Legislature(2001 - 2002)
03/13/2001 03:35 PM Senate STA
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* first hearing in first committee of referral
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SB 92-REMOVAL OF MEMBERS OF THE PF BOARD
CHAIRMAN THERRIAULT asked Clark Gruening whether anyone from the
Permanent Fund Trustee Board was planning to speak to the memo from
Mr. Lorensen, attorney with Simpson Tillinghast Sorensen Lorensen &
Longenbaugh.
CLARK GRUENING, Chairman of the Alaska Permanent Fund Corporation's
(APFC) Board of Trustees, said no, the memo speaks for itself and
should answer questions raised at the last meeting.
CHAIRMAN THERRIAULT said the memo did a concise job of covering the
issues raised at the previous meeting.
JIM BALDWIN, Assistant Attorney General, Governmental Affairs
Section, said SB 92 is not a new issue and that, based on the text
of the Alaska Constitution, it raises legal issues. According to
the Alaska Constitution, the legislature may, by law, provide for
removal by cause for boards or commissions that are at the head of
executive agencies or are quasi-regulatory or are quasi-judicial.
Since it is specifically stated there, it shouldn't be implicated
anywhere else in the legislative or executive article. The APFC
isn't quasi-regulatory or judicial, it isn't at the head of the
executive branch agency. The argument focuses on separation of
powers.
SENATOR PEARCE joined the meeting.
MR. BALDWIN said, as discussed at the previous meeting, Bradner v.
Hammond is the only case that touches on appointment power but it
isn't "directly on point". The argument was put forth before the
last legislature and he thought the constitutional amendment was
evidence that it was accepted. This is a legal position that the
office has taken and there is evidence of this in other opinions
from prior administrations.
CHAIRMAN THERRIAULT said that he read past testimony in addition to
Bradner v. Hammond and he agrees that case isn't directly on point
because it dealt with legislative confirmation. The discussion last
year was centered around there being a continuum of legislative
interference in the confirmation process. He can understand the
court's ruling because the legislature could insert itself in the
process to a greater degree than having the removal for cause
language, which would still be an administrative action taken
without legislative interaction. He asked Mr. Baldwin to discuss
the differences and degree from the viewpoint of the Department of
Law.
He also asked for a discussion on the Alaska State Pension
Investment (ASPI) Board which has similarities and is not quasi-
regulatory or quasi-judicial but has a removal for cause clause
that hasn't been litigated. He asked whether the position taken by
the department when that language was put into statute was that it
was likely to be suspect if there was a challenge on constitutional
grounds.
Number 519
MR. BALDWIN said that Alaska has, by intent, a strong executive
branch and the power of appointment is solely an executive power.
The Alaska Constitution gives the legislative branch no role,
through law making power, in deciding how appointments are made,
their duration, and removal. In pre-statehood days, there was
government by commission, which had the effect of blunting the
power of the federal government, thereby giving more power to local
government. Constitutional framers believed there needed to be a
change from this arrangement and wanted a strong, centralized,
government with boards and commissions under the appointed power of
the governor. There would be a check on the appointment power for
quasi-judicial, quasi-regulatory or heads of principle departments
by providing confirmation hearings. The removal provision, which
places the appointee beyond the reach of the removal at pleasure
of the governor applies to everything else in the executive branch.
Property and liberty rights are another issue because persons with
a salary or a property right in an office can't, under the 5th
amendment, have that taken away arbitrarily; there must be some due
process.
As a matter of degree, he thinks it's a skilled legal argument but
questions of degree don't always hold sway in a constitutional
argument. It is not cut and dried and is, in fact, a point of
debate among lawyers that has not yet been tested in an Alaskan
court.
The argument was made on the ASPI Board, and it subsequently became
law against the advice from the Department of Law. There is
speculation as to why this happened, but it isn't the only example
of a law being enacted even though the constitutionality is
arguable. He thought he could probably find several examples in
Alaska statute where removal for cause has been applied to a non-
quasi-judicial or regulatory board or a board that is not that of
an executive agency. The fact that they are there doesn't make them
more constitutional.
MR. BALDWIN said the constitutional amendment passed by the
legislature last session is a significant piece of legislative
history for anyone analyzing the issue. "It could be argued that
the intent was that they supported that construction." However,
trying to prove legislative intent is difficult, at best.
CHAIRMAN THERRIAULT said he didn't mean to imply constitutionality
just because something similar is in statute. This hasn't, as yet,
been tested in court and since there is no similar case with this
language it is not known how the court would rule.
MR. BALDWIN agreed and said it's an open question in Alaska but DOL
believes its argument is contextually supported by the
Constitution. If the committee passes SB 92, he noted he had
several suggestions to make it a better piece of legislation.
CHAIRMAN THERRIAULT said he knew Mr. Baldwin was concerned about a
definition for "just cause" but there was no definition in that
section of statute addressing the ASPI Board and there is "no need
for a definition unless you want to stray from the ordinary court
interpretation of the phrase."
MR. BALDWIN said you'd be relying on the common law interpretation
for the phrase which means the definition is left to judges,
attorneys and established precedent. Determining the meaning of
"just cause" isn't easy because a citizen might be interpreting one
event and the law might be interpreting another event and both are
using the term "just cause". Another statute where cause is more
specifically stated is AS 16.05 for the Board of Fish and Game.
He pointed out a weakness in the legislation is the absence of
provision for due process. The language appears to say that a
letter is sent stating cause and that's the end of it. However,
when someone is removed in that manner they might have the right to
a due process hearing, which may be trial like with discovery and
an independent third party to make the decision about removal. This
can be a very long and complicated process. Removing a board member
doesn't just happen, there is a process that must be followed.
CHAIRMAN THERRIAULT said that administrative appeals follow the
process whereby a division director makes a decision which is
reviewed up the chain of authority. If someone is removed for cause
it's the Governor, who is at the top of the authority chain, making
the decision. Other than asking for a reconsideration, the only
option is to take the matter to the court for a decision. Since the
process is trial like anyway, why not just take it through the
court system?
MR. BALDWIN said that, under this legislation, the decision itself
would be the Governor's and it's then established that there must
be some sort of due process that leads to that decision. That
process may be a simple hearing where the individual can come in
and try to clear their reputation or something more involved where
the individual can come in and there's a record created where the
reasons are put on the record and the individual has a chance to
rebut those reasons and try to prove their case. Going directly to
court is essentially delegating the decision to the judicial branch
and the court probably would not allow this, saying that
administrative remedies haven't been exhausted. This most probably
means that the due process hearings haven't been held.
Reading the statute, it appears that the Governor simply writes a
letter. If that is the intent of SB 92, then it should be clear on
the record that there is no more due process being accorded than
just the letter. This would be less than the removal right accorded
to a member of the Fish and Game Board or a member of the
Regulatory Commission for Alaska both of which are boards with
salary, property rights and due process rights.
CHAIRMAN THERRIAULT said that in going in that direction, the level
of legislative interference with the Governor's process is
heightened so the possibility that it would be ruled
unconstitutional is also heightened.
MR. BALDWIN said Chairman Therriault hit upon the tension between
the legal issues at play. The for cause provision intrudes upon the
appointment power but the for cause provision that's not spelled
out in how it's exercised produces legal problems on the other side
of the argument.
He wanted it clearly understood that removal for cause isn't as
simple as writing a letter. There must be due process in removal
for cause.
CHAIRMAN THERRIAULT asked for questions from committee members and
members of the public. There were none.
Committee members had no amendments. The bill has a zero fiscal
note. He asked for the will of the committee.
SENATOR PHILLIPS moved SB 92 and zero fiscal note from committee
with individual recommendations. There were no objections.
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