Legislature(1995 - 1996)
03/26/1996 08:05 AM House STA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 26, 1996
8:05 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."
- PASSED CSHB 345(STA) OUT OF COMMITTEE
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."
- HEARD AND HELD
HOUSE BILL NO. 371
"An Act relating to the rights of terminally ill persons."
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 47
Supporting continued funding of the Alaska National Guard Youth
Corps Challenge Program.
- PASSED CSHJR 47(STA) OUT OF COMMITTEE
HOUSE BILL NO. 546
"An Act providing for and relating to the issuance of general
obligation bonds in the amount of $600,211,000 for the purpose of
paying the cost of acquiring, constructing, reconstructing, and
equipping public schools and of repair and major maintenance of
public school and University of Alaska facilities; and providing
for an effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 345
SHORT TITLE: PENSION INVESTMENT BOARD PROCUREMENTS
SPONSOR(S): REPRESENTATIVE(S) FOSTER, Ivan
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
03/21/96 3259 (H) COSPONSOR(S): IVAN
03/26/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 383
SHORT TITLE: REIMBURSE FOR LOCAL SERVICE TO INEBRIATES
SPONSOR(S): REPRESENTATIVE(S) IVAN, Brown, Elton, Nicholia
JRN-DATE JRN-PG ACTION
12/29/95 2366 (H) PREFILE RELEASED
01/08/96 2366 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2366 (H) CRA, STATE AFFAIRS, FINANCE
01/16/96 (H) CRA AT 1:00 PM CAPITOL 124
01/16/96 (H) MINUTE(CRA)
01/23/96 (H) CRA AT 4:00 PM CAPITOL 124
01/23/96 (H) MINUTE(CRA)
01/25/96 (H) CRA AT 1:00 PM CAPITOL 124
01/25/96 (H) MINUTE(CRA)
02/21/96 2846 (H) COSPONSOR(S): BROWN
02/22/96 (H) CRA AT 1:00 PM CAPITOL 124
02/22/96 (H) MINUTE(CRA)
02/27/96 (H) CRA AT 1:00 PM CAPITOL 124
02/27/96 (H) MINUTE(CRA)
02/28/96 2907 (H) CRA RPT CS(CRA) NT 3DP 2DNP 1NR
02/28/96 2908 (H) DP: ELTON, NICHOLIA, IVAN
02/28/96 2908 (H) DNP: VEZEY, KOTT
02/28/96 2908 (H) NR: AUSTERMAN
02/28/96 2908 (H) 2 FISCAL NOTES (REV, DCRA)
02/28/96 2908 (H) ZERO FISCAL NOTE (DHSS)
02/28/96 2908 (H) REFERRED TO STATE AFFAIRS
02/28/96 2944 (H) COSPONSOR(S): ELTON
03/12/96 3100 (H) COSPONSOR(S): NICHOLIA
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
03/21/96 (H) MINUTE(STA)
03/26/96 (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
03/21/96 (H) MINUTE(STA)
03/26/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HJR 47
SHORT TITLE: AK NAT'L GUARD YOUTH CORPS CHALLENGE PROG
SPONSOR(S): REPRESENTATIVE(S) BRICE, Mulder, Willis, Rokeberg,
James
JRN-DATE JRN-PG ACTION
04/28/95 1632 (H) READ THE FIRST TIME - REFERRAL(S)
04/28/95 1632 (H) MLV, STATE AFFAIRS, FINANCE
05/01/95 1718 (H) COSPONSOR(S): WILLIS
01/22/96 2511 (H) COSPONSOR(S): ROKEBERG
02/14/96 (H) MLV AT 5:00 PM CAPITOL 17
02/14/96 (H) MINUTE(MLV)
02/15/96 2774 (H) MLV RPT CS(MLV) 6DP
02/15/96 2774 (H) DP: WILLIS, MULDER, FOSTER, IVAN, KOTT
02/15/96 2774 (H) DP: DAVIES
02/15/96 2774 (H) ZERO FISCAL NOTE (GOV)
03/18/96 3186 (H) COSPONSOR(S): JAMES
03/21/96 (H) STA AT 8:00 AM CAPITOL 102
03/21/96 (H) MINUTE(STA)
03/23/96 (H) STA AT 10:00 AM CAPITOL 102
03/23/96 (H) MINUTE(STA)
03/26/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 546
SHORT TITLE: G.O. BONDS: SCHOOLS & UNIV.
SPONSOR(S): STATE AFFAIRS
JRN-DATE JRN-PG ACTION
03/22/96 3270 (H) READ THE FIRST TIME - REFERRAL(S)
03/22/96 3270 (H) STA, HES, FINANCE
03/26/96 (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 committee substitute for HB 345.
BOB 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.
TIM VOLWILER
8030 North Douglas Highway
Juneau, Alaska 99801
Telephone: (907) 463-4825
POSITION STATEMENT: Provided testimony in opposition to HB 345.
LOIS IRVIN
167 West Baryview Avenue
Homer, Alaska 99603
Telephone: (907) 235-7172
POSITION STATEMENT: Provided testimony in support of HB 345.
MICHAEL J. KIRK
1718 Evergreen Avenue
Juneau, Alaska 99801
Telephone: (907) 586-4318
POSITION STATEMENT: Provided testimony in support of HB 371.
DICK REGAN
825 Gold Belt Avenue
Juneau, Alaska 99801
Telephone: (907) 586-4318
POSITION STATEMENT: Provided testimony on HB 371.
JAY LIVEY, Deputy Commissioner
Office of the Commissioner
Department of Health and Social Services
P.O. Box 110601
Juneau, Alaska 99811-0601
Telephone: (907) 465-3030
POSITION STATEMENT: Provided testimony in support of HB 371 on
behalf of the Administration.
SID HEIDERSDORF, Representative
Alaskans For Life
P.O. Box 020658
Juneau, Alaska 99802
Telephone: (907) 789-9858
POSITION STATEMENT: Provided testimony in opposition to HB 371.
REPRESENTATIVE TOM BRICE
Alaska State Legislature
State Capitol, Room 426
Juneau, Alaska 99801-1182
Telephone: (907) 465-3466
POSITION STATEMENT: Sponsor of HJR 47.
REPRESENTATIVE JERRY MACKIE
Alaska State Legislature
State Capitol, Room 404
Juneau, Alaska 99801-1182
Telephone: (907) 465-4925
POSITION STATEMENT: Provided introduction of HB 546, a bill
sponsored by the House State Affairs Committee.
ACTION NARRATIVE
TAPE 96-40, SIDE A
Number 0015
The House State Affairs Committee was called to order by Chair
Jeannette James at 8:05 a.m. Members present at the call to order
were Representatives Ivan, Willis, Porter, Green, Ogan, Robinson
and James. No members were absent.
HB 345 - PENSION INVESTMENT BOARD PROCUREMENTS
CHAIR JEANNETTE JAMES called on John Walsh, Legislative Assistant
to Representative Richard Foster, to present the committee
substitute (9-LS1179/C).
JOHN WALSH, Legislative Assistant to Representative Richard Foster,
explained based on the testimony last week (Thursday, March 21,
1996), a committee substitute was drafted (9-LS1179/C). He
referred the committee members to page 3, and explained the change
split the procurement by contract, and the investment and brokerage
services. The testimony indicated last week that the state did not
procure brokerage services by contract, therefore, the language
needed to be clarified. He called it a technical change. He would
be glad to answer any questions from the committee members.
Number 0175
REPRESENTATIVE SCOTT OGAN asked Mr. Walsh how much latitude would
the board have to determine the requisite skills addressed in the
bill?
MR. WALSH replied it was the intention of the sponsor to hold any
investment to a high standard. There was no intention to lower the
standard in any way. However, by putting this into statute,
investments in Alaska would be looked at harder. He explained
there were investments in Alaska that would not jeopardize the
performance of the fund. Furthermore, the securities exchange
requirements, background checks, or performance bonds, for example,
would not be lowered. He said the bill created a potential for a
partnership arrangements with larger firms or joint ventures with
Alaskan investment counsellors. He reiterated the sponsor did not
intend to jeopardize or diminish the integrity of the fund.
Number 0322
REPRESENTATIVE BRIAN PORTER asked Mr. Walsh where the 7 percent
figure came from? He further wondered if the committee substitute
doubled the brokerage service from 7 percent to 14 percent. He
stated the language was unclear.
Number 0345
MR. WALSH replied the 7 percent was requested in the beginning as
part of the negotiation process. He could not say if it was high
or low figure, however. He further explained there was procurement
by contract for investment advisory service and the actual
acquisition of securities. The first was a professional management
service and the second was the actual acquisition of the security.
Therefore, the investment was not doubled.
Number 0432
REPRESENTATIVE PORTER wondered if the security acquisition ever
occurred without the assistance of an investment service.
Number 0439
MR. WALSH asked, in other words, could the board buy directly? It
was possible, he replied. He did not know if it was or had been
done before, however.
Number 0454
REPRESENTATIVE OGAN said he also read the new language to indicate
that it was doubled to 14 percent.
Number 0488
MR. WALSH suggested calling on the Department of Revenue for
further clarification.
CHAIR JAMES called on Bob Storer, Department of Revenue (DOR).
Number 0515
BOB D. STORER, Chief Investment Officer, Treasury Division,
Department of Revenue, said he read the new language as two
separate distinct services. He did not read it as a double-up.
Number 0544
REPRESENTATIVE PORTER further stated he also read it as an "up to"
requirement. He asked Mr. Storer, if it would be easier to
administer, if the language read "up to" 7 percent rather than "at
least" 7 percent?
Number 0577
MR. STORER replied it was more complicated than that because the
money managers transacted for a multitude of plan sponsors
simultaneously. Therefore, the money managers were obligated to
execute their trades first, then the DOR's trades. He called it a
layered process. The money manager would view this in the
aggregate so that at the end of the year, 7 percent of the volume
of trade was through Alaska, rather than 7 percent of the DOR's
trades.
Number 0648
REPRESENTATIVE JOE GREEN asked Mr. Storer to explain the 7 percent
figure. Why 7 percent and not 10 percent, for example?
Number 0654
MR. STORER replied he did not participate in the discussions
surrounding the figure, so he could not answer that question.
Number 0663
REPRESENTATIVE CAREN ROBINSON stated prior testimony indicated
there was a fear that this bill might jeopardize the integrity of
the fund. She asked Mr. Storer if those fears were warranted?
Number 0684
MR. STORER explained HB 345 legislated investment policy.
Furthermore, any time an investment policy was legislated, there
was a negative, because it defined certain acts. He explained the
dynamics in the investment world had changed over the years.
Legislation, therefore, would inhibit the ability to function in
the best interest of the beneficiaries.
Number 0751
REPRESENTATIVE ED WILLIS asked if it was possible that the state
might have to bail out the fund if decisions were mandated?
Number 0780
MR. STORER responded he was not prepared to say if that could
happen. There were a number of implications as a result of HB 345,
however, because it dictated investment policy.
Number 0930
REPRESENTATIVE GREEN wondered if it would be necessary to error
above 7 percent because trades could continue right up to the end
of the year.
Number 0959
MR. STORER replied it was a moving target. Representative Green
was correct. The market dictated the activity. He explained one
could front load the activity, or force trades with non-specialty
firms.
Number 1008
CHAIR JAMES explained she was very familiar with fiduciary
responsibility. She had taught classes on that very issue because
many were not familiar with their responsibilities. However, she
felt uncomfortable forcing a certain percentage. On the other
hand, she was disappointed that this was an issue being discussed
today. The union funds indicated that they invested in Alaska.
They were not told to do so, they just did it. She would be more
comfortable if the pension board just listened to the presentations
from Alaska. She did not want to mandate to interfere with the
earning power of the fund, however. Of course, the beneficiaries
wanted the board to make the best possible decisions. If she were
on the board, she would be scared to death due to the activity of
the stock market right now. She was afraid some of the funds were
in jeopardy. She called the responsibilities of the board awesome.
She reiterated the board needed to be encouraged, as an option, to
invest in Alaska. She reiterated she had strong feeling on both
sides of the issue. She stated there were good investments in
Alaska such as the gas line. On the other hand, she did not want
to mandate a certain percentage and potentially jeopardize the
fund. She really wanted a cooperative effort between the fund
managers and the state.
Number 1227
MR. STORER said he agreed with Chair James. He explained two-way
communication was the main issue involved here. He said there had
been two presenters before the board from Alaska - a fixed income
manager, and a mortgage manager. There was an educational aspect
as well. As-long-as the board was communicating and being educated
by the investment professionals in Alaska, that would help form the
thinking of the board.
Number 1295
REPRESENTATIVE WILLIS said the statutes called for the adoption of
a policy for investment education for the trustees. He asked if
this had been accomplished?
Number 1304
MR. STORER replied the trustees met formally between 8 to 10 times
each year. A two day meeting was organized in the Spring after the
legislative session, devoted purely to education to stay abreast of
the investment topics. Furthermore, last Sunday, a meeting was
organized by the board to discuss real estate investments.
Number 1353
REPRESENTATIVE WILLIS further said the statutes called for an
investment advisory council. He wondered if the council had been
appointed.
Number 1360
MR. STORER replied three members had been appointed to the
investment advisory council. The board allowed up to five members,
however. There was also a general consultant outside of the
council. He explained the council was comprised of members with
specific type of expertise. Currently, the council was comprised
of experts in the fields of academia, plan sponsorship, and
investment management.
Number 1394
CHAIR JAMES stated she would like to see the board encourage the
people to bring the opportunities to them. She said "funds of
money are like magnets." Therefore, if there was an opportunity
people would gravitate to it. The message should be loud and clear
that the board should be giving consideration to Alaskan
investments.
Number 1458
MR. WALSH stated testimony last week indicated that other funds in
other states and some private funds were required to look at the
local market prior to looking at the global market. He said it
tied the hands of those board, but it was a commitment.
Number 1505
CHAIR JAMES commented the pension fund would not be here today if
it were not for legislation. Therefore, the legislature did have
the right to make specific demands. It was not out of its
bailiwick. The legislature needed to decide if it wanted to send
a message, or mandate something. She was not willing to answer
that today, however, but was willing to listen.
Number 1548
REPRESENTATIVE WILLIS asked Mr. Walsh if the private union funds
had a specific percentage they were bound by?
Number 1553
MR. WALSH replied he could not remember if they were bound by a
specific figure. However, other states such as Oregon and Texas,
were bound by a certain percentage.
Number 1588
MR. STORER said there was a study done of which about 17 percent of
the public funds used this type of investment vehicle.
CHAIR JAMES called on the first witness in Juneau, Tim Volwiler.
Number 1618
TIM VOLWILER said he was a teacher with 16 years of service. He
expressed his opposition to HB 345. He said the economic benefit
to the state would come from the retirees actually receiving their
money and spending it instate. A study conducted by the Permanent
Fund indicated that local businesses benefited when the fund was
distributed. Furthermore, he was afraid of any change to the
current structure. He stated the board was working well now. It
had not been in existence for many years so "lets leave it alone."
Currently, there was nothing that prohibited the board from using
instate services. He believed in leaving the board to chose as it
saw fit. He was also opposed to joint ventures. He said let the
free market prevail. The stock market was volatile so any
restrictions placed on the board could present a problem.
Moreover, he suggested targeting specific funds to encourage
economic development rather than the pension fund. As an employee,
he felt he earned his salary and his retirement, therefore, "this
pot of money should be for those that would retire." The board was
established because of the massive losses in the junk bonds. The
beneficiaries, therefore, were reluctant to change the board's
direction.
Number 1840
REPRESENTATIVE GREEN moved that CSHB 345(STA) (9-LS1179/C) be
adopted for consideration. Hearing no objection, it was so
adopted.
Number 1860
CHAIR JAMES said the House State Affairs Committee had heard a
great deal of testimony on this issue. The next committee of
referral was the House Labor and Commerce Committee. The details
could be hammered out there, therefore, she was willing to move the
bill forward today.
Number 1870
REPRESENTATIVE OGAN said he wanted to discuss a possible amendment.
He was concerned about the language on page 3, line 1, "investment
services that the board procures by contract, and seven percent of
the..." He was concerned it would be read to mean 14 percent
rather than 7 percent. He suggested changing the word "and" to
"or."
Number 1895
CHAIR JAMES stated she was more concerned about the language on
page 2, line 31, "services provided by persons located in the state
to at least seven percent of the...." She suggested changing the
language "at least" to read "up to." The word "or" as
Representative Ogan suggested could imply less than 7 percent.
Number 1945
REPRESENTATIVE OGAN said he brought it up for discussion only. He
agreed with the language "up to" that Chair James suggested. It
would give the board the latitude to invest in Alaska while not
being a mandate.
Number 1956
CHAIR JAMES said a motion was needed to discuss the specifics.
Number 1965
REPRESENTATIVE OGAN moved that on page 2, line 31, delete the
language "at least" and insert the language "up to." The motion
was followed with discussion.
Number 2006
REPRESENTATIVE GREEN said he was concerned about micro-managing.
He asked what would happen if a good deal came along that did not
fit the guidelines? Therefore, he did not support the amendment.
Number 2035
REPRESENTATIVE ROBINSON said the language really did not make a lot
of difference.
Number 2041
REPRESENTATIVE PORTER suggested a friendly amendment to include the
language "to a level up to" rather than "up to." Furthermore, he
did not agree with a mandate but agreed more with encouraging a
policy to try to get to reach this level. The new language would
work towards that purpose.
CHAIR JAMES called for a roll call vote. Representatives Ogan,
Porter, Robinson, and Willis voted in favor of the friendly
amendment. Representatives James, Green and Ivan voted against the
friendly amendment. The friendly amendment passed.
Number 2122
REPRESENTATIVE ROBINSON stated she did not agree with a mandate.
She suggested a resolution or a letter through the House State
Affairs Committee voicing its concerns. She would not hold the
bill, however.
Number 2150
CHAIR JAMES agreed with Representative Robinson. She reiterated
she was disappointed that it was even an issue being discussed
today.
Number 2156
REPRESENTATIVE IVAN moved that CSHB 345(STA) (9-LS1179/C) move from
the committee with individual recommendations and attached fiscal
notes as amended. Representative Willis objected. A roll call
vote was taken. Representatives James, Ogan, Green, Ivan and
Porter voted in favor of the motion. Representatives Robinson and
Willis voted against the motion. The bill was moved to the next
committee of referral.
HB 383 - REIMBURSE FOR LOCAL SERVICE TO INEBRIATES
The next order of business to come before the House State Affairs
Committee was HB 383.
CHAIR JAMES called on Representative Ivan Ivan, sponsor of the
bill.
Number 2240
REPRESENTATIVE IVAN read the following sponsor statement into the
record.
"Widespread alcohol abuse not only damages Alaska's families and
society, but also drains public coffers at an alarming rate. Local
governments constantly struggle under the financial burden of their
efforts to cope with alcohol problems.
"Those problems include the many public inebriates evident in our
municipalities.
"Under AS 47.37.170, local police take into protective custody a
person who appears to be intoxicated and incapacitated in a public
place and place that person in an approved public treatment or
detention facility. A licensed physician or other qualified health
practitioner must then examine the inebriate as soon as possible.
If the person if found to be incapacitated by alcohol, he or she is
detained for no more than 48 hours in a health facility or for no
more than 12 hours in a detention facility. Tremendous costs
accrue to municipalities and public health facilities due to this
program.
"By two methods, House Bill 383 will reduce or eliminate the
financial burden that local governments and public health
facilities bear each year fulfilling this unfunded mandate.
"First, the bill provides for direct state grants to municipalities
and traditional village councils to reimburse them for the cost of
dealing with inebriates.
"Second, the bill gives local governments the power to set taxes on
alcoholic beverages at whatever rate they want, regardless of
whether or not they tax other sales.
"To help defray the state's granting cost as well as closing the
fiscal gap, reducing alcohol consumption and fighting crime, the
bill raises the alcohol excise tax for the first time since 1983."
REPRESENTATIVE IVAN further stated the bills that allowed for the
increase in alcohol tax were originally sponsored by Representative
Kay Brown, HB 96 and HB 97. He explained they had been
incorporated into HB 383 to reimburse the municipalities. He
reiterated the bill was trying to address the problems faced by
municipalities when taking care of inebriates. It was a direct
result of an argument between the community of Dillingham and
Bristol Bay in his district of who should take care of the
inebriates.
Number 2397
CHAIR JAMES announced the House State Affairs Committee would only
hear testimony today. There would not be any action taken on the
bill, however.
CHAIR JAMES called on the first witness via teleconference in
Homer, Lois Irvin.
Number 2397
LOIS IRVIN explained Homer had been trying to address this issue
for the past year. There was a problem surrounding the use of a
facility to hold the inebriates. Moreover, according to the bill
there was also a funding issue involved. She expressed her support
of HB 383.
TAPE 96-40, SIDE B
Number 0010
REPRESENTATIVE OGAN said alcohol was probably the single biggest
problem for municipalities. He had mixed feelings about the bill,
however. He did not really want to raise a tax. He wanted to hear
from Representative Porter, as the former police chief, and the
committee members further. He had been a member of a task force
that tried to address this issue in the past. One suggestion was
to abolish alcohol. He said that was not going to happen, but it
was a strong suggestion indicating a strong problem.
Number 0062
CHAIR JAMES said she was concerned because the symptom was being
addressed and not the problem. This was a reoccurring issue in the
United States. The proportion of alcohol was probably the best
thing to adjust. Moreover, the problems of society were based on
despair, unemployment, and hopelessness. Therefore, until a
sufficient economic base and jobs were available, the problem would
not be addressed. Therein lied the problem of government spending.
She wondered if money should be appropriated to the core of the
problems, or to the programs to help the symptoms. She said she
did not have a solution, only a direction, and she was not sure if
HB 383 was going in the same direction.
Number 0128
REPRESENTATIVE ROBINSON said she supported HB 383, 100 percent.
She explained Juneau increased the sales tax on alcohol, and the
tax money went directly to the social service programs. She felt
that every other community in the state should have the same option
without having to fight it in court.
Number 0152
REPRESENTATIVE PORTER said he had spent more time in his life
considering the solutions to this problem compared to anybody else
here. The unfortunate truth, however, was that the drinking
problem in Juneau was not any different compared to any other
community. If Juneau did not have a drinking problem, he would
"sign up on this bill in a heartbeat." However, that was not the
case. The only way to solve the problem was to create an attitude
that made people want to stop drinking. The sobriety program aimed
at the bush addressed this attitude. He explained he was sponsor
of a bill that incorporated the sobriety program as part of state
policy. There were a multitude of approaches - prohibition,
increased taxation - but he was concerned about repeating history.
He was reluctant to go down those roads again. Therefore, he would
not greatly support HB 383.
Number 0250
REPRESENTATIVE GREEN wondered what ever happened to the antabuse
program? He asked if it was rendered unconstitutional?
Number 0266
REPRESENTATIVE PORTER replied it was being used more frequently in
sentencing practices now.
Number 0279
REPRESENTATIVE IVAN said society was just scratching the surface of
this problem. He explained, there were two other bills in the
process, and a resolution, to look at establishing a statewide task
force to address the issue further.
CHAIR JAMES announced the bill would be held for a while in the
committee.
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 announced the House State Affairs Committee would only
be hearing from those that were not able to testify on Thursday,
March 21, 1996.
CHAIR JAMES called on the first witness in Juneau, Michael Kirk.
Number 0361
MICHAEL KIRK said those that heard him testify on the pension fund
last week might wish today that he was terminally ill, and those
that heard him testify today on the rights of the terminally ill
might wish he were pensioned and retired. He stated, amongst the
Eskimo people, the elders sacrificed their lives by their own free
will through the cold and hunger. They were not considered
suicidal but honored for their actions. The majority of people who
requested to end their lives were doing so for their family and
community. He said according to Scripture, greater love had no man
than he or she sacrificed his life for the life of another. The
truth was elusive to human beings, so he wondered when the experts
lectured, what was the truth? He explained, soldiers, policemen,
and firemen freely and willingly sacrificed their lives for others.
Furthermore, fathers, mothers, siblings and even pets sacrificed
their lives for others. According to health care practitioners,
more money was spent on the last few days of the terminally ill,
against their will, than what was spent on keeping the person
healthy. He wondered if it was possible that the experts had
another purpose than love, justice and truth. He maintained that
purpose was possibly to impose their will onto the rest so that we
could not exercise our free will. Please consider that today, he
said. He thanked the committee members for their time.
Number 0588
REPRESENTATIVE PORTER complimented Mr. Kirk on his testimony. He
said it was a pure joy to listen to. He did not necessarily agree
with everything he said, however.
Number 0599
CHAIR JAMES said to Mr. Kirk he did a very good job of telling the
committee members how he felt "from the bottom of your toes to the
top of your head." She agreed with Mr. Kirk that religion was a
personal contact with a higher power. It should not be imposed on
others, however. The responsibility of the legislators was to
balance the decisions of society and the constituents. It was
difficult to vote against one's personal belief, and if it was
impossible then one should not be a legislator. It was impossible
to insulate a person from their religion, however.
Number 0676
REPRESENTATIVE GREEN complimented Mr. Kirk on the use of the
English language.
CHAIR JAMES called on the next witness in Juneau, Dick Regan.
Number 0698
DICK REGAN said he had long supported the concept of HB 371. He
was anxious to see the bill move forward to the next committee of
referral. He himself was a victim of an inoperable terminal
illness. It was incidental to his interest in the bill, however.
He believed it was a well drafted bill. It was conservatively
drafted. The bill provided for the state regulations that were
addressed in the opinion of the Ninth Circuit Court of Appeals. He
thanked the committee members for their consideration of this
issue. He reiterated he would like to see the bill moved to the
next committee of referral.
CHAIR JAMES called on the next witness in Juneau, Jay Livey,
Department of Health and Social Services.
Number 0811
JAY LIVEY, Deputy Commissioner, Office of the Commissioner,
Department of Health and Social Services, presented a statement
from the Administration.
"The Administration supports HB 371 because an individual's
decision to end one's life due to a terminal illness is intensely
personal and one in which the government should not be involved."
CHAIR JAMES called on the next witness in Juneau, Sid Heidersdorf.
Number 0840
SID HEIDERSDORF, Representative, Alaskans For Life, said the
organization was opposed to HB 371. He explained he had been to
four hearing on this issue now, and quit a few people had testified
that they were opposed to suicide, but were in favor of "death with
dignity." He found that astonishing and disturbing because it was
still suicide, a person was intentionally taking his own life or
asking someone to assist him. This was indeed a physician assisted
suicide bill. The recent decision by the court was not the last
word, he suspected it would go to the Supreme Court. He asked the
committee members to not "jump on the train" because maybe it was
heading off the cliff. He asked the committee members to do what
was right and not what might happen in the courts. He questioned
the polls and the support of HB 371 due to the wording of the
questions asked. Furthermore, the law was a teacher. He wondered
what this law taught society? He replied it would teach society
that suicide was morally acceptable. Suicide was a problem amongst
the youth already. He called the bill terrible public policy. The
supporters of HB 371 testified that they did not want other
people's morals forced upon them. However, he believed this bill
would affect the value system of society by involving the medical
profession, health institutions and pharmacies. It was a terrible
mistake to involve the doctors in killing in addition to healing.
They should be limited to healing. This law would give physicians
great power. He cited the country of Holland whereby the
physicians were exercising their power and not the individuals.
Moreover, this bill was one step from euthanasia. He called this
entire issue a "slippery slope." He equated it to the Nazi
concentration camps because the same logic was used. He believed
those that were terminally ill deserved to have their pain managed
and receive compassionate care. The law should be asking how the
final days could be made better and not how to end one's life. He
was offended by the term "death with dignity." It implied those
that died without killing themselves died without any dignity. He
asked the committee members to reject HB 371 not because of what it
might lead to, but because of what it was. In conclusion, he read
from a booklet in defense of euthanasia titled The Destruction of
Life Devoid of Value, "the situation of imminent death is not being
changed only the cause of death is being replaced by another cause
which has the advantage of being painless. Legally speaking, this
is no killing, only the changing of the cause of unavoidable death.
In truth it is a pure healing action, the elimination of pain is
also healing. This we have to conclude we are not dealing here
with an established exception of the law, not to kill. We are not
dealing here will an unlawful killing, but with an unprohibited
human action carried out as a blessing for the suffering as a pain
relief for the nearly dead since it is not done for the purpose of
killing them, but to relieve suffering." The language he quoted
was used as a rational for the basis of the Nazi killing programs.
He said, "those who do not know history are forced to relive it."
Number 1730
CHAIR JAMES announced the House State Affairs Committee would not
be taking any action on this bill today. The issue would not go
away, however. She felt society was already sliding down the
slippery slope. Therefore, the legislature needed to determine how
to slide down it with the least disastrous results. She believed
the issue needed more time. She suggested talking to the people
further before taking any action.
Number 1779
REPRESENTATIVE PORTER asked Mr. Heider what his view was on the
practice of the cessation of artificial life support?
Number 1799
MR. HEIDER replied the organization believed that extraordinary
means were not required. If the on-going practice of a community
considered the use of artificial lungs, for example, as
extraordinary care, then it was not required. He said that was
dying from the disease which was vastly different than involving
the health care profession in ending a person's life.
Number 1860
REPRESENTATIVE OGAN thanked Mr. Heider for his testimony. He
explained his wife had been a health care professional for many
years. She had held the hand of more than one person who expired.
He said there would be an exodus of health care workers from the
field, if they were forced to participate in this type of activity.
It took a very special person to have a job that dealt with death.
He had the highest respect for those that dealt with it. He felt,
philosophically, that society placed a low value on life and cited
abortion as an example. He said, it further degraded human life,
if it was decided it was appropriate to take the life of someone
that had a few less days than the rest of us. We were all
terminal. Furthermore, he was concerned about the message this
bill was sending to society. It was the highest calling as a
legislature to protect the sanctity of life.
Number 2032
MR. HEIDER said the bill, of course, provided for a conscientious
objection as a safeguard. He encouraged the committee members to
read the handout titled, "International Anti-Euthanasia Task Force"
fact sheet. He said the safeguards according to the fact sheet
became meaningless in Holland.
Number 2116
REPRESENTATIVE ROBINSON asked Chair James what the plan was for the
bill?
CHAIR JAMES replied she did not have an immediate plan. She was
not ready to deal with the issue today, however, because there were
many unanswered questions.
HJR 47 - AK NAT'L GUARD YOUTH CORPS CHALLENGE PROG
The next order of business to come before the House State Affairs
Committee was HJR 47.
CHAIR JAMES called on Representative Tom Brice, sponsor of HJR 47.
Number 2216
REPRESENTATIVE TOM BRICE explained HJR 47 showed legislative
support for the Alaska National Guard Youth Corps ChalleNGe
Program. It was funded 100 percent by the federal government and
just received a budget cut of $600,000. The cut would dramatically
reduce its ability to continue to help as many youth as it had in
the past. Therefore, HJR 47 asked that Congress continue the
funding. He explained the ChalleNGe Program was designed for the
youth at-risk, the youth that had dropped out of school, and the
youth that had been identified as a criminal risk and offered them
a 22 month course to allow them to develop or to complete their
General Education Degree (GED). The program gave them a small
stipend at the end to be used for furthering their education. He
cited there was about an 85 percent success rate. In conclusion,
he called HJR 47 a timely resolution; it was time to consider the
actions in Washington D.C. Moreover, it was a program that
addressed the problems of juvenile justice in a broad fashion. He
would be happy to answer any questions of the committee members.
TAPE 96-41, SIDE A
Number 0013
REPRESENTATIVE OGAN said he was very impressed with the program.
He said one of his legislative assistants had a child in the
program which turned his behavior around. He said this program was
a proactive approach rather than a reactive approach. He announced
he would sign on as a cosponsor.
REPRESENTATIVE BRICE replied, "thank you."
CHAIR JAMES called on the first witness via teleconference in
Anchorage, Carla Pettigrew.
Number 0110
CARLA PETTIGREW explained her son was in the program, Andy Penman.
She said Andy used drugs and did not stay in school. Andy agreed
to enter the program. She was very proud of him today, he was a
very successful human being upon leaving the program. He obtained
his GED and his life skills improved tremendously. He was
currently employed by a hotel in Anchorage. His self-confidence
also increased as a result of the program. He turned into a leader
instead of remaining a follower. She asserted without the program
she strongly believed her son would have been a ward of the state
at some point. She contributed the success of the program to its
military structure and its ability to bring out the best of an
individual. She strongly supported HJR 47.
CHAIR JAMES called on the next witness via teleconference in
Anchorage, Andy Penman.
Number 0359
ANDY PENMAN said the Alaska National Guard Youth Corps ChallENge
Program had taught him more about life compared to any other place.
It also taught him initiative, self-confidence, and respect for
others. The program made him think about a lot of things. He
explained the first stage, hard core, was spent in the woods. The
second stage was in the classroom. He participated on a drill team
that won second place in a competition. Furthermore, a bond was
established with the other classmates that could not be broken by
anything. The awards he won meant a lot to him, but he valued what
he learned more.
Number 0580
REPRESENTATIVE PORTER said he was familiar with the program. It
might not be the appropriate approach for everyone, but it was
appropriate for many. It had produced singularly exceptional
results. He suggested, for inspiration, to see the kids before and
after the program. After the program, the kids were together,
inspired and motivated. The program provided the same results as
basic training; the feeling of an accomplishment in the end.
Number 0679
REPRESENTATIVE GREEN explained he had seen the kids before and
after the program. The transformation was incredible. Some even
lost their addictions during the program.
Number 0748
REPRESENTATIVE BRICE suggested amending the language on page 1,
line 5, to read "nearly 200" based on recent information he just
received from his staff.
REPRESENTATIVE GREEN moved that on page 1, line 5, delete the
language "more than 136" and insert the language "nearly 200."
(Amendment 1) Hearing no objection, it was so moved.
Number 0800
REPRESENTATIVE ROBINSON moved that CSHJR 47(STA) (9-LS1035/C) be
adopted for consideration. Hearing no objection, it was so
adopted.
Number 0834
REPRESENTATIVE ROBINSON moved that CSHJR 47(STA) (9-LS1035/C) move
from the committee with individual recommendations and attached
fiscal notes, as amended. Hearing no objection, it was so moved
from House State Affairs Committee.
HB 546 - G.O. BONDS: SCHOOLS & UNIV.
The next order of business to come before the House State Affairs
Committee was HB 546.
CHAIR JAMES announced HB 546 was a House State Affairs Committee
bill, but it was similar to a bill by Representative Jerry Mackie,
so he would present the introduction.
Number 0884
REPRESENTATIVE JERRY MACKIE explained several weeks ago he
introduced HB 507 on the last day of the deadline because bonding
was important to consider for school construction issues. It was
discovered since then that there simply was not enough money in the
capital budget to fund maintenance for public schools. Therefore,
a creative approach was needed. He asked Chair James to agree to
work with him to address this issue. He said a committee backing
was needed to get the attention that this issue was warranted. He
referred the committee members to the handout titled, "Legislative
Proposal Relating to Statewide School Major Maintenance and
Construction" He explained it was prepared by the Southeast
Regional Resource Center (SERRC), an education group that provided
technical and professional assistance to school districts around
the state. The resource center outlined the critical needs in the
state and the possible ways to accomplish this. He referred the
committee members to page 2, and read some of the recommended
criteria, "health and life safety of students, structural
preservation...." The current process of the Department of
Education (DOE) was flawed according to any school district, unless
it was number one on the list. The urban communities did not
provide equity and parity to those areas, and it was heavily
weighted to the rural areas. House Bill 546 contained DOE's entire
list for 1996, word for word; and dollar for dollar. It was a
place to start. However, he felt there was not equity in this bill
for Southcentral, Anchorage, Kenai Peninsula, or Mat-Su
communities. There was about $80 million to $90 million for the
Fairbanks region. The bill was heavily weighted to the rural
areas. According to the DOE, that was where most of the
maintenance and new construction was needed. He introduced the
bill knowing and understanding that there was not equity, but it
was a place to start. He suggested looking at criteria such as
what was offered by SERRC to determine how to equalize the bill.
He explained he sent a letter to the caucus leaders in the various
regions of concern to ask them what it would take to achieve
equity. He said to move through the legislature a bill needed to
be equitable to all areas of the state. Furthermore, before the
people would approve a bond initiative it would have to have
fairness and equity as well. He said, "please do not be alarmed at
the current structure of the list now." He would be the first to
admit it needed a lot of work. He suggested looking at the
Anchorage School District and its current bond debt program as a
possible solution. Furthermore, there were many rural schools that
did not need to be on the list because some were more critical than
others. That was the case throughout the state. He reiterated a
criteria was needed to determine which schools were more critical
than others. He said he was wide open to come up with a solution.
He said this was a billion dollar problem, including the University
of Alaska facilities, so it would be hard to scratch the surface,
unless a creative approach was taken such as bonding. The current
market for bonds was favorable. Interest rates were low, the debt
was consistently going down, so the time was now to look at
bonding. The Administration also felt it was an excellent time.
In conclusion, there was a big maintenance problem throughout the
state that needed to be addressed, or it would cost the state more
money in the future to repair if it was left unattended now.
Number 1345
REPRESENTATIVE ROBINSON agreed with the direction of HB 546, 100
percent. She was concerned about the maintenance and school needs
that were left unattended. She wondered what would happen to the
existing groups that were already in the capital budget. Would
they move forward, or be taken out of the budget?
Number 1370
REPRESENTATIVE MACKIE said there were one or two schools budgeted
for new construction, and four or five budgeted for major
maintenance. They were included in the bill because they were high
on the Administration's priority list. That money, perhaps, could
be taken from the capital budget. If there was bi-partisan support
for this bill those schools would not need to be a part of the
capital budget because they would participate under the criteria
ranking as all the other schools in the state.
Number 1404
REPRESENTATIVE ROBINSON wondered what would happen if the bond
issue was not supported by the people. How would that affect the
schools in the current capital budget? She was looking out for the
schools in her district.
Number 1445
REPRESENTATIVE MACKIE said he would be concerned also if that was
the situation in his district as well. The initiative would go to
the ballot in November and become effective next year. Therefore,
the current schools in the capital budget would probably not be
affected. He said he was looking at the bigger problem throughout
the state, but he reiterated he understood the position of
Representative Robinson. It would have to be dealt with
appropriately.
Number 1473
REPRESENTATIVE ROBINSON wondered about the new needs in the
communities that had not been forwarded to the Department of
Education.
Number 1497
REPRESENTATIVE MACKIE said the reality was that the $1 billion in
need would probably turn into $2 billion in need, if it appeared
the bill was to move forward. He believed the most critical needs
were identified in the bill right now, however, because it was hard
to believe that the DOE would not know about the critical needs in
the communities. It was such a big issue in the state right now
due to a lack of attention from previous Administrations, that the
bonding approach was the only way to address the problems.
Number 1583
REPRESENTATIVE GREEN stated there were some schools in Anchorage
that should be on the list in HB 546. The kids were skirting
around puddles on the floor from leaking roofs in some schools, for
example. He asked Representative Mackie if the British Petroleum
Settlement had been used up? He also wondered if the money had
been misappropriated. He stated he championed the idea of the
bill.
Number 1617
REPRESENTATIVE MACKIE replied a number of the Majority's schools
were taken care of during the settlement four years ago. It did
take care of a lot of the problems, but there were still major
maintenance problems and new construction needs. He cited a school
in Craig that was built for 110 students of which 400 students were
attending the school. That was just one example of the many.
Every district could point to a problem that existed.
Number 1674
REPRESENTATIVE GREEN wondered if Representative Mackie knew the
amount that was allocated to the schools from the settlement. He
further wondered if there was a chance that the money would be
siphoned off.
Number 1692
REPRESENTATIVE MACKIE said the amount was approximately $200
million in the form of direct grants to the districts for their
construction projects. The money did take care of the identified
projects. He did not see how it could have be misappropriated,
however, because the problems were so critical.
Number 1738
REPRESENTATIVE PORTER said he took offense that the majority
benefited from the settlement money while the minority did not. He
asserted that was not the case. Furthermore, direct grants
probably could not be mismanaged assuming it was justifiable in the
first place. However, if the University of Alaska was included in
the bond project, specific language was needed. He explained money
had been appropriated before to the university for a specific
purpose but was never used for that purpose. He asked
Representative Mackie what would the debt service requirement be
for the state?
Number 1800
REPRESENTATIVE MACKIE said the DOE was reluctant to provide that
information because it was currently working on a bond proposal for
the Administration for prisons. He explained it would depend on
the final number for the schools which ranged from $8 million to
$30 million depending on the number of schools. More information
would be available at the next scheduled hearing.
Number 1845
CHAIR JAMES said it was obvious after numerous discussions with
individuals regarding this issue that many of the larger districts
probably had not submitted projects knowing full well that they
would not be funded. She suggested an allocation process based on
an estimated need for each district. She said in the Fairbanks
area that would be difficult, however, because it was an active
community. Moreover, in 1993, $20 million of the approximately
$173 million spent on schools, went to the Fairbanks Northstar
Borough School District along with a bonding package of which the
state would pay 70 percent of a bond. The school district in
Fairbanks went to the people twice with bond projects and each time
it was turned down. It was called the "$65 million high school"
discussion in 1993. A future vote was in the works in May of this
year. She felt it would be passed or the money would be lost to
another district. She agreed the DOE process was not equitable.
She believed in more local control.
Number 2080
REPRESENTATIVE MACKIE stated he did mean any disrespect regarding
his comment about the Majority. The urban areas did not receive
the money nor was the DOE's list followed. It was widely
acknowledged it was not a fair process. Therefore, the committee
process was selected to ensure a fair process. Furthermore, he did
not believe the DOE's process was flawed or unfair. The department
looked at the current needs. He felt an allocation system to the
various school districts was unfair because most rural communities
did not have the ability to bond. The only solution he could think
of was a critical needs analysis using an objective criteria rather
than a political criteria. He did not have all the answers,
however, but stated the best way was to include all the regions.
He explained the Department of Education was required by law to
defend its list in HB 546. The dollar amount could be used,
according to the DOE, and the legislature could determine the
disparity allocating the additional money needed, for example.
Number 2253
CHAIR JAMES said everything that had been applied to the state for
was in the list in HB 546. That, however, was not all the needs.
She reiterated there were some areas that probably did not submit
anything because they felt like there was not a need.
Number 2267
REPRESENTATIVE IVAN said he was confused about the final list of
the DOE. He explained there was a prior list. He asked for
clarification.
Number 2281
CHAIR JAMES replied she had been trying to determine that herself.
Moreover, she felt this would have to be a political decision
because every decision made in Juneau was a political decision. It
was a dream to assume that any other type of decision would be
made. There was a political reality to this issue.
Number 2327
REPRESENTATIVE MACKIE said he did not disagree with Chair James.
He said the areas that were not equalized needed to be addressed in
HB 546 politically, and not according to the DOE's list. He felt
it was necessary to look at the list and use the numbers while
looking at the other inequities around the state to come up with a
package that would pass the legislature and the voters. The only
way to reach that was through equity.
Number 2350
ADJOURNMENT
CHAIR JAMES adjourned the House State Affairs Committee meeting at
10:23 a.m.
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