Legislature(2001 - 2002)
04/25/2001 09:11 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 25, 2001
9:11 AM
TAPES
SFC-01 # 85, Side A
SFC 01 # 85, Side B
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 9:11 AM.
PRESENT
Senator Dave Donley, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Loren Leman
Senator Gary Wilken
Senator Alan Austerman
Senator Lyman Hoffman
Senator Donald Olson
Senator Lydia Green
Also Attending: JOHN BITNEY, Legislative Liaison, Alaska Housing
Finance Corporation, Department of Revenue; PAUL ROETMAN, staff to
Senator Leman; DEBBIE OSSIANDER, Legislative Chair and Member,
Anchorage School Board; ALISON ELGEE, Deputy Commissioner,
Department of Administration; BRUCE JOHNSON, Deputy Commissioner of
Education, Department of Education and Early Development; CHRIS
CHRISTENSEN, Deputy Administrative Director, Alaska Court System;
ROBERT STORER, Executive Director, Alaska Permanent Fund
Corporation, Department of Revenue; RON LORENSON, outside counsel
for the Alaska Permanent Fund Corporation
Attending via Teleconference: From Oklahoma: MELISSA HILL, Alaska
Teacher Placement Program; From Anchorage: JOHN KELSEY, former
trustee, Alaska Permanent Fund Corporation
SUMMARY INFORMATION
SB 181-SMALL COMMUNITY HOUSING LOANS
The Committee heard from the Alaska Housing Finance Corporation and
a committee substitute was adopted. The bill was held in Committee.
SB 149-TEACHER INCENTIVES
The Committee heard from the sponsor, the Department of
Administration, the Department of Education and Early Development
and representatives from school districts. The bill moved from
Committee.
SB 161-NO PAY FOR JUDGES UNTIL DECISION
The Committee heard from the sponsor and the Alaska Court System.
The bill was held in Committee.
SB 92-REMOVAL OF MEMBERS OF THE PF BOARD
The Committee heard from the Alaska Permanent Fund Corporation, the
Corporation's legal counsel and a former board member. The bill was
held in Committee.
HB 149-PRIVATE PRISON IN KENAI
This bill was scheduled but not heard.
SENATE BILL NO. 181
"An Act making the interest rate for the Alaska Housing
Finance Corporation's small community housing mortgage loans
the same as the interest rate on mortgage loans purchased
under the corporation's special mortgage loan purchase program
from the proceeds of the most recent applicable issue of
taxable bonds before the origination or purchase of the small
community housing mortgage loans."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley indicated he had a proposed committee substitute to
distribute to Committee members for consideration.
AT EASE 9:10 AM / 9:17 AM
Co-Chair Donley moved for adoption of CS SB 181, 22-LS0488/S as a
working draft and explained the changes. He noted the original
version of the bill eliminates the one-percent subsidy within the
Housing Assistance Loan Fund (HALF) program. The committee
substitute, he stated, retains this subsidy for the first $100,000
value of a residential purchase and would limit availability to
only those communities with an average cost of living equal to, or
greater than, 125 percent of the statewide average.
Senator Hoffman objected and shared he had a conversation with
representatives from the Alaska Housing Finance Corporation (AHFC)
where he learned that limiting availability of the subsidy to any
amount less than $200,000 would jeopardize the dividend provided to
the state treasury. He commented that this limitation would also
"cripple the housing program in many rural areas of the state."
stressed the existing allowances are necessary to ensure the
continuation of the program's ability to offer lower interest
rates. He requested a representative of the Corporation address the
benefits of the program.
Co-Chair Kelly announced public testimony had been heard during the
bill's previous hearing and was concluded.
Co-Chair Donley added that his intent is to only adopt the
committee substitute at this meeting and hold the bill for future
review. He invited written comments on the committee substitute.
Co-Chair Kelly asked what, if any impact the proposals in the
committee substitute would have on the annual AHFC dividend to the
State of Alaska.
JOHN BITNEY, Legislative Liaison, Alaska Housing Finance
Corporation, Department of Revenue testified that he saw the
committee substitute as "legislation that would limit use of the
program."
Co-Chair Donley clarified the $100,000 limitation only applies to
the first $100,000 of a home loan. A loan over that amount could
still be obtained, with the portion above the limit accrued at the
regular interest rate, he stressed.
Senator Austerman commented that public testimony should be allowed
on the changes in the committee substitute.
Mr. Bitney stated he understood the language to imply that the
corporation may not use money to subsidize any amount that exceeds
$100,000. He pointed out this does not change other statutes
governing the calculation procedure determining the one-percent
reduction below the normal rate. Therefore, he advised, language
reconciliation may be necessary to overcome the conflict.
Mr. Bitney continued, noting the committee substitute also limits
the corporation from issuing loans under this program only to those
areas with a higher cost of living. This, he emphasized, changes
the program itself and would probably limit the loan activity to
the extent that AHFC would earn less money and subsequently the
dividend would be smaller. He qualified that because the committee
substitute was just released, he had been unable to research the
matter fully.
Co-Chair Kelly requested an analysis from the corporation and that
the witness work with Co-Chair Donley and Senator Hoffman to
determine the best way to carry out the intent of the legislation
without drastically reducing dividend payments.
Co-Chair Donley recalled Senator Hoffman's earlier comments that
the existing interest rate subsidy program is parallel to the first
time homebuyers program. Co-Chair Donley understood there is a
limit to the amount that could be borrowed under the first time
homebuyers program and asked if this were correct.
Mr. Bitney affirmed and stated the acquisition limit for the price
of a home in Anchorage is $179,000, and for areas outside of
Anchorage the limit is $160,000.
Co-Chair Donley asked if first time homebuyers program is available
statewide.
Mr. Bitney answered it is, but pointed out that the real estate
market in many areas is such that the first time homebuyers program
could not be utilized because home prices are higher than the
maximum allowed.
Co-Chair Donley stated that while the HALF program has no financial
needs criteria, the first time homebuyer program does have
limitations if the borrower has significant assets.
Mr. Bitney confirmed that as well as an acquisition limit; the
first time homebuyers program is for low to moderate-income
borrowers.
Co-Chair Donley asked if in light of these factors, the first time
homebuyers program really is comparable to the HALF program.
Mr. Bitney responded that the comparison is shown through the
historical use of the program. He informed that 85 percent of loans
issued under the HALF program have been made to borrowers earning
less than $100,000 annually. He stated the average income of
borrowers under the HALF program is less than that of the urban
borrowers of the tax exemption program. While he admitted there are
exemptions to the norm, such as with the $400,000 loan granted
under the HALF program, he stressed that the program is used
primarily by borrowers with similar incomes and for the purchase of
similar homes as the borrowers under the tax exemption program.
Co-Chair Kelly again asked how the provisions in the committee
substitute would impact the AHFC dividend.
Co-Chair Donley stated he wanted an analysis of the financial
ramifications of the committee substitute from AHFC.
Senator Hoffman withdrew his objection and the committee substitute
was ADOPTED.
Co-Chair Kelly ordered the bill HELD in Committee.
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 149
"An Act relating to employment incentives for teachers and
health care providers, to reemployment of retired teachers, to
loans to and loan forgiveness for teachers and health care
providers, to awards to teachers, to eligibility for major
medical insurance coverage for beneficiaries of the teachers'
retirement system, and to teacher certificates; and providing
for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Senator Leman presented the legislation relating to a topic
discussed by the Committee about finding incentives to improve the
opportunity for hiring and rehiring teachers held at an earlier
meeting. He noted when he first introduced this bill it included
health care providers. However, he said it was decided in the
Senate Health, Education and Social Services Committee to limit the
scope to teachers, as well as deleting language that produced high
fiscal notes.
Senator Leman stressed the need for proactive measures required to
obtain teachers.
AT EASE 9:30 AM / 9:32 AM
Senator Leman continued with his presentation noting that the bill
now targets three items.
PAUL ROETMAN, staff to Senator Leman detailed the three primary
elements of the committee substitute. He listed the first as the
recognition of credentials for out of state teachers, the second as
an incentive for employment of retired teachers through an election
option, and the third as improvement of medical coverage for
current teachers.
Mr. Roetman addressed incentives for out of state teachers as shown
in Sections 1 and 2 of the committee substitute. He stated this
steam lines the process by offering an Alaskan preliminary teaching
certificate to an applicant with a valid teaching credential from
any state, as well as clearance through a criminal background
check. He noted that the preliminary teaching certificate holder
would have to pass the existing competency exam within one year and
complete Alaska studies within three years of receiving the
certificate. He said these preliminary certificates could be issued
for special education and other specialties as well. He remarked
this procedure would make it easier for teachers to move to Alaska
and quickly gain employment. He informed that a teacher, while
employed under the preliminary teaching certificate, does not
qualify for tenure.
Mr. Roetman next spoke to the impact of the legislation on
reemployment of retired teachers as described in Sections 3, 4 and
6. He explained the stipulations under which a school could declare
a teacher shortage and subsequently hire a retired employee covered
by the Teachers Retirement System (TRS). He detailed that a retired
TRS employee could elect to continuation of retirement benefits
upon re-employment as a teacher. He noted additional retirement
benefits would not accrue and that the employee would receive only
a salary. He qualified this re-employment option is not available
for teachers, administrators or principals who retired under the
Retired Incentive Plan (RIP) early retirement program. He also
pointed out tenure could not be accrued by participants.
Mr. Roetman stated that an annual report to the legislature is
required under this legislation to allow monitoring of the impact
of the re-employment of retired teachers on the retirement program
itself. In addition, he noted, the retirement portion of the
legislation has a three-year sunset clause in the event the teacher
shortage situation changes.
Mr. Roetman listed the third element of the legislation, which
increases medical benefits to 100 percent coverage for a teacher
who worked 25 years rather than 20 years. He stated current law
provides for medical benefits on an age-determined basis only; a
TRS member must be 65 years of age or older to begin receiving
coverage. He commented the intent of this portion of the
legislation is to increase retention of teachers by providing
additional medical benefits available at an earlier age.
Senator Hoffman asked if there are incentives for part-time
teachers to help cover the teacher shortages.
Mr. Roetman replied the incentives are for full time employment
only.
Senator Green asked the same question and Mr. Roetman affirmed his
answer.
AT EASE 9:37 AM / 9:39 AM
Mr. Roetman corrected his earlier testimony and stated the
retirement re-employment incentive extends to retirees who accept
part time teaching employment as well as full time employment.
MELISSA HILL, Alaska Teacher Placement Program, testified via
teleconference from Oklahoma, that the Program is "on the front
lines of recruiting". She told how the Program works with the 53
school districts in the state as well as teachers seeking
information regarding employment in Alaska. Therefore, she
surmised, the Program has a unique perspective on the teacher
shortage both instate and nationally.
Ms. Hill listed several facts as follows.
Over the previous five years, there has been a decline
nationally of students pursuing careers in education.
Many states, upon realizing this, began proactive approaches
and raised teacher salaries.
Those states that did not take these measures and are now in a
reactive phase, have adopted measures that include, but are
not limited to, hiring incentives - some as high as $10,000,
housing allowances, loan forgiveness programs and alternative
certification procedures.
Ms. Hill encouraged the Committee to consider all three components
of this legislation, asserting they are only a small effort
compared to other states' activities.
Ms. Hill remarked the preliminary certification of out of state
teachers is the program's highest priority, and would assist in the
certification process for both school districts and educators.
Ms. Hill expressed that the employment of retired teachers "brings
experience and mentors into the classroom."
Ms. Hill stated the increase in medical benefits is "just a small
component" compared to the efforts of other states. She stressed
that any incentives would be helpful.
Ms. Hill told the Committee she was attending a job fair in
Oklahoma with representatives from 11 Alaska School Districts. She
said that the districts in urban areas, such as Anchorage and the
Kenai Peninsula are conducting some interviews. However, she said
the rural school districts were having a difficult time recruiting
for the up to 30 vacant positions in their districts. She warned
that the teacher shortage would get worse before it improves and
stressed the need to certify and hire qualified teachers in Alaska.
To not do so, she cautioned, would not give "justice to Alaskan
children."
DEBBIE OSSIANDER, Legislative Chair and Member, Anchorage School
Board testified in Juneau in support of the legislation. She spoke
of "acute shortage areas" within the Anchorage School District
(ASD) that extended beyond teachers to special education and
related services, librarians, foreign language teacher experts,
math and science teachers and music specialists. She stated that
the district has had to contract with private firms, at a higher
cost, to provide some special education services.
Ms. Ossiander told of requests to the Department of Education and
Early Development for flexibility in accepting out of state
teaching certificates for provisional certification in Alaska.
Ms. Ossiander stated the problems associated with the current
process of issuing the waivers for special education teachers.
Ms. Ossiander expressed the high priority the ASD Board has placed
on establishing a system to re-employ retired TRS teachers. She
informed of the high standards required to obtain an Alaska
teaching certificate and because of this, the length of time
involved in meeting the requirements.
Ms. Ossiander said the increased medical benefits opportunity would
provide an incentive the ASD could offer retired teachers to return
to work.
Co-Chair Kelly asked Ms. Ossiander's professional credentials.
Ms. Ossiander replied she is a certified respiratory therapist who
has become "a quasi education specialist" over her ten-year
involvement with the school board.
Co-Chair Kelly referenced SB 86, regarding alternative
certification and recalled previous Committee discussions about the
fear that communities would opt for retired teachers over
alternative certification of professionals in other fields entering
teaching with a preliminary teachers certificate.
Co-Chair Kelly gave Senator Leman as an example of a Stanford
University educated engineer, with 14 years experience in the
legislature "explaining things to people" and who is willing to
teach. Co-Chair Kelly wanted to know if a recently educated
certified teacher would get preference.
Ms. Ossiander expressed she supported SB 86, giving an example of
foreign language immersion programs and the opportunity to have
certificated teachers fluent in such languages. She requested
school districts be given flexibility to obtain and certify
available specialists. She predicted the districts would find
highly qualified professionals in their field to offer higher-level
education of math, music and other subjects.
Co-Chair Kelly appreciated Ms. Ossiander was not a professional
educator, citing the need for community member involvement. He
commented that retired teachers were easy to rehire but that school
districts should also think about hiring professionals with
expertise in their field. He stated that SB 86 is an attempt to
"think outside of the box" and SB 149 offers a "more utilitarian
answer to a pressing problem" that still allows for alternative
solutions to the teacher shortage.
Ms. Ossiander qualified she is not directly involved in individual
hiring decisions, but said she would convey to the other board
members the importance of having a teacher in the classroom who is
"extremely capable and qualified in the subject that they're
teaching."
Senator Hoffman assessed this legislation as helpful in solving a
short-term problem. However, he cited lowered attendance at teacher
job fairs since 1997 and asked the witness for suggestions in
addressing the long-term problem.
Ms. Ossiander replied, "I think that there is no one simple
answer," as evident by the different legislation pertaining to the
issue. She expressed she is encouraged by the increased per pupil
allocation in the foundation funding formula as it would allow the
district to hire and maintain qualified teachers.
AT EASE 9:54 AM / 9:59 AM
Senator Green recalled concerns about the rehire of a state
employee, including a legislator, and the possible complications
associated with participation in another retirement package.
ALISON ELGEE, Deputy Commissioner, Department of Administration
explained that currently a retired Public Employees Retirement
System (PERS) member who takes a job as a teacher, or a retired TRS
member who takes a job in a PERS position, would not have to
suspend receipt of retirement benefits since that employee is
entering different retirement plan. However she noted the
certification requirements necessary to obtain a teaching position.
Ms. Elgee suggested if the intent is to allow a retired PERS member
to become a teacher, clarification language should be inserted in
the legislation to stipulate whether that employee, with a
preliminary certification, is to be covered by TRS or continue to
be eligible to receive PERS retirement payments. She noted that a
public employee must be covered under a benefit plan and
recommended PERS as a default in these instances.
Co-Chair Kelly asked if at the point the teacher becomes fully
certified, the employee is then covered under TRS.
Ms. Elgee affirmed TRS is the appropriate system for a teacher who
has fulfilled all requirements for becoming fully certified.
Senator Green shared a conversation she overheard about the desire
to hire retired PERS members as teachers at the University of
Alaska. She asked what system the university participates in.
Ms. Elgee listed classified staff as PERS members and certified
staff as TRS members. She noted there is also an optional
retirement plan available to teachers.
Co-Chair Kelly understood the Department of Education and Early
Development might have contradictory information on the subject.
BRUCE JOHNSON, Deputy Commissioner of Education, Department of
Education and Early Development stated a determination made during
the creation of SB 36, from the Twentieth Alaska State Legislature,
specified that a "subject matter specialist" would have a teacher
certificate. He cited language from that legislation, "A person
employed as a subject matter expert teacher … is considered a
certificate employee" for purposes of TRS.
Senator Green assured she was not attempting to "muddy the waters"
on either SB 86 or SB 149, but pointed out this was a problem
presented and that the manner of transferring from PERS to TRS, for
both school districts and the university, should be clarified. She
assumed there were provisions allowing a retired PERS or TRS member
to instruct at the University of Alaska on a part time basis.
Ms. Elgee affirmed a public employee could work in a separate
field, as long as the new position is eligible to participate in a
retirement system different than the one the employee retired from.
Senator Hoffman asked if the employee would have to "start all
over" to become vested in the new retirement program.
Ms. Elgee answered that is correct and noted the vesting
requirement for TRS is eight years.
Mr. Johnson testified the "department has been excited about the
concepts" presented, and judges SB 149 to be good legislation that
would provide "additional tools" to ensure the most qualified
individuals are employed as teachers in Alaska. He reaffirmed the
situation is acute, that job fairs are attracting fewer applicants
and that Alaskans could be recruited as teachers.
Mr. Johnson added the department's support for the acceptance of
teacher certificates from other states for preliminary
certification. He expressed, "That makes good sense and eliminates
tremendous barriers that we've had up to this point in time."
Mr. Johnson noted the Alaska State Board of Education had recently
adopted preliminary certification regulations similar to the intent
of the bill.
Senator Green asked if an employee retired under PERS, who becomes
a teacher, could elect to not participate in TERS. She predicted
this could save the school districts money.
Ms. Elgee responded that currently a full time employee does not
have the election to not participate in the applicable retirement
system. She noted that the re-hire provisions in the bill for
retired TRS members do give the option to not participate, but that
retired PERS members would be required to participate in the TRS
program.
Co-Chair Kelly pointed out that by requiring these teachers to
participate, they are actually contributing to the retirement fund.
He stated this is a long-term advantage of the fund.
Senator Leman offered a motion to move SS SB 149 from Committee
with accompanying Department of Education and Early Development
zero fiscal note and fiscal note from the Department of
Administration for $50,000.
SFC 01 # 85, Side B 10:13 AM
There was no objection and the bill MOVED from Committee.
CS FOR SENATE BILL NO. 161(JUD)
"An Act relating to the withholding of salary of justices,
judges, and magistrates; relating to prompt decisions by
justices, judges, and magistrates; and relating to judicial
retention elections for judicial officers; and providing for
an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley testified this bill amends the current timeframe
guidelines governing when the judicial branch must issue decisions
in court cases. He detailed statute in place since statehood that
requires judges and justices to produce a proposed decision within
six months of the last argument on a case. He noted that there is
no time requirement for rendering a final decision and as a result,
several cases have been pending for over two years and one case for
over three years.
Co-Chair Donley asserted, "justice delayed is justice denied" and
that two years is too long for Alaskans to wait for a decision from
the Supreme Court.
Co-Chair Donley explained this legislation would add another "six-
month tier" to the existing system to hold multi-judge courts
accountable for issuing "reasonable decisions within a reasonable
amount of time." He noted an additional two months would be allowed
in times when a justice vacates the panel and a new justice is
appointed. He stated citizens could therefore expect a decision
within one year, or 14 months if there was a change in panel
membership, after the completion of all arguments and pleadings in
a case. He surmised this is more than an adequate amount of time.
Co-Chair Donley shared that the position of the judiciary branch is
that the existing law is unconstitutional. The reason, he said, is
because it is improper for the legislature to set such deadlines.
However, he stressed this law was established at statehood and has
been followed since that time, which sets a precedence.
Co-Chair Donley also noted Section 1 of the legislation adds to the
existing law that provides the content of the Official Election
Pamphlet (OEP). He shared that the current procedure designates a
page in the OEP detailing various information about each judge up
for retention confirmation. He stated this legislation requires the
voter's guide to also include information as to whether or not a
judge has complied with the timeframe requirements as specified in
this legislation.
Co-Chair Donley explained the process of having a judge complete a
salary warrant each pay period indicating whether the judge is in
compliance with that law. He stated that if the judge is not in
compliance, the salary is withheld. He noted there are currently
some judges that are not getting paid under the existing statute.
He surmised the public should have knowledge of this when deciding
whether to retain a judge.
Senator Olson pointed out it actually takes longer than six months
to appoint and confirm a new judge. Therefore he surmised the
additional two months for multi-paneled courts would be inadequate.
He asked how the deadline would be justified when there is an even
number of Supreme Court justices seated.
Co-Chair Donley responded it would be an issue only if there were a
significant period of time a seat was vacant. He stated new
justices are appointed "fairly promptly". Regardless of this, he
pointed out, the court can issue decisions with only four members
seated. He continued that in this instance, there would only be a
problem if the court deadlocked in a 2-2 vote. He posed a scenario
of a court that took the entire six months allowed to issue a
preliminary ruling and after six more months passed a member left
the bench without a final ruling issued and the remaining four
justices were tied in their opinion. He surmised the statistical
probably of this worst possible scenario was small. He stated if
this were a concern, he would support adding another month on the
extension, giving the court a possible nine months in which to
render a decision if one member left the bench during
consideration.
Co-Chair Kelly noted that current law already applies to these
situations.
Co-Chair Kelly asked the length of time it could take for a court
to render a final decision if there were a vacancy during the
consideration.
Co-Chair Donley replied the governor could appoint a new justice
within a month, leaving one month for the new court to make a
decision.
Senator Ward noted that candidates for public office are given an
opportunity in the voter's pamphlet to explain, "something we've
done or not done". He asked if judges up for retention have the
same option and could therefore explain why their salary was
withheld.
Co-Chair Kelly replied that the judges do make statements printed
in the voter's guide.
Co-Chair Kelly referred to Co-Chair Donley's statement that the
courts consider the existing law unconstitutional and asked for an
elaboration.
Co-Chair Donley explained that the administrator of the court
system, not speaking for the Supreme Court, has taken the position
that the existing law is a violation of the separation of powers.
He noted that neither the Supreme Court nor the Attorney General
have issued opinions on the matter.
Co-Chair Kelly asked how many other states have similar laws.
Co-Chair Donley was unsure, but stated that at least two courts in
jurisdictions outside Alaska found similar laws to be infringements
of the separation of powers. He stated other courts have upheld
statutes withholding legislators' salaries in the case of a failure
to produce a budget within a specified time period. He noted the
inconsistencies between a court ruling in favor of withholding
legislators' salaries, but ruling as unconstitutional, the
withholding of judges' salaries.
Co-Chair Kelly commented in defense of Alaska's court system,
informing there is no choice as to which cases are accepted. He
stated that the caseload is therefore higher in Alaska then in
other states.
Co-Chair Donley responded this is one of the arguments raised by
the court administrator.
CHRIS CHRISTENSEN, Deputy Administrative Director, Alaska Court
System, testified the purpose of this legislation is to encourage
timeliness and eliminate unnecessary delays in decision-making and
minimize delays. He assured that the Chief Justice and other
members of the Supreme Court share this concern and have been
taking "major steps" in the last few years to address timeliness
issues.
Mr. Christensen detailed that in the previous year, the Supreme
Court adopted very detailed time standards for trial courts. He
defined a time standard as a quantifiable goal for the delivery of
court services and noted that different time standards are adopted
for different types of cases. He pointed out the Alaska Court
System computer system is antiquated, but the intent is to start
issuing quarterly reports to the legislature later in the year on
the achievement of these time standards.
Mr. Christensen also noted that the previous October federal funds
were used to train all judges on case management techniques. In
addition, he said, the judicial branch established a mentoring
program so the judges who are particularly efficient in managing
their caseloads could advise those who are not and those who are
new to the bench.
Mr. Christensen reminded the Committee the Chief Justice announced
during her State of the Judiciary speech, that the Supreme Court is
also committed to shortening times for appellate cases. He shared
that approximately two weeks before this bill was introduced, the
Supreme Court did adopt time standards for appellate court cases
and new procedures for flagging and monitoring cases that are being
delayed so that individual cases don't languish.
Mr. Christensen emphasized this is very unusual and that while it
was common in other states for the Supreme Court to adopt time
standards for the trial courts, it is "almost unheard of" for the
Supreme Court to adopt time standards for its own operations.
Mr. Christensen summarized that timeliness is an issue requiring
attention and that the Alaska Court System has been actively taking
steps to address it. He expressed, "We're optimistic that we'll see
continued improvements. That being said, the court system does
strongly oppose SB 161."
Mr. Christensen stated that because the Supreme Court and the Court
of Appeals are actually committees, the six-month rule operates
differently for them. He explained how a judge or justice seated on
one of these courts is assigned to the task of authoring the
majority decision and has six months to do so. However, he
stressed, the opinion itself is subject to negotiation and revision
by the other majority members and is subject to having a dissent
written, all of which may take additional time.
Mr. Christensen told how this law dates to 1959, and that every two
weeks since statehood, every judicial officer in the state, from
the Supreme Court down to the magistrates, has to sign an affidavit
before they get a paycheck. He pointed out there are over 20,000
state employees that all have jobs to do and that this is the only
group of state employees who have paychecks withheld if they could
not certify they are not behind on their work.
Mr. Christensen affirmed that as Senator Donley pointed out, the
court administration view is that the existing law is
unconstitutional and would not survive legal challenge. Mr.
Christensen asserted it has been followed for 40 years, not because
it is constitutional but simply as a matter of respect for the
reasonable wishes of a coordinate branch of government. He stated
the legislature is the funding authority and that the legislature
has expressed a desire that cases are resolved within six months
and also that the legislature historically has provided a level of
funding through the judiciary branch to handle these cases in that
timeframe. Therefore, he concluded, it would be unreasonable to not
respect those wishes.
Mr. Christensen detailed that in the previous fiscal year there
were approximately 150,000 new cases filed in the court system.
That same year, he informed, about 150,000 old cases were disposed,
which he commented is a lot of cases. Mr. Christensen continued
that during the previous year there were 25 occasions in which an
individual judge or justice could not sign the pay affidavit and
subsequently had a paycheck withheld. He surmised that 25 delays
out of 150,000 cases, under the performance measure established by
the legislature, is a fairly good record. He predicted the average
time period would still be reduced with the implementation of the
new time standards.
Mr. Christensen explained the current law would not survive a legal
challenge is based on events in other states. He estimated there
are six states that take a judge's paycheck if assigned work is not
completed within a certain amount of time. He added that such laws
have been challenged not by the court system, but by individual
judges, in three states: Nevada, Montana and Wisconsin. Each time,
he stated, the law was thrown out for reasons directly applicable
to the Alaska Constitution, which he described as follows.
Mr. Christensen elaborated the first issue that, Alaska's
Constitution, the constitutions of the three aforementioned states,
and most other state constitutions, provide that a judge's
compensation shall not be diminished during the term of office
except by a general law applied to all state employees. He
remarked, "Money has a time value. When you take away a judge's
paycheck for a period of time that has the effect of diminishing
it." He cited the record set 20 years ago by an Anchorage judge,
who was carrying an active caseload of 800 cases, and because of
one divorce case involving a court employee, that judge had a
paycheck withheld for over four months. Mr. Christensen asserted,
"It's difficult to argue that holding somebody's paycheck for more
than four months is not a diminishment as prohibited by the
constitution."
Mr. Christensen next detailed how, under our state constitution,
the Supreme Court and not the legislature is charged with
administering the judicial branch. He commented the six-month rule,
as currently in effect is, "a form of micro-management that goes to
the very heart of the Supreme Court's authority to administer our
branch. It applies to the work of every judge, every day in every
case."
Mr. Christensen told the Committee there are a number of court
cases from other states in which the courts have considered the
general question of whether the legislature could set timelines for
the courts to do their work. He noted these are cases in which the
legislature sets timelines but that they do not involve the
withholding of a judge's paycheck. He stated the majority is
"overwhelming, about 15 to one," that setting timelines for the
judiciary is a "violation of fundamental separation of powers
doctrine." He explained there is a rule of constitutional law that
one branch can't set a timeline for another branch to carry out a
constitutional function. Deciding cases, he informed, is a
constitutional power of the courts not a statutory power. He noted
this rule is generally invoked to protect legislative and executive
branches from timelines set in court cases although "rules like
this work both ways."
Mr. Christensen clarified that notwithstanding the court
administration's longstanding belief that the existing law is
unconstitutional, the court system as an institution, has never
complained to the legislature. He noted that he does receive
complaints occasionally from individual judges but, "our answer has
always been the same: if you don't like the law, then file a suit.
Otherwise comply with it."
Mr. Christensen asserted SB 161 is too far reaching and is likely
to result in a challenge to the underlying six-month rule. He
surmised that given the case law in other states, the rule would be
struck down. He shared that as an administrator, he supports the
six-month rule as it currently pertains to the trial courts, but
does not support the expansion to apply to the Supreme Court and
the Court of Appeals. He explained how if the assigned justice
fails to present a majority decision within six months and the full
court is unable to release a final decision within the 12 months
allocated in the bill, all members of that court lose their
paycheck. In essence, he stated, an individual judge or justice
could be performing duties in a timely manner yet have a paycheck
withheld if a colleague has taken too long. He stressed that there
are "serious constitutional problems" involving both the equal
protection clause and the impairment of contract clause, which
relates to taking one state employee's paycheck because a different
state employee has not done their work on time.
Mr. Christensen stated, "Constitutional issues aside, this is an
issue of fundamental fairness. The bill proposes to take a paycheck
from someone because of circumstances beyond their control. A
person could be performing the duties of the office diligently and
efficiently and in a timely manner and still be deprived of a
paycheck because of something someone else didn't do." He relayed
an instance where a justice was hospitalized and the progression of
cases was delayed as a result.
Mr. Christensen surmised the question ultimately is what harm this
bill is trying to prevent. Currently, he reported, there are 465
cases in front of the Supreme Court of different types and in
various stages of completion. Of this amount, he disclosed, 20
cases are more than one year old, which he calculated as less than
five percent. He assured he did not want to make excuses and that
the Chief Justice agrees that 20 overdue cases is too many.
Mr. Christensen stressed there is a reason the court does not
always resolve cases as quickly as desired. He stressed that,
unlike most Supreme Courts, the Alaska Supreme Court is not a
Certiorari (cert) court with regards to the civil caseload. He
defined cert court as having discretion as to reject cases, and
thus control the caseload. In contrast, he explained, the Alaska
Supreme Court must hear and decide every civil case that is
appealed to it, regardless of the merits of the case and regardless
of the significance of the issues to the public at large.
Mr. Christensen gave comparisons of the caseloads of several cert
courts to the Alaska Supreme Court. He stated the US Supreme Court
is a cert court with nine justices to share the workload of issuing
86 written opinions in the previous year. He noted this is the
number of cases the US Supreme Court determined it could decide in
the time period. He then pointed out three states close to Alaska:
also have cert courts. He listed the California Supreme Court, with
seven justices, issued written opinions in 88 cases during 1999. He
pointed out this is an average of 13 opinions per justice. He
continued with the Oregon Supreme Court noting the seven justices
issued 98 opinions during the same time period at 14 per justice,
and the Washington Supreme Court with nine judges, issued opinions
on 148 cases at 16 per justice. In contrast, he informed that the
Alaska Supreme Court with only five members issued written opinions
on 153 cases, at an average of 31 per justice, which he stressed is
twice the number of written opinions issued by the other courts in
that are able to control the workload.
Mr. Christensen asserted that in order to guarantee that all cases
leave the Alaska Supreme Court within 12 months, the court would
need to change to a cert court, as has been done in the
aforementioned states. He explained the process of creating a new
intermediary court of civil appeals, as has been done in the other
three states. He pointed out the legislature established such a
court about 20 years ago to address criminal cases because the
state Supreme Court caseload became too great.
Mr. Christensen noted the Alaska Court System fiscal note for this
bill reflects the cost establishing an intermediary court. He
qualified that the legislation has an effective date of 2004 so
this court would not need to be created immediately. He surmised it
is unlikely the legislature would expend the money to establish a
new appeals court to speed up the Supreme Court's caseload when
only less than five percent of that caseload is over one year old.
Mr. Christensen shared that the 20 cases open after one year
typically exist because they are more complex, involve more issues
and are more likely to have a split decision, which he stated
require dissenting opinions to be written after the majority
opinion is issued. At that time, he continued, the majority opinion
is rewritten to include a response to the dissenting opinion.
Mr. Christensen added that some overdue cases exist because of a
turnover in the court. He pointed out that three seats on the
Alaska Supreme Court turned over in the last five years and that
unlike trial courts, the existing caseload is not reassigned to
other courts while a seat is vacant or a justice has an illness. He
stressed that this legislation would not eliminate these problems.
He asserted, despite the court's best efforts and despite its
success in getting the average case resolved in less time, there
would always be a few cases that take longer than a year.
Mr. Christensen remarked if SB 161 were in statute in fiscal year
2000, no member of the court would have received a paycheck for the
entire year in spite of the number of written opinions issued at
twice the rate of other states. He asserted if the bill became law
today, all members of the Supreme Court would lose their paycheck
immediately.
Mr. Christensen opined the matter is made worse with the inclusion
of Sections 3 and 5 of the legislation, which changes the way in
which the six-month rule is calculated. He detailed that currently
when a case goes before the Supreme Court or the Court of Appeals,
the parties have the option of requesting an oral argument. He
described that currently when the court hears an oral argument, a
conference is held immediately following the arguments, a vote is
taken and the opinion is assigned, whereby the six-month timeframe
begins. If no oral argument is requested, he continued the opinion
is assigned at the point and time when an oral argument would have
occurred. He stated this means all parties are treated equally,
whether or not an oral argument is presented. Under the bill if no
oral argument is requested the six-month rule begins immediately,
which results in the loss of two of the allocated six months.
Mr. Christensen noted there are technical problems with the bill,
but stated he would not address these specifically because fixing
them would not make the existing law constitutional and would not
resolve the constitutional problems with the bill itself.
Mr. Christensen reiterated the bill is not constitutional and that
this has not been refuted in two hearings of the Senate Judiciary
Committee nor has the Division of Legislative Legal and Research
Services issued an opinion to the contrary.
Mr. Christensen continued that in addition of the
unconstitutionality of the legislation, the bill makes statutory
changes that "are simply unfair," by punishing people who have
completed their work. He hoped these two facts would be enough to
give the Committee pause. If not, he requested the Committee
perform a risk analysis. He shared that as a court administrator
who does not want to lose the existing six-month rule, he has done
a risk analysis and found that if this bill were to become law and
survived challenge, the only achievement would be 20 cases resolved
more quickly. He warned if the bill became law and was struck down
under challenge, the existing six-month rule for all courts would
be lost. He surmised that with the removal of the six-month rule,
"human nature" would dictate that the progression of the annual
150,000 trial court cases would slow considerably.
Mr. Christensen concluded by stating, "I've done the math and quite
frankly, SB 161 scares me."
Co-Chair Donley asked what would be the position of the court
administration if the legislature adopted state policy that
appellate courts should produce their opinions within one year. He
pointed out this policy could be violated by the courts, but would
serve as a guideline.
Mr. Christensen responded legislatures set many statutory policies
for the courts that establish specific timelines for individual
types of cases. He noted that many of these laws have been
overturned in other states and that no challenge has been brought
for the Alaska statutes. He deemed SB 161 as setting policy,
although the courts have followed legislative policy for several
years.
Co-Chair Donley restated his suggestion adding the statute would
stipulate guidelines but that salary would not be withheld as a
penalty. He explained this would set a goal for the courts to
achieve and provide notification in the voter's guide if the
guidelines are not followed.
Mr. Christensen replied the legislature has authority to set such
policy and that as the funding authority it is reasonable make
expressions of policy to the Alaska Court System. He commented that
when the legislature expresses a policy and provides adequate
funding so the courts could meet the guidelines, he expected the
courts to "make a sincere effort" to follow them.
Co-Chair Donley requested the court administration's position on
Section 1 of the bill regarding publication of a judge's compliance
with the guidelines in the voter's pamphlet.
Mr. Christensen responded there are two types of information the
bill instructs the courts to provide, how many times a judge has
had a paycheck withheld info on how many times judge has paycheck
withheld and a breakdown of the amount of time each judge has taken
to render a decision in each case. He detailed the salary
information is already compiled and available upon request and that
the legislature could require it to be printed in the OEP. He noted
however, the Department of Administration has advised that release
of this information violates the state personnel laws, although the
court administration disagrees. He addressed the breakdown
requirement emphasizing the court's current computer system could
not accommodate this task. He noted the new system could
"conceivably" accomplish this once it is online, which would be in
three years. He informed that judges "get dozens and dozens of
orders across their desk every day and most of them are no-brainers
that you sign a minute after you've read it." He was unsure whether
this collection of information would be of any value since most
items are completed within the first four-month breakdown.
Co-Chair Donley suggested holding the bill in Committee and working
with the court system regarding adopting a state policy providing
that citizens are entitled to a decision within one year and
inclusion of each judge's success on this in the voter's guide. He
noted judges would have an opportunity to offer a response and
explanation in the voter guide individual statements. He also
wanted to clarify the Department of Administration no longer denies
the public and the judicial counsel access to this information,
which he stressed is part of the judge's constitutional
responsibility. He also wanted to address Section 2, part 2 of the
bill and possibly remove it.
Co-Chair Kelly ordered the bill HELD in Committee.
SENATE BILL NO. 92
"An Act relating to removal of members of the board of
trustees of the Alaska Permanent Fund Corporation; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
ROBERT STORER, Executive Director, Alaska Permanent Fund
Corporation, Department of Revenue, outlined the two commissioner
and four members of the public, make-up of the board. He noted the
public members serve staggered four-year terms. He stated the
legislation provides removal for just cause language consistent
with 19 other State of Alaska boards and commissions, including the
Pensions and Investment Board, which is charged with managing the
assets of the state's retirement system.
Mr. Storer told the Committee he has been involved in managing
institution funds for over 20 years, and has seen how managing
funds has become increasingly sophisticated, thus requiring time
for board member's to "get up to speed." This legislation, he
stated, would ensure continuity in fund management and allow
institutional memory to be passed along from outgoing board
members.
Senator Wilken recalled that the legislature attempted to pass
similar legislation approximately five years ago, but the governor
vetoed it. He asked what was different about this bill that the
governor would support.
Mr. Storer affirmed Governor Knowles vetoed the same language in a
different bill, early in his administration. Mr. Storer stated that
the governor has indicated he now supports this provision after
speaking to former trustees and giving the matter consideration.
Senator Ward requested a copy of governor's veto message on the
earlier bill.
Co-Chair Donley asked if the governor has issued a position on the
current legislation.
Mr. Storer responded that before introducing this bill,
representatives of the Corporation including himself, spoke with
the governor and were told he would support this legislation.
Co-Chair Donley suggested that since this language had been vetoed,
a written statement from governor in support of this bill, with an
explanation of why his position changed, is appropriate.
Senator Green asked if "only for cause" is a legal term.
RON LORENSON, outside counsel for the Alaska Permanent Fund
Corporation, responded that there is "a large body of law" dealing
with the subject of "for cause". He stated rather than providing a
definition, these laws review a specific situation and the court
determines whether there is just cause. He referenced a legal
opinion he prepared on the subject of just cause for the
Corporation, which he offered to share with the Committee.
Senator Green requested a copy of the opinion.
Mr. Lorenson said he would provide this. He summarized his
findings, saying, "fair-minded people would know it when they see
it" when taking into consideration performance and conduct. He said
the opinion also states that traditionally the legislature has not
given specific definitions of "for cause".
JOHN KELSEY, former trustee, Alaska Permanent Fund Corporation,
testified via teleconference from Anchorage that he served
continuously on the Board under three different governors from 1987
to 1995. He noted that he served as chair three different times and
was in that position during two occasions when all trustees, except
him, were replaced. He stressed that during these times, he was the
only trustee with the institutional knowledge about the fund's
operation.
Mr. Kelsey urged the Committee to pass SB 192. He cited his
experiences as giving him "great cause" in supporting this bill. He
emphasized he did not wish to denigrate new trustees, attesting
they are excellent appointees. However, he stressed the need for
experienced trustees on the Board to help guide newer trustees. He
asserted the replacement of numerous trustees at one time is,
"unfair to new trustees and it is certainly unfair to the
stakeholders of the fund who own the assets." He asserted that a
new board is understandably cautious and usually fails to make
timely actions. He offered to detail specific occurrences if
requested.
Mr. Kelsey informed he was twice forced into the "uncomfortable"
situation of training a new board, which he surmised was not the
intent of the legislature that created the Corporation.
Mr. Kelsey remarked that passage of this legislation would ensure
"historical experience will be provided for all future boards, thus
assuring that which was intended by the enabling legislation, which
provided for staggered terms for trustees."
Co-Chair Donley asked if Mr. Kelsey knew why the governor vetoed
the earlier legislation.
Mr. Kelsey replied that he had no way of telling.
Co-Chair Donley reiterated it would be helpful to have the
governor's veto message related to the earlier legislation and a
written statement regarding the current legislation.
Senator Ward noted Mr. Storer said he would provide this
information.
Co-Chair Donley suggested holding this bill until this information
was received.
Senator Wilken agreed this information was important but suggested
moving the bill at this time and reviewing the information before
the bill comes before the full Senate.
Co-Chair Donley stated he wanted to hold the bill until the next
day.
Senator Wilken noted he just received the governor's veto message.
Co-Chair Donley ordered the bill HELD in Committee.
ADJOURNMENT
Co-Chair Donley adjourned the meeting at 11:00 AM
| Document Name | Date/Time | Subjects |
|---|