Legislature(1997 - 1998)
03/03/1998 01:45 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
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HOUSE FINANCE COMMITTEE
March 3, 1998
1:45 P.M.
TAPE HFC 98 - 49, Side 1
TAPE HFC 98 - 49, Side 2
TAPE HFC 98 - 50, Side 1
TAPE HFC 98 - 50, Side 2
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee
meeting to order at 1:45 p.m.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Mulder
Representative Foster
Representative Grussendorf
Representative Moses was absent from the meeting.
ALSO PRESENT
Representative Jeannette James; Representative Brian Porter;
John Key, General Manager, Cominco Alaska; Jim Baldwin,
Assistant Attorney General, Department of Law; Chris
Christensen, General Counsel, Alaska Court System; Deborah
Behr, Assistant Attorney General, Department of Law; Jeff
Logan, Staff, Representative Green; Keith Laufer, Alaska
Industrial Development and Export Authority, Department of
Commerce and Economic Development; Randy Simmons, Executive
Director, Alaska Industrial Development and Export
Authority, Department of Commerce and Economic Development.
SUMMARY
HJR 36 Proposing amendments to the Constitution of the
State of Alaska relating to redistricting of the
legislature, and repealing as obsolete language in
the article setting out the apportionment schedule
used to elect the members of the first state
legislature.
HJR 36 was HELD in Committee for further
consideration.
HJR 44 Proposing amendments to the Constitution of the
State of Alaska relating to redistricting of the
legislature.
HJR 44 was HELD in Committee for further
consideration.
HB 264 "An Act providing for a negotiated regulation
making process; and providing for an effective
date."
CSHB 264 (FIN) was REPORTED out of Committee with
"no recommendation" and with two fiscal impact
notes, one by the Department of Revenue and one by
the Office of the Governor.
HB 386 "An Act relating to the financing authority,
programs, operations, and projects of the Alaska
Industrial Development and Export Authority; and
providing for an effective date."
CSHB 386 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with a zero fiscal
note by the Department of Commerce and Economic
Development.
HOUSE BILL NO. 264
"An Act providing for a negotiated regulation making
process; and providing for an effective date."
REPRESENTATIVE JEANNETTE JAMES, SPONSOR spoke in support of
the proposed committee substitute for HB 264, Work Draft 0-
LS0910\L, dated 2/25/98.
Deborah Behr, Assistant Attorney General, Department of Law
reviewed changes made by the proposed committee substitute.
? Page 3, lines 1 & 3, "An agency shall notify the public
so that interested parties can apply..."
Ms. Behr noted that this language allows flexibility to
notify the public in a manner that results in the least
cost. "Interested persons" was included to clarify that an
individual may volunteer their time, even if they are not
directly affected by the regulation. This is to allow
retired public officials, judges and others to participate.
? Page 3, lines 17 & 18, "The agency should strive to
achieve the balanced committee representation..."
Ms. Behr emphasized that the intent is to achieve balance.
It was not placed in statute because it would be difficult
to assess when balance is achieved.
? Page 5, lines 16 & 17, "Members of a negotiated
regulation making committee are responsible for their
own expenses of participation."
The prior version would have required agencies to certify
need. The subcommittee decided that each member would pay
his or her own way. Ms. Behr maintained that this provision
would result in meetings being held in metropolitan areas.
Groups will have to take donations and pay for their own
members to travel. Teleconferencing will be used.
? Page 5, lines 26 - 29, Disclosure
This would require a member to disclose gifts; grants or
other financial benefits that exceed $150 dollars and have
been accepted to finance the disclosure member's
participation on the regulation committee. Ms. Behr did not
think a member would have to disclose their salary.
? Page 7, line 17, Immunity for members of a negotiated
rules making committee and its members.
Ms. Behr noted that CSHB 264 (STA) did not provide absolute
immunity to members participating on the committee. The
proposed committee substitute provides absolute immunity.
She observed that the members would only advise on various
decisions. She emphasized that the provision would
encourage private businesspersons to participate.
? Page 7, lines 27 - 30, Members of a Negotiated Rule
Making Committee.
Ms. Behr explained that this would exempt members from the
provisions of the Executive Ethics Act. Public officers on
a negotiated rule making committee would still be under the
provisions of the Executive Ethics Act. Member's financial
contribution to the meeting would be disclosed under
previous provisions. This would indicate their position.
Criminal provisions would still apply to gross conduct, such
as accepting a bribe.
? Page 8, lines 1 - 5, Conforming amendment
Ms. Behr observed that this provision would bring back the
existing law after five years.
Representative Mulder MOVED to ADOPT Work Draft 0-LS0910\L,
dated 2/25/98. There being NO OBJECTION, it was so ordered.
Discussion pursued regarding the amendment to the Executive
Ethics Act. Ms. Behr clarified that the legislation takes
negotiated regulation making committees out of the Act. She
emphasized that they are short-term committees that are not
making final decisions. Only their travel is disclosed.
Representative Davies did not recall discussion on the
subject during the subcommittee. Representative Kelly did
recall some discussion on this matter during the
subcommittee hearing.
Representative James spoke in support of the provision.
Representative Davies expressed concern with the provision.
He noted that a person would not need to disclose close
financial associations or their employer.
Ms. Behr emphasized that the intent of the legislation is to
encourage upper level executives of private businesses.
Co-Chair Therriault observed that members do not authorize
actions. Representative Davies spoke in support of
balancing disclosure requirements to indicate a member's
general bias. Co-Chair Therriault asked if there is a
problem in the current stakeholder process mechanism.
Representative Davies MOVED to ADOPT Amendment 1 (copy on
file). Co-Chair Therriault OBJECTED for the purpose of
discussion. Amendment 1 would amend page 5, line 17 by
inserting "if they have adequate resources. However, an
agency may pay for a committee member's reasonable travel
and per diem expenses..." He observed that the amendment
would allow agencies to pay for members. Members would
still be generally responsible to pay their own way.
Ms. Behr clarified that the legislation would not allow
agencies to pay for a member's travel. She noted that if
the section were deleted the status quo would prevail. She
expressed concern with Amendment 1. She noted the
difficulty in assessing the ability to pay.
Representative Grussendorf spoke in support of allowing
agencies to pay. He observed that there might be
circumstances where an agency would want to pay someone's
way to achieve balance on the committee.
Representative Martin spoke against the amendment. He
expressed concern that it would be costly.
Representative James emphasized that it is a volunteer
system that should not be costly. She preferred that
agencies not pay for member's travel.
Representative Davis stressed that it would not be fair to
pay for some and not others.
Representative Davies observed that industries would pay for
their representation. He noted that members of the public
might not have the same ability to pay. He stressed that
the status quo allows agencies to decide. He pointed out
that it would be cheaper to pay for one person's travel then
to send several agency people to the area the person
resides.
Representative Grussendorf stressed that the ability to pay
would differ. He emphasized that the amendment would help
achieve balance.
Representative WITHDREW Amendment 1. There being NO
OBJECTION, it was so ordered.
Representative Davies MOVED to delete subsection (c) on page
5, lines 16 and 17. He observed that the amendment would
retain the status quo. There being NO OBJECTION, it was so
ordered.
Ms. Behr stated that the fiscal impact was not changed by
the proposed committee substitute.
Representative Martin MOVED to report CSHB 264 (FIN) out of
Committee with the accompanying fiscal notes. There being
NO OBJECTION, it was so ordered.
CSHB 264 (FIN) was REPORTED out of Committee with "no
recommendation" and with two fiscal impact notes, one by the
Department of Revenue and one by the Office of the Governor.
HOUSE BILL NO. 386
"An Act relating to the financing authority, programs,
operations, and projects of the Alaska Industrial
Development and Export Authority; and providing for an
effective date."
Co-Chair Therriault provided members with a proposed
committee substitute for HB 386, Work Draft 0-GH2023\E,
dated 3/3/98 (copy on file).
KEITH LAUFER, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT
AUTHORITY (AIDEA), DEPARTMENT OF COMMERCE AND ECONOMIC
DEVELOPMENT reviewed the proposed committee substitute. He
noted that the sunset date would be July 1, 2003. Minor
wording changes occurred on page 5, line 11. Section 8 was
replaced. The original legislation would have set up a
procedure for AIDEA to create categories of confidential
documents. Documents that could never be made confidential
were identified. This provision was changed to set forth
the specific items that can be made confidential on page 6,
line 21 - page 7 line 2. Subsection (b) addresses concerns
regarding information compiled by AIDEA that can also remain
confidential if the information fits within one of the
confidential categories. The definition of "political loss"
was moved to section 10 by request of the drafter. "Shall"
was changed to "must" on page 7, line 22. Other technical
changes were made to conform to drafting recommendations.
Section 23 is new. Section 23 is the legislative
authorization to finance bonds for the DeLong Mountain
transportation project at Red Dog mine and for the Nome port
improvement project. The effective date was changed to
clarify that only section 21 has a June 30, 1998 effective
date.
Representative Davies asked if legislative approvals in
section 23 would follow the due diligence process.
RANDY SIMMONS, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY, DEPARTMENT OF COMMERCE AND
ECONOMIC DEVELOPMENT clarify that the due diligence process
would apply. The process would start in the following week.
The Board of Directors must approve findings on the
projects.
Representative Grussendorf pointed out that "political loss"
could refer to nationalization, confiscation, or destruction
by military activities. Mr. Simmons agreed and noted that
AIDEA used to require insurance on every export transaction
regardless of the country of export.
In response to a question by Representative Martin, Mr.
Simmons noted that AIDEA could authorize bonds up to $400
million dollars a year. Bond covenants apply to certain
coverage.
(Tape Change, HFC 98 -49, Side 2)
Mr. Simmons noted that AIDEA has $322 million dollars in
loans outstanding. He clarified that the state of Alaska is
not morally obligated on any of the bonds issued by AIDEA.
JOHN KEY, GENERAL MANAGER, COMINCO ALASKA read his written
testimony in support of HB 386 (copy on file).
Mr. Simmons noted that there are 44 years left on the AIDEA
loan to Red Dog. He explained that AIDEA owns the
facilities on development projects they finance. The Alaska
Industrial Development and Export Authority may receive
payments to the State long after there are outstanding
bonds. Red Dog would still be responsible for their
financial commitments if the bonds were paid off.
Representative Foster MOVED to ADOPT Work Draft 0-GH2023\E,
dated 3/3/98. There being NO OBJECTION, it was so ordered.
Representative Foster MOVED to report CSHB 386 (FIN) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 386 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a zero fiscal note by the
Department of Commerce and Economic Development.
HOUSE JOINT RESOLUTION NO. 44
Proposing amendments to the Constitution of the State
of Alaska relating to redistricting of the legislature.
Co-Chair Therriault provided members with a proposed
committee substitute for HJR 44, Work Draft 0-LS0528\I,
dated 3/3/98 (copy on file). Representative Mulder MOVED to
ADOPT , Work Draft 0-LS0528\I, dated 3/3/98. There being NO
OBJECTION, it was so ordered.
REPRESENTATIVE BRIAN PORTER, SPONSOR, testified in support
of HJR 44. He explained that the legislation would change
the method of appointment to the reapportionment board. The
legislation would codify single member districts for the
House and Senate. The Alaska Supreme Court has indicated
its support for single member districts. The Governor
currently appoints the reapportionment board. He noted that
only one other state involves their governor in the
appointment of their reapportionment board. Under the
legislation the chief supreme court justice would appoint
the reapportionment board. He maintained that the current
process is partisan. He discussed the 1992 reapportionment
process. Due to litigation a superior court judge appointed
a couple of masters to redraw the 1992 reapportionment plan.
The court plan was rejected at the federal level. It was
subsequently readjusted.
Representative Porter stated that the Supreme Court has
requested that page 3, line 3 be amended by deleting
"subject to the provisions of this section" and inserting as
provided by law". He observed that the legislature might
want to provide criteria for how the appointments should be
made. He asserted that at least one person should be
appointed from each of the judicial districts to guarantee
geographical representation.
In response to a question by Representative Grussendorf,
Representative Porter observed that if the plan were
challenged in federal court, it would be appealed in federal
court. If an Alaskan citizen challenged the plan, it would
be brought before the Alaska Superior Court. He thought
that the chief justice would have to remove himself if it
were appealed to the Supreme Court.
In response to comments by Representative Grussendorf,
Representative Porter observed that interest in the issue
would be greater as the event becomes closer. He stated
that the intent is to be objective and to get partisan
politics out of the process. He observed that the Supreme
Court appoints the Ethics Committee.
Co-Chair Therriault clarified that subsection (c) on page 3
was included in the previous version.
Representative Davies stressed that the legislation would be
more prospective if it were to apply after the next
election.
Co-Chair Therriault noted that the legislation's effective
date is 2002.
Representative Porter emphasized that the intent is to make
the next reapportionment non-partisan.
Representative Davies stated that the change could effect an
individual's decision to run for office.
Representative Martin asserted that any plan would be
accused of being partisan. He stressed that an attempt to
balance partisan interests can be made. He expressed
concern with the criteria of "integrated socio-economic"
areas. He gave examples of redistricting plans where he
felt that the criteria for a integrated socio-economic area
were misused. He observed the difficulty of integrating
cultural groups in the State. He pointed out that
population has not grown as fast in some areas of the State
as in others. He suggested that it would be difficult to
maintain socio-economic integration of areas.
Representative Porter spoke in support of retaining the
criteria of socio-economic integration. He stressed that
this provision is intended to provide fair representation
for the State's minority population. He noted that the
United States Supreme court ruled in favor of one man one
vote. States are generally allowed a variance in population
between districts of 1 to 1.5 percent. He observed that the
Alaska Supreme Court has allowed population variances of up
to 10 percent. He acknowledged that the plan would not stop
litigation. He asserted that there would not be a
presumption of the partisan politics if the board is
appointed through the court. He observed that the court
will be able to use case law that has been developed over
the years. He discussed the 1992 reapportionment process.
Representative Martin asserted that the Justice Department
and the Alaska Supreme Court are polarized. The US Supreme
Court has emphasized one man one vote for equal
representation.
(Tape Change, HFC 98 -50, Side 1)
In response to comments by Representative Martin,
Representative Porter observed that the legislation would
shorten the process by 90 days. He reviewed the
reapportionment process timeline. He discussed page 5, line
21. If any litigation or interruption of the process occurs
to the extent that the up coming election is affected then
the prior reapportionment plan would be used.
Representative Martin reiterated concerns regarding the use
of the chief justice of the Supreme Court.
Representative Mulder noted that a potential conflict of one
judge does not mean that the court cannot make a decision.
If a justice felt that they had a conflict, he or she, could
excuse themselves.
Representative Porter agreed and added that the same
situation occurs with the appointment of the Ethics Board.
Representative Martin maintained that the court should be
kept as pure as possible. He noted that a tie decision
could occur if one justice is removed.
In response to a question by Representative Grussendorf,
Representative Porter asserted that he would support the
legislation regardless of the gubernatorial candidates.
Representative Grussendorf did not think that "socio-
economic" should be removed.
Co-Chair Therriault pointed out that the legislation has
been changed by the committee substitute.
Representative Davies stated that the chief justice has the
mantel of impartiality. He maintained that the legislation
might have unintended consequences. He expressed concern
that judges would be subjected to a litmus test. He felt
that judges could be put in the position of standing against
a recall election if reapportionment does not satisfy
everyone. He observed that the Ethics Board is a judicial
function. The legislation asks the court to be involved in
a legislative issue.
Representative Grussendorf noted that there has been
discussion regarding legislative approval or the election of
judges.
Representative Porter pointed out that the other justices
select the chief justice. He noted that all judges have
their personal notions. The challenge is to make judgements
based on the law. He stated that he would be opposed to the
election of judges.
Co-Chair Therriault clarified that the intent of the
proposed change to page 3, line 3 is to allow the
legislature to add through statute further restrictions to
the appointment of the redistricting board. He stated that
the legislature might want to require that members live in
an area a certain length of time of be a state resident for
a certain amount of time.
Representative Porter suggested the use of "may be amplified
through law". He observed that the intent is to minimize
unnecessary language in the Constitution. He emphasized
that the Constitution is automatically superior to statute.
Statutes can only amplify the Constitution.
JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW
discussed the committee substitute. He spoke in support of
allowing the Court to do military surveys. He observed that
over 9,000 of the people who applied for permanent fund
dividends were active duty military. He noted that there
are a number of nonresident military residing in districts
that could affect redistricting.
Mr. Baldwin clarified that the intent of the legislation is
that "two contiguous" house districts could pertain to
districts that are contiguous across waters.
Mr. Baldwin discussed the proposed amendment to page 3, line
3. He expressed concern that a substantial portion of the
constitutional amendment before the voters would yet to be
enacted by law. He pointed out that partisan criteria could
be enacted through statute.
Mr. Baldwin observed that a member of the board couldn't run
for office. He assumed that the State would have to show a
compelling state interest to justify this discrimination.
Mr. Baldwin discussed the current reapportionment process.
He noted that, under the current provision, an officer of
the Governor could make adjustments to the reapportionment
plan proposed by the Board. He asserted that the
legislation does not provide a non-judicial "safety valve".
He observed that a statewide elected official that is
answerable to the public would not make the appointments.
Mr. Baldwin reiterated that language on page 5, lines 21 -
24 is a direct incentive for litigation. He stressed that a
new plan would at least provide for one-person one vote.
Operation of the old plan would perpetuate a mal-apportioned
state for another two years. He stated that the
Administration does not support the legislation.
Representative Martin disagreed with the proposal to allow
the Board to do a military census. He noted that the next
census would count those on base. The US Supreme Court has
upheld counting of military personnel.
In response to a question by Representative Davies, Mr.
Baldwin stated that the language regarding military census
taking is ambiguous. He acknowledged that the discussion in
the House Judiciary Committee placed on the record that the
intention is that the language would not allow the taking of
a military census. He observed that the intent is to remove
individuals that do not vote in Alaska. He noted that the
military population is concentrated in urban areas of the
State. He observed that there would be more representatives
for urban areas of the State. He asserted that the section
creates a voting rights issue. He noted that the
Department's fiscal note is in response to this issue. If
the military population is removed there is a smaller ideal
number per district. He asserted that if military personnel
are counted there will be a heavier representation in
Fairbanks and Anchorage made up of people who don't vote.
Representative Davies observed that the current provision
does not allow public officials or employees to be members
of the Board. Mr. Baldwin clarified that this prohibition
pertains to state, federal and municipal employees. He
observed that the intent is that recommendations not be made
by anyone with a stake in the process.
Mr. Baldwin expressed concern with the removal of "shall be
made without regard to political affiliation.
CHRIS CHRISTENSEN, GENERAL COUNSEL, ALASKA COURT SYSTEM
discussed the legislation. He observed that the Court has
concern with section 8 on page 3. He emphasized that the
people need to believe that the justice system is fair and
impartial and that it produces a just result. He noted that
the framers of the Constitution created a unique judicial
system. He observed that the system was created to be free
from the influence of partisan politics. The Supreme Court
is concerned that section 8 will involve the Court in
partisan politics.
(Tape Change, HFC 98 - 50, Side 2)
Co-Chair Therriault pointed out that the Court has been
involved in the current process. Mr. Christensen
acknowledged that the Supreme Court is the final arbiter of
legal matters. When the Court is called to review political
matters it is acting judicially to settle a case. He
maintained that the appointment process is a different case.
In response to a question by Co-Chair Therriault, Mr.
Christensen observed that judges frequently appoint masters
to look at and evaluate evidence and make recommendations.
The master is serving as the judge's agent in evaluating
evidence and looking at a case. He emphasized that this
process is different than the process of appointing a
reapportionment board.
Co-Chair Therriault noted that a judge would refrain from
discussing subjects that they would be asked to adjudicate.
Mr. Christensen pointed out that the appearance of
impropriety is as important as actual impropriety.
Representative Davies noted that masters tend to follow the
basic pattern set out by the underlying reapportionment plan
and make the minimum changes necessary to bring the plan
into compliance.
Co-Chair Therriault asked if a board appointed by the
judiciary made a recommendation that was challenged by the
court, would the court be precluded from setting up a master
to refine the recommendation before final judgement. Mr.
Christensen could not answer the question.
In response to a question by Representative Grussendorf, Mr.
Christensen stated that he is not aware of anything outside
the judicial branch that the court appoints. He thought
that there were other states that involved their supreme
courts in the reapportionment process. He observed that
judges are elected in many other states.
HJR 44 was HELD in Committee for further consideration.
HOUSE JOINT RESOLUTION NO. 36
Proposing amendments to the Constitution of the State
of Alaska relating to redistricting of the legislature,
and repealing as obsolete language in the article
setting out the apportionment schedule used to elect
the members of the first state legislature.
JEFF LOGAN, STAFF, REPRESENTATIVE GREEN discussed HJR 36.
He noted that the sponsor concurs with proposed changes to
HJR 36 with on exception. He referred to section 10, page
4. This section deals with the effective date and
applicability. He observed that it is the sponsor's
intention that the provisions of HJR 36 apply to the next
reapportionment cycle. He proposed that "2001" be amended
to read "2000" and "December 31, 2000" be replaced with
March 25, 1994". March 25, 1994 is the effective date of
the current reapportionment plan.
Co-Chair Therriault observed that appointments are made
between January 1st and 16th of the year following the
census. Mr. Logan noted that this language does not appear
in HJR 36. He maintained that the reapportionment board
could be appointed anytime after receipt of the census. He
observed that the census shall be completed within 9 months
after the census date. He observed that the census could be
completed in the year 2000. He stressed that it is the
sponsor's intention that the legislation applies to the next
reapportionment.
Representative Mulder MOVED to ADOPT proposed committee
substitute for HJR 36, Work Draft 0-LS0939\P, dated 3/3/98.
HJR 36 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 4:20 p.m.
House Finance Committee 13 3/4/98pm
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