Legislature(2011 - 2012)SENATE FINANCE 532
01/25/2012 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB39 | |
| HB121 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 39 | TELECONFERENCED | |
| + | HB 121 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
January 25, 2012
9:02 a.m.
9:02:12 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Lisa Weissler, Staff, Senator Hollis French; Laura Brod,
Former State Representative, Minnesota; Representative Alan
Austerman; Margo Waring, Juneau; Ruth Danner, Juneau; Barry
Fadem, President, National Popular Vote; Susan K. Bell,
Commissioner, Department of Commerce, Community and
Economic Development; Cathy Jeans, Finance Operations
Manager, Department of Commerce, Community and Economic
Development; Rodger Painter, President, Alaskan Shellfish
Growers Association; Russell Dick, President and CEO, Haa
Aani, LLC; Paul Fuhs, Alaska Sea Farms.
PRESENT VIA TELECONFERENCE
Dr. Carolyn Brown, Juneau; Randy S. Griffin, Fairbanks;
Judy Andree, League of Women Voters, Juneau.
SUMMARY
SB 39 U.S. PRESIDENTIAL ELECTION COMPACT
SB 39 was HEARD and HELD in committee for further
consideration.
CSHB 121(RLS)
LOAN FUNDS: CHARTERS/MARICULTURE/MICROLOAN
CSHB 121(RLS) was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 39
"An Act ratifying an interstate compact to elect the
President and Vice-President of the United States by
national popular vote; and making related changes to
statutes applicable to the selection by voters of
electors for candidates for President and Vice-
President of the United States and to the duties of
those electors."
9:03:27 AM
LISA WEISSLER, STAFF, SENATOR HOLLIS FRENCH, explained SB
39. She referred to the Sponsor Statement (copy on file).
She stated that the bedrock rule in elections was that the
person with the most votes wins, but that was not always
the case under the current election system. She stated that
the United States Constitution directed each state to
appoint a number of electors equal to the state's number of
senators and representatives. In Alaska, that was three
electors. She stated that the constitution allowed the
states to determine how the electors would be appointed.
Co-Chair Hoffman remarked that there was a belief that the
bill would eliminate the Electoral College. He wondered if
that was true. Ms. Weissler replied that SB 39 would not
eliminate the Electoral College.
Co-Chair Hoffman wondered how many people in Alaska support
SB 39. Ms. Weissler agreed to provide that information.
Senator Olson queried the similarity between a bill that
was introduced a few years prior and SB 39. Ms. Weissler
replied that they were very similar.
9:09:46 AM
LAURA BROD, FORMER STATE REPRESENTATIVE, MINNESOTA,
testified in support of SB 39. She communicated that she
was involved in similar legislation as a state
representative in Minnesota. She stated that SB 39 would
guarantee the presidency of the United States to the
candidate who received the most votes in the entire United
States. The bill ensured that every vote, in every state,
would matter in every presidential election. She explained
that the bill had been enacted by nine jurisdictions that
possessed 132 electoral votes - 49 percent of the 270
necessary to activate it (VT, MD, WA, IL, NJ, DC, MA CA,
and HI). She furthered that the bill had passed 31
legislative chambers in 21 jurisdictions (AR, CA, CO, DT,
DC, DE, HI, IL, ME, MD, MA, MI, NV, NJ, DM, NY, NC, OR, RI,
VT, and WA). In a recent 47 to 13 vote, in the republican-
controlled New York Senate, republicans supported the bill
21 to 11, and democrats supported in 26 to 2. The bill had
been endorsed by 2,124 state legislators.
Ms. Brod stated that the shortcomings of the currents
system stemmed from the state winner-take-all statutes,
which award all of a state's electoral votes to the
candidate who received the most popular votes in each
state. The sinner-take-all rule had permitted candidates to
win the presidency without winning the most popular votes
nationwide in 4 of our 56 elections. A shift of 60,000
votes in Ohio in 2004 would have elected Kerry despite
Bush's nationwide lead of 3 million. She explained that
another shortcoming of the winner-take-all rule was that
presidential candidates had no reason to pay attention to
the concerns of voters in states where they are comfortably
ahead or hopelessly behind. In 2004 and 2008, candidates
concentrated two-thirds of their visits and ad money in the
post-convention campaign in just six closely divided
battleground states, with 98 percent going to just 15
states. She stressed that two thirds of the states were
ignored.
Ms. Brod declared that Article II, Section 1 of the United
States Constitution gave the states exclusive control over
the manner of awarding their electoral votes: "Each state
shall appoint, in such manner as the legislature thereof
may direct, a number of electors…" The winner-take-all rule
was not in the constitution. It was used by only three
states in the nation's first election in 1789. She stressed
that Maine and Nebraska's awarding of electoral votes by
district was a reminder that states control the process.
Ms. Brod noted that under SB 39, all the electoral votes
from the enacting states would be awarded to the
presidential candidate who received the most popular votes
in all fifty states and DC. The bill would take effect only
when enacted by states possessing a majority of the
electoral votes. She explained that SB 39 would preserve
the Electoral College and state control of elections.
9:14:34 AM
Ms. Brod noted that there was not much campaign money spent
in the state, but Alaskans contributed money to campaigns
that was never spent in the state by the candidates. She
continued to express that a national popular vote would
require the candidates to wait for the polls to return,
before a president is determined.
Co-Chair Hoffman queried the views of the citizens of
Alaskans pertaining to SB 39. Ms. Brod stated that about 70
percent believed that a National Popular Vote was in the
best interest of them and Alaska.
Co-Chair Hoffman wondered why Alaskans supported the bill.
Ms. Brod replied that individuals did not want to vote,
because they felt that their votes did not matter. She also
stated that some Alaskans felt that the candidates were not
focusing on the issues that Alaskans cared about.
Co-Chair Hoffman noted that the 2004 election would have
allowed John Kerry to win the popular vote. He wondered if
the bill would favor one party more than the other. Ms.
Brod replied that SB 39 would not favor one party more than
the other.
9:24:09 AM
Senator McGuire wondered how the compact would be enforced
and executed. She also queried the possibility of a
constitutional challenge. Ms. Brod replied that she did
expect litigation regarding this legislation. She explained
a case from 1893, which determined that the awarding of
electors was specifically a state's right. She noted that
interstate compacts were tools used by legislators, but SB
39 was a non-typical way to develop a compact. She stated
that the compact would allow the states to retain the
authority for elections. The states would certify the total
votes, as designed and determined by Alaska.
Senator Thomas wondered how the electoral votes in Alaska
would be determined. Ms. Brod replied that the compact
would allow for Alaska to take all of the votes in Alaska,
and determine which candidate won Alaska for each
candidate. She furthered that the totals for each candidate
would be based on the total national vote from each state,
and the electors would base their vote on the national
popular vote.
9:32:35 AM
Senator Olson wondered how voter fraud would be dealt with,
and incomplete numbers of votes. He added the computers
were a dominant part of elections in rural Alaska, and
might not work as well in those areas. Ms. Brod replied
that the rural voters would be heard under this
legislature. She stressed that each state could determine
voter fraud laws. She felt that voter fraud would decrease
under SB 39.
Senator Egan noted some occurrences when the members of the
Electoral College did not vote for the candidate that was
expected. Ms. Brod replied that there were eleven cases in
history when and elector did not vote they direction that
was expected. She stressed that it was the state's right to
determine how to deal with "faithless" electors.
Senator Egan queried how much of the United States
population lived in the top 50 largest cities in the US.
Ms. Brod agreed to provide that information.
9:40:28 AM
Co-Chair Hoffman noted the positive reasons for SB 39:
campaign dollars spent in the state, the presidential win
would not be declared until the polls in the western United
States were closed, and Alaskan issues would be addressed
during the presidential campaign. He queried some potential
drawbacks to changing the current system. Ms. Brod replied
that she could not think of any drawbacks to changing the
system. She stressed that a national popular vote was in
the best interest of the country.
JUDY ANDREE, LEAGUE OF WOMEN VOTERS, JUNEAU (via
teleconference), testified in support of SB 39. She felt
that the legislation was a bi-partisan effort. She stressed
the importance of the Electoral College, but pointed out
that the Electoral College had evolved to support a
partisan system. She felt that individuals must be counted
at the national level.
9:46:53 AM
DR. CAROLYN BROWN, JUNEAU (via teleconference), spoke in
strong support of SB 39. She shared that the states had the
right under the US Constitution, to determine how the
electors would consider the vote.
RANDY S. GRIFFIN, FAIRBANKS (via teleconference), testified
against SB 39. He felt that Alaska had more representation
than Alaskans deserved. He felt that Alaska was given more
power per person. He stressed that Alaskans would lose that
power. He liked the electoral system, because it would
accentuate the state's boundaries. He felt that the states
would be considered "little nations."
9:52:25 AM
MARGO WARING, JUNEAU, testified in support of SB 39. She
expressed that the history of voting in the country was not
positive.
RUTH DANNER, JUNEAU, spoke in support of SB 39. She stated
that Alaskans raise $1.6 million for presidential
elections, and the money was spent elsewhere in the
country.
BARRY FADEM, PRESIDENT, NATIONAL POPULAR VOTE, testified in
support of SB 39. He pointed out that Alaska had no clout
under the current system.
Co-Chair Stedman noted the one zero fiscal not form the
Division of Elections.
SB 39 was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 121(RLS)
"An Act establishing the commercial charter fisheries
revolving loan fund, the Mariculture revolving loan
fund, and the Alaska microloan revolving loan fund and
relating to those funds and loans from those funds;
and providing for an effective date."
10:02:26 AM
SUSAN K. BELL, COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, referred the CSHB 121
Revolving Loan Funds Summary (copy on file). She stated
that there were three proposed revolving loan funds:
Commercial Charter Fisheries, Mariculture, and Microloans.
She referred to page 2, which displayed the capitalization
amounts: Commercial Charter Fisheries, $9 million;
Mariculture, $2.5 million; and Microloans, $3 million. She
looked at the loan limits for each fund: Commercial Charter
Fisheries, $100,000; Mariculture, $100,000; and Microloans,
$35,000 for a single individual and $70,000 for a two or
more. She noted that the loan terms, interest rates, and
floor/ceiling were also displayed.
Commissioner Bell pointed out that many were interested in
pursuing revolving loan avenues for economic development.
She stated that there were discussions with local financial
institutions that expressed support. She stressed that the
Charter Culture Fisheries and Mariculture funds had
important implications for coastal and rural Alaska.
Commissioner Bell looked at page 3: "Commercial Charter
Fisheries Revolving Loan Fund." This fund would-
• Provide access to capital for Alaskan-Owned
Charters.
• Repatriate permits to Alaska.
• Increase economic benefits from this sector.
Commissioner Bell pointed out the fund's current activity:
NOAA took 1,088 applications, issuing 90 percent permanent
and only 10 percent as interim (Alaska residents received
92 out of 111). She explained that for the first four
months of 2011, average permit prices for Area 2C permits
were nearly $35,000 and Area 3A permits were nearly
$59,000.
Commissioner Bell looked at page 4, "Mariculture Revolving
Loan Fund":
• Mariculture industry has significant potential
for year-round job creation in rural and coastal
areas of the state.
• Relatively new industry and require 5-7 years to
see return on investment.
• Wild harvest exceeds cultivated harvest. Based on
current levels, with greater investment, farmed
shellfish will exceed the market value of wild
caught shellfish (excluding crab) within 10-15
years.
• Industry could generate $20-$30 million in annual
product sales.
Commissioner Bell discussed page 5, "Alaska Microloan
Revolving Loan Fund":
• Improves economic development to seed start-up
businesses.
• Provides access to working capital, inventory
expansion, etc.
• Provides financing for expansion.
• Modeled after SBA program.
• Alaska one of few remaining states without a
microloan program.
Co-Chair Hoffman wondered how the split was determined on
the capitalization of each of the programs. Commissioner
Bell replied that the demand for Commercial Charter
Fisheries was increased, and was supported in the House.
She stated that there was an estimated of anticipated loan
limits, market demand, and history to determine the
capitalization.
Co-Chair Stedman queried the initial capitalization
submission. Commissioner Bell responded that the initial
proposed capitalizations were $5 million for Charter
Fisheries, $2.5 for Mariculture, and $3 million for
Microloan.
Co-Chair Hoffman stressed that he supported commercial
fishing. He added that his district was probably the
largest fishing district in the state. He wondered if his
district's programs were too healthy to assist.
Commissioner Bell replied that the vast majority of the
processed loans were for commercial fishing.
10:13:27 AM
Co-Chair Hoffman noted that many of his constituents were
interested in marketing their product, and felt that there
was not enough emphasis on that aspect of assistance.
Commissioner Bell replied there were too core areas of
economic development activity: financing and marketing. She
agreed to participate in discussions to improve individual
regional marketing entities.
Co-Chair Hoffman stressed that individuals wanted to
process their own fish, and send the fish to market. He
wondered if there was assistance in a revolving loan
program that could assist them. Commissioner Bell replied
that there was potential within the Microloan program or
the Rural Development Investment Fund (RDIF).
Senator Thomas queried how the determination of interest
rates and whether there would be an annual report of the
program. Commissioner Bell responded that the microloan
program would be available on a statewide basis, and the
RDIF program was specific to community populations that
were 5,000 or less if not connected by road or rail to
Anchorage or Fairbanks and 2,000 or less if connected. She
stressed that there was growth in the utilization of the
RDIF in the year prior.
CATHY JEANS, FINANCE OPERATIONS MANAGER, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, stated that
there were mandated reports that were supposed to be filed
by the end of January of each year for commercial fisheries
and fisheries enhancement. She agreed to add the
Mariculture and Microloan funds to the report.
10:18:37 AM
Senator McGuire requested data that determined the
principal amount. She stressed the loans should develop
revenue. She wondered if there was an anticipation of
profits coming back to the state. Commissioner Bell replied
that there was some anticipation that prices could be as
high as $100,000, and also as many as 100 Alaskans that
needed to purchase a permit. She stressed that there was
basis in determining the principal amount. She agreed to
provide further information.
Senator Egan would why the interest would be different on a
three-year area and Co-Chair Stedman also queried who would
authorize the loans. Commissioner Bell stated that DCCED
had worked with the Commercial Finance Industry to
determine the rates.
Co-Chair Stedman requested the default issues regarding
cross-correlation for the borrowers.
Co-Chair Stedman noted the four new fiscal notes from the
Department of Education and Early Development.
10:25:38 AM
RODGER PAINTER, PRESIDENT, ALASKAN SHELLFISH GROWERS
ASSOCIATION, testified in favor of HB 121. He pointed out
that there was a tremendous demand for financing. He
stressed that the loans were meant for operating capital.
He felt that there were many applicants who would utilize
the $25 million capitalization.
Senator McGuire queried the proper amount to capitalize the
fund. She wondered if Mr. Painter supported advocacy of the
committee to raise the $2.5 million principal in the
Mariculture Fund. Mr. Painter replied that he was going to
embark on a training program to apprentice farmers, and in
two years those people would be looking for financing. He
stressed that currently there were enough people who would
use up the entire fund.
RUSSELL DICK, PRESIDENT AND CEO, HAA AANI, LLC, testified
in support of HB 121. He stressed that there were financial
challenges and moving impediments on economic development
in rural communities. He felt that HB 121 would encourage
economic expansion in rural communities.
10:35:43 AM
PAUL FUHS, ALASKA SEA FARMS, spoke in support of HB 121.
Commissioner Bell thanked the committee, and stated that
she would follow-up with the default rate questions.
Co-Chair Stedman requested a classical calculation, and
queried how many loans had been restructured and defined as
default.
Senator McGuire requested information regarding the budget
for BSC funding.
CSHB 121(RLS) was HEARD and HELD in committee for further
consideration.
Co-Chair Stedman cancelled the following day's meeting.
ADJOURNMENT
10:41:01 AM
The meeting was adjourned at 10:41 AM.