Legislature(1995 - 1996)
03/21/1996 08:00 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE March 21, 1996 8:00 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Scott Ogan, Vice Chair Representative Joe Green Representative Ivan Ivan Representative Brian Porter Representative Caren Robinson Representative Ed Willis MEMBERS ABSENT All members present. COMMITTEE CALENDAR * HOUSE BILL NO. 345 "An Act relating to the procurement of investment and brokerage services by the Alaska State Pension Investment Board." - HEARD AND HELD HOUSE BILL NO. 371 "An Act relating to the rights of terminally ill persons." - HEARD AND HELD HOUSE BILL NO. 383 "An Act relating to reimbursement by the state to municipalities and certain established villages for services provided to individuals incapacitated by alcohol; and providing for an effective date." - SCHEDULED BUT NOT HEARD HOUSE BILL NO. 304 "An Act relating to geographic differentials for the salaries of certain state employees who are not members of a collective bargaining unit; relating to periodic salary surveys and preparation of an annual pay schedule regarding certain state employees; relating to certain state aid calculations based on geographic differentials for state employee salaries; and providing for an effective date." - SCHEDULED BUT NOT HEARD HOUSE JOINT RESOLUTION NO. 47 Supporting continued funding of the Alaska National Guard Youth Corps Challenge Program. - SCHEDULED BUT NOT HEARD HOUSE BILL NO. 422 "An Act prohibiting the adoption of regulations by an agency of the executive branch of state government, annulling all regulations adopted by an agency of the executive branch, repealing provisions of the Administrative Procedure Act, and relating to additional legislation to carry out the purposes of this Act; and providing for an effective date." - SCHEDULED BUT NOT HEARD (* First public action) PREVIOUS ACTION BILL: HB 345 SHORT TITLE: PENSION INVESTMENT BOARD PROCUREMENTS SPONSOR(S): REPRESENTATIVE(S) FOSTER JRN-DATE JRN-PG ACTION 05/10/95 2088 (H) READ THE FIRST TIME - REFERRAL(S) 05/10/95 2088 (H) STATE AFFAIRS, L&C, FINANCE 03/21/96 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 371 SHORT TITLE: RIGHTS OF TERMINALLY ILL PERSONS SPONSOR(S): REPRESENTATIVE(S) BROWN, TOOHEY, Finkelstein, Davies JRN-DATE JRN-PG ACTION 12/29/95 2363 (H) PREFILE RELEASED 01/08/96 2363 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2363 (H) HES, STATE AFFAIRS, JUDICIARY 02/06/96 (H) HES AT 3:00 PM CAPITOL 106 02/06/96 (H) MINUTE(HES) 02/13/96 (H) HES AT 3:00 PM CAPITOL 106 02/13/96 (H) MINUTE(HES) 02/20/96 (H) HES AT 3:00 PM CAPITOL 106 02/20/96 (H) MINUTE(HES) 02/21/96 2827 (H) HES RPT CS(HES) 1DP 2DNP 3NR 02/21/96 2827 (H) DP: TOOHEY 02/21/96 2827 (H) DNP: G.DAVIS, ROKEBERG 02/21/96 2827 (H) NR: BUNDE, ROBINSON, BRICE 02/21/96 2827 (H) 2 FISCAL NOTES (2-DHSS) 02/21/96 2827 (H) REFERRED TO STATE AFFAIRS 03/19/96 (H) STA AT 8:00 AM CAPITOL 102 03/19/96 (H) MINUTE(STA) 03/21/96 (H) STA AT 8:00 AM CAPITOL 102 WITNESS REGISTER JOHN WALSH, Legislative Assistant to Representative Richard Foster State Capitol, Room 410 Juneau, Alaska 99801-1182 Telephone: (907) 465-3789 POSITION STATEMENT: Provided sponsor statement for HB 345. JIM CRAWFORD, President and Chief Executive Officer City Commerce Corporation 9521 Spring Hill Drive Anchorage, Alaska 99509 Telephone: (907) 563-9683 POSITION STATEMENT: Provided testimony on HB 345. DAVID SCHWANTES 8148 East 4th Avenue Anchorage, Alaska 99504 Telephone: (907) 333-1327 POSITION STATEMENT: Provided testimony in opposition to HB 345. DENNIS MILLHOUSE, Owner Trend Setters School of Beauty 407 East Northern Lights Blvd. Anchorage, Alaska 99503 Telephone: (907) 274-7150 POSITION STATEMENT: Provided testimony in support of HB 345. GAYLE HARBO 820 Red Poll Lane P.O. Box 10210 Fairbanks, Alaska 99710 Telephone: (907) 457-7815 POSITION STATEMENT: Provided testimony in opposition to HB 345. GARY BADER, Chairman Alaska State Pension Investment Board P.O. Box 22304 Juneau, Alaska 99801 Telephone: (907) 463-1700 x 239 POSITION STATEMENT: Provided testimony on HB 345. MICHAEL KIRK 1718 Evergreen Avenue Juneau, Alaska 99801 Telephone: (907) 586-4318 POSITION STATEMENT: Provided testimony in opposition to HB 345. ROBERT D. STORER, Chief Investment Officer Treasury Division Department of Revenue P.O. Box 110405 Juneau, Alaska 99811-0405 Telephone: (907) 465-4399 POSITION STATEMENT: Provided testimony on HB 345. JOHN CYR, Vice President National Education Association - Alaska P.O. Box 2776 Palmer, Alaska 99774 Telephone: (907) 745-2015 POSITION STATEMENT: Provided testimony in opposition to HB 345. RAYMOND J. ELLIS, Certified Public Accountant Raymond J. Ellis 1500 West 33rd Avenue Anchorage, Alaska 99503 Telephone: (907) 274-5537 POSITION STATEMENT: Provided testimony in support of HB 345. SCOTT JOHANNES, President Criterion General Inc. 8221 Dimond Hook Drive Anchorage, Alaska 99507 Telephone: (907) 344-3200 POSITION STATEMENT: Provided testimony on HB 345. DAVID GOTTSTEIN, President Dynamic Capital Management, Inc. 471 West 36th Avenue Anchorage, Alaska 99503 Telephone: (907) 562-6374 POSITION STATEMENT: Provided testimony in opposition to HB 345. BOB BELL 2610 Curlew Circle Anchorage, Alaska 99515 Telephone: (907) 274-5257 POSITION STATEMENT: Provided testimony on HB 345. MANO FREY, Trustee Alaska Laborers - Employers Retirement Fund 13500 Old Seward Highway Anchorage, Alaska 99515 Telephone: (907) 345-4429 POSITION STATEMENT: Provided testimony in support of HB 345. REPRESENTATIVE KAY BROWN Alaska State Legislature State Capitol, Room 517 Juneau, Alaska 99801-1182 Telephone: (907) 465-4998 POSITION STATEMENT: Sponsor of HB 371. SYLVIA SHORT, Member Alaskans For Death With Dignity 705 West 47th Avenue Anchorage, Alaska 99503 Telephone: (907) 562-4992 POSITION STATEMENT: Provided testimony in support of HB 371. AL SUNDQUIST 3384 Mt. Vernon Court Anchorage, Alaska 99503 Telephone: (907) 562-7522 POSITION STATEMENT: Provided testimony in support of HB 371. LYNN STIMLER, Executive Director American Civil Liberties Union - Alaska Affiliate (ACLU) P.O. Box 201844 Anchorage, Alaska 99520 Telephone: (907) 258-0044 POSITION STATEMENT: Provided testimony in support of HB 371. JANET OATES, Director of Marketing and Government/Community Relations Providence Health System - Alaska P.O. Box 199604 Anchorage, Alaska 99514 Telephone: (907) 261-4946 POSITION STATEMENT: Provided testimony in opposition to HB 371. ARTHUR CURTIS 1605 Sitka, Number 203 Anchorage, Alaska 99501 Telephone: (907) 272-7360 POSITION STATEMENT: Provided testimony on HB 371. KENT AUTOR 4010 Piper Street Anchorage, Alaska 99508 Telephone: (907) 562-5795 POSITION STATEMENT: Provided testimony in support of HB 371. CHARLES ABBOTT P.O. Box 1434 Delta Junction, Alaska 99737 Telephone: (907) 895-1098 POSITION STATEMENT: Provided testimony in opposition to HB 371. JIM EDE 2420 Davis Road Wasilla, Alaska 99654 Telephone: (907) 376-4631 POSITION STATEMENT: Provided testimony in support of HB 371. LINDA WAHL P.O. Box 770 Dillingham, Alaska 99576 Telephone: (907) 842-5618 POSITION STATEMENT: Provided testimony in opposition to HB 371. BRUCE GORDON P.O. Box 80046 Fairbanks, Alaska 99708 Telephone: (907) 479-6988 POSITION STATEMENT: Provided testimony in support of HB 371. VICKY LAWYER P.O. Box 58527 Fairbanks, Alaska 99711 Telephone: (907) 488-6726 POSITION STATEMENT: Provided testimony in support of HB 371. AL BOWLING P.O. Box 390 Kotzebue, Alaska 99603 Telephone: Not provided. POSITION STATEMENT: Provided testimony in support of HB 371. CHRISTINA PERRIGO 301 Wortman Loop Sitka, Alaska 99835 Telephone: (907) 747-8948 POSITION STATEMENT: Provided testimony in opposition to HB 371. LLOYD PERRIGO 301 Wortman Loop Sitka, Alaska 99835 Telephone: (907) 747-8948 POSITION STATEMENT: Provided testimony in opposition to HB 371. RENEE MURRAY 605 West 42nd Avenue Anchorage, Alaska 99503 Telephone: (907) 561-8796 POSITION STATEMENT: Provided testimony in support of HB 371. BEVERLY HAYWOOD, Co-chairperson Juneau Unitarian Fellowship 985 Mendenhall Peninsula Road Juneau, Alaska 99801 Telephone: (907) 790-4069 POSITION STATEMENT: Provided testimony in support of HB 371. RITCHIE SONNER, Executive Director Hospice and Home Care - Juneau 3200 Hospital Drive, Number 100 Juneau, Alaska 99801 Telephone: (907) 463-3113 POSITION STATEMENT: Provided testimony in opposition to HB 371. FRANCIS T. HURLEY, Archbishop Archdiocese of Anchorage 600 West 11th Avenue Anchorage, Alaska 99501 Telephone: (907) 274-8358 POSITION STATEMENT: Provided testimony in opposition to HB 371. ACTION NARRATIVE TAPE 96-38, SIDE A Number 0000 The House State Affairs Committee was called to order by Chair Jeannette James at 8:00 a.m. Members present at the call to order were Representatives Willis, Porter, Green, Ivan and James. Members absent were Representatives Ogan and Robinson. HB 345 - PENSION INVESTMENT BOARD PROCUREMENTS The first order of business to come before the House State Affairs Committee was HB 345. CHAIR JEANNETTE JAMES called on John Walsh, Legislative Assistant to Representative Richard Foster, to present the sponsor statement. Number 0050 JOHN WALSH, Legislative Assistant to Representative Richard Foster, read the following statement into the record. "HB 345; An Act Relating to the Procurement of Investment and Brokerage Services by the Alaska State Pension Investment Board. "House Bill 345 simply requires that the Alaska Pension Investment Board `increase the utilization of brokerage and investment services provided by persons located in the state to at least seven percent of the brokerage services procured by the board.' Additionally, there is a provision to allow the board to `opt' out upon a written finding that the seven percent goal is unattainable. "In support of the bill, I would merely reiterate the findings section of the legislation wherein the case is made for a healthy, competitive private sector; the need to review state procurement practices and support a local procurement process; and most importantly, the need for all state agencies and state resources to be directed toward improving the statewide economy. "For the record, it is not the intent of the sponsor to jeopardize in any way the integrity of these investment funds." MR. WALSH said he would be available for any questions. CHAIR JAMES called on the first witness in Juneau, Jim Crawford. Number 0341 JIM CRAWFORD, President and Chief Executive Officer, City Commerce Corporation, referred the committee members to a graph titled, "Alaska's Economy since Statehood - Employment." He explained employment was the best way to judge an economy on a statewide basis. There were many misconceptions about Alaska's economy, therefore, affecting the stability of instate investments. The graph indicated employment was a continual plot for Alaska. MR. CRAWFORD further referred the committee members to a graph titled, "Employment - Trendlines: 1978 - 1994 (Alaska, Texas, California and New York.)" The trend line for Alaska was more positive compared to the other states. MR. CRAWFORD further referred the committee members to a graph titled, "Employment - Actual: 1978 - 1994 (Alaska, Texas, California and New York.)" The graph indicated a cyclical economy for all the states. This was contrary to popular belief that Alaska's economy was more cyclical than other states. MR. CRAWFORD further referred the committee members to a graph titled, "Housing - Trendlines: 1985 - 1994 (Anchorage, Dallas, Los Angeles and New York.)" The graph indicated a greater housing risk in the other cities compared to Anchorage. MR. CRAWFORD further referred the committee members to a graph titled, "State of Alaska Permanent Fund - Income and State Oil Revenues." MR. CRAWFORD referred to a handout titled, "State of Washington - State Investment Board Real Estate Investment Plan." He explained Washington cut back their allocation of real estate from 78 percent to 44 percent. The state of Washington invested in its own state and region. The state of Oregon put mortgage money into the state alone. The state of Texas put 50 percent of its entire fund into real estate instate. There was a pattern in other states to support the local economy with an excellent return. MR. CRAWFORD further referred to a handout titled, "Apartment Financing Comparison." He suggested reducing apartment rates by 15 percent to connect Alaska to long-term money. Alaska's apartments and commercial buildings were financed on short-term loans with short amortization and higher interest rates, by 2.5 percent. MR. CRAWFORD asked the committee members to pass the bill forward to the House Finance Committee for further consideration. He called the bill a critical component to expand the local economy. CHAIR JAMES called on the next witness in Juneau, David Schwantes. Number 0695 DAVID SCHWANTES expressed his opposition to HB 345. He said currently, if a person wanted to make a presentation to the board, he was allowed. Furthermore, to require a 7 percent investment was a disservice. The board was elected to do the best job that it could do. Therefore, if a presentation was made and the board felt it was good for the people, it would be adopted. MR. SCHWANTES referred the committee members to page 2, lines 30 - 31; and page 3, lines 1 - 2, and read, "unless the board makes a written finding that the board is unable to meet this goal because there is insufficient number of persons with the requisite skill in the state to perform the service." He said there were many people in Alaska that had the skill, but he wondered if they provided the best quality. He reiterated the board would accept a presentation if it was the best quality for the people that it served. The bill, however, would require the use of that investment, even if there was a better one. Therefore, he reiterated, he was opposed to HB 345. Number 0860 CHAIR JAMES stated she was surprised to hear testimony against HB 345 because the public expressed dissatisfaction that funds were not being invested in the state. She wondered, if Mr. Schwantes had any confidence in the state, according to his testimony regarding the requisite skills. She commented 7 percent was not very much. Number 0896 MR. SCHWANTES replied he did have confidence in the board that was elected to invest the funds. Therefore, if the board made a decision to invest in the state, that was fine. The board had the skills to determine if a presentation was of quality and best represented the people. CHAIR JAMES called on the next witness in Juneau, Dennis Millhouse. Number 0959 DENNIS MILLHOUSE, Owner, Trend Setters School of Beauty, expressed his support of HB 345. It was time that Alaskan money was reinvested in Alaska. He explained he got caught in the economic downturn in the late 1980's and had yet to recover. He said he hoped the bill passed so that the people who lived in Alaska and made their money in Alaska could reinvest in Alaska. He did not leave Alaska when he encountered his problems because Alaska was his home. He asked the state to loosen up and to reinvest its money to make Alaska better. CHAIR JAMES called on the next witness in Juneau, Gayle Harbo. Number 1222 GAYLE HARBO stated it was important that the board be allowed to invest the money in the best way possible to get the best return. Currently, there was not anything that prevented the board from investing 7 percent, or more, in the state of Alaska. The board was the expert, so let the board decide. She expressed her opposition to HB 345. CHAIR JAMES called on the next witness in Juneau, Gary Bader. Number 1292 GARY BADER, Chairman, Alaska State Pension Investment Board (ASPIB), explained the board was comprised of eight members - four were elected by the beneficiaries and four were appointed by the Governor. Two of the current members were appointed by Governor Hickel then reappointed by Governor Knowles. The board was interested in serving the best interest of the participants in the system. The participants were: for example, retirees, potential beneficiaries, and public entities. Moreover, the returns of the system were of a vital interest to the employee's level of comfort. It was also important to the political subdivisions that were assessed based on the earnings of the fund. If the fund did not earn as it should, the contribution rates of employers tended to go up over time. Moreover, the board created a mechanism where all of the equity trades were reported to the brokers in Alaska. It was not up to the board, however, to see that the check went directly to the brokers. He said there was an interest to invest in Alaska. The board would consider an investment in Alaska that was in the best interest of the fund. Lastly, he believed there were ways that Alaska benefitted from investments in Alaska. He cited the Alaska Housing Finance Corporation that ensured investments were placed in areas of general need. Number 1435 REPRESENTATIVE BRIAN PORTER said he did not see language in the bill that indicated 7 percent of the investment should go towards improving Alaska. The language only indicated that 7 percent of the investment services the board procured should be brokeraged through the local brokerage services. Number 1453 MR. BADER stated the bill did not require investment in Alaska as Representative Porter indicated. He was responding to earlier testimony that inferred there was a linkage between investment in Alaska and HB 345. Number 1464 REPRESENTATIVE PORTER said he assumed that there was a linkage. A local investor would have better knowledge of prudent investments in Alaska compared to an investor in New York, for example. He reiterated he did not see language in the bill that indicated this would jeopardize money. Number 1481 REPRESENTATIVE JOE GREEN asked Mr. Bader how much of the Alaska State Pension Investment Board's portfolio was invested in Alaska now? Number 1485 MR. BADER replied a very small amount of the portfolio was invested in Alaska now. Number 1512 REPRESENTATIVE GREEN asked Mr. Bader if investments were not made in Alaska because they were shakier, or the return was not as good, for example? Number 1522 MR. BADER replied he did not say the ASPIB would not invest locally. He explained an investment allocation was based upon the risk characteristics of the fund. The fund had not called for an increased allocation in real estate or mortgages, therefore, the other investments tended to be stocks and bonds, which were not instate investments. Number 1550 REPRESENTATIVE SCOTT OGAN agreed with the remarks of Representative Porter. The bill simply increased the board's utilization of brokerage and investment firms that were based in Alaska or Alaskan owned. The board could still make the calls to invest wherever it wanted. He wondered how good the investors were in Alaska. He asked, are they capable and competent enough to invest properly? Number 1593 MR. BADER stated that question would be better put to the Chief Investment Officer, Robert Storer, who would testify shortly. Number 1601 CHAIR JAMES asked Mr. Bader, what brokerage firms did the board normally use when looking to invest? Number 1608 MR. BADER replied a brokerage firm was normally selected in terms of stocks by the investment manager engaged. Furthermore, the pension fund had directed a mechanism to recapture some of the commissions back to the fund as opposed to the investment manager, for example. Number 1635 CHAIR JAMES wondered if the fund was its own broker. Number 1638 MR. BADER responded the fund was using another broker, but there was an arrangement for discounts. That did not cover the entire fund, however. CHAIR JAMES asked if that was a local broker or a broker outside of the state? MR. BADER replied that was a broker outside of the state. Number 1651 CHAIR JAMES asserted herein lied the problem. If Alaska could keep the money instate, it would not be having the financial dilemma now. She never failed to hear the people wonder why the state did not invest its own money in Alaska. She reiterated the 7 percent brokerage requirement in the bill was not an unreasonable request. CHAIR JAMES called on the next in Juneau, Michael J. Kirk. Number 1717 MICHAEL J. KIRK said he was here today on behalf of retired teachers, state employees, municipal employees and the people. He said, "If I told you how to invest the money in the piggy bank of your children, you'd be outraged." The tradition in this country was a free economy. There were no special privileges in the investment game. There was, however, in the Alaska State Constitution a prudent investor clause, of which you, the legislators, had sworn to uphold. Furthermore, he explained he had followed approximately 250 to 300 corruption pension fund cases of which the same type of pleading was heard today. He said he would love to see the money invested in the state, but not somebody else's money. "You invest your own money, they invest their own money, and I'll be darned if they tell me how to invest my savings." He referred the committee members to his handout on the Robin E. Ward's opinion column in the Anchorage Daily News and urged them to read it. He reiterated, until the prudent investor clause was changed in the Alaska State Constitution, the committee members would be violating their loyalty to it. Number 1852 REPRESENTATIVE PORTER stated he understood the position of Mr. Kirk. However, as a retired municipal employee, he felt Mr. Kirk was not talking on behalf of every retiree. Furthermore, the state put more than 50 percent of the money into the trust fund. Moreover, the investment procedures were well within state policy and guidelines. Imprudent investment was not an issue, and there was nothing in this bill that indicated anyone should make an imprudent investment. Number 1891 MR. KIRK responded the market would find its own sense of gravity. He would not object, if 100 percent were invested in the fund, for example. He reiterated the bill violated the law, and the market. REPRESENTATIVE PORTER replied, "I respectfully disagree with you." CHAIR JAMES called on the next witness in Juneau, Robert Storer, Department of Revenue (DOR). Number 1920 ROBERT STORER, Chief Investment Officer, Treasury Division, Department of Revenue, explained the DOR provided staff for the Alaska State Pension Investment Board. He said he was here primarily to answer any questions, but he did have a few observations to comment on. He referred the committee members to page 2, line 10, and read "increase the board's utilization of brokerage and investment services provided by persons located in the state to at least seven percent of the brokerage and investment services that the board procures by contract, unless the board makes a written finding that the board is unable to meet this goal because there is an insufficient number of persons with the requisite skill in the state to perform the services." He explained brokerage services were not procured by contracts in Alaska. Therefore, given the intent of this bill, he suggested changing the language. Furthermore, the ASPIB accepted fiduciary responsibility on July 1, 1993 for the retirement funds. The contract stated that they must consider the status of the funds' investments and liabilities, determine appropriate investment objectives, establish investment policies to achieve these objectives, and act only in regard to the best interests of the system's plan and beneficiaries. Moreover, the pension board was held to the prudent expert rule standard. He said he could not quiver with the intent of the bill. However, legislation that defined investment criteria, in effect, defined investment policy. Therein was his problem with the bill. Moreover, a policy did try to address the commitment that brokerage firms had made in Alaska. He explained the board balanced the Alaskan entities and the best executions through information. Information was provided on a quarterly basis by the Department of Revenue. He explained there were two different entities within a brokerage firm - retail and institutional. The DOR used the institutional entity. The institutional market was in jeopardy of downsizing, however. Furthermore, he explained 30 percent of all equity trades were through firms that had offices located in Alaska which equated to about $764,000 in commission. "Did all of that money come back to Alaska," he asked? The answer was, "no." How much? He did not know as well. "It would not be all, however." Number 2187 REPRESENTATIVE GREEN asked Mr. Storer, if the board were to use a local broker to contact an institutional broker, could the fee be shared? Number 2206 MR. STORER replied the board had committed to a commission recapture program which brought dollars back into the plan. It was intentional to not include the Alaskan firms otherwise all the commissions would come back to the department. "By excluding them, we are advantaging them in this process," he stated. REPRESENTATIVE GREEN wondered if this was double talk. MR. STORER replied, this was a "trust me" scenario. It was done intentionally so that the maximum dollars were available to firms that had offices located in Alaska. Number 2266 REPRESENTATIVE GREEN asked Mr. Storer if it was possible through institutional brokerage to direct the money? He wondered if there were additional ways to direct the money through the state. Number 2279 MR. STORER replied, "yes, you can direct money." There were implications, however. There were market impacts, for example. When directing money, it had to be in the best interest of the beneficiaries. It also had to be in the best interest of Alaska's financial community. He reiterated the institutional desks were distinctly different than the offices in Alaska. Number 2319 REPRESENTATIVE PORTER asked Mr. Storer what the current percentage the board was using for local investment brokers? Number 2324 MR. STORER replied about 30 percent of the commission dollars were executed through firms that had offices located in Alaska. The execution was not made directly through the offices in Alaska, however. REPRESENTATIVE PORTER stated that would not mean the board had exceeded the 7 percent goal. MR. STORER replied, according to the language and intent of HB 345, the answer would be 0 percent, because the commissions were not executed in Alaska. Number 2349 CHAIR JAMES stated if a firm such as Merrill Lynch, for example, had an office in Alaska, but the dealings were with the office in New York, she wondered how the money would come back to Alaska. Number 2365 MR. STORER stated money did come back to Alaska. How much, however, he could not measure. It was called the "intermurals" of Merrill Lynch. He explained as much information was provided to the local firms to receive as much commission dollars as possible in the process. It depended on the relationship of the firms, however. Number 2393 CHAIR JAMES stated she was embarrassed and disappointed that the intent of HB 345 was even an issue. Testimony today indicated to her why it was an issue, however. She said, "the public doesn't understand." She wondered if organizations were willing to tell the people why there were not willing to invest in Alaska. It was hard for her to believe there was not prudent investment available in Alaska. She reiterated her frustration with the process. MR. STORER replied, "I understand, Madame Chair." CHAIR JAMES called on the next witness in Juneau, John Cyr. Number 2460 JOHN CYR, Vice President, National Education Association - Alaska (NEA - Alaska), said the NEA - Alaska was opposed to HB 345. TAPE 96-38, SIDE B Number 0000 MR. CYR further said the board was obligated to get the best return that was possible for the fund for the state. House Bill 345 was the antithesis of faith in Alaska. If there was faith in Alaskan businesses, brokerage firms, and Alaskans, legislation would not be needed. Let the free market economy determine the best process. Number 0046 CHAIR JAMES stated she agreed with Mr. Cyr. However, there were at least eight people today that were concerned about the prudent decisions of the board. She agreed the market should set the process. There was bias, however. Furthermore, legislators had a fiduciary responsibility as well. She reiterated, if this was not an issue, the bill would not be before the committee today. CHAIR JAMES called on the first witness via teleconference in Anchorage, Ray J. Ellis. Number 0095 RAY J. ELLIS, Certified Public Accountant, Raymond J. Ellis, said he had been practicing in Alaska for over 30 years and during this time he had seen many ups and downs in the economy. He also worked with many clients to obtain financing. He explained it had become very difficult to obtain financing in Alaska. He mentioned his investment in real estate in the 1980's and the problems associated with the banks. He expressed his support of HB 345 for more opportunities for financing projects. CHAIR JAMES called on the next witness via teleconference in Anchorage, Scott Johannes. Number 0223 SCOTT JOHANNES, President, Criterion General Inc., explained as a general contractor he practiced business all over the state. He said the financing process was unique due to the rural communities in Alaska. It was hard to have comparable pricing for the banks to use for loans, therefore, the banks required stringent cash requirements. It was frustrating because the state put a lot of money into the rural communities as state funded projects, but it could not make funds accessible for private development. There were many individuals that wanted to develop but could not find the financing to get started. CHAIR JAMES called on the next witness via teleconference in Anchorage, David Gottstein. Number 0290 DAVID GOTTSTEIN, President, Dynamic Capital Management Inc., read the following statement into the record. "My name is David Gottstein. I am the president of Dynamic Capital Management, an Alaskan based investment Advisory firm specializing in large capitalization equities. I am in the market to manage other peoples' money for a fee. This includes government pension assets. On the surface, because I might gain materially from its passage, you might assume that I would favor HB 345 as it is currently written. You would be very wrong. I am also a life-long Alaskan, and I do not think the bill as written serves the residents of Alaska or would accomplish the goals intended. "Even though the intent of the proposed legislation should gain wide approval within the state, the mechanism used is fundamentally flawed on a number of issues. With more focused analysis, a much better formula could be devised. "As members of the legislature, you are charged with the difficult task of balancing your fiduciary obligations to grow and to protect the pension and other assets of state government with your obligations, as citizens charged with the general welfare of you constituencies, to seek the growth of employment opportunities for Alaska's residents. I believe the solution would be to adopt a legitimate prejudice to hire firms that can show that the bulk of their human resources, wherever possible, are located in Alaska, and that services are provided without materially sacrificing competency, performance,or competitiveness in the area of fees, charges or commissions. There are several reasons why a quota system would not establish a system of checks and balances to accomplish the goal of having a legitimate prejudice to hire such Alaskan firms. For example: "1. The legislation, currently written establishing a quota system, could result in disaster. It is important that the decision makers assigning contracts feel ownership in the outcome and performance of their decisions. By focusing the decision making process on a mandate to hire Alaskans, state decision makers are forced to abdicate their primary responsibility as fund protectors to become job creators. If a bad performance ensues from one of the marginally qualified Alaskan contractors, fiduciaries cannot be held accountable, because they were forced by statute to select from a limited pool. It would be better for all if competency did not have to take a back seat in the decision- making process. Can you imagine a standard so low that one is required to hire someone unless they are determined to be unqualified? Do you know what one calls the person who graduates last in his or her medical class? He or she is called Doctor. This path is laced with potential mines. "2. The second flaw lies within the language, not the intent. The language in part says "services provided by persons located in the state..." The potential problem here is that legally a "person" can mean a human or an entity. A company with an office in Alaska, with only an order taker, might qualify, even though personnel in other states were actually getting paid for the services. Brokerage services might appear to go through an Anchorage or Fairbanks office, but actually be credited to an institutional New York broker when determining commission income and bonuses. "3. There is also a human factor. It is obvious from the way the legislation is written that the drafters have given up on the state bureaucracy's ability to contract services without a prejudice against local hire. They have no incentive to do so. They would rather go to Phoenix to check up on a money manager than Anchorage. Attempting to beat them into submission by expecting them to adopt a new agenda and to perform it appropriately and with enthusiasm is, quite frankly, naive. Perhaps a better approach would be to convince the procurement officers that Alaskan employment "will" be a secondary, but a legitimate criteria in the selection process. Rather than cramming a process down their throats that they don't believe in, getting input from them on how to accomplish both goals simultaneously would yield better results. "4. I believe the main challenge here is to devise a method whereby the state does not suffer from using local hire but rather supports and fosters growth in an immature but potentially significant industry. Current requirements sometimes preclude the state from nurturing a promising financial services industry. Therefore, in part, we may have to deal with certain regulatory or policy issues that act to discriminate against local hire because of company size and age, or amount of assets under management. Nascent industries need help most in their early stages of development. Let me next suggest two different approaches that may work better than a quota system. "Instead of quota standards that set a minimum percentage as a goal, a peer review qualification test could be maintained that requires, at a minimum, above average competency. This could be done by inserting the language I used previously such as "to institute a legitimate prejudice policy to hire firms who can show that the bulk of the human resources engaged in providing purchased services are located in Alaska, and that services are provided without materially sacrificing competency, performance, or cost." This does not require Alaskan companies to be the best or the cheapest, but they would have to be competitive. Fiduciaries could then be required to manage the execution of the policy. "Another approach, not dissimilar from that which other institutions use as a matter of course, would be to craft a farm team program for investment managers with a relatively modest dollar commitment. This would require the trustees to engage local hire farm or test teams under guidelines they deem appropriate. The quota system recommendation came as a result of frustration within the industry. A better approach would be to tell fiduciaries that they must engage in an affirmative action plan without dictating to them how to do it. A quota system could result in significant performance issues with a marginally- performing service provider, discrediting the whole intent of the legislation. "These are just a few words on what might be a delicate subject. I would be happy to answer questions from the committee members." CHAIR JAMES called on the next witness via teleconference in Anchorage, Bob Bell. Number 0519 BOB BELL said he was an Anchorage Assembly Member and Engineer. He explained the Anchorage Assembly passed a resolution asking the financial officers to use the local brokerage firms as much as possible. He explained the hard times he experienced in the 1980's. The local financial institutions stood by him compared to the national financial institutions. Furthermore, the local brokers knew how to better invest in Alaska. He strongly supporting keeping the profits in Alaska. CHAIR JAMES announced HB 383 would no be heard today due to time constraints. It would be scheduled for to Saturday, March 23, 1996. House Bill 371 would be heard next. CHAIR JAMES called on the next witness via teleconference in Anchorage, Mano Frey. Number 0687 MANO FREY, Trustee, Alaska Laborers - Employers Retirement Fund, explained the fund was a joint trustee comprised of four management trustees, and four union trustees. The composition provided a balance for decision making. It was personally repugnant to him to have to be here today to testify to urge the ASPIB to invest in Alaska. It was beyond his comprehension that it did not meet that standard already. The Alaska Laborer's Fund had always provided a funding level for investments in Alaska. He cited the pension fund was about $400 million. It used investment advisors from outside, but directed them, as long as the investment was prudent, to look at the Alaskan market. He asserted there were prudent investment opportunities in the state of Alaska. In conclusion, he encouraged the ASPIB to make a direct investment in the state. HB 371 - RIGHTS OF TERMINALLY ILL PERSONS The next order of business to come before the House State Affairs Committee was HB 371. CHAIR JAMES called on Representative Kay Brown, sponsor of HB 371. Number 0868 REPRESENTATIVE KAY BROWN expressed her appreciation of the House State Affairs Committee for looking at this issue today. The issue was both profound and emotional. She explained when she introduced HB 371 the situation was somewhat different than today. At that time, she was seeking to legalize the opportunity for a terminally ill competent adult to receive the assistance of a doctor to end his or her life in a dignified manner. However, since the introduction of HB 371, the Ninth Circuit Court of Appeals had recognized the right to die with dignity as a constitutional liberty for those that were terminally ill and competent. She referred the committee members to the summary of findings by Terri Lauterback, Legislative Counsel. The summary outlined the provisions of the decision in the Compassion in Dying, et al. v. State of Washington case which were similar to the provisions in HB 371. Furthermore, she recognized that there were many different points of view on this issue. She emphasized that the passage of HB 371 did not require anybody to do anything that did not fit within their own moral code. However, it did allow those that had a different moral code to act in accordance with their own conscience. The legislature should move forward, debate, and establish appropriate and proper safeguards to exercise this right. The court decision made it difficult, if not impossible, to prosecute a physician for participating in an act of this nature. Moreover, the words struck down in the state of Washington were similar to the words in the Alaska law. The public interest was best served by setting the conditions so that all parties were protected. The safeguards in the law recognizing the state of the legal situation were as followed: "The patient must be terminally ill in the opinion of a physician. "The patient must knowingly request life-ending medication in writing. "A second, consulting physician must then confirm both the diagnosis and the patient's mental competence. "The request must be witnessed by individuals who have nothing to gain from the patient's death and are not connected with the patient's health care providers. "The request must be made at least twice and no fewer than 10 days must pass between a first and second request. "The administration of the life-ending medication is solely in the hands of the patient; the patient may change his or her mind at any time. "Physicians and pharmacists have the absolute and unquestioned right to decline involvement. Physicians unwilling to participate are not required to refer patients to willing physician (but may not withdraw from the case before the patient obtains the services of an alternate physician). Under current state law, pharmacists are not required to fill any prescription. "Hospitals also have the right to decline involvement. Institutions unwilling to participate must take all reasonable steps to transfer the patient to his/her home or to an institution which is willing to participate." REPRESENTATIVE BROWN further referenced a recent poll that showed strong support for HB 371 in Anchorage. The results were: for example, two-thirds were very likely or somewhat likely to support it; 14 percent were very likely or somewhat likely to support it once they learned about the specific provisions and safeguards; and there was overwhelming support that people should have control over their own medical care and their own end-of-life decision. She urged the committee members to consider the benefits of moving the bill forward to establish a framework rather than leaving the matter in the hands of the courts and attorneys. She would be happy to answer any questions. CHAIR JAMES called on the first witness via teleconference in Anchorage, Sylvia Short. Number 1186 SYLVIA SHORT, Member, Alaskans For Death With Dignity, explained the decision of the Ninth Circuit Court of Appeals struck down the statutes in the state of Washington that parallel the statutes in Alaska. Alaska was bound by the decision of the Ninth Circuit Court of Appeals as a member of the circuit. As a result of the decision, there were not any guidelines or safeguards to support the participating physicians. The only way to save the state from the needless cost of court cases and from the possibility of misinterpreting the court decision was to pass HB 371. CHAIR JAMES called on the next witness via teleconference in Anchorage, Al Sundquist. Number 1377 AL SUNDQUIST thanked the committee members for his opportunity to testify today. He expressed his support of HB 371. He discussed the arbitrary structure of the assisted suicide laws. He cited the development of the Uniform Penal Code and read, "model code reports considered the argument that the criminality of assisted suicide should turn upon the presence of the selfish (indisc.), but concluded that the life, of course, was to maintain the prohibition and rely on litigation in the sentence." He said it was time for the acceptance of a compassionate motive for suicide. Furthermore, he quoted the Archbishop Francis T. Hurley as stating, "I have sat at the bedside of the dying, and I have heard the cries of those in extreme pain. I found myself praying to God for their speedy death. On occasion I have held them in my arms as they died." Assisting their speedy death was a humane and compassionate solution, according to Mr. Sundquist. "Let me answer to my God in my own way. You in the committee have the power to save me from the fearful death solution. Please pass HB 371." CHAIR JAMES called on the next witness via teleconference in Anchorage, Lynn Stimler. Number 1499 LYNN STIMLER, Executive Director, American Civil Liberties Union - Alaska Affiliate (ACLU), said it was clear that the decision of the Ninth Circuit Court of Appeals that a terminally ill competent person had the right to determine the time and manner of his death. This was a very important chance for the legislature to establish boundaries of this new constitutional right. The ACLU believed that HB 371 would pass constitutional muster under the Ninth Circuit Court of Appeals' analysis. She called HB 371 a responsible attempt to set limits and establish procedures for Alaskans suffering from terminal illnesses. If the legislature were to do nothing, it would make it more difficult for terminally ill patients to assert their constitutional right. CHAIR JAMES called on the next witness via teleconference in Anchorage, Janet Oates. Number 1642 JANET OATES, Director of Marketing and Government/Community Relations, Providence Health System - Alaska, discovered the following observation, "my observation is that in the U.S. people often cry `there ought to be a law,' as if that would settle the matter." Perhaps, the observation reflected the aversion to struggle with difficult moral issues. The Providence Health System in Alaska opposed HB 371. The system opposed it based on the respect for the sacredness of life, and for the compassionate care of the dying and vulnerable person. The system felt the growing public support was a result of the fear of losing dignity and control during the dying process, the fear of un-released pain, the fear of being a burden to the family, and the fear of abandonment by family and friends. The health care system in general had failed miserably for the support of a dying person. The Providence Health System was aggressively promoting better pain management and education for the support of the dying. Furthermore, the system was concerned because it felt this was a reflection of society's approach of a "quick fix." She cited the country of Holland where the system was over utilized. She urged the committee members to give this matter some time. Pain management was improving everyday to help the dying. In conclusion she quoted, "laws are powerful ways for society to tell their stories." Laws did not only reflect the values of society, but also shaped the values. CHAIR JAMES called on the next witness via teleconference in Anchorage, Arthur Curtis. Number 1890 ARTHUR CURTIS said as a Minister he pondered the questions of suffering and life and death often. The evidence indicated pain could not be controlled to make life liveable and endurable in the thrones of an incurable illness. Furthermore, science was probably unlikely to make those last days endurable for some illnesses. Moreover, HB 371 established guidelines to ensure that nobody was forced into making a decision against his will. It did not condone murder or suicide. It was simply an aide to hasten an inevitable death. The bill could be competently passed by the legislature to ensure that decisions were made according to a person's own moral and religious belief. CHAIR JAMES called on the next witness via teleconference in Anchorage, Kent Autor. Number 2028 KENT AUTOR expressed his support of HB 371. He supported the bill based on the irony that he could be more merciful to his dog than he could be to himself. The bill enabled his freedom of choice for himself. It also enabled his doctor to provide the assistance to exercise his right. The bill also removed government restrictions on individual liberties. He did not see it as a moral issue or an issue of rights, he saw it as an issue of freedom granted by the constitution. Finally, the law set forth sensible and effective restrictions to preclude abuse. Moreover, he stated he had a great deal of experience with death. It surprised him that humans came into this world the same way, but there were an infinite number of ways to leave it, some better than others. He asserted the majority of citizens supported the concept of HB 371. His experience in the pet cremation service industry further confirmed the widespread support for medically assisted deaths. He reiterated it was ironic that a person could be more merciful towards his pet than himself. He stated this was not a matter of managing pain, but of managing the prospect of life's misery. He thanked the committee members for their time. CHAIR JAMES called on the next witness via teleconference in Anchorage, Kent Woodman. Number 2256 KENT WOODMAN said he had been an Alaskan resident for over 42 years. He was not here today to discuss his personal illness, but to talk about the duty of the laws. The United States Ninth Circuit Court of Appeals just ruled that it was unconstitutional to prohibit a physician assisted end-of-life. He called it a "whopping" defeat for the opposition. The decision was being studied now by the Attorney General (AG) of Alaska. Furthermore, the AG had already issued instructions not to prosecute positions under the statutes because they were similar enough to Washington's laws. The item of a "slippery slope" was dismissed as a pertinent defense. The most supportive element of the document was that the religious and moral persuasions could not impose their standards on others. The position further stated laws were needed on the books to set the parameters to prevent abuse. The failure to pass HB 371 this session would force the passage of another bill the next session that might not be as well crafted. He called HB 371 an excellent document. TAPE 96-39, SIDE A Number 0049 CHAIR JAMES called on the next witness via teleconference in Delta Junction, Charles Abbott. CHARLES ABBOTT expressed his opposition to HB 371. He believed that the argument of a person setting his values according to what he felt was right was missing the point. He equated HB 371 with the abortion issue that argued the death of a child was dignity for the mother. He also believed that the first death would be "death with dignity," the second would be "death with intimidation," and the third would be "death with abuse." He thanked the committee members for their time. CHAIR JAMES called on the next witness via teleconference in Mat- Su, Jim Ede. Number 0117 JIM EDE expressed his support for HB 371. He supported previous testimony in support of the bill as well. If, there was any doubt whether or not to support the bill, he suggested studying the decision of the Ninth Circuit Court of Appeals for clarification. He believed in following the law of the land. He urged the committee members to pass the bill as quickly as possible. CHAIR JAMES called on the next witness via teleconference in Dillingham, Linda Wahl. Number 0211 LINDA WAHL said she had lived in Dillingham since 1968. She objected to HB 371 due to the term, "terminally ill." She cited her daughter was diagnosed as terminally ill in 1990 and was still around due to care and alternative treatment methods. She explained a physician in 1991 over medicated her and felt justified in doing so. It was not asked for nor was she in any condition to ask for it. She said the decision making powers needed to be questioned for the terminally ill. Her daughter was still considered terminally ill but was a working and productive member of the community. The issues needed to be looked at closer before adopting an easy-out for people. CHAIR JAMES called on the next witness via teleconference in Fairbanks, Bruce Gordon. Number 0365 BRUCE GORDON expressed his support for HB 371. He explained his daughter died recently from a terminal illness. She knew her end was coming soon and was determined to end her life without putting him at risk before current law. She also knew that under current law her doctor would risk prosecution, if he were to prescribe sufficient pain medication to end her suffering. Fortunately, she found a non-violent means and died in her own bed. The freedom that she was searching for was provided for in HB 371. He reiterated his support for the bill and urged the committee members to approve it. CHAIR JAMES called on the next witness via teleconference in Fairbanks, Vicky Lawyer. Number 0509 VICKY LAWYER expressed her support of HB 371. She shared a story about a friend who suffered from a terminal disease. Her friend had a living will, but it was not enough to let him die the way he wanted. He eventually got to the point where he was ready to die, but the laws were in the way. The only option was to remove his feeding tube and starve to death. It took two weeks for nature to take its course. She wondered at what point free will ended because we assert it everyday. She explained the two important words today were "decision" and "choice." This was not a political issue or a religious issues, it was a personal issue. Her friend was not allowed to die the way he wanted to, and that was the sad part of her story. Please vote in favor of HB 371. She thanked the committee members. CHAIR JAMES called on the next witness via off-net in Kotzebue, Al Bowling. Number 0690 AL BOWLING expressed his support of HB 371. He was a strong supporter of the inalienable rights given by the creators of the constitution. He supported the right, when placed in this situation, to chose to end the suffering with prescription medication. He reiterated the laws that were designed to prevent this choice were unconstitutional and illegal. The legislature was a body to protect the rights of its citizens and to provide guidelines. Preventing the passage of HB 371, would be an attempt to deprive Alaskans of their constitutional right. It was the moral obligation of the Alaska State Legislature to pass HB 371. CHAIR JAMES called on the next witness via teleconference in Sitka, Christina Perrigo. Number 0801 CHRISTINA PERRIGO said USA Today reported the number of older persons suffering from a terminal illness who attempted suicide due to depression was around 90 percent. Even Jack Kavorkian said that he considered anyone with a disabling disease who was not depressed as abnormal. Those who argue in favor of physician assisted suicide ignore the treatment for depression. It was the depression, not the disease, that made a person suicidal. She was also concerned about the terminally ill circumventing the dying process. She explained there were five stages in the dying process - denial, anger, bargaining, depressing, and acceptance. Based on her experience suicide was wrong because it short circuited the five stages of the dying process. Furthermore, many terminally ill patients would consider suicide because they were pressured into seeing themselves as burdens on their family or society. The family members who supported the suicide often unwillingly supported the notion that the ill family members' life had lost all meaning. Furthermore, escalating medical costs were a cause for the terminally ill to see themselves as a drain on the economy and society. She said the "right to die" would become a "duty to die." She lastly referred to Scripture in the Bible. CHAIR JAMES called on the next witness via teleconference in Sitka, Lloyd Perrigo. Number 0975 LLOYD PERRIGO asked the committee members to give the bill long consideration. He was concerned for the elders. Those who were elderly now or classified as terminally ill might feel a duty to end their lives because of their strong independence and their desire to not be a burden. They needed our protection and suicide was not a treatment for depression. There were effective means to deal with depression for terminally ill patients. Furthermore, he was concerned for himself, his children, and his grandchildren. He wondered what would happen in 30 years, for example, if the bill was to pass. He felt it would not be safe to live in Alaska. He was afraid the bill would transfer to those that were not terminally ill creating involuntary deaths. He reiterated, to protect the elders and everybody for the future, he urged the committee members to not support the bill. CHAIR JAMES called on the next witness via teleconference in Anchorage, Renee Murray. Number 1109 RENEE MURRAY said she was a 42 year Alaskan resident. She expressed her support of HB 371. It was a personal choice, according to the bill. The decision could not be made by the family or the doctor, it must be made by the individual. She also felt very strongly about HB 371 because she was a senior citizen. She wanted to be able to make a choice in her life. She did not see a reason for others to be involved in the last choice she would ever have to make. She wanted to reserve that last right. She further believed it was a constitutional right as well. CHAIR JAMES called on the first witness in Juneau, Beverly Haywood. Number 1243 BEVERLY HAYWOOD, Co-Chairperson, Juneau Unitarian Fellowship, said the Fellowship unanimously supported HB 371. Furthermore, in 1988 after several years of study the Unitarian Universalist Association of North American passed a resolution in favor of the right to die with dignity. The Association was a mainstream Protestant Church. She read the resolution into the record. "Guided by our belief as Unitarian Universalist that human life has inherent dignity, which may be compromised when life is extended beyond the will or ability of a person to sustain that dignity; and believing that it is every person's inviolable right to determine in advance the course of action to be taken in the event that there is no reasonable expectation of recovery from extreme physical or mental disability; and "WHEREAS, medical knowledge and technology make possible the mechanical prolongation of life; and "WHEREAS, such prolongation may cause unnecessary suffering and/or loss of dignity while providing little or nothing of benefit to the individual; and "WHEREAS, such procedures have an impact upon a health-care system in which services are limited and are inequitably distributed; and "WHEREAS, differences exist among people over religious, moral, and legal implications of administering aid in dying when an individual of sound mind has voluntarily asked for such aid; and "WHEREAS, obstacles exist within our society against providing support for an individual's declared wish to die; and "WHEREAS, many counselors, clergy, and health-care personnel value prolongation of life regardless of the quality of life or will to live; "THEREFORE BE IT RESOLVED: That the Unitarian Universalist Association calls upon its congregations and individual Unitarian Universalists to examine attitudes and practices in our society relative to the ending of life, as well as those in other countries and cultures; and "BE IT FURTHER RESOLVED: That Unitarian Universalists reaffirm their sup[port for the Living Will, as declared in a 1978 resolution of the General Assembly, declare support for the Durable Power of Attorney for Health Care, and seek assurance that both instruments will be honored; and "BE IT FURTHER RESOLVED: That Unitarian Universalists advocate the right to self-determination in dying, and the release from civil or criminal penalties of those who, under proper safeguards, act to honor the right of the terminally ill patients to select the time of their own deaths; and "BE IT FURTHER RESOLVED: That Unitarian Universalists advocate safeguards against abuses by those who would hasten death contrary to an individual's desires; and "BE IT FINALLY RESOLVED: That Unitarian Universalist, acting through their congregations, memorial societies, and appropriate organizations, inform and petition legislators to support legislation that will create legal protection for the right to die with dignity, in accordance with one's own choice." CHAIR JAMES called on the next witness in Juneau, Ritchie Sonner. Number 1428 RITCHIE SONNER, Executive Director, Hospice and Home Care - Juneau, explained hospice was a form of health care that addressed the terminally ill by providing pain management to keep the patient as comfortable as possible in the comfort of their own environment. It also tried to keep the patient lucid and aware. Hospice was a recent development in the field of medicine as well as pain management. Pain management was now a state of the art treatment method compared to even 10 years ago. It was still in its developmental stage. Hospice opposed HB 371 because it felt that the hospice philosophy of pain management and home care was being provided. Unfortunately, the medical community was not as educated as it should be and was not aware of the alternatives available. That was the challenge of hospice. Furthermore, she explained it was not uncommon for someone with a terminal illness to request to end his life. However, once the pain was brought under control, he was able to experience the remaining days, weeks, or months of his life without requesting to end it again, according to numerous accounts of hospice care providers. She reiterated Hospice opposed HB 371. CHAIR JAMES called on the next witness in Juneau, Archbishop Francis T. Hurley. Number 1539 FRANCIS T. HURLEY, Archbishop, Archdiocese of Anchorage, referred the committee members to his handouts including an article written by himself and an opposition article written by Kent Lee Woodman in the Anchorage Daily News. The two articles indicated this was a very, very difficult issue. He came today with a strong background as a Catholic Bishop. The Catholic Church had a long history of countering pain through hospitals, medical schools and universities, for example. It was considered an evil that had to be avoided and stopped if at all possible. The Church did not believe that one had to suffer to get to heaven, contrary to allegations. Furthermore, he explained the Ninth Circuit Court of Appeals' ruling was narrow, and read, "the prescribing of a medication by a physician for the purpose of enabling a patient to end his life." The remaining was the opinion of the Court. He felt confident it was going to be a matter of the United States Supreme Court. The Court made it clear that the state did have an interest and a right to intervene in this issue. It was a question of balance, however. The Court claimed it was its prerogative and not the legislature's. He wondered if the Court was moving into the legislative mode. Moreover, HB 371 left many questions unanswered. He stated, "all law affects culture and the way we think and the way we act." The bill would create a coercive atmosphere among the elderly, he believed. He was further concerned about the impact on the native culture. Furthermore, the law also affected the public attitude towards life. He also questioned the ramifications of HB 371 and cited abortion. The permission for an abortion had led to the idea that the government should pay for an abortion for the poor. He was concerned of moving towards a government assisted suicide. He further raised a legal question and wondered if "incompetent" individuals were entitled to the same exercises as "competent" individuals. That legal question had yet to be confronted. He also believed this was a controversy that would touch more people more profoundly than any other case the courts would see in the foreseeable future. That was a powerful statement. In conclusion, he said laws were a combination of many considerations, not just religion. These included, for example: legal, sociological, psychological, philosophical, medical, cultural, spiritual, and financial to name a few. Moreover, this issue evolved around two highly emotionally charged words, "suicide" and "dignity." He cringed when he heard the word "dignity" associated with the word death. He had seen, watched, and talked to people that were dying. He wondered if all the people involved in taking care of the dying and the dying process itself were not dignified. He thanked the committee members for their time. ADJOURNMENT Number 1918 CHAIR JAMES adjourned the House State Affairs Committee meeting at 10:12 a.m.