Legislature(2005 - 2006)HOUSE FINANCE 519
03/08/2006 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB278 | |
| SB210 | |
| SB172 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 278 | TELECONFERENCED | |
| + | SB 172 | TELECONFERENCED | |
| + | SB 210 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 8, 2006
1:44 P.M.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:44:08 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Beth Kerttula
Representative Carl Moses
MEMBERS ABSENT
Representative Jim Holm
Representative Bruce Weyhrauch
ALSO PRESENT
Suzanne Cunningham, Staff, Representative Kevin Meyer;
Heather Brakes, Staff, Senator Gene Therriault; Joe Balash,
Staff, Senator Gene Therriault; Whitney Brewster, Director,
Division of Elections, Office of the Lt. Governor; Devon
Mitchell, Executive Director, Alaska Municipal Bond Bank
Authority, Department of Revenue; Anne Carpeneti, Assistant
Attorney General, Legal Services Section-Juneau, Criminal
Division, Department of Law; Annette Kreitzer, Chief of
Staff, Office of the Lieutenant Governor; Kevin Ritchie,
Executive Director, Alaska Municipal League; Carl Rose,
Alaska Association of Alaska School Boards, Juneau; Bill
Byork, President, National Education Association (NEA)
Alaska
PRESENT VIA TELECONFERENCE
Carol Samuels, Northwest Securities Corporation, Seattle,
Washington; Doug Griffin, Alcohol Beverage Control Board,
Department of Public Safety; Captain Ed Harrington, Alaska
State Troopers, Department of Public Safety; John Shively
Holland America, Anchorage; Eric Whaley, Merril Lynch
SUMMARY
HB 278 An Act relating to the Alaska Municipal Bond Bank
Authority; permitting the Alaska Municipal Bond
Bank Authority or a subsidiary of the authority to
assist state and municipal governmental employers
by issuing bonds and other commercial paper to
enable the governmental employers to prepay all or
a portion of the governmental employers' shares of
the unfunded accrued actuarial liabilities of
retirement systems and authorizing governmental
employers to contract with and to issue bonds,
notes, or commercial paper to the authority or its
subsidiary corporation for that purpose; and
providing for an effective date.
HB 278 was HEARD and HELD in Committee for further
consideration.
SB 172 An Act relating to the presentation of initiatives
and referenda on the ballot.
SB 172 was HEARD and HELD in Committee for further
consideration.
SB 210 An Act relating to the manufacture and
transportation of alcoholic beverages; relating to
forfeitures of property for violations of
alcoholic beverage laws; and relating to
violations of alcoholic beverage laws.
SB 210 was reported out of Committee with
"individual" recommendations and with zero note #1
by the Department of Public Safety.
1:45:18 PM
HOUSE BILL NO. 278
An Act relating to the Alaska Municipal Bond Bank
Authority; permitting the Alaska Municipal Bond Bank
Authority or a subsidiary of the authority to assist
state and municipal governmental employers by issuing
bonds and other commercial paper to enable the
governmental employers to prepay all or a portion of
the governmental employers' shares of the unfunded
accrued actuarial liabilities of retirement systems and
authorizing governmental employers to contract with and
to issue bonds, notes, or commercial paper to the
authority or its subsidiary corporation for that
purpose; and providing for an effective date.
REPRESENTATIVE MIKE HAWKER, SPONSOR, stated that one of the
biggest issues facing the State of Alaska is the unfunded
pension liability. It has become a growing issue the last
several years; last year, a determination was made on how to
best address it. HB 278 recommends a way to address that
liability.
Representative Hawker stated there is a $6 billion dollar
deficit. He knew that the State could not come up with that
amount of money, however, the amount could be amortized over
time. The issue before the Committee is how to pay it off,
understanding the compound growth rate of 8%.
HB 278 provides a tool within the financial market to help
pay off the obligation with the least possible cost to tax
payers. The idea is to borrow from an entity, asking a less
amount of interest and the difference would be a net savings
over time for the State.
1:50:59 PM
Representative Hawker suggested a possible savings close to
$1.5 billion dollars over the time of the loan if the debt
is bonded out. He reiterated that this savings would be to
the taxpayers of the State of Alaska.
Representative Hawker acknowledged that borrowing the funds
would create a profound constitutional change and that such
a mechanism was available within the international markets.
The bill was brought forward because it addresses the
capital market; municipalities would like to have the
consideration of that option and the statutory authority to
pursue it. He noted that the Municipality of Anchorage
supports the concept. The Alaska Municipal League (AML) has
passed a resolution indicating that they would like the
statutory authority to consider the option. The bill would
provide statutory authority to municipalities to pursue
pension obligation bond transactions.
1:55:08 PM
Representative Hawker stressed the simplicity of the bill.
The most complicated aspect of the legislation is
understanding what pension obligation bonds are and the
associated benefits and risks. He recommended that staff
and legislators carefully read the back up materials
regarding the transactions. Two firms interested in
pursuing the transactions are on line for testimony &
questions.
1:58:31 PM
Representative Hawker said pension bonds would be better
than the alternatives to solving the pension fund concern.
Most municipalities do not have the ability to write a check
to solve their pension fund issues. The annual required
payment into the Teacher Retirement System (TRS) amounts to
50% of the teacher's gross pay. A pension bond obligation
would allow the State to reduce their matching requirement.
The local taxpayers end up paying most of the cost for the
local school districts.
Representative Hawker summarized significant points of
opposition:
· Too risky - risk that the State would not be able to
invest at 8% and borrow at 5%. The spread between what
can be borrowed and what can be invested is called
arbitrage. Arbitrage has been illegal since 1986.
There is a specifically allowed federal provision for
pension obligations. Representative Hawker was
comfortable that investors would be able to continue
the 8% profit on investments.
· The mechanism of the bill is to grant the authority to
the Alaska Municipal Bond Bank to execute the
transactions on behalf of the municipalities, in order
to facilitate reaching all capital markets in the
country. The risk becomes obligated to the State if
that authority faults. There is a moral obligation to
the State, if the municipality defaults.
· Some say that Wall Street would "frown on the benefit"
of issuing obligation to the municipalities. The
current pension obligation is a moral obligation to the
State of Alaska.
· There is fear that the municipalities would not "pay
up". Representative Hawker did not agree.
Representative Hawker urged support for HB 278, believing
that capital markets are extremely self-governing and the
investors would not take a high risk with those accounts,
given the high degree of self-regulation.
2:09:46 PM
Representative Hawker urged that the fiscal note be changed
to indeterminate.
2:11:04 PM
Co-Chair Meyer pointed out that representatives from
Northwest Securities Corporation were present to testify on
line.
Representative Hawker advised that several firms had taken
an interest in the State of Alaska. No one firm is
authorizing a transaction, only providing educational
backup.
2:12:26 PM
Representative Kelly noted support for the legislation and
asked if Fairbanks had indicated support for the option.
2:13:39 PM
Representative Hawker replied that the bill does not address
specific concerns.
2:14:28 PM
CAROL SAMUELS, (TESTIFIED VIA TELECONFERENCE), NORTHWEST
SECURITIES CORPORATION, SEATTLE WASHINGTON, provided an
overview of a power point presentation included in the file.
(Copy on File). She testified in favor of the bill.
2:16:46 PM
Ms. Samuels referred to Page 1, the pension obligation bond
description. A pension obligation bond is a financing used
to defray unfunded pension costs. It is a replacement
financing rather than a new obligation. Many jurisdictions
have used pension obligation bonds to refinance the system
loans at rates lower than the amortization rate.
Ms. Samuels referred to Page 2, addressing why pension
obligation bonds might be useful in Alaska.
· According to the recently released 2004 valuation,
assuming above average growth in population, Public
Employees Retirement System (PERS) rates rise to
32% of payroll beginning in 2011 and do not decline
until 2029 and the Teachers Retirement System (TRS)
rates rise to 50% of payroll in 2011 and continue
increasing to 56% by 2028 before declining.
· Pension obligation bonds can be an effective tool
for immediately reducing payroll rates and
producing long-term savings for jurisdiction.
· In Oregon, jurisdictions are projected to save over
$1.3 billion dollars from use of that technique.
Ms. Samuels continued, Page 3 provides a graph indicating
the Alaska Pension system, asset base, covered employees,
*average employer rate, funded ratio and the Unfunded
Accrued Actuarial Liability (UAAL) as of 2003 valuation.
2:23:11 PM
Page 4 provides a graph of the bonding used as a popular
tool. Many jurisdictions throughout the country have chosen
to finance their PERS liability with bonds. In Oregon:
· A total of 133 school districts, cities, counties and
the State have issued $5.4 billion dollars of pension
bonds.
· Savings projected at $1.3 billion overall, assuming an
8% rate of return.
· Original statutory authority provided to local
governments and school districts in 2001 for issuance
of "full faith and credit obligations".
· School districts also granted authority to enter into
an intercept agreement with the State, whereby,
operating funds were additionally pledged. The
approach resulted in "State" credit rating.
· State constitutional amendment approved by voters in
2003 authorizing the State to issue General Obligation
(GO) bonds for its share of the liability. Voter
approval margin was 55.25%.
2:25:05 PM
Page 5 highlights the arbitrage issue. Issuing a pension
bond is not like refinancing a mortgage. The success from
borrowing depends on the market returning more than the cost
of the bond.
2:27:47 PM
Ms. Samuels continued, Page 6 indicates the Alaska Public
Retirement System (PERS) history of investment results. She
pointed out that in Oregon, PERS has a long history of
strong investment performance:
· 10 year average: 12.38%
· 15 year average: 12.69%
· 56 year average: 10.84%
2:29:44 PM
Page 9 demonstrates the Alaska PERS system-wide refinancing
analysis. A refinancing of the $3.4 billion PERS could
result in net present value savings of over $1 billion
dollars.
2:31:40 PM
Page 10 examines the savings available in refinancing the
Teachers Retirement System (TRS). She estimated a $37
million dollar savings, which might be redirected back into
the classroom.
2:32:15 PM
Page 11 summarizes the lessons learned over the past.
1. Payment to PERS does not guarantee UAAL will be paid
off in full.
2. What happens if UAAL is subsequently reduced or
increased - reduction and lump sum payment would put
jurisdiction in surplus. Funds would not be
returned to jurisdiction, but surplus would be used
to reduce payroll rates further.
3. Structure of the financing matters - inappropriate
to use unrealistic assumptions about rates of
return; amortization structure of bonds should match
amortization of UAAL that the PERS system uses; it
is not prudent to have back weighted structures
where all savings are produced in early years.
2:34:04 PM
Ms. Samuels noted several examples of debt financing, which
had been accomplished in inappropriate ways. She noted that
8% was used as a reasonable rate of return, whereas 9% was
not appropriate in their opinion.
2:34:58 PM
Page 12 continues outlining the "house keeping" issues. She
noted that regulations would need to be drafted to ensure
that funds were accounted for and payroll rates were reduced
in a rational manner. She opined that work would need to be
done on the system to ensure funds were protected.
2:38:19 PM
Ms. Samuels noted Page 13 summarizes the intent of HB 278.
The bill authorizes access to capital markets for the
purpose of financing pension liabilities. It provides
express authorization for all types of jurisdictions to
issue obligations for that purpose either individually or
thorough another entity. It also provides authorization for
individual jurisdictions to pool together through a state
entity such as Bond Bank to achieve economics of scale.
Additionally, it will allow for credit support to enhance
access to the market such as, intercept of funding, bond
reserves and bond insurance.
2:38:59 PM
Vice Chair Stoltze questioned the number of agencies that
sell this type of bond. Ms. Samuels replied that there are
multiple firms eager to help with selling the bonds.
Representative Hawker added that any capital market would be
available to pursue such a transaction.
2:39:54 PM
Representative Kelly referred to the mechanism used to
determine a credit rating, inquiring if that would be
available and/or useful. Representative Hawker commented
that was being researched and there would be a forthcoming
amendment.
Representative Kelly followed up with queries about the
taxation structure of bonds. Representative Hawker
responded that in a 1986 federal statutory change, in order
to take advantage of arbitrage, the bonds become executed on
a taxable basis.
ERIC WHALEY, (TESTIFIED VIA TELECONFERENCE), MERRIL LYNCH,
noted questions that many municipalities raised regarding
how the legislation would impact either the municipality or
the State's bond rating. Mr. Whaley pointed out that an
unfunded liability already exists. One unfunded liability
would be replaced by another.
A question was asked if the risk was not positive over a 20-
30 year time period, would the State have been better off if
the pension bond had not been issued. Mr. Whaley provided
historical examples since 1926 of when portfolios had a
return less than the bond rates and the only time that
happened was just before the Great Depression. He
acknowledged risk, commenting it is minimal.
Mr. Whaley offered to answer questions of the Committee.
2:45:04 PM
KEVIN RITCHIE, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL LEAGUE
(AML), JUNEAU, testified in favor of the legislation. AML
supports the State to allow employers the option of
refinancing the PERS & TRS debt to avoid the 8.25% rate
imposed by the system. He emphasized that it would be a
tool for only some municipalities; it is not a fix for all.
He added that the relationship between the State and the
schools are important.
2:46:58 PM
Mr. Ritchie pointed out that the municipalities currently
are asking, given the funding provided last year to reduce
the 5% increase, questioning what that meant for the long-
term health of the system. He maintained that these are
important policy questions that must be addressed.
Representative Kelly referred to previous discussion
regarding the refinancing a portion of the fund. Mr.
Ritchie deferred to the finance specialists to better answer
that question.
2:48:30 PM
Mr. Ritchie reiterated that the municipalities do support
the legislation.
2:48:58 PM
Representative Hawker concurred that the legislation would
be more beneficial if it refinanced the entire fund,
however, knew that some municipalities might not be
comfortable with that risk. It would be best to let them
each decide.
2:49:53 PM
Vice Chair Stoltze asked if each municipality's level of
debt would affect their ability to participate.
Representative Hawker responded that indeed,
municipalities would have to consider their own debt load
and rating circumstances. It represents a substantial
obligation and noted that each circumstance would need to be
considered on an individual basis.
Vice Chair Stoltze thought that net-caps for the
municipalities could be considered and wondered if that
potential exists.
Representative Hawker acknowledged that caps could affect
the municipality's ability to participate or prohibit
financing options.
2:51:56 PM
Representative Kerttula asked how a municipality could go
about obtaining authorization for financing. Representative
Hawker responded, it would happen through the same process
used for current financial obligations incurred by
municipalities. He referred to AS 29, regarding authority
of municipal debt and outlined the methods to obtain
authorization for municipal debt.
2:53:35 PM
CARL ROSE, ALASKA ASSOCIATION OF ALASKA SCHOOL BOARDS,
th
JUNEAU, noted that on February 12, 2006, Ms. Samuels had
addressed their Board. He advised that the numbers
impressing him was the projected 50% anticipated increase
rate in payroll by 2011; increasing again to 56% by 2028.
AASB supports the option for municipalities to refinance to
reduce the high rates affecting payroll. He noted
appreciation for all the work done on the bill.
2:56:17 PM
BILL BYORK, PRESIDENT, NATIONAL EDUCATION ASSOCIATION (NEA),
ALASKA, expressed the organization's desire to explore the
proposed refinancing options. It is a critical tool for
addressing the State's unfunded liability and that HB 278 is
essential.
2:57:30 PM
Representative Hawker summarized, noting that both the
financial and educational communities view the bill as a
viable tool but not supported by the Administration.
Amendments will be forthcoming to address concerns. He
disagreed that the risks outweigh the benefit.
Co-Chair Meyer stated that the Administration could testify
when the bill incorporated the amendments, making it more
supportable.
2:58:55 PM
HB 278 was HELD in Committee for further consideration.
3:00:22 PM
SENATE BILL NO. 210
An Act relating to the manufacture and transportation
of alcoholic beverages; relating to forfeitures of
property for violations of alcoholic beverage laws; and
relating to violations of alcoholic beverage laws.
HEATHER BRAKES, STAFF, SENATOR GENE THERRIAULT, related that
in 2004, Congress passed legislation recognizing that many
rural communities and their residents face the highest
alcohol abuse and family violence rates in the country. The
Alaska Rural Justice and Law Enforcement Commission was
established and it released a Draft Interim Report that
contains recommendations, including amendments to several
provisions in Alaska statutes. Senate Bill 210 is a
response to some of the recommendations made in that report.
3:01:44 PM
Ms. Brakes pointed out several changes. The first one
allows seizure of alcohol transported by common carrier in
violation of current law. It allows for the authority to
seize property determined to have been purchased or obtained
through the proceeds of illegal importation or sale of
alcohol, and it outlines procedures for a person claiming an
interest in property that has been seized. It also defines
"manufacture" of alcohol and clears up inconsistency in
statutes regarding allowable quantities of alcohol and the
presumption of possession for sale.
Ms. Brakes reported that there are currently over 100
communities in Alaska that have chosen a local option to
limit or ban the sale of alcohol. She referred to the 2004
Annual Drug Report by the Department of Public Safety (copy
on file.) She noted that on pages 7 and 8, bootlegging
remains a lucrative business. SB 210 provides clarity and
consistency in the beverage control statutes in order to
assist law enforcement and communities in fighting the
illegal importation of alcohol.
3:04:41 PM
Representative Hawker inquired about a change from 12 liters
to 10 ½ liters in the provision for possession of distilled
spirits. Ms. Brakes replied that AS 04.11.010(c) in Section
1 is being amended regarding the sale of spirits in order to
make language consistent throughout statutes.
Representative Hawker summarized that this change makes the
provision consistent with other statutory language. He
referred to earlier testimony about forfeiture provisions
and the concern that a person could lose their home. He
inquired about the judicial process related to that
situation. Ms. Brakes explained that the intent of SB 210
is to mirror the controlled substances statutes. Loss of a
person's home was a concern in a previous committee. The
sponsor's concern remains about someone who paid for a home
from proceeds of an illegal activity. That property would
be subject to forfeiture, but there would be court
proceedings to make the determination. Representative
Hawker stated that there would be a judicial process. Ms.
Brakes agreed.
3:08:03 PM
Representative Kerttula noted that she would ask for a legal
opinion about what happens to family members in such a
situation.
DOUG GRIFFIN, ALCOHOL BEVERAGE CONTROL BOARD, DEPARTMENT OF
PUBLIC SAFETY, offered to answer questions.
CAPTAIN ED HARRINGTON, ALASKA STATE TROOPERS, DEPARTMENT OF
PUBLIC SAFETY, also offered to answer questions.
3:09:47 PM
Representative Kelly presented a scenario in a village
involving a common air carrier that lands in a dry village
with illegal alcohol on board before continuing on to a non-
dry village. He asked what the consequences would be for
the plane. Captain Harrington said that is not a problem.
The troopers deal with it when the alcohol reaches the dry
village. Representative Kelly expounded on the possible
scenario when the plane reaches the dry village. He
wondered about an unintended consequence. He suggested
another scenario involving a boat on a river passing by a
dry village and wondered about possible unforeseen
consequences.
Vice Chair Stoltze noted those are valid questions.
Co-Chair Chenault closed public testimony.
3:13:25 PM
Representative Kerttula redirected her question about the
family members of a bootlegging situation to Anne Carpeneti.
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES
SECTION-JUNEAU, CRIMINAL DIVISION, DEPARTMENT OF LAW,
responded that the provision allowing the state to seize and
forfeit items purchased from illegal activity has been in
statute since 1982 and a house has never been seized. The
family is protected under forfeiture law.
Representative Kerttula asked about the family vehicle. Ms.
Carpeneti replied that there are safeguards for those types
of situations.
3:16:04 PM
Representative Kelly asked for a response from Ms. Carpeneti
regarding his previous scenarios. Ms. Carpeneti explained
that there should be no problem in either situation because
the plane and boat would be in transit and the alcohol would
stay on the vessel. There is a statute that requires
labeling of alcohol intended for damp villages.
Representative Hawker noted on page 3 of the bill that
"items of value purchased from the proceeds" are being added
to the list of forfeitures. He wondered if an innocent
person who is paid from illegal proceeds, or given items
purchased by illegal proceeds, is subject to consequences.
Ms. Carpeneti said that situation is also protected by
remission procedures in current law that are not affected by
this bill.
Co-Chair Chenault asked what is being changed regarding
transporting alcohol by common carriers in dry villages.
Ms. Carpeneti said this bill refers only to alcohol that has
been illegally transported in violation to this particular
statute, which has particular labeling requirements.
3:19:08 PM
Representative Kerttula referred to Section 3, the 30 days
notice, and asked if the innocent spouse is included. Ms.
Carpeneti replied that they would have to file a notice of
their interest. She clarified that Section 3 streamlines
procedures when no one files a notice of interest and
addresses civil forfeitures, which don't happen often.
Representative Kerttula asked about the right to a jury
trial. Ms. Carpeneti replied that she thought forfeiture
proceedings were not subject to a jury trial. She suggested
Captain Harrington respond to the question.
Representative Kerttula redirected her question to Captain
Harrington, who replied that he does not know. He said that
most forfeitures have been adjudicated at a criminal trial.
Co-Chair Meyer corrected his statement that the committee
has seen the bill previously.
3:22:50 PM
Co-Chair Chenault MOVED to REPORT SB 210 out of Committee
with individual recommendations and with the accompanying
zero fiscal note. There being NO OBJECTION, it was so
ordered.
SB 210 was reported out of Committee with a "no
recommendation" and with a zero note #1 by the Department of
Public Safety.
3:23:51 PM
SENATE BILL NO. 172
An Act relating to the presentation of initiatives and
referenda on the ballot.
3:24:42 PM
JOE BALASH, STAFF, SENATOR GENE THERRIAULT, addressed the
bill. He noted that current law provides direction to the
lieutenant governor to prepare both a ballot title and a
summary for the election ballot. The summary must be "true
and impartial" and is limited by the number of words
allowed. There is a separate limitation for a ballot title.
SB 172 began as a measure to increase the number of words in
the title. As laws become more complex, more than six words
are often needed to describe them. It became apparent that
more words to describe the summary were also needed. He
stated that the fiscal note was generated by the maximum
allowable words per section, as set forth in the bill.
Representative Hawker expressed a desire to discuss the
fiscal note.
WITNEY BREWSTER, DIRECTOR, DIVISION OF ELECTIONS, commented
on the fiscal impact of the bill. She explained that the
bill would make it likely that the Division of Elections
would have to move to two ballots. She stated that the
fiscal note reflects anticipated expenses for upcoming
elections. She also noted that two initiatives would likely
appear on the 2006 general election and primary ballots.
3:28:31 PM
She noted that the division conducted a special election for
the Municipality of Anchorage in 2004, which generated the
figure to determine the cost for forty districts to have two
ballots. She added that this could potentially increase to
three ballots.
Ms. Brewster pointed out that costs included hiring
additional temporary employees, ballot shipping, postage,
ballot translation into indigenous language, additional
information in the election pamphlet, advertisement in the
newspaper, and an increase in costs for archiving ballots
after the election. She also noted that additional language
on a ballot increases the time used in a voting booth to
read the language.
3:31:22 PM
Co-Chair Meyer opened the floor for public testimony.
JOHN SHIVELY, HOLLAND AMERICA, ANCHORAGE, testified in
support of the bill. He pointed out that initiatives
pertaining to his industry could not be captured in 100
words. He suggested that as initiatives are becoming more
complicated, more words are required on ballots.
3:33:08 PM
Co-Chair Meyer CLOSED PUBLIC TESTIMONY. He stated his
intention to hold the bill until conversations could be held
with the Division of Elections, and to hold any amendments
until that time.
Representative Hawker raised questions regarding the fiscal
note. He conceded that the trend of more complicated
initiatives required some action, but expressed surprise at
the extent of the fiscal note.
Representative Hawker asked whether the fiscal note was
generally correct. Mr. Balash noted that the sponsor's
focus had been on the number of ballots required.
Representative Hawker followed up by commenting on the size
of the fiscal note. Mr. Balash stated that the sponsor did
not question the assumptions of the fiscal note.
3:39:06 PM
Representative Hawker asked whether a maximum of 500 words
would be sufficient to describe even something as
complicated as the cruise ship tax initiative. Mr. Balash
recalled the previous year and the sponsor's concern about a
very large bill with 129 words in the title. He speculated
what would have happened if that bill was taken through a
referendum process. He continued that it was difficult to
describe the scope of such a large bill in few words.
Representative Kerttula expressed concern that two pages on
a ballot might make initiatives even more confusing. She
also noted that it was more difficult to abridge than to
expand a description. She suggested that it is a difficult
issue.
Representative Hawker asked for the sponsor's intentions on
proceeding with the bill.
Mr. Balash noted that his work with the bill had ended after
leaving the Judiciary Committee, but he expressed openness
to further suggestions. He referred to discussion with the
Lieutenant Governor's office regarding the number of words
per page. He referred to past ballots, such as those
contained in the 2004 general election. He expressed
concern from the sponsor that the type font not be reduced
in order to accommodate the number of pages.
3:44:34 PM
Representative Kerttula explained that Amendment #1 would
allow for an attachment to a petition or referendum. She
proposed that information be made available at the polling
location, as opposed to having it contained on the actual
ballot.
Mr. Balash stated that the motivation of the sponsor is that
the voters have the information. He asked how absentee
ballots would be addressed.
Representative Hawker recommended that for absentee ballots
a check box could be included, or it could be printed in the
official election pamphlet.
3:47:59 PM
Mr. Balash thought those would be reasonable ideas for
consideration.
Representative Kelly asked about the $237,000 assumption.
Mr. Balash said he understood the direction of the
assumption, but preferred not to speak for the division. He
asked if the division would speak to that. He noted that
the sponsor accepted the assumption.
Representative Kelly voiced concern about that.
3:50:07 PM
ANNETTE KREITZER, CHIEF OF STAFF, OFFICE OF THE LIEUTENANT
GOVERNOR, stated that there is no pamphlet during a primary
election. She said that her office welcomes scrutiny on the
fiscal note. She asked the director to not use the worse
case scenario.
Ms. Brewster commented on posting the language at the
polling place. She said it is currently required by law and
is posted in three locations in the polling place. She
offered to answer questions associated with the note.
3:52:27 PM
Co-Chair Chenault asked about the printing cost of $237,000.
Ms. Brewster replied that it is a hard cost at .37 cents per
ballot. The number of ballots printed in the 2004 general
election was 642,000.
Co-Chair Chenault asked why 642,000 ballots were printed.
Ms. Brewster responded that the number included test
ballots. The number is based on what was printed in the
2004 election.
Co-Chair Chenault inquired how many people voted in that
election. Ms. Brewster offered to provide that information.
Co-Chair Chenault stated his intent to hold the bill to
discuss the fiscal note costs. Ms. Brewster addressed
solutions. She offered to provide an official election
pamphlet, which would include all of the language and would
provide a smaller note.
3:55:24 PM
Co-Chair Chenault stated that would be discussed at the
meeting.
Representative Kerttula pointed out that the pamphlet would
allow both sides to present their information.
SB 210 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:55 P.M.
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