  a political  subdivision of                                                                  
     the state  from certain  companies that do  business in                                                                  
     Sudan;"                                                                                                                  
                                                                                                                                
     Page 2, following line 8:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "*  Sec. 2.  AS 36.95  is amended  by  adding a  new                                                                
     section to read:                                                                                                           
          Sec. 36.95.001. Procurements in companies that do                                                                   
     business  in  Sudan   prohibited.  Notwithstanding  any                                                                  
     other provision,  the state or a  political subdivision                                                                    
     of the state  may not procure goods or  services of any                                                                    
     kind  in any  amount  from  a company  on  the list  of                                                                    
     companies that  conduct or  have direct  investments in                                                                    
     business  operations  in  Sudan that  is  prepared  and                                                                    
     updated under AS 37.10.072."                                                                                               
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 6, line 18:                                                                                                           
          Delete all material and insert:                                                                                       
     "REPEAL. Section  1 of this Act,  AS 36.95.001, enacted                                                                    
     by  sec. 2  of this  Act,  AS 37.10.072 and  37.10.073,                                                                    
     enacted  by  sec.  3   of  this  Act,  AS 37.10.220(d),                                                                    
     enacted  by sec.  4 of  this Act,  and AS 37.13.120(f),                                                                    
     enacted by sec. 5 of this"                                                                                                 
                                                                                                                                
REPRESENTATIVE  JOHNSON  explained  that Conceptual  Amendment  1                                                               
would  prohibit the  state and  its  political subdivisions  from                                                               
doing  business with  businesses on  the [divestment]  list.   He                                                               
concluded,  "So, if  we  can't  buy stock,  we  can't write  them                                                               
checks out of our treasury."                                                                                                    
                                                                                                                                
8:30:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON objected to  the motion to adopt Conceptual                                                               
Amendment 1.   He warned  that the proposed amendment  would have                                                               
many unintended  consequences.  He  explained that,  for example,                                                               
state  and municipal  agents would  have to  constantly refer  to                                                               
purchases and  figure out whether  they would comply.   Version R                                                               
has  narrowly defined  who would  be affected,  and the  proposed                                                               
amendment would reverse that, he said.                                                                                          
                                                                                                                                
8:32:00 AM                                                                                                                    
                                                                                                                                
COMMISSIONER  GALVIN  said  [House  Bill  287],  introduced  last                                                               
session  to  divest  from  Darfur,   would  have  had  unintended                                                               
consequences,  which is  why the  administration did  not support                                                               
it.   The  governor's  requested bill,  HB  92, eliminates  those                                                               
unintended  consequences.     Commissioner  Galvin  said   it  is                                                               
unlikely that the  state would buy from companies  that are going                                                               
to be on  the list, because those companies are  not likely to be                                                               
ones that  would have services  in the state's market.   However,                                                               
the burden  and the bureaucratic  institution that would  have to                                                               
be set  up to  implement the amendment  would be  significant, he                                                               
stated.   He  concluded, "So,  ... weighing  that, we  see little                                                               
benefit  in terms  of actually  moving forward  with the  primary                                                               
objective of the legislation while  creating tremendous burden on                                                               
the various institutions ...."                                                                                                  
                                                                                                                                
CHAIR LYNN concurred.                                                                                                           
                                                                                                                                
8:34:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON said  he disagrees  that the  state would                                                               
not likely be  doing business with those companies.   He revealed                                                               
that he has  a list of such  companies.  One of  them is Wärtsilä                                                               
Oyj  -  a  manufacturer  of generators  that  is  "powering  Nome                                                               
today."  Another is a company  that provides the state its motors                                                               
for its supertankers.   He offered other examples.   He said when                                                               
the state  writes a check to  those companies, the money  goes to                                                               
"their investment  in Sudan, to their  bottom line."  He  said if                                                               
the real goal is to save lives  in Sudan, then it is necessary to                                                               
ensure that  state money does not  get to that country.   The way                                                               
to do  that, he reiterated, is  by not doing business  with those                                                               
companies on  the list.   Representative Johnson said  checks are                                                               
being written  from the state  treasury, the money from  which is                                                               
going directly to  Sudan.  In response to Chair  Lynn, he said he                                                               
is  not talking  about companies  three times  removed, but  "the                                                               
State of  Alaska doing business  with companies that are  on this                                                               
list."                                                                                                                          
                                                                                                                                
8:37:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG  directed   attention  to   Conceptual                                                               
Amendment 1,  line 19,  as numbered on  the amendment,  and asked                                                               
the  committee to  contrast that  to the  language in  Version R,                                                               
page 6, line 21.  He  said the proposed amendment would repeal AS                                                               
37.10.073,  which is  on page  5 in  Version R.   The  subject is                                                               
immunity.   If that  language is repealed,  that would  mean that                                                               
"after the date of repeal the  immunity goes away."  He said that                                                               
would  have terrific  legal repercussions,  because the  board of                                                               
the  permanent fund,  the corporation,  and employees  within the                                                               
Department of Revenue,  "and everybody else," would  no longer be                                                               
immunized  for  potential  causes  of action  for  following  the                                                               
mandate of the  proposed bill [if Amendment 1 were  adopted].  He                                                               
stated that he  would strongly oppose Conceptual  Amendment 1 for                                                               
that reason.                                                                                                                    
                                                                                                                                
8:40:32 AM                                                                                                                    
                                                                                                                                
MR. BURNS agreed that immunity should not be eliminated.                                                                        
                                                                                                                                
8:41:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOHNSON  said   Tam   Cook  drafted   Conceptual                                                               
Amendment 1, and  he related that he would like  to hear from her                                                               
on this issue.                                                                                                                  
                                                                                                                                
The committee took an at-ease from 8:41:31 AM to 8:42:30 AM.                                                                
                                                                                                                                
8:42:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG requested that the committee table                                                                     
Conceptual Amendment 1.  There being no objection, Conceptual                                                                   
Amendment 1 was tabled.                                                                                                         
                                                                                                                                
8:43:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON moved to adopt Amendment 2, labeled 26-                                                                  
GH1049\A.1, Cook, 2/2/09, which read as follows:                                                                                
                                                                                                                                
     Page 1, line 3, following "Sudan":                                                                                       
          Insert "or that own or operate medical facilities                                                                   
     anywhere  in  the   world  that  provide  partial-birth                                                                  
     abortions"                                                                                                               
                                                                                                                                
     Page 5, following line 25:                                                                                                 
     Insert new material to read:                                                                                               
          "Sec. 37.10.073. Medical facilities divestment.                                                                   
     (a)  The  commissioner  or  any  fiduciary  of  a  fund                                                                    
     subject to  this title may  not invest in and,  if such                                                                    
     securities are  owned, shall cause  the fund  to divest                                                                    
     ownership  in  the  publicly  traded  securities  of  a                                                                    
     company that  is placed by  the commissioner on  a list                                                                    
     of  companies that  own or  operate medical  facilities                                                                    
     anywhere  in  the   world  that  provide  partial-birth                                                                    
     abortions.  On or  before January 31  of each  year, if                                                                    
     the  fund   has  investments  managed  by   an  outside                                                                    
     investment  manager,  the  fiduciary shall  direct  the                                                                    
     investment  manager  not  to invest  in  and,  if  such                                                                    
     securities  are  owned,  to  divest  ownership  in  the                                                                    
     publicly traded securities of a  company that is placed                                                                    
     by the commissioner  on the list prepared  under (c) of                                                                    
     this section.                                                                                                              
          (b)  If an investment in a fund under (a) of this                                                                     
     section is managed as a  commingled investment or other                                                                    
     business structure  in which the  fund is not  the sole                                                                    
     owner of  the investment interest or  the investment is                                                                    
     an index  fund, the provisions  of (a) of  this section                                                                    
     do not  apply. The commissioner shall  require that, on                                                                    
     or  before  January 31  of  each  year,  the  fiduciary                                                                    
     submit   letters   to   the  managers   of   commingled                                                                    
     investments   requesting  the   managers  to   consider                                                                    
     removing from the commingled  investment any company on                                                                    
     the list prepared under (c) of this section.                                                                               
          (c)  The commissioner shall prepare and update,                                                                       
     on  or  before December 31  of  each  year, a  list  of                                                                    
     companies  that  own   or  operate  medical  facilities                                                                    
     anywhere  in  the   world  that  provide  partial-birth                                                                    
     abortions.                                                                                                                 
          (d)  On or before January 31 of each year, the                                                                        
     commissioner shall  advise the president of  the senate                                                                    
     and the speaker of the  house of representatives of the                                                                    
     companies  on  the  list prepared  under  (c)  of  this                                                                    
     section.                                                                                                                   
          (e)  The commissioner may adopt regulations under                                                                     
     AS 44.62  (Administrative Procedure  Act) to  carry out                                                                    
     the purposes of this section.                                                                                              
          (f)  In this section,                                                                                                 
               (1)   "commissioner"  means the  commissioner                                                                    
     of revenue;                                                                                                                
               (2)     "partial-birth   abortion"  means   a                                                                    
     procedure   in   which   a  person   deliberately   and                                                                    
     intentionally                                                                                                              
               (A)   partially  vaginally delivers  a living                                                                    
     fetus for the  purpose of performing an  overt act that                                                                    
     the person knows will kill the fetus; and                                                                                  
               (B)    performs  the overt  act,  other  than                                                                    
     completion of delivery, that kills the fetus;                                                                              
               (3)    "partially vaginally  delivers"  means                                                                    
     brings  about  the  delivery of  a  fetus  through  the                                                                    
     mother's vagina that causes                                                                                                
               (A)      in   the  case   of   a   head-first                                                                    
     presentation, the  entire fetal  head to be  outside of                                                                    
     the mother's body; or                                                                                                      
               (B)  in the case  of breech presentation, any                                                                    
     part of  the fetal trunk  past the navel to  be outside                                                                    
     of the mother's body."                                                                                                     
                                                                                                                                
     Page 5, line 25:                                                                                                           
          Delete "Sec. 37.10.073"                                                                                             
          Insert "Sec. 37.10.074"                                                                                             
          Following "indemnification.":                                                                                       
          Insert "(a)"                                                                                                          
                                                                                                                                
     Page 6, following line 11:                                                                                                 
     Insert a new subsection to read:                                                                                           
          "(b)  For actions taken in compliance with                                                                            
     AS 37.10.073  or  inaction  done  in  good  faith,  the                                                                    
     commissioner   of    revenue,   fiduciary,    and   the                                                                    
     commissioner  of   revenue's  or   fiduciary's  agents,                                                                    
     attorneys,   trustees,   officers,  employees,   staff,                                                                    
     custodians,  research  firms  and  investment  managers                                                                    
     under  contract,  and   board  members  complying  with                                                                    
     AS 37.10.220 or AS 37.13.120 are                                                                                           
               (1)  exempt from any conflicting state                                                                           
     statutory  or  common  law obligations,  including  any                                                                    
     obligations with  respect to choice of  asset managers,                                                                    
     investment funds, or investments  for the public fund's                                                                    
     securities portfolios;                                                                                                     
               (2)  immune from liability under state or                                                                        
     local law;                                                                                                                 
               (3)  indemnified and held harmless by the                                                                        
     State of  Alaska from claims, demands,  suits, actions,                                                                    
     damages,  judgments,  costs,   charges,  and  expenses,                                                                    
     including  attorney fees  and  costs,  and against  all                                                                    
     liability, losses,  and damages of any  nature that the                                                                    
     commissioner,  fiduciary,  and  the  commissioner's  or                                                                    
     fiduciary's  agents,   attorneys,  trustees,  officers,                                                                    
     employees,  staff,  custodians,   research  firms,  and                                                                    
     investment  managers under  contract  may  at any  time                                                                    
     sustain by reason of any  decision to restrict, reduce,                                                                    
     or  eliminate  investments   made  in  compliance  with                                                                    
     AS 37.10.073; and                                                                                                          
               (4)  immune from adverse licensing actions                                                                       
     under AS 08."                                                                                                              
                                                                                                                                
     Page 6, line 12:                                                                                                           
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 6, following line 13:                                                                                                 
          Insert a new subsection to read:                                                                                      
          "(e)  The board shall comply with AS 37.10.073."                                                                      
                                                                                                                                
     Page 6, line 14:                                                                                                           
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 6, following line 15:                                                                                                 
          Insert a new subsection to read:                                                                                      
          "(g)  The board shall comply with AS 37.10.073."                                                                      
                                                                                                                                
     Page 6, lines 18 - 19:                                                                                                     
          Delete all material and insert:                                                                                       
          "REPEAL. Section 1 of this Act, AS 37.10.072, and                                                                     
     37.10.074(a),   enacted  by   sec.  2   of  this   Act,                                                                    
     37.10.220(d),  enacted  by  sec.  3 of  this  Act;  and                                                                    
      AS 37.13.120(f), enacted by sec. 4 of this Act, are                                                                       
     repealed on the earliest of the day after"                                                                                 
                                                                                                                                
     Page 7, line 8, following "describing":                                                                                    
          Insert "sec. 1 of this Act, AS 37.10.072 and                                                                          
          37.10.074(a), enacted by sec. 2 of this Act,                                                                          
      AS 37.10.220(d), enacted by sec. 3 of this Act, and                                                                       
     AS 37.13.120(f), enacted by sec. 4 of"                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  objected to the motion  to adopt Amendment                                                               
2.                                                                                                                              
                                                                                                                                
REPRESENTATIVE JOHNSON  said Amendment 2 would  prevent the state                                                               
from  investing  in  any  hospitals   that  allow  partial  birth                                                               
abortion.    He  said  the  issue of  divesting  from  Darfur  is                                                               
resulting  in litigation  - several  retirement groups  are suing                                                               
their  investment managers  for divesting  for social  purposes -                                                               
but  the issue  has not  elevated  itself to  the [U.S.]  Supreme                                                               
Court.   On the other hand,  the issue of partial  birth abortion                                                               
has been through that high court.                                                                                               
                                                                                                                                
8:45:03 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  emphasized that  he has  always been  "pro-life" and,                                                               
thus, against  partial birth abortion.   Furthermore, he  said he                                                               
has   consistently   co-sponsored   and   voted   on   legitimate                                                               
legislation  regarding  partial  birth  abortion.   He  said  the                                                               
proposal of  Amendment 2  disappoints him,  because it  "pits one                                                               
good cause against another good  cause to the detriment of both."                                                               
He  explained that  the proposed  amendment illustrates  a belief                                                               
that "if we divest to  hinder one injustice, ... other injustices                                                               
need to  be addressed at  the same time."   He stressed  that the                                                               
situation  in  Darfur  has  been   declared  by  Congress  to  be                                                               
genocide,  and  that declaration  has  been  acknowledged by  two                                                               
Presidents.    Other  injustices  in  the  world  have  not  been                                                               
declared  genocide, whether  or not  they should  have been.   He                                                               
stated his belief that that  is the foundation for the governor's                                                               
bill.  Chair Lynn requested  that Representative Johnson withdraw                                                               
Amendment  2, and  redraft  it into  a  bill prohibiting  partial                                                               
birth abortion, which he said he would happily co-sign.                                                                         
                                                                                                                                
8:48:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON responded that  genocide and partial birth                                                               
abortion are  similar tragedies, and  he stated that he  will not                                                               
withdraw Amendment 2.   He said the bill does not  do enough.  He                                                               
said,  "If  we're going  to  jeopardize  the permanent  fund  for                                                               
future generations,  through taxation by the  federal government,                                                               
I want to at least do it for something where there's an upside."                                                                
                                                                                                                                
8:51:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WILSON   directed  attention  to   a  publication                                                               
[included  in   the  committee  packet]   from  the   Center  for                                                               
Retirement Research  at Boston College, entitled,  "Should Public                                                             
Plans  Engage in  Social Investing?"   The  publication discusses                                                             
state actions that  may conflict with federal  foreign policy and                                                               
comments that  social divestment can be  complicated, costly, and                                                               
ineffective.   However, the  end of  the publication  states, "In                                                               
more  than one  instance, federal  courts have  ruled that  state                                                               
legislation,  regarding social  investment, was  unconstitutional                                                               
on grounds  that it  overlapped with  federal regulations."   She                                                               
stated that  currently the  bill is okay  because of  the federal                                                               
declaration of  genocide; however,  she said adding  other issues                                                               
will create  conflict with federal  legislation and,  thus, would                                                               
be unconstitutional.                                                                                                            
                                                                                                                                
8:53:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  responded  that both  the  U.S.  Supreme                                                               
Court and  the federal government  have ruled that  partial birth                                                               
abortion "is  not something that  should be done";  therefore, he                                                               
said [the  adoption of Amendment  2] would not be  "running afoul                                                               
of federal law."                                                                                                                
                                                                                                                                
8:53:58 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN  said neither  he nor Mr.  Burns is  aware of                                                               
any  legal  opinion  regarding social  investing  or  changes  in                                                               
investment  policy  subjecting  the  permanent fund  to  risk  of                                                               
taxation.  In response to the  chair, he stated, "We're not aware                                                               
of any  risk to the  permanent fund or  to the taxed  position of                                                               
the permanent fund that HB 92  would ... represent."  In response                                                               
to  a  follow-up  question,  he  said  the  divestiture  proposed                                                               
through HB 92  would affect less than 1 percent  of the permanent                                                               
fund's investment.                                                                                                              
                                                                                                                                
8:55:42 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN, in response  to Representative Johnson, said                                                               
it is  his understanding that  some nonprofit  organizations have                                                               
lost  their standing  after investing  for  political and  social                                                               
purposes.  He clarified, "But that  is not the principal on which                                                               
the state funds are tax exempt."                                                                                                
                                                                                                                                
REPRESENTATIVE JOHNSON said  for years he has  heard from several                                                               
members of  the permanent fund  investment board and  the banking                                                               
community that the  IRS is anticipating getting its  hands on the                                                               
permanent  fund.   He asked  if  that information  has just  been                                                               
misleading.                                                                                                                     
                                                                                                                                
COMMISSIONER  GALVIN  said  he   does  not  think  Representative                                                               
Johnson  has  been  mislead,  because   there  are  other  issues                                                               
associated with the  taxation of the permanent  fund; however, he                                                               
reemphasized  that he  is not  aware  of "the  connection to  the                                                               
nonprofit tax exempt status."                                                                                                   
                                                                                                                                
8:58:00 AM                                                                                                                    
                                                                                                                                
MR. BURNS noted that there is  a legal opinion, a number of years                                                               
old,  regarding  the exemption  from  taxation  of the  permanent                                                               
fund.  The issue of whether  or not the permanent fund is taxable                                                               
has  been  raised, but  this  opinion  says  it is  not  taxable,                                                               
because it is part of the state.                                                                                                
                                                                                                                                
8:59:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON asked  if Mr. Burns knows  of any language                                                               
in that legal  opinion which shows that the state  could be taxed                                                               
if it starts investing for any  other reason than for the good of                                                               
the state.                                                                                                                      
                                                                                                                                
MR.  BURNS  deferred to  others  more  qualified to  answer  that                                                               
question.                                                                                                                       
                                                                                                                                
8:59:58 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN opined  that it is within the purview  of state how it                                                               
spends its money.                                                                                                               
                                                                                                                                
9:00:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  directed   attention  to  language  in                                                               
Amendment 2,  on page 1, line  10, as numbered on  the amendment,                                                               
which would  require the  commissioner to develop  a list  of all                                                               
the companies that  deal with partial birth  abortions around the                                                               
world.    He  said  this  is  quite  a  bit  different  from  the                                                               
requirement in  the bill that  would allow  the state to  rely on                                                               
federal  lists.   He  asked  Commissioner  Galvin if  that  would                                                               
result in considerable expense to the department.                                                                               
                                                                                                                                
COMMISSIONER GALVIN  surmised that the  result would be  a higher                                                               
cost than  that expected  for "the  base bill";  however, without                                                               
further study, he said he really cannot answer the question.                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  noted that language in  Amendment 2, on                                                               
page 4, lines 6 and 11,  as numbered on the amendment, references                                                               
AS 37.10.074(a).   He said, "I  find no such statute  in the bill                                                               
or in the  amendment or in current law."   Finally, he pointed to                                                               
language in  Amendment 2 on  page 3, line  1, as numbered  on the                                                               
amendment, and  noted that it  does not contain  the immunization                                                               
amendatory language that the  committee just incorporated through                                                               
Version R.   The result,  he said,  would be a  potential blanket                                                               
immunization and the undoing of Version R.                                                                                      
                                                                                                                                
9:03:49 AM                                                                                                                    
                                                                                                                                
COMMISSIONER GALVIN,  in response  to Representative  Gatto, said                                                               
"instrument of  the state" and  "nonprofit" are two  distinct and                                                               
separate terms.                                                                                                                 
                                                                                                                                
MR. BURNS, in response to  a remark by Representative Gatto, said                                                               
he  cannot recall  any link  the state  has had  to being  called                                                               
nonprofit.                                                                                                                      
                                                                                                                                
9:05:39 AM                                                                                                                    
                                                                                                                                
A  roll call  vote was  taken.   Representative Johnson  voted in                                                               
favor  of   Amendment  2.    Representatives   Gatto,  Gruenberg,                                                               
Petersen, Seaton, Wilson, and Lynn  voted against it.  Therefore,                                                               
Amendment 2 failed by a vote of 1-6.                                                                                            
                                                                                                                                
9:06:20 AM                                                                                                                    
                                                                                                                                
CHAIR  LYNN  brought  Conceptual  Amendment  1  back  before  the                                                               
committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  GRUENBERG  questioned   whether  the  drafter  of                                                               
Amendment  1 had  mistakenly  typed AS  37.10.073  instead of  AS                                                               
36.95.001.                                                                                                                      
                                                                                                                                
9:08:56 AM                                                                                                                    
                                                                                                                                
COMMISSIONER  GALVIN suggested  that  if [Amendment  2] had  been                                                               
[adopted],  it   would  have  created   a  new   [AS]  37.10.073;                                                               
therefore, he surmised that [Amendment  1] had been written as if                                                               
[Amendment 2] were to be approved.                                                                                              
                                                                                                                                
9:09:32 AM                                                                                                                    
                                                                                                                                
TAMARA COOK,  Director, Legislative Legal and  Research Services,                                                               
Legislative Affairs  Agency, as the  drafter of Amendments  1 and                                                               
2, said  she does not believe  that [Amendment 1] was  drafted in                                                               
contemplation of another amendment being [approved].                                                                            
                                                                                                                                
REPRESENTATIVE GRUENBERG noted  that in Amendment 1,  there is no                                                               
repealer  for  AS  36.95.001;  therefore  the  section  regarding                                                               
procurements would never be repealed.                                                                                           
                                                                                                                                
MS.  COOK  pointed out  that  the  repealer  is  on line  18,  as                                                               
numbered on the amendment.                                                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG said there  is no reference in Amendment                                                               
1 to Section 6  of the bill, which is in regard  to the notice to                                                               
the  legislature;  therefore there  would  be  no requirement  to                                                               
notify  the   legislature  of  the  effect   of  the  procurement                                                               
amendment.                                                                                                                      
                                                                                                                                
MS. COOK responded,  "It's not an issue that is  addressed at all                                                               
in this amendment."                                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG said  he thinks that is a  defect in the                                                               
amendment.                                                                                                                      
                                                                                                                                
9:11:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON reiterated  his aforementioned  points in                                                               
support of Amendment 1.                                                                                                         
                                                                                                                                
9:13:19 AM                                                                                                                    
                                                                                                                                
A  roll call  vote was  taken.   Representative Johnson  voted in                                                               
favor  of  Amendment  1.   Representatives  Gruenberg,  Petersen,                                                               
Seaton, Wilson,  Gatto, and  Lynn voted  against it.   Therefore,                                                               
Amendment 1 failed by a vote of 1-6.                                                                                            
                                                                                                                                
9:13:54 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN opened public testimony.                                                                                             
                                                                                                                                
9:14:22 AM                                                                                                                    
                                                                                                                                
DEBORAH BOCK,  Member, Save  Darfur, testified  in support  of HB
92.   She reported  that 27 states  have already  adopted similar                                                               
legislation,  and Save  Darfur  wants Alaska  to  be the  twenty-                                                               
eighth.  She  said the organization is delighted with  HB 92 as a                                                               
bill that  provides "straight-forward divestment  procedures that                                                               
can be carried out at virtually  no cost to the State of Alaska."                                                               
She  relayed  that the  bill  has  been  endorsed by  the  Alaska                                                               
Retirement Management  (ARM) Board and the  Alaska Permanent Fund                                                               
Corporation.   Regarding  the concern  over  lawsuits, she  noted                                                               
that there has  been one lawsuit filed in the  State of Illinois,                                                               
and  that  suit was  resolved  by  the Sudan  Accountability  and                                                               
Divestment Act (SADA), which provides  encouragement to states to                                                               
divest through protection  of fund managers.   Ms. Bock expressed                                                               
appreciation to the  committee for taking the time  to study this                                                               
issue, and she urged  its members to vote in favor of  HB 92.  In                                                               
response to  a question from  Representative Gruenberg,  she said                                                               
she  does   not  know  how   many  other  states   are  currently                                                               
considering similar legislation.                                                                                                
                                                                                                                                
9:16:16 AM                                                                                                                    
                                                                                                                                
NANCY DAWSON testified  in support of HB 92.   She talked about a                                                               
Cambodian who  experienced genocide in  his country and  has said                                                               
that the  only thing that keeps  those in refugee camps  going is                                                               
the thought  that someone,  somewhere will help  them.   She said                                                               
she is  happy that  the differences  were resolved  regarding the                                                               
bill introduced  last year, and  she emphasized her hope  that HB
92 would pass out of committee expeditiously.                                                                                   
                                                                                                                                
9:17:30 AM                                                                                                                    
                                                                                                                                
AMY KEARNS,  Save Darfur,  testified in  support of  HB 92.   She                                                               
said she  is glad that  previous conflicts were resolved  and the                                                               
bill is  being heard.   She stated,  "I add my  name to  the list                                                               
because I  was concerned about  some of the amendments  that have                                                               
now been  taken out  of the bill."   She said  she would  like to                                                               
reiterate what Ms. Bock said.                                                                                                   
                                                                                                                                
9:18:37 AM                                                                                                                    
                                                                                                                                
LAUREN TIBITS,  Representative, STAND Juneau, explained  that she                                                               
is a high school junior who  not only represents STAND Juneau - a                                                               
student anti-genocide coalition - but  also represents STAND as a                                                               
whole, which  she said  is the student  division of  the Genocide                                                               
Intervention  Network.    She   indicated  her  involvement  with                                                               
[SADA],  and  said  she  is currently  working  on  the  Sudanese                                                               
Divestment Task Force for Alaska.                                                                                               
                                                                                                                                
MS.  TIBITS said  she  thinks  HB 92  is  an  important piece  of                                                               
legislation that will  affect thousands of people.   She said she                                                               
has  conversed  with  countless  refugees  living  in  New  York,                                                               
Washington, D.C., and across America,  which she indicated was in                                                               
relation to  a STAND  conference, and those  people all  share in                                                               
common the  desire to see  genocide end.   She stated  her belief                                                               
that   those  responsible   for   genocide  are   not  only   its                                                               
perpetrators,  but also  any  one  who knows  about  it and  does                                                               
nothing.   She mentioned her  belief in the  interconnectivity of                                                               
all  humans.   Ms. Tibits  expressed her  support of  HB 92,  and                                                               
thanked  all  the legislators  for  their  consideration of  this                                                               
legislation.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG commented  on Ms.  Tibits' presentation                                                               
and her prospects for the future.                                                                                               
                                                                                                                                
9:22:30 AM                                                                                                                    
                                                                                                                                
RICKY TAGABEN told  the committee that he  graduated from Juneau-                                                               
Douglas High  School in 2008.   He shared  that last year  two of                                                               
the "Lost  Boys" - survivors of  genocide - came to  JDHS, and he                                                               
was asked to welcome them in  Tlingit.  He said while speaking to                                                               
them,  he was  reminded of  the  origin of  the Tlingit  National                                                               
Anthem,  one of  the lines  in which  is:   "So it  may never  be                                                               
forgotten, our voices  will be heard on  our grandfather's land."                                                               
He told  the two  visitors that  although it may  not be  in this                                                               
lifetime, "Dinka voices will be heard on Dinka land."                                                                           
                                                                                                                                
MR. TAGABEN thanked  the committee for its  consideration of this                                                               
topic of  legislation again this  year, and urged its  members to                                                               
vote  in  favor  of  HB  92.    He  related  a  story  of  former                                                               
legislator,  Elizabeth   Peratrovich,  who  presented   an  anti-                                                               
discrimination bill that did not  pass after its first time being                                                               
heard and  was asked upon  her second try  if the bill  would end                                                               
discrimination.    Mr.  Tagaben related  that  Ms.  Peratrovich's                                                               
response was  to point  out that there  are already  laws against                                                               
larceny   and  murder,   yet  those   crimes  still   occur,  but                                                               
introducing legislation is a way to  express to the world how one                                                               
feels about  discrimination.   Mr. Tagaben  concluded that  he is                                                               
testifying because  he wants  to tell the  world, along  with his                                                               
fellow statesmen, "how we feel about this."                                                                                     
                                                                                                                                
9:24:45 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN closed public testimony.                                                                                             
                                                                                                                                
9:24:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG   moved  to  report  CSHB   92  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.    There  being no  objection,  CSHB  92(STA)  was                                                               
reported out of the House State Affairs Standing Committee.                                                                     

Document Name Date/Time Subjects
HB 92 - Amendment 26-GH1049-A.1.pdf HSTA 2/24/2009 8:00:00 AM
HB 92
HB 92 - Amendment 26-GH1049-A.2.pdf HSTA 2/24/2009 8:00:00 AM
HB 92
sudan_company_rankings.pdf HSTA 2/24/2009 8:00:00 AM
HB 92 - Amendment 26-GH1049-A.3.pdf HSTA 2/24/2009 8:00:00 AM
HB 92
HB 92 - Amendment 26-GH1049-A.4.pdf HSTA 2/24/2009 8:00:00 AM
HB 92
Sudan implementation timeline.pdf HSTA 2/24/2009 8:00:00 AM