01/22/2008 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB305 | |
| HB313 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 305 | TELECONFERENCED | |
| *+ | HB 313 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
January 22, 2008
8:13 a.m.
MEMBERS PRESENT
Representative Bob Lynn, Chair
Representative Bob Roses, Vice Chair
Representative John Coghill
Representative Kyle Johansen
Representative Craig Johnson
Representative Andrea Doll
MEMBERS ABSENT
Representative Max Gruenberg
COMMITTEE CALENDAR
HOUSE BILL NO. 305
"An Act relating to campaign fund raising by a legislator,
legislative employee, or candidate for election to the
legislature during a regular or special legislative session."
- MOVED CSHB 305(STA) OUT OF COMMITTEE
HOUSE BILL NO. 313
"An Act providing for and relating to the issuance of general
obligation bonds for the purpose of paying the cost of a
scientific crime detection laboratory; and providing for an
effective date."
- MOVED HB 313 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 305
SHORT TITLE: CAMPAIGN FUND RAISING DURING SESSIONS
SPONSOR(s): REPRESENTATIVE(s) MEYER
01/11/08 (H) PREFILE RELEASED 1/11/08
01/15/08 (H) READ THE FIRST TIME - REFERRALS
01/15/08 (H) STA
01/22/08 (H) STA AT 8:00 AM CAPITOL 106
BILL: HB 313
SHORT TITLE: G.O. BONDS FOR CRIME LAB
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/16/08 (H) READ THE FIRST TIME - REFERRALS
01/16/08 (H) STA, FIN
01/22/08 (H) STA AT 8:00 AM CAPITOL 106
WITNESS REGISTER
REPRESENTATIVE KEVIN MEYER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 305 as prime sponsor.
MIKE PAWLOWSKI, Staff
Representative Kevin Meyer
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of Representative
Meyer, prime sponsor, during the hearing on HB 305.
BROOK MILES, Executive Director
Alaska Public Offices Commission (APOC)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
305.
JOYCE ANDERSON, Administrator
Select Committee on Legislative Ethics
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
305.
JOHN GLASS, Deputy Commissioner
Office of the Commissioner
Department of Public Safety
Anchorage, Alaska
POSITION STATEMENT: Presented HB 313 on behalf of the House
Rules Committee, sponsor by request of the governor.
JERRY BURNETT, Director
Division of Administrative Services
Department of Revenue
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
313.
ACTION NARRATIVE
CHAIR BOB LYNN called the House State Affairs Standing Committee
meeting to order at 8:13:01 AM. Representatives Roses, Coghill,
Johansen, Johnson, Doll, and Lynn were present at the call to
order.
HB 305-CAMPAIGN FUND RAISING DURING SESSIONS
8:13:34 AM
CHAIR LYNN announced that the first order of business was HOUSE
BILL NO. 305, "An Act relating to campaign fund raising by a
legislator, legislative employee, or candidate for election to
the legislature during a regular or special legislative
session."
8:13:57 AM
REPRESENTATIVE KEVIN MEYER, Alaska State Legislature, presented
HB 305 as prime sponsor. He said the law that prohibits
legislators from raising money during service in office should
extend to federal and local law. The proposed legislation would
make the laws uniform. He stated that there is not an effective
date in the bill. In response to a question Chair Lynn, he
confirmed that unless the proposed bill is amended to include an
effective date, no one currently in the legislature would be
affected. Representative Meyer said the bill is essentially
simple, but may look complicated because of its impact.
8:17:20 AM
MIKE PAWLOWSKI, Staff to Representative Kevin Meyer, Alaska
State Legislature, testified on behalf of Representative Meyer,
prime sponsor, during the hearing on HB 305. He noted that
language was added on page 1, line 14, which would allow for
session or special session to be held outside of Juneau.
8:17:59 AM
REPRESENTATIVE ROSES offered his understanding that current
statute prohibits any candidate from campaigning during the
legislative session, not just incumbents. He noted that there
is information pertaining to a State v. ACLU lawsuit in the
committee packet. He said he thinks Mr. Pawlowski has said that
because the lawsuit speaks to the constitutional rights of an
individual, "the ruling has been that we've sort of overlooked
what statute is in favor of this lawsuit."
8:18:57 AM
REPRESENTATIVE MEYER told Representative Roses he is correct
that "we've been overlooking that for non-legislators."
8:19:35 AM
MR. PAWLOWSKI referred to a memorandum from Legislative Legal
and Research Services, dated April 3, 1999, which addresses the
Ethics Act. He stated that the Ethics Act prohibition was
acceptable because it did not apply to non-incumbents. He
continued:
We noticed in reading the existing statute, that the
APOC provision, which is separate from the Ethics
Code, does apply to both.
MR. PAWLOWSKI, in response to a comment from Representative
Roses, regarding campaigning, stated that APOC statute applies
only to fundraising. He concluded, "So, a non-incumbent could
perform any number of campaign activities, but they could not
raise money while the legislature's in session, unless it's
within 90 days and outside of the capital."
8:20:59 AM
BROOK MILES, Executive Director, Alaska Public Offices
Commission (APOC), answered questions during the hearing on HB
305. She stated that APOC does not enforce the provisions of AS
15.13.072(d), because, in its decision, the Alaska Supreme
Court, although not striking this section from statute,
nullified it by striking a provision that was currently in AS
15.13.074(c), which called for non-incumbents and incumbents to
have "a legislative time out." She said it was found that there
was no "state-compelling" reason for the limitation; therefore,
it was "left to the Select Committee on Legislative Ethics where
it is appropriate for incumbents." She concluded, "So, I'd have
to tell you, under advice of the attorney general, it's likely
that even if this bill is passed, the commission will still not
be enforcing that against non-incumbent candidates."
CHAIR LYNN asked, "Well, if they're not enforcing it, should it
be there?"
MS. MILES replied:
It shouldn't be there. Actually, in past years, ...
APOC has suggested that because it's unenforceable,
the provision of AS 15.13.072(d) should be deleted
from the statute. The last time the legislature was
set to do that, a huge controversy arose, in that
there was interest in the members that if you couldn't
apply it to incumbents that legislators should be able
to campaign as much as they wanted to during session,
too, and there was a move to strike it from the
legislative ethics provisions, which of course, then
caused great controversy and things just stalled.
8:22:41 AM
CHAIR LYNN shared his understanding that while a [non-incumbent]
running for office has the advantage of raising money through
campaigning, the incumbent has the advantage of being an
incumbent, and those factors balance each other out.
MS. MILES replied that that has also been her understanding.
She reported that data does not show that a non-incumbent gains
a significant edge during the time that an incumbent is spending
in session. Notwithstanding that, she said she thinks the added
language previously highlighted by Mr. Pawlowski regarding the
location in which the legislature is convened in a regular or
special session is "probably very positive."
8:24:07 AM
JOYCE ANDERSON, Administrator, Select Committee on Legislative
Ethics ("the Ethics Committee"), said the committee has
discussed campaigning during a regular or special session and is
"very much in agreement and made a recommendation regarding the
other change that's in the law." She confirmed the previous
statement of Ms. Miles that the Ethics Committee does enforce AS
24.60.031, regarding legislators not campaigning during a
session. She said there has been past discussion regarding
campaigning by legislators for any office, and although the
committee has not officially come out with an endorsement, its
members feel that there should not be any campaigning.
8:25:42 AM
REPRESENTATIVE ROSES commented that Ms. Anderson covered the
topic well, and, as a member of the Ethics Committee, he agrees
that a majority of the committee members "would like to see it
covering all offices and not just one here currently listed."
8:26:01 AM
REPRESENTATIVE DOLL asked how other states handle this issue.
MS. ANDERSON replied that she does not have that information,
but she said she can find out.
REPRESENTATIVE COGHILL suggested that request be fulfilled by
the sponsor, rather than asking APOC or the Ethics Committee to
conduct that kind of research.
8:27:08 AM
REPRESENTATIVE MEYER deferred to Mr. Pawlowski.
8:27:32 AM
MR. PAWLOWSKI offered to compile that information.
8:27:55 AM
CHAIR LYNN closed public testimony.
8:28:02 AM
REPRESENTATIVE JOHANSEN agreed with the need for the bill, but
expressed concern that it is "one more place in print where the
capital would be somewhere else in the state."
8:28:50 AM
REPRESENTATIVE JOHNSON moved to adopt Amendment 1, which read as
follows:
Page 1, line 2, following "session":
Insert "; and providing for an effective date"
Page 2, line 4, following "contribution":
Insert "for the legislator or legislative
employee's own campaign"
Page 2, line 7:
Delete "candidate or individual"
Insert "legislator or legislative employee"
Page 2, line 11, through page 3, line 7:
Delete all material and insert:
"* Sec. 2. AS 15.13.074 is amended by adding a new
subsection to read:
(j) While the legislature is convened in a
regular or special legislative session, a legislator
may not solicit or accept a contribution to be used
for the purpose of influencing the outcome of an
election under this chapter unless
(1) it is an election in which the
legislator is a candidate;
(2) the solicitation or acceptance occurs
during the 90 days immediately preceeding [sic] that
election; and
(3) the solicitation or acceptance occurs
in a place other than the capital city or a location
in which the legislature is convened in a regular or
special session if the location is other than the
capital city.
* Sec. 3. AS 24.60.031(a) is amended to read:
(a) A [LEGISLATOR OR] legislative employee may
not
(1) on a day when either house of the
legislature is in regular or special session, solicit
or accept a contribution or a promise or pledge to
make a contribution for a campaign for municipal,
state, or federal office [THE STATE LEGISLATURE];
however, a [LEGISLATOR OR] legislative employee may,
except in the capital city or in the location in which
the legislature is convened in regular or special
session if the location is other than the capital
city, solicit or accept a contribution, promise, or
pledge for a campaign for municipal, state, or federal
office [THE STATE LEGISLATURE] that occurs during the
90 days immediately preceding the [AN] election for
that office; or
(2) accept money from an event held on a
day when either house of the legislature is in regular
or special session if a substantial purpose of the
event is to raise money on behalf of the [MEMBER OR]
legislative employee for [STATE LEGISLATIVE] political
purposes; however, this paragraph does not prohibit a
[LEGISLATOR OR] legislative employee from accepting
money from an event held in a place other than the
capital city or a location in which the legislature is
convened in regular or special session if the location
is other than the capital city during the 90 days
immediately preceding an election for public office in
which the legislative employee is a candidate [; OR
(3) IN A CAMPAIGN FOR THE STATE
LEGISLATURE, EXPEND MONEY THAT WAS RAISED ON A DAY
WHEN EITHER HOUSE OF THE LEGISLATURE WAS IN A
LEGISLATIVE SESSION BY OR ON BEHALF OF A LEGISLATOR
UNDER A DECLARATION OF CANDIDACY OR A GENERAL LETTER
OF INTENT TO BECOME A CANDIDATE FOR PUBLIC OFFICE;
HOWEVER, THIS PARAGRAPH DOES NOT APPLY TO MONEY RAISED
IN A PLACE OTHER THAN THE CAPITAL CITY DURING THE 90
DAYS IMMEDIATELY PRECEDING AN ELECTION].
* Sec. 4. AS 24.60.031 is amended by adding a new
subsection to read:
(c) A legislator may not
(1) on a day when either house of the
legislature is in regular or special session, solicit
or accept a contribution or a promise or pledge to
make a contribution
(A) for the legislator's own campaign for
public office, unless the solicitation, acceptance,
promise, or pledge occurs in a place other than the
capital city or a location in which the legislature is
convened in regular or special session if the location
is other than the capital city during the 90 days
immediately preceding the election in which the
legislator is a candidate;
(B) for another candidate in an election
for municipal, state, or federal office; or
(C) to influence a state ballot proposition
or question;
(2) accept money from an event held on a
day when either house of the legislature is in regular
or special session if a substantial purpose of the
event is to raise money on behalf of the legislator's
campaign for public office; however, this paragraph
does not prohibit a legislator from accepting money
from an event held in a place other than the capital
city or a location in which the legislature is
convened in regular or special session if the location
is other than the capital city during the 90 days
immediately preceding an election in which the
legislator is a candidate; or
(3) in a campaign for municipal, state, or
federal office, expend money that was raised on a day
when either house of the legislature was in a
legislative session by or on behalf of a legislator
under a declaration of candidacy or a general letter
of intent to become a candidate for public office;
however, this paragraph does not apply to money raised
in a place other than the capital city or a location
in which the legislature is convened in regular or
special session if the location is other than the
capital city during the 90 days immediately preceding
an election in which the legislator is a candidate.
* Sec. 5. This Act takes effect immediately under
AS 01.10.070(c)."
8:29:02 AM
CHAIR LYNN objected for discussion purposes.
8:29:09 AM
REPRESENTATIVE JOHNSON spoke to Amendment 1. He stated his
belief that a legislator should not be allowed to participate in
a fundraising effort for another candidate for another office
during session, no matter what title the candidate is pursuing.
For example, he said he thinks it would be wrong if he were to
assist in a fundraising effort for the mayor of his city during
session. The fundraising letters would be going out to people
who have brought legislation to him, and it would exercise undue
influence on contributors. In response to Chair Lynn, he
clarified that he does not view endorsements as falling in the
same category as fundraising.
8:31:18 AM
REPRESENTATIVE DOLL noted that she attends a monthly meeting of
the Democrat Party in Juneau. At the function, fundraising is
done and checks are made out, although not to her. She asked
how such a situation would pertain to Amendment 1.
REPRESENTATIVE JOHNSON stated that it is not his intention for
Amendment 1 to affect such a situation. He said he is
specifically addressing "specific fundraising events sponsored
by legislators during the session, for other candidates."
REPRESENTATIVE DOLL noted that the capital city throws a
Democratic Party event every February, and the purpose of the
auction at the event is to serve as a fundraiser. She asked how
that would be affected by Amendment 1.
REPRESENTATIVE JOHNSON said he does believe Amendment 1 pertains
to that situation; it only pertains to fundraising for a
specific candidate. Amendment 1 is intended to not allow a
legislator to use his/her office, the name of the office, or the
power of the incumbent to raise funds for another candidate or
bond initiative of any kind during session. In response to a
question from Chair Lynn, he said that would not include raising
funds for a political party. However, he said he would not have
a problem with that, because he does not believe a political
candidate should be raising funds for anyone during a
legislative session. He stated, "When we're in session, we
should be concentrating on the business of the state, and not
advancing some political agenda."
8:35:17 AM
CHAIR LYNN said he often receives requests for contributions
from national offices in his political party.
REPRESENTATIVE JOHNSON said he does not think contributing a
donation to a candidate is the same as putting ones name on a
fundraising event.
8:36:12 AM
MS. ANDERSON stated that the Ethics Committee issued an advisory
opinion in December, based on the current statute, that said
that during session, legislators are not allowed to put their
name, as host or co-host, on a campaign fund-raising invitation
in support of a legislative candidate. Legislators are allowed
to endorse the candidate, as long as their name remains off of
any campaign invitation. She said they could certainly put
their name on a signature advertisement that solicits a vote.
She said the new language that is being proposed would make this
true for federal and municipal candidates. She continued:
The only thing that isn't in here that you mentioned
happens to be ... a ballot initiative. ... There have
been questions in the past for the Ethics Committee
regarding what type of work a legislator may do in
relation to a ballot initiative, and what side is the
campaigning side and what side is more the
legislators' side, which is more of a policy statement
... - you're ... either ... for it or against it - and
so, you're talking about more policy issues versus a
campaigning aspect.
... I haven't had a chance to really look too closely
at your amendment, but I think that what's in place
right now would cover your concern.
MS. ANDERSON, in response to Chair Lynn, said currently a
legislator is allowed on his/her own time - not using state
resources - to work on an initiative, gather signatures, and
conduct fundraising. If this issue were added into the proposed
legislation, she observed, than the fundraising aspect would be
removed from those actions that are allowable.
REPRESENTATIVE JOHNSON said that is intent of Amendment 1, to
treat all elections as if they were legislative elections, in
terms of the restrictions that apply.
8:39:59 AM
CHAIR LYNN asked the sponsor if he would support or oppose
Amendment 1.
8:40:08 AM
REPRESENTATIVE MEYER replied that he supports the intent of
Amendment 1. He said the intent of the bill is "to prohibit any
of us from leveraging our offices to raise money for our own
elections or elections of others." He said he had not thought
much about the initiative process, but can see where someone
could use his/her office to help raise money for initiatives,
which he said he does not condone.
REPRESENTATIVE JOHNSON, in response to the sponsor, said
language regarding 90 days is included in Amendment 1.
8:41:16 AM
MR. PAWLOWSKI pointed out language on page 2, beginning on line
28 [as numbered on the amendment], and said:
I believe this is very specific that you cannot, for
another person, raise money when ... the legislature's
in session, regardless of the 90 days. So, it is
different than what Joyce was talking about in the
Ethics Committee. Because the provision in the
existing statute would allow that type of conduct
within 90 days of the election.
8:42:07 AM
REPRESENTATIVE JOHNSON indicated that he may have misunderstood
[the sponsor's] statement. He clarified that he does not intend
to affect a candidate's ability to campaign and raise money, but
does intend to affect a candidate's ability to raise money for
someone else. He said he does not think that would exclude
joint fundraisers, for example. He said he agrees with current
law that says only a treasurer can accept money, and he would
not want to see anyone using his/her incumbent office for
campaigning.
REPRESENTATIVE JOHNSON noted that if Amendment 1 is adopted, the
proposed legislation would have an immediate effective date.
8:43:35 AM
REPRESENTATIVE ROSES said he has no problem with an immediate
effective date.
8:44:01 AM
REPRESENTATIVE COGHILL said he does have a problem with "an
effective date that becomes kind of retroactive." He said there
may be municipal and federal entities that have "already set
things in motion."
REPRESENTATIVE JOHNSON, in response to a question from
Representative Coghill, offered his understanding that
[Amendment 1] would not change existing statute that says funds
can be raised within 90 days of the election, as long as it is
"not in the city where the session's being held."
8:46:28 AM
MR. PAWLOWSKI clarified that the 90-day rule would apply for a
legislator's own campaign, but not in a situation regarding a
ballot initiative or fundraising for another candidate.
8:47:07 AM
CHAIR LYNN withdrew his objection to Amendment 1.
8:47:24 AM
REPRESENTATIVE DOLL objected to Amendment 1. She said she
believes it is broad, and without further study, she would not
vote in favor of it.
A roll call vote was taken. Representatives Roses, Johansen,
Johnson, and Lynn voted in favor of Amendment 1.
Representatives Coghill and Doll voted against it. Therefore,
Amendment 1 passed by a vote of 4-2.
8:48:34 AM
REPRESENTATIVE MEYER, in response to Representative Coghill,
said he has not considered conforming language, but agreed that
it would be good to do so.
REPRESENTATIVE COGHILL said he is still trying to figure out how
to create conforming language. He said it would be wise to
either challenge or agree with the court. He added, "I'm always
open to challenging the court, but in this particular case I
think I agree with them." He suggested that the words - "A
candidate or an individual" - on page 1, line 5, could be
changed to, "A legislator or a legislative employee". In
response to Chair Lynn, he offered his understanding that the
bill had not been referred to any other House committee. He
said it could be heard in the House Rules Standing Committee.
8:50:58 AM
REPRESENTATIVE DOLL expressed concern regarding the speed at
which the bill was being heard, and she stated that she would
like the committee to discuss whether or not the bill should be
heard by the House Judiciary Standing Committee.
8:51:26 AM
REPRESENTATIVE COGHILL said he does not know that making
decisions under pressure is good reason to send the bill to
another committee of referral.
8:52:06 AM
REPRESENTATIVE COGHILL moved to adopt Amendment 2, as follows:
On page 1, line 5:
Delete "A candidate or an individual"
Insert "A legislator or a legislative employee"
There being no objection, Amendment 2 was adopted.
8:52:49 AM
REPRESENTATIVE COGHILL moved Amendment 3, to strike the
effective date just adopted through Amendment 1.
8:53:10 AM
REPRESENTATIVE JOHNSON objected. He said, "I think this is one
of those things that may be legal, but isn't right. And any
time we delay enacting ethical behavior or ethical legislation,
we've done a disservice to the public."
REPRESENTATIVE ROSES pointed out that even with an effective
date, the bill still has to continue through discussion of the
House, then the Senate, then be signed by the governor. He
continued:
... Anybody that would be affected by this piece of
legislation will have plenty of notice to make sure
that they don't run afoul of it by the time it becomes
effective. So, if there's anybody out there
campaigning now or anybody out there fundraising now
or sponsoring fundraisers for other people, this
certainly would give them plenty of time to make sure
their name was removed from future activities or
future fundraising mailers or so on.
REPRESENTATIVE ROSES concurred with Representative Johnson's
statement that if there is something to be fixed, it needs to be
fixed immediately, without postponing the effect of what is
trying to be done.
CHAIR LYNN expressed his concern that people or entities may
have acted in reliance of the law as it is today, "and then this
upsets the apple cart."
REPRESENTATIVE JOHNSON said he agrees with Representative Roses'
comments regarding the timing of moving the bill through, and
furthermore, he indicated that another factor in the equation is
that this is a 90-day session. He offered further calculations
leading to the conclusion that it would be two months before
people "see this legislation coming," and 180 days before it
would take effect.
REPRESENTATIVE COGHILL withdrew Amendment 3.
8:57:37 AM
REPRESENTATIVE COGHILL moved to report HB 305, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
305(STA) was reported out of the House State Affairs Standing
Committee.
REPRESENTATIVE MEYER said he would be considering conforming
language and, if that task becomes more complicated than
anticipated, would request a hearing of the bill in the House
Rules Standing Committee.
The committee took an at-ease from 8:58:08 AM to 9:03:11 AM.
HB 313-G.O. BONDS FOR CRIME LAB
9:03:12 AM
CHAIR LYNN announced that the last order of business was HOUSE
BILL NO. 313, "An Act providing for and relating to the issuance
of general obligation bonds for the purpose of paying the cost
of a scientific crime detection laboratory; and providing for an
effective date."
9:03:32 AM
JOHN GLASS, Deputy Commissioner, Office of the Commissioner,
Department of Public Safety, presented HB 313 on behalf of the
House Rules Committee, sponsor by request of the governor. He
said he would explain the bill and the reason for it. Mr. Glass
said the current 18,000 square foot crime lab was built in
Anchorage, in 1986, and it serves six scientists and four
support personnel. He offered his understanding that it was in
2006 that the legislature appropriated $4.9 million towards a
study to create a new crime lab. The department has used the
money thus far to hire an architectural firm in Anchorage
[Livingstone Sloane, Inc.]. He noted that the Department of
Transportation & Public Facilities (DOT&PF) is on board with the
project. Mr. Glass used some visual displays set up in the
committee room. He said the department examined 34 parcels of
land in the Municipality of Anchorage on which to develop a new
crime lab and has chosen one that is a 15.3 acre parcel on Tudor
Road, 2.5 blocks to the West of the current lab.
MR. GLASS relayed that the architect firm contracted with a firm
and developed a plan for the size of crime lab needed, which is
between 80,000-84,000 to conduct the current crime lab business.
He noted that the crime lab services all the municipal and state
agencies in the state, doing finger print and latent print
examinations and crime scene investigation ballistics.
MR. GLASS stated, "The governor has proposed this bill for one
hundred million dollars." He noted that available to testify
are representatives of the department, the architecture firm, an
engineer at DOT, and a lab supervisor. Furthermore, he noted
that Jerry Burnett was available to answer questions related to
finance.
MR. GLASS, in response to a question from Chair Lynn, said
hopefully the old lab will be refurbished and made into office
space for the rest of the department, perhaps housing the office
that conducts sexual offender registration and the Alcohol
Beverage Control Board, as well as a couple other entities.
9:07:08 AM
REPRESENTATIVE ROSES suggested that the University of Alaska
Anchorage has a need for lab space and the old crime lab could
more easily be converted to that use. He asked Mr. Glass if it
would cost the same amount of money to build more office space
in the anticipated new building than to convert the old lab into
office space.
MR. GLASS said he does not know what the exact cost would be in
comparison; however, he talked about the high cost of building
laboratories, because of the type of equipment that is needed in
them.
REPRESENTATIVE ROSES said that is exactly why he would not want
to see a lab that has already been built be turned into office
space.
9:08:13 AM
MR. GLASS, in response to questions from Representative Coghill,
reiterated when the current crime lab was built and that it is
the only lab in the state. He added that it was 1994 when the
first DNA tests were processed in the laboratory. In response
to a follow-up question from Representative Coghill, he said the
laboratory is short on both lab space and storage space. He
said the best term to use for a lab that was built for 16
people, but now houses 41, is "compressed." He described the
small working space of each scientist and stressed the
importance of a sterile environment. He said, "When they're
working on their studies here, and then they have to move over
here and use their computer that's sitting next to them to do
that work, there is always the fear and danger of cross-
contamination, which always creates a high risk when it comes
time for court presentations."
MR. GLASS apologized that, due to technical difficulties, he was
unable to bring the 43 photos that were just e-mailed to him the
day before to show the committee pictures of the overcrowded
state of the lab; however, he said he could provide them later.
[Those photos were subsequently included in the committee
packet.]
MR. GLASS, in response to a question from Representative Roses,
confirmed that the lab does outsource its toxicology work to the
state of Washington, and it hopes that the new laboratory will
allow the department to do that work in house. In response to a
follow-up question, he said he does not know what the percentage
is of work being sent out of state. Currently, he estimated,
the cost to send that work out is $180,000 annually.
Additionally, the department pays travel and expenses for those
scientists in Washington who come to Alaska to testify in court.
9:11:48 AM
MR. GLASS, in response to a question from Representative
Johnson, said the new building would be approximately 83,000
square feet in the hopes of avoiding compression 10 years from
now. He said it is unknown what "new science" will come along
in the next 20 years. For example, he said the current lab was
built before scientist knew about DNA [testing].
REPRESENTATIVE JOHNSON asked if perhaps the department should
consider a 90,000 square foot building, because he said he does
not want the department to return with a request for an even
larger building because it didn't ask for enough to begin with.
He clarified that he is encouraging growth opportunity.
CHAIR LYNN observed that with increased state population comes
increased crime.
9:13:38 AM
MR. GLASS assured the committee that there is room for expansion
in the proposed laboratory; the current need is for
approximately 50,000 square feet, and the building is designed
at 83,000 square feet. Furthermore, he said the building will
allow for additions to be made as needed in the future, whereas
the current lab is not suited for additions and has no room to
expand, even if it could. In response to a question from
Representative Johnson, he said the $100 million needed for the
facility includes all costs: laboratory, move-in costs, and new
equipment.
REPRESENTATIVE JOHNSON asked, "So, we're bonding for a move?"
MR. GLASS reiterated that in the process of building the new
laboratory, the present equipment will be moved into it.
9:15:14 AM
MR. GLASS, in response to Representative Doll, confirmed that
there is only one medical examiner in the state; however, he
offered his understanding that that position is within the
Department of Health & Social Services. In response to a
follow-up question from Representative Doll, he said he does not
think the department has asked for a lab in the past. He
stated, "I think this is part of the process going back to 2006,
when the initial appropriation for the study and the design ...
was made, I think it's the only request." He said it is past
time for the request.
9:16:12 AM
REPRESENTATIVE COGHILL told Representative Johnson that the need
is great in all areas, and expanding one area overloads others.
He said, "The medical examiner is one example of those kind of
bottlenecks in our system right now." He expressed his
readiness to pass the bill out of committee.
9:17:12 AM
CHAIR LYNN said he thinks "all of us" strongly support law
enforcement. It does not do any good to arrest someone and not
be able to prosecute him/her, and part of the process leading to
a conviction is to have evidence that is fair to all parties.
9:17:32 AM
REPRESENTATIVE JOHNSON stated that he is opposed to bonding;
therefore, although he supports the project 100 percent, he does
not want to "use a credit card when we could pay for it with
cash." He stated:
I understand that we've got a huge account that's
making money, and everything gets rolled into the
permanent fund or the constitutional budget reserve,
and we save it there, and that's generating revenue.
That doesn't cut it for me. Unless we specifically
offset this hundred million dollars somewhere, that we
can pay those bonds off at a reduced rate, then I'm
not comfortable with bonding and indebting our future
for a project that we could pay for today.
9:19:40 AM
JERRY BURNETT, Director, Division of Administrative Services,
Department of Revenue, answered questions during the hearing on
HB 313. In response to Representative Johnson's remarks, he
said that in the budget proposed this year by the governor,
there are savings that total billions of dollars. He mentioned
the transportation endowment and close to a billion dollars in
additional direct deposits to the retirement funds. He noted
that under the Internal Revenue Service (IRS) code, if [the
state] specifically put a hundred [million] dollars into an
account that earned more than the interest on the bonds, it
would have to pay that difference to the IRS.
MR. BURNETT continued:
By putting the money in other savings accounts, we're
able to borrow this money; the last [general
obligation (GO)] debt that went in the State of Alaska
in 2003, the money was borrowed at 3.84 percent.
Today, if you were borrowing this money, it's
somewhere in the 4.5 percent range. The savings
accounts that are being proposed to have money added
to them are for a different purpose than off-setting
this directly, but they do have that effect. And
those savings accounts - if you put money in the
retirement fund since the history of [the Public
Employees Retirement System (PERS)] and [the Teacher's
Retirement System (TRS)] - they've earned over 9
percent. ... They earned 18.8 percent in the last
fiscal year. Today they probably lost some money.
But you have an indirect offset, and it's a matter of
balancing through the entire spending plan: debt,
savings, and general fund appropriations. And I think
this actually does a very good job of that.
REPRESENTATIVE JOHNSON said he understands; however, he stated
that part of his concern is that "this should be in the capital
budget." He continued:
To stand up and say that the capital budget is cut
when you're adding $250 million to it, to me is
disingenuous and a little inaccurate. ... When we
look at this, ... we should understand that we're
adding $100 million to the capital budget. And ...
that's my point. I understand the offset, and if your
logic held true, we should put every penny in the bank
and offset everything we do by generating that
investment and just start a big fund that we run
everything off of. So, it doesn't hold true all the
way across the board. I know you're thinking it's
maybe a good idea, and it may be, but ... I am not
supportive of bonding our future away."
REPRESENTATIVE JOHNSON said economic indicators show that the
economy will most likely get worse, so he said there is gambling
going on with money that the state has at present. In response
to a question from the chair, he said he brings this point to
the attention of the co-chairs of the House Finance Committee
every chance he gets.
9:23:45 AM
MR. BURNETT, in response to Representative Johnson's comment
about gambling, noted that last year, the Department of Revenue,
worked on the pension obligation bond legislation, which sets
borrowing at approximately 5.5 percent, compared to the
predicted borrowing range of 4.5 percent related to HB 313.
During its work on the pension obligation bond legislation, he
said, the department did "Monte Carlo simulations" - considering
"every point since markets have existed, and up to about 6
percent interest there is a 99 percent confidence level that the
state would not be gambling. He said, "It's not a matter of
losing money; it's a matter of you making the responsible choice
of actually putting the other money in savings. That's really
the question here."
9:24:49 AM
REPRESENTATIVE JOHNSON said he is intrigued by the fact that the
analysis is called "Monte Carlo." He noted that slot machines
in Las Vegas pay off at 99 percent, "and they don't build those
chandeliers by people that win at slots."
9:25:13 AM
REPRESENTATIVE ROSES expressed appreciation for Mr. Burnett's
having brought up the issue of the obligation bond. He said
this discussion does not differ so much from one that was held
several years ago to prepare for an expected serious revenue
shortfall. At the time, 50 Alaskans gathered together in
Fairbanks to consider how to leverage the existing money, and
that consideration was called, "percent of market value" (POM).
He continued:
And if there was some value to spending up to 5
percent of the earnings and leaving the 3 to ... 4
percent and not touching the corpus, this is actually
doing it in the opposite way: we're taking the $100
million that we would have spent, and we're going to
invest that at an average [return]. If you look at
the 10-year average return, just from the [Alaska
Retirement Management] (ARM) Board alone from when I
sat on there, you're talking 8.25 percent over a 10-
year average. And if you go even further out, and
look at a 15-year average or more, we exceed that.
And so, there's only been one period of time in which
the 3-year average went below 8 percent and it was
5.75 [percent]. And so, it's a risk, but it's
certainly a very minimal risk, and I think it's one
that's worth taking, simply because you're going to be
able to leverage some of the debt.
REPRESENTATIVE ROSES asked what kind of penalty factor would be
involved in trying to pay off a general obligation bond early if
that bond was "floated" and the interest rates started to "go
south."
9:26:47 AM
MR. BURNETT, regarding GO bonds, said depending on the structure
of the actual debt sale, the state has a number of opportunities
to refund bonds. For example, the state could get a lower
interest rate and sell new bonds. He said it is not necessary
to get a new vote of the public in order to refund bonds. If
the bonds are not "haulable" - they cannot be paid off early -
the state would borrow the money, put it into an account, and do
a "defeasement," which would have the advantage of a lower
interest rate.
9:27:33 AM
REPRESENTATIVE ROSES offered a translation from Mr. Burnett's
finance language:
You probably couldn't pay it off, but you could set
money aside and use the earnings from that money then
to pay off the debt, so that you're not upside down in
terms of your earnings as opposed to your
expenditures.
MR. BURNETT responded that's correct.
9:28:32 AM
MR. BURNETT, in response to a question from Representative
Johnson regarding an appropriation shown on page 2, line 17, of
the bill, explained that fiscal notes serve as information "or
[an] appropriation vehicle that goes along with the budget, with
the bill," whereas a specific appropriation does not need to be
in a fiscal note.
9:28:56 AM
REPRESENTATIVE ROSES moved to report HB 313 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 313 was reported out of the
House State Affairs Standing Committee.
9:29:43 AM
CHAIR LYNN discussed the upcoming House State Affairs Standing
Committee calendar.
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at
9:30:07 AM.
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