Legislature(1995 - 1996)

03/21/1996 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             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.                                                                    
                                                                               
                                                                               
                                                                              
                                                                               
                                                                               

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