Legislature(1993 - 1994)
04/20/1994 09:21 AM Senate STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE
April 20, 1994
9:21 a.m.
MEMBERS PRESENT
Senator Loren Leman, Chair
Senator Mike Miller, Vice Chair
Senator Jim Duncan
Senator Johnny Ellis
MEMBERS ABSENT
Senator Robin Taylor
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 494(STA) am
"An Act changing the Alaska State Pension Investment Board to the
Alaska Pension Investment Authority and relating to the authority;
and providing for an effective date."
SENATE BILL NO. 378
"An Act relating to permanent fund dividend program notice
requirements and to dividends of individuals convicted of felonies
or misdemeanors; and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
HB 494 - See State Affairs minutes dated 4/18/94.
SB 378 - See State Affairs minutes dated 4/18/94.
WITNESS REGISTER
Laraine Derr, Deputy Commissioner
Department of Revenue
P.O. Box 110400, Juneau, AK 99811-0400¶465-4880
POSITION STATEMENT: in favor of HB 494
Robert Storer, Chief Investment Officer
Treasury Division
Department of Revenue
P.O. Box 110406, Juneau, AK 99811-0406¶465-4399
POSITION STATEMENT: in favor of HB 494
David Skidmore, Aide
Senate Finance Committee
State Capitol, Juneau, AK 99801-1182¶465-3709
POSITION STATEMENT: sponsor of SB 378
Tom Williams, Director
Permanent Fund Dividend Division
Department of Revenue
P.O. Box 110460, Juneau, AK 99811-0460¶465-2323
POSITION STATEMENT: testified on SB 378
ACTION NARRATIVE
TAPE 94-29, SIDE A
Number 001
CHAIRMAN LEMAN calls the Senate State Affairs Committee to order at
9:21 a.m.
Number 010
CHAIRMAN LEMAN brings up HB 494 (ALASKA PENSION INVESTMENT
AUTHORITY) as the first order of business before the Senate State
Affairs Committee and calls the first witness.
Number 020
LARAINE DERR, Deputy Commissioner, Department of Revenue,
introduces Mr. Prussing and Mr. Storer.
Number 029
CHAIRMAN LEMAN asks if present employees will shift over from the
Department of Revenue to the state pension authority.
Number 042
MS. DERR responds that is essentially what the department believes
will happen.
Number 052
CHAIRMAN LEMAN asks if there will continue to be some sharing of
staff between the department and the authority.
Number 059
MS. DERR replies there will continue to be sharing of staff during
the transition, but that at some point in time that will cease.
Number 062
CHAIRMAN LEMAN asks Ms. Derr if she has an estimate on how long
that transition will take.
Number 064
MS. DERR responds the board has not yet addressed the question of
transition.
Number 067
SENATOR MILLER mentions the Executive Life investment, and asks
what responsibility or obligation the state would have to make up
losses incurred by the state pension board under HB 494.
Number 087
MS DERR replies there continues to be a question as to whether the
state was liable for the losses under Executive Life. Under a
deferred compensation plan, those assets really belong to the
state. When a person puts their assets into a deferred
compensation plan, they are basically giving over control of those
assets to the state. However, with retirement funds, those funds
are a defined benefit, and if the money is not there to pay that
benefit, that would have to be made up by the state. Employer
liability is inherent in a retirement system.
Number 108
ROBERT STORER, Chief Investment Officer, Department of Revenue,
states the investment board does have fiduciary responsibility. In
that context, it would be determined if the board was functioning
with all knowledge and best interest of the plan, and or
functioning under their responsibility of the "prudent investor
rule". One of the points the department is trying to do with the
investment authority is to further define who has fiduciary
responsibility and accountability.
Number 118
SENATOR MILLER asks Mr. Storer if he is saying he is not sure who
would be responsible.
MR. STORER responds it would depend on the invents. The state has
an obligation to make the retirement plan whole, if an event
occurs. But if the board was functioning outside it's fiduciary
responsibility, there would be accountability, and ways to pursue
that accountability.
Number 129
MS. DERR adds that the main thrust of HB 494 is accountability.
The board has fiduciary responsibility at this time. As an example
of that responsibility, Ms. Derr states that Mr. Storer is the
Chief Investment Officer for the board, but he is not accountable
to the board. He is accountable to the Commissioner of the
Department of Revenue. The board has fiduciary responsibility for
everything, but Mr. Storer is not accountable to the board. That
is one of the prime concerns of the board: that the staff of the
board be accountable to the board.
Number 145
CHAIRMAN LEMAN asks if there are further questions or if anyone
else wishes to testify. Hearing none, the chairman calls a brief
at ease.
Number 155
CHAIRMAN LEMAN calls the Senate State Affairs Committee back to
order. The chairman asks the pleasure of the committee.
Number 168
SENATOR ELLIS makes a motion to discharge HB 494 from the Senate
State Affairs Committee with individual recommendations.
Number 170
CHAIRMAN LEMAN, hearing no objection, orders HB 494 released from
committee with individual recommendations.
Number 175
CHAIRMAN LEMAN calls a brief at ease.
Number 176
CHAIRMAN LEMAN calls the Senate State Affairs Committee back to
order and brings up SB 378 (NO PFD:PERSONS JAILED FOR FELONY OR
MISD.) as the next order of business before the committee. The
chairman calls Mr. Skidmore to speak to the amendment and the
proposed committee substitute.
Number 178
DAVID SKIDMORE, Aide, Senate Finance Committee, states the
amendment would do two things: it would exempt non-incarcerated
misdemeanants from forfeiture of their dividend, and it would also
add the Department of Public Safety to a statute that requires
cooperation in determining which individuals would be ineligible.
Number 193
SENATOR MILLER makes a motion to adopt the Senate State Affairs
committee substitute for SB 378.
Number 196
CHAIRMAN LEMAN, hearing no objection, states the committee
substitute has been adopted. The chairman states there is a
proposed amendment, and a proposed amendment to the amendment.
SENATOR DUNCAN asks what the amendment to the amendment is.
MR. SKIDMORE replies that the amendment to the amendment was
suggested by Mr. Williams, Director of the Dividend Division.
Number 206
CHAIRMAN LEMAN asks Mr. Williams to speak to the amendment to the
amendment.
Number 207
TOM WILLIAMS, Director, Permanent Fund Dividend Division,
Department of Revenue, states the amendment to the amendment is
just some clarifying language stating the Department of Public
Safety would supply the Dividend Division with a list of the people
meeting the criteria under AS 43.23.005.
Number 212
CHAIRMAN LEMAN asks if there is any objection to the amendment or
the amendment to the amendment. Hearing none, the chairman states
the amendment to the amendment, and the amendment itself has been
adopted.
Number 215
SENATOR MILLER makes a motion to discharge SB 378 from the Senate
State Affairs Committee with individual recommendations.
Number 217
CHAIRMAN LEMAN, hearing no objection, orders SB 378 released from
committee with individual recommendations.
Number 219
CHAIRMAN LEMAN adjourns the Senate State Affairs Committee meeting
at 9:37 a.m.
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