Legislature(1993 - 1994)
04/13/1994 09:09 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CHAIRMAN LEMAN brings up SB 244 (PERMANENT FUND INVESTMENTS - LTD PARTNERS) as the next order of business before the Senate State Affairs Committee and calls the first witness. Number 555 CARL BRADY, Jr., Trustee, Alaska Permanent Fund Corporation, introduces Mr. Scott and Mr. Seekins. Mr. Brady describes the impetus behind SB 244. The corporation's and Mr. Brady's reasoning is contained in a memorandum and six attachments which were submitted to the Senate State Affairs Committee. TAPE 94-26, SIDE B Number 594 MR. BRADY continues his dissertation on SB 244. Number 581 CHAIRMAN LEMAN asks if there are any questions of Mr. Brady. Hearing none, the chairman calls Mr. Scott to testify. Number 580 BILL SCOTT, Executive Director, Alaska Permanent Fund Corporation, adds that SB 244 would provide for greater security and analysis of an investment. It is not a liberalization of how the corporation invests, but rather a greater concentration of analysis. Number 555 RALPH SEEKINS, Trustee and Current Chairman of the Board, Alaska Permanent Fund Corporation, states he takes his responsibility as a member of the board very seriously. He says the corporation is constantly grading itself on how well it is doing against other institutional investors. Mr. Seekins tells of a conference on alternative investments he recently attended in Colorado. Number 498 CHAIRMAN LEMAN comments he remains cautious about investments due to the Executive Life situation. Number 490 MR. SCOTT states that the Executive Life investments were made with virtually no supervision and outside control. The permanent fund has excellent and very restrictive internal controls in making investments. So Mr. Scott does not believe that one could compare the Executive Life investments with those made by the Permanent Fund Corporation in any way, shape, or form. Number 476 MR. BRADY adds that Washington and Oregon have over three billion dollars between them invested in this type of investment. Number 464 CHAIRMAN LEMAN notes the committee has an amendment to SB 244, and asks Mr. Scott to describe what the amendment would do. Number 461 MR. SCOTT states the amendment would substitute an entire new version for the original bill that was introduced. The first version was hastily drafted, and the corporation came up with what it believes would be a better definition of the limitations of the sort of investment that might be done under SB 244. It more clearly addresses the investment, as opposed to the vehicle for the he investment. Mr. Scott believes that "limited partnership" has negative connotations. MR. SCOTT states the original bill principally addressed limited partnerships. The corporation asks that the committee amend SB 244 by substituting the amendment for the original version. Number 444 CHAIRMAN LEMAN states there would be several complications involved in doing what Mr. Scott is asking the committee to do. The first is that the original title is not valid in relation to the new version being proposed by the corporation; the new version does not have an effective date. Secondly, the connotation of "limited partnership" will still carry through, because the short title of the bill will not be changed. MR. SCOTT asks the chairman if there is a solution to this minor impasse. Number 429 CHAIRMAN LEMAN responds that Legislative Legal Services could handle the problem. JIM KELLY, Research & Liaison Officer, Alaska Permanent Fund Corporation, suggests a simple title of "An Act relating to equity investments of the Permanent Fund." Number 418 SENATOR MILLER makes a motion to adopt amendment #1. Number 407 CHAIRMAN LEMAN asks if there is any objection to amendment #1. Hearing none, he states the amendment has been adopted. The chairman asks if there is anyone else who wishes to testify on SB 244. Number 400 SENATOR TAYLOR makes a motion to discharge SB 244 from the Senate State Affairs Committee with individual recommendations. Number 398 CHAIRMAN LEMAN, hearing no objection, orders SB 244 released from committee with individual recommendations.