Legislature(1995 - 1996)
01/29/1996 01:05 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE January 29, 1996 1:05 p.m. MEMBERS PRESENT Representative Brian Porter, Chairman Representative Joe Green, Vice Chairman Representative Con Bunde Representative David Finkelstein MEMBERS ABSENT Representative Al Vezey Representative Cynthia Toohey Representative Bettye Davis COMMITTEE CALENDAR HOUSE BILL NO. 341 "An Act establishing a tax court to consider and determine certain taxes and penalties due and collateral matters, and amending provisions relating to taxpayer challenges to the assessment, levy, and collection of taxes by the state; and providing for an effective date." - HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE HOUSE BILL NO. 392 "An Act relating to the affirmative vote necessary to amend the articles of incorporation of Native village corporations to authorize the classification of directors." - PASSED OUT OF COMMITTEE HOUSE BILL NO. 437 "An Act establishing the Judicial Officers Compensation Commission; relating to the compensation of supreme court justices, judges of the court of appeals, judges of the superior court, and district court judges; and providing for an effective date." - PASSED OUT OF COMMITTEE PREVIOUS ACTION BILL: HB 341 SHORT TITLE: ALASKA TAX COURT SPONSOR(S): REPRESENTATIVE(S) GREEN JRN-DATE JRN-DATE ACTION 05/09/95 2042 (H) READ THE FIRST TIME - REFERRAL(S) 05/09/95 2042 (H) RES, JUD, FINANCE 10/24/95 (H) RES AT 09:00 AM ANCHORAGE LIO 10/24/95 (H) MINUTE(RES) 01/19/96 (H) RES AT 09:00 AM CAPITOL 124 01/19/96 (H) MINUTE(RES) 01/24/96 (H) RES AT 08:00 AM CAPITOL 124 01/26/96 2536 (H) RES RPT CS(RES) NT 1DP 4NR 3AM 01/26/96 2537 (H) DP: GREEN 01/26/96 2537 (H) NR: OGAN, AUSTERMAN, KOTT, WILLIAMS 01/26/96 2537 (H) AM: NICHOLIA, DAVIES, LONG 01/26/96 2537 (H) FISCAL NOTE (COURT) 01/26/96 2537 (H) ZERO FISCAL NOTE (REV) 01/26/96 2537 (H) REFERRED TO JUDICIARY 01/26/96 (H) RES AT 08:00 AM CAPITOL 124 01/26/96 (H) JUD AT 01:00 PM CAPITOL 120 01/26/96 (H) MINUTE(JUD) 01/29/96 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 392 SHORT TITLE: NATIVE CORP DIRECTOR CLASSIFICATION SPONSOR(S): REPRESENTATIVE(S) IVAN JRN-DATE JRN-DATE ACTION 01/05/96 2369 (H) PREFILE RELEASED 01/08/96 2369 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2369 (H) CRA, JUDICIARY, FINANCE 01/16/96 (H) CRA AT 01:00 PM CAPITOL 124 01/16/96 (H) MINUTE(CRA) 01/17/96 2462 (H) CRA RPT 2DP 2NR 01/17/96 2462 (H) DP: AUSTERMAN, IVAN 01/17/96 2462 (H) NR: ELTON, KOTT 01/17/96 2462 (H) 2 ZERO FNS (DHSS, DCRA) 01/26/96 (H) JUD AT 01:00 PM CAPITOL 120 01/26/96 (H) MINUTE(JUD) 01/29/96 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 437 SHORT TITLE: JUDICIAL OFFICERS COMPENSATION COMMISSION SPONSOR(S): JUDICIARY BY REQUEST JRN-DATE JRN-DATE ACTION 01/19/96 2489 (H) READ THE FIRST TIME - REFERRAL(S) 01/19/96 2490 (H) JUDICIARY, FINANCE 01/29/96 (H) JUD AT 01:00 PM CAPITOL 120 WITNESS REGISTER IVAN M. IVAN, Representative Alaska State Legislature State Capitol Building, Room 503 Juneau, Alaska 99801 Telephone: (907) 465-4942 POSITION STATEMENT: Presented sponsor statement for HB 392. CHARLES S. "Chris" CHRISTENSEN III, Staff Counsel Office of Administrative Director Alaska Court System 303 K Street Anchorage, Alaska 99501 Telephone: (907) 264-8228 POSITION STATEMENT: Presented sponsor statement for HB 437 ACTION NARRATIVE TAPE 96-9, SIDE A Number 0001 CHAIRMAN BRIAN PORTER called the House Judiciary Committee meeting to order at 1:05 p.m. Members present at the call to order were Representatives Porter, Bunde, Green and Finkelstein. Members absent were Representatives Vezey, Toohey and B. Davis. HB 341 - ALASKA TAX COURT CHAIRMAN PORTER assigned HB 341 to a subcommittee composed of Representatives Green, Porter and Davis. He asked Representative Green to chair the subcommittee, to which Representative Green agreed. REPRESENTATIVE FINKELSTEIN expressed interest in HB 341 and volunteered to serve on the subcommittee in the event Representative Davis did not wish to do so. HB 392 - NATIVE CORP DIRECTOR CLASSIFICATION Number 0165 REPRESENTATIVE IVAN IVAN, sponsor of HB 392, presented the bill. He prefaced his remarks by saying he represented District 39, Southwestern Alaska. He explained that HB 392 amended the Alaska Corporations Code to allow Alaska Native Claims Settlement Act (ANCSA) village corporations to amend their articles and bylaws to authorize a classified or staggered term board of directors by a majority vote of the shares represented at a meeting of shareholders. Under current law, for those villages which did not have classified boards in place by July 1, 1989, such an amendment required a vote of two-thirds of all outstanding shares entitled to vote. This was often difficult for village corporations to achieve. House Bill 392 rectified that situation. REPRESENTATIVE IVAN added that HB 392 was introduced at the request of a village corporation based out of Napaskiak, located several miles downriver from Bethel, as well as a village corporation north of the Yukon River. For years, these corporations had attempted to classify their boards of directors. However, the requirement for a vote of two-thirds of all shares prevented the corporations from achieving that goal. REPRESENTATIVE IVAN explained that most of these small communities had five directors in place. With five directors, current law required each one to be up for reelection each year. The villages were seeking continuity in their boards of directors. With more than five directors, they could institute staggered terms. The purpose of HB 392 was to implement these changes. Number 0401 REPRESENTATIVE IVAN commented that Glen Price, attorney for the two village corporations, was available to answer questions. Representative Ivan added that when the HB 392 had been introduced in the House Community and Regional Affairs Committee, he had not heard any opposition to the bill. It was simple and straight- forward, he said. Number 0463 REPRESENTATIVE JOE GREEN asked whether Representative Ivan knew what the attitudes of the other villages were towards HB 392. REPRESENTATIVE IVAN replied that with more than 200 village corporations in Alaska, he could not respond to that. However, he felt certain that many small villages fell into this category. Bigger communities such as Bethel, he added, had up to nine directors; the regional corporations had nine or more. But as for the smaller villages, he knew of nobody who had come forward opposing this concept or having concerns over it. Number 0527 REPRESENTATIVE CON BUNDE asked how many village corporations Representative Ivan had communicated with about the issue. REPRESENTATIVE IVAN reiterated that they had not received opposition to HB 392. Number 0570 CHAIRMAN PORTER declared that in reviewing the bill, he and Tom Meyer, committee aide for the House Judiciary Committee, had noticed that while HB 392 appeared straight-forward, clear and easy to understand, it was involved in a body of law that was anything but clear and concise. CHAIRMAN PORTER observed that no one else was present to testify; however, before taking action on the bill, he wanted to mention that Mr. Meyer had discovered the law being amended by HB 392 was not a codified law. It was a session law grandfathering every corporation that had been incorporated prior to 1989 into the laws now being amended. For some reason, he said, these laws had never been codified. The new, revised law affecting corporations incorporated on or after July 1, 1989, was the one on the books. To anyone except a corporation lawyer, he said, that could be extremely confusing for someone reviewing the law books to determine which law affected which corporation, especially if it were a corporation begun prior to 1989. The question had just come up, he said, and nobody had been able to give them an answer yet. He stated his belief that the body of law in question needed to be codified in order to minimize confusion. He added that Representative Ivan's office was going to investigate the matter before HB 392 went to the House Finance Committee. Chairman Porter asserted that matter would probably not be affected by HB 392 one way or the other; it was a side issue, however, that needed addressing. Number 0733 REPRESENTATIVE GREEN moved that HB 392, version C, move from the House Judiciary Committee with individual recommendations and zero fiscal notes. There being no objection, it was so ordered. HB 437 - JUDICIAL OFFICERS COMPENSATION COMMISSION Number 0770 CHAIRMAN PORTER brought HB 437 before the committee and welcomed Chris Christensen to introduce the bill. CHARLES S. ("Chris") CHRISTENSEN III, Staff Counsel, Office of Administrative Director, Alaska Court System, presented the sponsor statement for HB 437. He said the bill, introduced at the request of the Alaska Supreme Court, was that court's highest priority for 1996. MR. CHRISTENSEN explained that HB 437 created a new Judicial Officers Compensation Commission to replace the State Officers Compensation Commission for purposes of determining the salaries of justices and judges. The existing commission recommended compensation levels for certain state officers, including judges, to the legislature. Its recommendations had not generally been implemented by the legislature, he said, for reasons unrelated to their merits. In contrast, he said, the commission created by HB 437 would have the authority to actually set judicial salaries, subject to both legislative appropriation and possible rejection by the legislature. MR. CHRISTENSEN said currently there were nine jurisdictions, including the federal government, operating some form of compensation commission with the authority to actually set salaries for public officers including judges. The commissions existed to see that fair decisions were made regarding compensation of certain government officials and to reduce political battles revolving around such salary decisions. MR. CHRISTENSEN explained that the current system in Alaska had historically resulted in salary adjustments for judges being lumped together with adjustments for legislators, the governor and his commissioners. This resulted in decisions about judicial salaries being subject to political decisions that were irrelevant. An essential goal of the court system, as well as government, he said, was to attract or retain highly qualified attorneys. Achieving that goal required salaries commensurate with the qualifications and responsibilities of the office of justice or judge. The judiciary, he added, had not received a cost-of-living adjustment since 1991; in the same time period, every other state has granted at least one salary increase to its judges. He said Alaska was now in the bottom one-third of the states in terms of judicial salaries. Furthermore, Alaska Superior Court judges had a far greater workload than federal judges. MR. CHRISTENSEN pointed out that one impact of eroding judicial salaries was already being seen, with several judgeships coming vacant in the past year. The percentage of private attorneys versus public attorneys applying for those positions was declining, he said. He preferred to see a balance. MR. CHRISTENSEN explained that the commission would have five members appointed by the governor, including a business executive; a person with personnel management experience; a representative of a nonpartisan voters' organization; an economist; and an attorney. Every other year, the commission would review the compensation of justices and judges. After holding required public hearings to discuss its findings, it would submit a report to the legislature. If the commission recommended a change of compensation, it would submit an order with the report. An order changing the compensation would take effect unless a bill disapproving the order in its entirety was enacted into law within 60 days after the order was submitted to the legislature. Unless disapproved, an order increasing compensation would be subject to funding through legislative appropriation and would not take effect until that appropriation was made. Unless disapproved, an order decreasing compensation would take effect on the day the legislature passed a general law, applying to all salaried officers of the state, decreasing compensation. That, he said, was the constitutional requirement for reducing a judge's salary. MR. CHRISTENSEN concluded by referring to page 4, line 14; he said an equivalent list of standards for determining a fair salary did not exist in the statute regulating the current commission. Number 1113 REPRESENTATIVE GREEN mentioned the significantly higher workload of Alaska Superior Court judges, compared to that of federal judges. He asked how the Alaska Supreme Court workload would compare. MR. CHRISTENSEN replied that it varied from court to court. In Anchorage, where most of the superior court judges were, the average caseload was 800 cases per judge. REPRESENTATIVE GREEN clarified that he was asking about the supreme court. Number 1186 MR. CHRISTENSEN responded that he did not have the statistics with him. He said they were very busy. He added that the court of appeals had been created some years before because the supreme court was considered overworked at the time. He added that justices and judges in the supreme court, court of appeals and superior court had similar salaries in Alaska, within 5 percent of each other. He believed there was more variation among federal judges. Number 1205 REPRESENTATIVE GREEN referred to the zero fiscal note in the packet and said he presumed that if the commission were established, the salaries would increase. He asked for an explanation. MR. CHRISTENSEN said the cost of the bill was the cost to run the commission. There was no cost to the court system for that, he said. The Department of Administration would be paying per diem to the five members of the commission for the period of time when they were meeting. He said there needed to be a fiscal note attached in the House Finance Committee. He added that there was no certainty that the commission would increase salaries. However, if the commission increased salaries and those increases came before the legislature, the legislature still had to appropriate the money. The legislature did retain final control. Number 1250 REPRESENTATIVE BUNDE commented that he had noticed that the zero fiscal note seemed inappropriate. A commission would certainly have a cost. He added that he was not disagreeing with the goal of having judges with real life experience; he thought Alaska could use more of those. He noted that there had been recommendations for increased salaries that the legislature had not funded. He asked how creating the new commission would impact that, because it would still need to be funded. Number 1293 MR. CHRISTENSEN replied that the current commission sent a recommendation to the legislature, which then had to act in an affirmative way in terms of introducing a bill and changing a statute. With the new system, the commission would send an order to the legislature that would have to be rejected within a specified period of time if they wanted to negate it. To affirm it, only an appropriation would be required. MR. CHRISTENSEN explained that when the current commission sent in its orders, those related to legislators and the governor as well, creating political issues. With the new commission, however, the issues revolving around legislators, the governor and his commissioners would be separated from salary considerations for judges and justices. Number 1350 REPRESENTATIVE BUNDE commented that he saw two issues: 1) establishing a commission; and 2) the mechanism for approval by the legislature. He said he was uncomfortable with the idea of getting a raise if there were no vote against it. He asked how this related to HB 236, which was an attempt to limit salaries. Specifically, he wanted to know if judges were being exempted from HB 236. Number 1300 MR. CHRISTENSEN replied no. He said the United States Supreme Court had considered the issues raised by this legislation in the federal context; they had ruled that the only way a legislature could delegate authority to determine the salaries of public officers was if they retained ultimate control, for example, in the form of the power of appropriation or the power of passing overriding legislation at a future date. This bill, he said, gave the legislature the power of that appropriation; furthermore, Alaska's constitution provided the Alaska State Legislature the power of overriding legislation. By law, one legislature could not bind a future legislature. MR. CHRISTENSEN commented that if HB 236 or something similar became law, the legislature would still retain the ability to reduce judges' salaries at a future time. However, the constitution said that in order to reduce a judge's salary, it had to be reduced by the same percentage as the salaries of all other officers of the state were being reduced. Judges could not be singled out. He noted that this provision existed in almost every state constitution, as well as the federal constitution. Number 1463 REPRESENTATIVE GREEN referred to Mr. Christensen's comments about discrepancies in salaries. He noted that the Alaska State Legislature had, some years prior, tried to increase its salaries by about 40 percent; there had been a hue and cry about that. Representative Green asked whether Mr. Christensen anticipated that if the commission were established, they would try to make parity with salaries elsewhere quickly. He wondered whether the states with similar mechanisms had seen a big advantage in salaries. Number 1508 MR. CHRISTENSEN responded that he would not expect the commission to recommend parity with federal judges. One factor the commission was required to consider, he said, was the cost to the state and whether or not the state could afford it. The legislature, he added, would do that same second-guessing. Most states did not pay their equivalent judges at the same rate as for federal judges, he clarified. They paid higher than Alaska but lower than that. Mr. Christensen added that he would expect politics to be involved in a large raise; that was the reason for the requirement of public hearings. With regard to other states, his own research indicated that most other states with this process used it not only for judges but for their legislatures as well, in hopes of reducing political battles over salaries. He understood that it had been relatively successful, at least at the state level, in reducing those battles. Number 1593 REPRESENTATIVE GREEN asked if Mr. Christensen could estimate the workload of the Alaska Supreme Court, compared to that of similar courts in other states. Number 1610 MR. CHRISTENSEN replied that was difficult to answer. Different states had their court systems set up differently. They had varying jurisdictions, numbers of cases and kinds of cases. Furthermore, other supreme courts had different numbers of members. He said he believed Alaska's was the smallest. He asserted this meant its individual members worked more than members of larger courts, as each member would write a certain number of cases. Mr. Christensen offered to gather some statistics. REPRESENTATIVE GREEN said Mr. Christensen had made a good point. Number 1647 CHAIRMAN PORTER noted that magistrates seemed to be excluded from consideration by the commission. He asked what the thinking was behind that. Number 1658 MR. CHRISTENSEN explained that magistrates were not constitutional officers appointed by the governor. They were employees hired by the court system. A third of them were not even attorneys. Magistrates received substantially lower salaries than judges, being Range 21 or less on the state pay scale. Many worked half- time. Mr. Christensen added there was no problem getting highly qualified applicants for magistrate positions with the amounts the legislature had funded the courts to pay them. Number 1695 CHAIRMAN PORTER commented that in the establishment of a commission, in most cases there was a gubernatorial appointment and a confirmation by the legislature. He noted that second step had been omitted and asked for the thinking on that. Number 1705 MR. CHRISTENSEN replied that he thought the legislation copied how the current commission operated. The Alaska Supreme Court certainly did not care how the commission was set up, he said. Mr. Christensen recounted an argument years before between the attorney general and a legislative committee over whether or not, with this type of commission, the legislature could be required to vote on the membership. He said he did not have the answer; however, the supreme court did not object to it if the legislature wanted to appoint the membership in a different manner or have them confirmed. Number 1734 CHAIRMAN PORTER asked about the commission member who would belong to a nonpartisan voters' organization. He said he knew of only one such organization and asked if Mr. Christensen knew of more. MR. CHRISTENSEN responded that the list was certainly subject to change. He said the current commission required that particular member. Although it might make sense when considering the legislature or other elected officers, he was not sure it made sense for judges. Mr. Christensen expressed that it was important, however, for one of the five members to be an attorney. Number 1784 CHAIRMAN PORTER referred to the provision for public hearings. He said he saw no mention under AS 39.23.560 of consideration of the public input, nor of the state's ability to pay the salaries. MR. CHRISTENSEN confirmed that with respect to considering the public input, that was not in the list. CHAIRMAN PORTER suggested it was perhaps included under item (12) on page 5, line 8. MR. CHRISTENSEN referred to page 5, line 2, and pointed out that the second half of item (9) related to the financial ability of the state to meet the costs. However, he said, Chairman Porter had made a good point about putting the requirement for considering public comment on that list. The public comment, he thought, was going to be highly relevant because these were public officers. Number 1848 REPRESENTATIVE BUNDE asked whether Mr. Christensen was conveying that the Alaska Supreme Court had either expressed concern about or was unable to attract quality applicants. MR. CHRISTENSEN responded that Alaska had a good judiciary; he thought in terms of qualifications, it was the best Alaska had ever had. However, he said, there would eventually be a turnaround. They were already seeing more public applicants as opposed to private applicants, the reason being, he said, that for most public attorneys, this was either a pay raise or the same salary. For qualified private applicants, he said, it was usually a big pay cut. He said that when the court had received a pay raise in 1990, that was their first raise in five years. During the two years before 1990, he said, the court had lost 20 percent of its members. Many of those who left had commented that they needed to get back into private practice to earn more money. Number 1914 REPRESENTATIVE GREEN noted that the legislation applied to a commission to recommend judges' salaries. He asked if that included just the judge or whether it filtered down through legal advisors, clerks and so forth. MR. CHRISTENSEN said absolutely not. That would continue to be done in the current method. This legislation was just for supreme court justices, judges of the court of appeals and judges of the superior and district courts. Approximately 55 men and women would be affected. Number 1960 CHAIRMAN PORTER suggested placing the word "comments" after "interests" in item (9), page 5, line 2. It would then read, "interests [comma], comments and welfare of the public and the financial ability of the state to meet the costs". MR. CHRISTENSEN agreed that would probably work well. Number 1988 REPRESENTATIVE GREEN offered an amendment to HB 437, inserting the word "comments", with commas before and after, between the words "interests" and the word "and" on line 2 of page 5. REPRESENTATIVE FINKELSTEIN noted that on page 3, line 28, it already said that the "commission shall give due regard to public comments". Although he saw no harm in it, he did not think the amendment was necessary. Number 2035 CHAIRMAN PORTER advised that there had been a motion, which they would call "Amendment Number 1, to add to page 5, line 2, the addition of `, comments' between the words `interests' and the word `and' on that line." He asked if there was an objection. There being no objection, Amendment Number 1 was passed. Number 2049 REPRESENTATIVE FINKELSTEIN said he had an amendment which he wanted to offer; however, he was going to hold off on it. He was interested in the issue of legislative compensation; he felt that all the reasons HB 437 was good for judges applied to HB 437 being good for legislators as well. He said legislators, more than anyone, suffered from having to be involved in deciding their own salaries. He said he would work on the amendment. Number 2084 REPRESENTATIVE BUNDE commented that he certainly wanted the state to have the best qualified judges possible, with real life experiences. However, he expressed concern that pay raises would become effective if the legislature failed to act. He would prefer action to be in the affirmative. Further, he would like to see legislative confirmation of commission members included in the bill as well. He felt HB 437 needed to be amended to include these. REPRESENTATIVE BUNDE moved that HB 437 be moved from the House Judiciary Committee, with the attached fiscal note and with a notation that it needed an additional fiscal note, with individual recommendations. Number 2137 CHAIRMAN PORTER recognized the motion to move the bill as described and asked if there was an objection. There being no objection, HB 437 moved from the House Judicial Committee. ADJOURNMENT There being no further business to conduct, CHAIRMAN PORTER adjourned the House Judicial Committee meeting at 2:45 p.m.