Legislature(2001 - 2002)

02/26/2002 03:37 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                    
                 SENATE STATE AFFAIRS COMMITTEE                                                                               
                        February 26, 2002                                                                                       
                            3:37 p.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gene Therriault, Chair                                                                                                  
Senator Randy Phillips, Vice Chair                                                                                              
Senator Ben Stevens                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Rick Halford                                                                                                            
Senator Bettye Davis                                                                                                            
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
SENATE JOINT RESOLUTION NO. 37                                                                                                  
Proposing an amendment to the Constitution of the State of Alaska                                                               
relating to officers and employees of the executive branch.                                                                     
     MOVED SJR 37 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE JOINT RESOLUTION NO. 38                                                                                                  
Proposing amendments to the Constitution of the State of Alaska                                                                 
relating to information regarding proposed expenditures.                                                                        
     MOVED SJR 38 OUT OF COMMITTEE                                                                                            
                                                                                                                                
SENATE BILL NO. 313                                                                                                             
"An Act repealing a provision relating to legislative approval of                                                               
construction projects of the Alaska Aerospace Development                                                                       
Corporation."                                                                                                                   
     MOVED SB 313 OUT OF COMMITTEE                                                                                              
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
SJR 37 - No previous action to report                                                                                           
SJR 38 - No previous action to report                                                                                           
SB 313 - No previous action to report                                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Senator Pete Kelly                                                                                                              
Alaska State Capitol 518                                                                                                        
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of SJR 37 and SJR 38                                                                              
                                                                                                                                
Annalee McConnell                                                                                                               
Director of the Office of Management & Budget                                                                                   
P.O. Box 110020                                                                                                                 
Juneau, AK 99811-0020                                                                                                           
POSITION STATEMENT: Testified on SJR 37                                                                                       
                                                                                                                                
Steve Conn                                                                                                                      
AkPIRG Representative                                                                                                           
P.O. Box 101093                                                                                                                 
Anchorage 99510                                                                                                                 
POSITION STATEMENT:  Testified against SB 313                                                                                 
                                                                                                                                
Steven Cleary                                                                                                                   
CODE Representative                                                                                                             
P.O. Box 1093                                                                                                                   
Anchorage, AK 99510                                                                                                             
POSITION STATEMENT: Testified against SB 313                                                                                  
                                                                                                                                
Stacey Fritz                                                                                                                    
P.O. Box 84997                                                                                                                  
Fairbanks, AK 99708                                                                                                             
POSITION STATEMENT: Testified against SB 313                                                                                  
                                                                                                                                
Sean McGuire                                                                                                                    
351 Cloudberry Lane                                                                                                             
Fairbanks, AK 99709                                                                                                             
POSITION STATEMENT:  Testified against SB 313                                                                                 
                                                                                                                                
Ed Davis                                                                                                                        
P.O. Box 71616                                                                                                                  
Fairbanks, AK 99707                                                                                                             
POSITION STATEMENT: Testified against SB 313                                                                                  
                                                                                                                                
Mike Milligan                                                                                                                   
12056 Gara Drive                                                                                                                
Kodiak, AK 99615                                                                                                                
POSITION STATEMENT:  Testified against SB 313                                                                                 
                                                                                                                                
Pat Ladner                                                                                                                      
Alaska Aerospace Development Corporation                                                                                        
4300 B Street                                                                                                                   
Juneau, AK 99510                                                                                                                
POSITION STATEMENT: Testified on SB 313                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-11, SIDE A                                                                                                            
                                                                                                                                
CHAIRMAN GENE THERRIAULT called the Senate State Affairs                                                                      
Committee meeting to order at 3:37 p.m. Present were Senators                                                                   
Stevens, Phillips  and Chairman Therriault.  Senator Davis  was on                                                              
an important telephone call and expected to arrive soon.                                                                        
                                                                                                                                
The first order of business was SJR 37.                                                                                         
                                                                                                                                
                 SJR 37-CONST AM: HIRING FREEZE                                                                             
                                                                                                                                
SENATOR PETE  KELLY introduced the  resolution as a way  to reduce                                                              
state spending. He said, "It's very  difficult for us to force the                                                              
executive branch  to engage in what  is considered by  most people                                                              
to  be  a  fairly simple  and  common  sense  response  to  budget                                                              
problems.  This constitutional  amendment is  designed to  do just                                                              
that.  It gives  the  Legislature  the  authority to  require  the                                                              
executive  branch,  through  resolution,   to  initiate  a  hiring                                                              
freeze."                                                                                                                        
                                                                                                                                
The  Legislature would  pass  a resolution,  which  would enact  a                                                              
statute  and  the governor  would  then  be directed  toward  that                                                              
statute  to  begin  a  hiring  freeze.   The  framework  for  that                                                              
resolution would be worked out by  the next Legislature after this                                                              
constitutional amendment is passed.                                                                                             
                                                                                                                                
CHAIRMAN  THERRIAULT  referred  to  the  exception  for  temporary                                                              
emergency positions  needed for  health and  safety and  asked who                                                              
makes that determination and what constitutes health and safety.                                                                
                                                                                                                                
SENATOR  KELLY  replied  the  Constitutional  Amendment  does  not                                                              
directly  speak to those  issues.  We have a  resolution that  one                                                              
might consider  a sample  resolution that we  heard up  in finance                                                              
today  that talks  about  health  and safety.  The  Constitutional                                                              
Amendment doesn't  do that and, I  think the sponsor  statement is                                                              
probably in error  to bring up that specific thing  regarding this                                                              
constitutional amendment."                                                                                                      
                                                                                                                                
SENATOR THERRIAULT said it would  then apply to all general funded                                                              
positions.                                                                                                                      
                                                                                                                                
SENATOR  KELLY said  it could.  The Legislature  would make  those                                                              
determinations as needed.                                                                                                       
                                                                                                                                
CHAIRMAN  THERRIAULT  asked  for verification  that  a  concurrent                                                              
resolution requires a simple majority in both house.                                                                            
                                                                                                                                
SENATOR KELLY agreed.                                                                                                           
                                                                                                                                
CHAIRMAN THERRIAULT  asked the administration's  representative to                                                              
testify.                                                                                                                        
                                                                                                                                
         C                                                                                                                      
ANNALEE MCONNELL,  Director of the Office of  Management & Budget,                                                              
said  it  is  her understanding  that  the  reasoning  behind  the                                                              
proposal  is  that  some  in  the  Legislature  feel  that  it  is                                                              
unconstitutional  to  require  a  hiring  freeze  because  of  the                                                              
separation of  powers. Therefore, it  would be necessary to  go to                                                              
the  voters  to  allow  the  Legislature   to  be  the  body  that                                                              
determines whether there will be a hiring freeze or not.                                                                        
                                                                                                                                
One of  the issues this  raises is whether  this kind  of function                                                              
makes sense  in the Constitution  because it is not  very specific                                                              
on purpose about  how particular programs should  be administered.                                                              
The  Legislature   has  the  power  to  make   appropriations  but                                                              
recognizes that  the execution or management of  programs requires                                                              
some flexibility within an administration.                                                                                      
                                                                                                                                
Although the  resolution is being  presented as a response  to the                                                              
fiscal gap, the  administration does not believe this  is the best                                                              
response to  that issue.  There is  already difficulty  in filling                                                              
positions   in  many  areas   of  state   government  because   of                                                              
competition  with the federal  government  and the private  sector                                                              
and  every   position  is  not   filled  today.  Looking   to  the                                                              
Legislature to decide what a hiring  freeze should look like would                                                              
place them in  the administration's current difficult  position of                                                              
having  to decide  which positions  are  critical for  maintaining                                                              
public safety functions.                                                                                                        
                                                                                                                                
The  Legislature  does  have  the option  to  suggest  changes  to                                                              
statutes that are  on the books as a means of  cutting the budget.                                                              
This type  of budget  cutting would  generate healthy  discussions                                                              
about  taking  the   state  out  of  the  business   of  providing                                                              
particular  programs  and  services  and provide  the  public  the                                                              
opportunity  to   express  their   views  on  the   importance  of                                                              
particular  services.  Putting  something  of  this  sort  in  the                                                              
constitution  as a  way  of forcing  the  administration  to do  a                                                              
hiring freeze is an awkward maneuver.                                                                                           
                                                                                                                                
The specifics of a hiring freeze  are a more appropriate topic for                                                              
the Finance Committee, but she wondered  whether this is necessary                                                              
to put into the Constitution because  there are other ways to make                                                              
budget cuts more  directly if that in fact is  the goal. Governors                                                              
have done hiring freezes on their  own initiative in both 1999 and                                                              
1986 when there  were precipitous drops in revenues  and without a                                                              
constitutional amendment.                                                                                                       
                                                                                                                                
CHAIRMAN  THERRIAULT  agreed  that the  Legislature  controls  the                                                              
budget, but once  it is passed they have little  control. If there                                                              
is a  drastic reduction  in revenue part  way through  that fiscal                                                              
year, they  want the  administration to carry  some of  that money                                                              
forward to  the next  fiscal year,  they have  no power  to direct                                                              
that  action.  They  can eliminate  programs  and  make  statutory                                                              
changes as  well as  passing an  amendment to  the budget  but all                                                              
these are  subject to  a governor's  veto. It  is because  of this                                                              
lack of  direct control  over the  budget once  it is passed  that                                                              
makes this attractive.                                                                                                          
                                                                                                                                
      C                                                                                                                         
MS.  MCONNELL  thought  the  provisions  that currently  exist  do                                                              
allow the Legislature to cut the  budget mid year. It is true that                                                              
the veto could be overridden, but  that is a function of the basic                                                              
system  that says  if the  Legislature  passes a  measure and  the                                                              
governor vetoes  it, then that veto  may be overridden by  a three                                                              
quarters  vote of  the entire  Legislature.  This is  a much  more                                                              
direct  approach and  puts the  responsibility  for the  decisions                                                              
about which  areas should be funded  on the Legislature,  which is                                                              
the arm that has the appropriation  power. A hiring freeze doesn't                                                              
necessarily  affect the  fiscal gap.  Cutting  a federally  funded                                                              
project  does  not help  with  the  fiscal  gap and  neither  does                                                              
cutting  a position at  the Fairbanks  or Anchorage  International                                                              
Airports.                                                                                                                       
                                                                                                                                
The  Legislature  can change  specific  parts  of the  budget  and                                                              
evaluate  whether it is  a wise  action in  terms of the  services                                                              
that are needed  because the administration would be  able to tell                                                              
the Legislature  what the  impact would be  for any cut  proposal.                                                              
This is  a good reciprocal process  for determining whether  a cut                                                              
should be made and if so, where.  A hiring freeze is an across the                                                              
board cut that doesn't distinguish between life safety or not.                                                                  
                                                                                                                                
In prior years when the administration  has proposed certain areas                                                              
for  budget cuts  they have  not been  acceptable. Closing  DOT/PF                                                              
maintenance  stations  or  letting  roads melt  open  rather  than                                                              
plowing   are  examples.   Such  changes   are  better   addressed                                                              
individually so the impact on services can be evaluated.                                                                        
                                                                                                                                
CHAIRMAN  THERRIAULT replied  that the current  system allows  for                                                              
the Legislature to make changes but  it is a system where a simple                                                              
majority increases spending but there  must be a super majority to                                                              
make any kind of reduction.                                                                                                     
                                                                                                                                
He  asked  whether  she  thought the  proposed  language  for  the                                                              
resolution  and  the  amendment has  enough  flexibility  for  the                                                              
Legislature  to   tailor  the  hiring  freeze  to   the  immediate                                                              
circumstance.                                                                                                                   
                                                                                                                                
     C                                                                                                                          
MS. MCONNELL  replied that if she were reading  the amendment as a                                                              
citizen she would assume that it  meant all vacancies. There could                                                              
be  statutes  that say  differently,  but  it  seems that  even  a                                                              
statute that addresses an across  the board hiring freeze is still                                                              
not getting at the specific issues  of whether it helps the fiscal                                                              
gap or whether  it goes to  the places that the  Legislature feels                                                              
that money should  not be spent. In the Department  of Labor there                                                              
are some general funded positions  in the research section that do                                                              
the work  that is necessary  to get the  federal funds.  There are                                                              
about  $550 million  in funds  in the  budget that  come from  the                                                              
federal government  and are dependent on population  and formulas.                                                              
If a position is frozen and accurate  data cannot be produced, the                                                              
state's  share of  federal formula  programs is  put in  jeopardy.                                                              
Another example  is worker compensation hearings.  The Legislature                                                              
agreed that  it was taking too  long to get a  worker compensation                                                              
hearing so another position was added  in last year's budget. That                                                              
person was  hired but another hearing  officer is now  leaving. If                                                              
that vacancy  is not filled, the  changes made last year  were for                                                              
naught.                                                                                                                         
                                                                                                                                
If   the   Legislature   believes   there  are   ways   that   the                                                              
administration  should  be  holding   back  on  spending,  a  more                                                              
strategic way of  doing that is by taking specific  actions in the                                                              
budget.  Although it  would take  a super majority  to override  a                                                              
governor's  veto, the  Legislature  has that  same obligation  now                                                              
when the budget is formulated. It  should not be easier to cut the                                                              
budget than to establish it in the  first place. The same goes for                                                              
budget amendments;  there is not a different threshold  for budget                                                              
amendments or supplemental budgets than for the original budget.                                                                
                                                                                                                                
CHAIRMAN THERRIAULT  noted that the  fiscal note was  the standard                                                              
note for anything that goes onto the ballot.                                                                                    
                                                                                                                                
There  was  no  additional  testimony.   There  was  no  committee                                                              
substitute and no amendments.                                                                                                   
He asked for the will of the committee.                                                                                         
                                                                                                                                
SENATOR PHILLIPS made a motion to  move SJR 37 and attached fiscal                                                              
note from committee with individual recommendations.                                                                            
                                                                                                                                
There being no objection, SJR 37 moved from committee.                                                                          
                                                                                                                                
                                                                                                                                
            SJR 38-CONST AM: PRIORITY OF EXPENDITURES                                                                       
                                                                                                                              
                                                                                                                                
 SENATOR  KELLY   explained  the  resolution  would   require  the                                                              
administration   to   submit   subsequent    budgets   with   each                                                              
department's  activities ranked in  order of  value. Though  it is                                                              
the  Legislature's   responsibility  to  appropriate   funds,  the                                                              
departments are  better equipped to evaluate and  prioritize their                                                              
own activities and production.                                                                                                  
                                                                                                                                
The passage of SJR  38 would put this resolution to  a vote of the                                                              
people  and, if  approved,  would amend  the  Constitution of  the                                                              
State of Alaska.                                                                                                                
                                                                                                                                
This  is similar  to  the  statute  that Representative  Dyson  is                                                              
passing through  both bodies.  He said he  is of the  opinion that                                                              
the statute  alone isn't sufficient  because of the  separation of                                                              
powers and the discussion that was held for SJR 37.                                                                             
                                                                                                                                
CHAIRMAN THERRIAULT stated that,  by law, the governor must submit                                                              
the budget to the Legislature by  a certain date. He asked whether                                                              
the concern  is that with  Representative Dyson's  legislation the                                                              
governor would choose to ignore the requirement.                                                                                
                                                                                                                                
SENATOR KELLY replied that is his concern.                                                                                      
                                                                                                                                
CHAIRMAN THERRIAULT  noted  that  Section  1 places  the  existing                                                              
language  into subsection  (a)  and subsection  (b)  is added.  He                                                              
confirmed  that  Senator Kelly  was  anticipating  that a  statute                                                              
would flesh  out the  particulars if this  were enacted.  He asked                                                              
for an explanation of a prioritized fashion.                                                                                    
                                                                                                                                
SENATOR  KELLY  replied  that the  prioritized  fashion  would  be                                                              
established by law.  The Legislature would decide on  some form of                                                              
prioritization,  then pass that statute  and require  the governor                                                              
to  submit it  in  that form.  "Like  in the  last  one, [SJR  37]                                                              
governors may  veto these statutes,  they have that right,  but at                                                              
some point  a governor  is not going  to veto  this and  then that                                                              
statute is going  to sit there almost dormant and  then, like in a                                                              
resolution form,  you could require them  to do that on  the other                                                              
one. On  this one, you've got  the constitutional authority.  … At                                                              
some point it  is going to require the governor  to participate in                                                              
this process. Some governor is going  to have to pass this statute                                                              
and  not veto  it. It  will have  the luxury,  so to  speak, of  a                                                              
gubernatorial  veto whereas  the last  one we  were talking  about                                                              
didn't because it's enacted by resolution."                                                                                     
                                                                                                                                
CHAIRMAN  THERRIAULT asked  if he envisioned  the mechanism  would                                                              
have to be "turned  on" each year or once the  Legislature does it                                                              
by  resolution the  governor  shall submit  the  budget with  this                                                              
detail year after year.                                                                                                         
                                                                                                                                
SENATOR KELLY said  the form would be determined  by the different                                                              
Legislatures.  He  assumes  it  would  be passed  just  once,  but                                                              
different  Legislatures in  different years  may choose  different                                                              
forms and they would have to pass the change by law.                                                                            
                                                                                                                                
CHAIRMAN  THERRIAULT  asked  what  action  would  be  taken  if  a                                                              
Legislature no longer wanted the information at all.                                                                            
                                                                                                                                
SENATOR KELLY said it would be repealed.                                                                                        
                                                                                                                                
CHAIRMAN  THERRIAULT   said  this  Legislature  might   want  this                                                              
information,  but there  will be  an  election this  fall and  the                                                              
governor is  building the budget  during the election  process. He                                                              
asked whether  he puts the  prioritized document together  for the                                                              
next Legislature.                                                                                                               
                                                                                                                                
SENATOR  KELLY replied  he  envisions  it the  same  way that  the                                                              
budget is  created every year. There  would just be a  rider added                                                              
requiring prioritization.                                                                                                       
                                                                                                                                
CHAIRMAN THERRIAULT  asked if  this would  be the budget  document                                                              
itself or a separate document.                                                                                                  
                                                                                                                                
SENATOR KELLY said the budget document would have the rider.                                                                    
                                                                                                                                
There was no further testimony.                                                                                                 
                                                                                                                                
CHAIRMAN  THERRIAULT  stated  there   was  no  proposed  committee                                                              
substitute and  no proposed amendments.  The attached  fiscal note                                                              
for $1,500  is standard  for anything that  will be placed  on the                                                              
ballot.                                                                                                                         
                                                                                                                                
He asked for the will of the committee.                                                                                         
                                                                                                                                
SENATOR PHILLIPS made a motion to  move SJR 38 and attached fiscal                                                              
note from committee with individual recommendations.                                                                            
                                                                                                                                
There being no objection, SJR 38 moved from committee.                                                                          
                                                                                                                                
                                                                                                                                
          SB 313-NO LEGIS APPROVAL OF AEROSPACE PROJECT                                                                     
                                                                                                                              
CHAIRMAN  THERRIAULT announced  he  proposed  this legislation  to                                                              
repeal the  section of  the statutes  that relates to  legislative                                                              
approval  of   construction  projects  of  the   Alaska  Aerospace                                                              
Development Corporation (AADC).                                                                                                 
                                                                                                                                
Section 14.40.886 that is proposed for repeal reads as follows:                                                                 
            Notwithstanding any other provision of AS                                                                           
        14.40.821-14.40.990,   a   proposed   construction                                                                      
        project of  $1,000,000 or more shall  be submitted                                                                      
        by   the  corporation  to   the  legislature   for                                                                      
        approval at a regular session  of the legislature.                                                                      
                                                                                                                                
Repeal of this section would not  and is not intended to give AADC                                                              
the same  standing as  the railroad. If  this legislation  were to                                                              
pass, there  would still need to  be an appropriation by  the full                                                              
Legislature  for  AADC  to  accept and  expend  federal  funds  or                                                              
corporate receipts  coming into the corporation.  By removing this                                                              
section of the  statute it would be clear that  Legislative Budget                                                              
and  Audit would  be able  to make  modifications  to that  budget                                                              
without having to  wait for the next time the  full Legislature is                                                              
sitting in session. Thus AADC would  be able to be more responsive                                                              
to meet the needs of its clientele.                                                                                             
                                                                                                                                
Committee  members had  no questions  but there  were a number  of                                                              
people that wanted to testify via teleconference.                                                                               
                                                                                                                                
STEVE  CONN  with  the  Alaska  Public   Interest  Research  Group                                                              
(AkPIRG) went on  record in opposition to SB 313.  He said this is                                                              
a public corporation and they believe  passage of this legislation                                                              
would rob residents and their representatives  of the kind of open                                                              
debate and  questioning that allows  them to know the  benefits as                                                              
well  as the  downside costs  and  risks of  the various  projects                                                              
undertaken by  AADC. With benefits  come costs and risks  that are                                                              
more  than a  budgetary matter  to be  dealt with  by a  budgetary                                                              
agency because they deal with things  that impact quality of life.                                                              
Such matters  should be discussed  in an open forum  as originally                                                              
intended.                                                                                                                       
                                                                                                                                
STEVEN  CLEARY   with  the  group  Citizens  Opposed   to  Defense                                                              
Experimentation (CODE) testified  in opposition to SB 313. He said                                                              
he echoed Mr. Conn's testimony.                                                                                                 
                                                                                                                                
SENATOR   PHILLIPS   asked   whether  CODE's   concern   is   more                                                              
environmental than expenditure of dollars.                                                                                      
                                                                                                                                
MR.  CLEARY  said his  group  is  currently  seeking to  do  three                                                              
things. Two of those are to get an  environmental impact statement                                                              
(EIS) out  on the Kodiak  Launch Complex  and to get  public input                                                              
into the  process and they  see passage of  SB 313 as a  matter of                                                              
taking the public out of the process.                                                                                           
                                                                                                                                
STACEY FRITZ  said she was representing  No Nukes North,  which is                                                              
an  organization  that  promotes educated  opposition  to  missile                                                              
defense activities  in Alaska. There  are about 300  group members                                                              
that would like in depth information on this issue.                                                                             
                                                                                                                                
"It should  be deeply disturbing  to all  of us that  Secretary of                                                              
Defense  Donald Rumsfeld  has recently  exempted  the new  Missile                                                              
Defense  Agency   from  normal   Pentagon  oversight   procedures.                                                              
According  to Rumsfeld's  orders, the Missile  Defense Agency  can                                                              
now conduct tests  without involving the Pentagon  Office of Tests                                                              
and Evaluations. Missile Defense  Agency commanders no longer have                                                              
to specify new  weapons requirements. The agency no  longer has to                                                              
report back  to the Pentagon on  the project's timelines  or costs                                                              
and Secretary Rumsfeld has clarified  that he retains the right to                                                              
approve contingency  or emergency  deployment of any  experimental                                                              
defense test assets. So not only  has the public been removed from                                                              
information about  where billions of their tax  dollars are going,                                                              
they can not  even be assured that their federal  government knows                                                              
anything about it."                                                                                                             
                                                                                                                                
She  said passage  of this  legislation would  remove the  state's                                                              
oversight  of major  construction  projects at  the Kodiak  Launch                                                              
Complex.  Rather  than making  the  AADC  more responsive  to  its                                                              
clientele, which is largely the Department  of Defense, the people                                                              
of Alaska  would rather see the  Legislature and the AADC  be more                                                              
responsive to the public.                                                                                                       
                                                                                                                                
She wanted  to go  on record as  opposing the  bill and  urged the                                                              
Legislature to  retain all oversight  of missile  defense activity                                                              
anywhere  in  the state  and  particularly  at the  Kodiak  Launch                                                              
Complex.                                                                                                                        
                                                                                                                                
CHAIRMAN THERRIAULT  asked her if  she would still be  against the                                                              
legislation knowing that the full  Legislature would still control                                                              
the appropriation process. He informed  her that any unanticipated                                                              
project  that  is funded  by  the  federal government  or  through                                                              
corporate  receipts would  still have  to be  appropriated by  the                                                              
Legislative Budget  and Audit Committee under the  powers that are                                                              
given to it by the full Legislature.                                                                                            
                                                                                                                                
MS.  FRITZ  said  it  is  her  understanding   that  the  bill  is                                                              
attempting to remove  state oversight of major  projects on Kodiak                                                              
and she doesn't  feel there has been enough scrutiny  of the major                                                              
projects there. She  hopes that money coming in  from anywhere for                                                              
Kodiak Launch  Complex projects  would be  subject to scrutiny  by                                                              
the Legislature.                                                                                                                
                                                                                                                                
CHAIRMAN THERRIAULT  informed her  that it  already is  subject to                                                              
scrutiny and the passage of this  legislation wouldn't change that                                                              
scrutiny. No  money can be received  and spent by  the corporation                                                              
without  the underlying  appropriation that  is made  by the  full                                                              
Legislature.  This  bill  simply clarifies  that  the  Legislative                                                              
Budget and Audit  Committee, which is made up of  Senate and House                                                              
members, can  make budgetary adjustments  during the  eight months                                                              
of the year  that the full Legislature  is not in Juneau.  It is a                                                              
misconception that is largely borne  out of the budget system that                                                              
has led  people to believe that  the bill removes  state oversight                                                              
of AADC.                                                                                                                        
                                                                                                                                
MS.  FRITZ  said she  would  like  to  believe  that is  true  and                                                              
although she doesn't fully understand  the budget system she would                                                              
still like  to voice her concern  as a relatively  informed member                                                              
of the public on this issue.                                                                                                    
                                                                                                                                
SENATOR  PHILLIPS  asked  if No  Nukes  North  is  philosophically                                                              
against the Missile Defense Initiative.                                                                                         
                                                                                                                                
MS.  FRITZ  replied  they are  opposed  both  environmentally  and                                                              
politically. They  try to provide in-depth information  on missile                                                              
defense  activities in  Alaska to promote  educated opposition  to                                                              
the project.                                                                                                                    
                                                                                                                                
SENATOR PHILLIPS told her he represents  Fort Richardson and maybe                                                              
Elmendorf  so  he   has  a  constituency  that   views  the  issue                                                              
differently  than  she  does. He  was  interested  in  determining                                                              
whether her opposition  is philosophical or fiscal  because he has                                                              
fiscal concerns.                                                                                                                
                                                                                                                                
MS.  FRITZ  said  she  is  fiscally opposed  as  well  but  it  is                                                              
difficult  for   her  to  separate  the  environmental   from  the                                                              
political because  she believes missile defense will  create a new                                                              
arms race  in space and on  earth. This is globally  destabilizing                                                              
and environmentally unsound.                                                                                                    
                                                                                                                                
      C                                                                                                                         
SEAN MGUIRE  testified in  opposition to SB 313. It  is disturbing                                                              
to him  to have political leaders  try to remove  information from                                                              
the public  on any  level and  he believes  this makes the  public                                                              
wary.                                                                                                                           
                                                                                                                                
SIDE B                                                                                                                          
4:25 p.m.                                                                                                                       
                                                                                                                                
CHAIRMAN THERRIAULT  said he understands  that the  budget process                                                              
is  complicated but  this legislation  would not  change the  fact                                                              
that AADC  is a state  corporation that  cannot receive  or expend                                                              
any  money without  the  approval of  the  full Legislature.  This                                                              
would make  it clear  that while  the Legislature  is not  in full                                                              
session, the Legislative Budget and  Audit Committee would be able                                                              
to  make  modifications to  the  budget  that  was passed  by  the                                                              
Legislature.  The meetings  would  be publicly  noticed and  would                                                              
take into  account public testimony.  This committee  is comprised                                                              
of  members of  the  House  and members  of  the Senate  with  the                                                              
chairmanship alternating  between the bodies every  two years. The                                                              
Legislature  is  still  well  informed   of  monies  received  and                                                              
projects that are  approved. Current wording is  a redundancy that                                                              
was  incorporated when  AADC statutes  were first  put into  place                                                              
because  the Legislature  was  unsure  how the  corporation  would                                                              
develop.  Part of the  concern was  that the  corporation had  the                                                              
power to  issue bonds for  projects. The Legislature  was somewhat                                                              
concerned that  they would  issue bonds  in amounts that  exceeded                                                              
$1,000,000   and  expend   those   receipts  without   Legislative                                                              
oversight.  With   the  passage   of  this  bill,   oversight  and                                                              
accountability are maintained with  the added benefit of increased                                                              
flexibility.                                                                                                                    
                                                                                                                                
      C                                                                                                                         
SEAN MGUIRE  replied that does make him  somewhat more comfortable                                                              
but it still makes him uncomfortable  when four or five members of                                                              
some committee are  making these decisions because  this is taking                                                              
away from a whole range of ideas and views.                                                                                     
                                                                                                                                
                                 c                                                                                              
SENATOR PHILLIPS  corrected Mr. MGuire  on the composition  of the                                                              
committee and said opportunities  arise that might be lost if it's                                                              
necessary to wait until the next legislative session.                                                                           
                                                                                                                                
ED DAVIS  from Fairbanks  said he  wanted to  give his  historical                                                              
viewpoint  regarding  military  launches  taking  place  on  state                                                              
subsidized facilities.  Between the mid  1980s and into  the early                                                              
1990s he  was a  leader in  starting a  group called Sane  Alaska,                                                              
which encouraged a sane nuclear policy.                                                                                         
                                                                                                                                
As AADC  was beginning,  his group  was losing membership  because                                                              
the Cold War was  coming to an end and the threat  of an arms race                                                              
was reduced. However, one of the  last issues they became involved                                                              
in was the Star  Wars research that was planned  at the University                                                              
of Alaska  Poker Flat  Research Range. With  the exposure  of what                                                              
that  really  meant they  were  told  there  was no  intention  of                                                              
delving  into things  that might  destabilize  global security  by                                                              
triggering an arms race.                                                                                                        
                                                                                                                                
With  respect  to SB  313,  he doesn't  want  to lose  any  public                                                              
disclosure  or  Legislative  oversight that  would  prevent  doing                                                              
something that  might not  be in the  best interest of  the state,                                                              
the country or the world.                                                                                                       
                                                                                                                                
CHAIRMAN THERRIAULT  said it is in the operating  budget where the                                                              
Legislature  authorizes the  University of  Alaska Legislature  to                                                              
receive  and  expend  funds  that  come  from  different  sources.                                                              
Because  of  the  university size,  the  authorization  number  is                                                              
large. They have  a bit of leeway in their appropriation  and when                                                              
some of  the research money that  was previously referred  to came                                                              
available,  they had  authorization on  the books  to receive  and                                                              
expend that money.  With respect to AADC, they  are proposing that                                                              
rather than making an empty appropriation  of $10 or 20 million in                                                              
anticipation  of  projects  that  may  come in,  they  would  like                                                              
Legislative Budget and Audit to be  able to look at those projects                                                              
as they come  in and reserve  judgment until they come  in. Viewed                                                              
this way,  the bill  provides the  opportunity for more  oversight                                                              
because there wouldn't be any blanket authorization.                                                                            
                                                                                                                                
MIKE MILLIGAN  from Kodiak testified  in opposition to SB  313. He                                                              
has always been  a strong supporter of the rocket  launch facility                                                              
in Kodiak  and is  excited  about its  future. He  wants to  go on                                                              
record as reminding  the people with CODE that a  fantastic job is                                                              
being done in preserving the democratic exchange of information.                                                                
                                                                                                                                
He said  that if  we are  to automatically  get away from  missile                                                              
defense  it  doesn't  mean  that  India  and  Pakistan  will  stop                                                              
building   missiles.   However,  he   is   generally  opposed   to                                                              
legislative bodies  giving up  authority. This democratic  society                                                              
operates with oversight and this  appears to be an attempt to make                                                              
it easier for  some of the federal interests that  are involved in                                                              
a rocket  launch facility  to come in  whenever they want  to. The                                                              
Kodiak facility  is in the  development stage and  the development                                                              
and proposals need to be planned and held up for review.                                                                        
                                                                                                                                
Kodiak  recently had  a very  exciting Athena  rocket launch  with                                                              
four satellites.  The launch  facility offers  an opportunity  for                                                              
Alaska and humankind. The future  of the facility is bright but it                                                              
is   a  future   that  needs   dedicated  legislative   oversight.                                                              
Personally  he wants  to  see the  military  continue  to use  the                                                              
launch facility because  they are best prepared  to contribute the                                                              
resources that  will make it a  viable facility. They can  do that                                                              
with the  understanding that the  Legislature meets in  the spring                                                              
and that is when  they need to present their  proposals. This will                                                              
ensure both legislative and public oversight.                                                                                   
                                                                                                                                
SENATOR  STEVENS  addressed  his  comments  to  everyone  who  had                                                              
testified via  teleconference. He  questioned whether any  of them                                                              
had read  the statutes  that deal  with the  AADC because  all the                                                              
concerns voiced  regarding relinquishing  oversight are  stated in                                                              
the  statutes.  He  found  it  disturbing   that  they  would  say                                                              
Legislators are  not doing their  job when they  obviously haven't                                                              
even  read  the  statutes.  He  suggested  they  should  read  the                                                              
statutes before testifying.                                                                                                     
                                                                                                                                
MR. CONN said,  "You're absolutely incorrect. We  believe that the                                                              
current  situation  requires  more oversight  not  less  oversight                                                              
during the summer,  in a period in time when the  citizenry is not                                                              
focused on what you are doing in Juneau."                                                                                       
                                                                                                                                
SENATOR  STEVENS said,  "You ought  to read the  statute and  then                                                              
read the  Executive Budget Act in  37.07. It says  everything that                                                              
every one of you  has spoken about is already in  statute and this                                                              
act that Senator  Therriault has introduced doesn't  repeal any of                                                              
that. You're not reading what's already in statute."                                                                            
                                                                                                                                
MR. MILLIGAN was somewhat opposed  to the comments made by Senator                                                              
Stevens.   Alaska   has   a   political    season   and   [balance                                                              
indecipherable because he and Senator  Stevens were talking at the                                                              
same time.]                                                                                                                     
                                                                                                                                
SENATOR  STEVENS  interjected,  "You're not  reading,  you're  not                                                              
listening to what I said. If you  read 37.07 it says in section 6:                                                              
'Public  participation   and  development  of  an   annual  budget                                                              
including  opportunity for  public to  review and  comment on  the                                                              
plans and  programs of the  office of  the governor and  all state                                                              
agencies.'  It already  says  that in  law.  You're not  reading--                                                              
you're  telling us to  do what's  already in  statute. And  you're                                                              
using  it  to  try  to  further  your  mechanism  to  prevent  the                                                              
development down there  and saying we're not doing  what's already                                                              
there. It's already in law."                                                                                                    
                                                                                                                                
CHAIRMAN THERRIAULT  said that gets back to one of  the issue that                                                              
was  brought up  concerning the  university  proposal that  caused                                                              
concern in  Fairbanks. That kind  of blanket appropriation  is the                                                              
other way  of dealing with this  situation and provides  little to                                                              
no oversight.  In that type  of instance, a blanket  authorization                                                              
would  be given  so  that any  proposal coming  in  would be  pre-                                                              
authorized.   In  contrast,   this  request   requires  that   the                                                              
Legislative Budget  and Audit Committee look at  and evaluate each                                                              
proposal as  they come  in, which offers  more oversight  than the                                                              
system under which the university currently operates.                                                                           
                                                                                                                                
The existing statute  says you can only act during  the four month                                                              
window of opportunity when the Legislature  is sitting in session.                                                              
That has turned out to be unworkable.  For example the Legislature                                                              
is frequently  unable to tell whether  a client will want  a range                                                              
safety upgrade in  any one of the eight interim  months or whether                                                              
there  will  be  federal  or corporate  money  for  that  upgrade.                                                              
Without this legislation,  the only other way  for the Legislature                                                              
to  deal  with  that  potential scenario  is  to  give  a  blanket                                                              
authorization  even though  none  of the  specifics  of a  project                                                              
would be known.                                                                                                                 
                                                                                                                                
MR. MILLIGAN wanted to comment on  a conversation he had with some                                                              
British aerospace  technicians that were in Kodiak  for the launch                                                              
that took place  the previous summer. He said  that ultimately, it                                                              
will be  necessary to have  range safety equipment  permanently in                                                              
place at the Kodiak launch facility.                                                                                            
                                                                                                                                
He then asked Chairman Therriault  why changes couldn't wait until                                                              
the regular  legislative session. While  the facility is  still in                                                              
the  development  stage,  he  thought  it  important  to  put  the                                                              
appropriations on a calendar year format.                                                                                       
                                                                                                                                
CHAIRMAN  THERRIAULT  countered  that  if  they  anticipated  that                                                              
equipment would be needed at the  range but they weren't sure when                                                              
it would  be authorized in the  federal budget, they could  pass a                                                              
capital  appropriation  that would  stay  on  the books  for  five                                                              
years. Such an appropriation would  be pre-authorized and could be                                                              
used  at  any   time.  There  would  be  no   further  legislative                                                              
interaction  at that  time, which  is exactly  the concern  voiced                                                              
today. With the  passage of this bill, any proposal  would have to                                                              
go to the administration  and they would have to  propose that the                                                              
Legislative   Budget   and   Audit   Committee   take   it   under                                                              
consideration.  If  it  were  close  to  the  regular  legislative                                                              
session, it would probably be put  off, but if it was just after a                                                              
regular  session, the  administration  would have  to  take it  to                                                              
Legislative  Budget  and Audit  and  they  would  have to  have  a                                                              
meeting and  then take action.  The authorization  for Legislative                                                              
Budget and Audit  to take action is only granted  to the committee                                                              
on a year-by-year basis.                                                                                                        
                                                                                                                                
Passage of  this bill  would keep the  Legislature from  having to                                                              
consider  a  blanket  authorization,   which  contributed  to  the                                                              
controversy  at  Poker Flat.  He  didn't  think  that any  of  the                                                              
testifiers would want to see that sort of situation repeated.                                                                   
                                                                                                                                
PAT LADNER, President and CEO of  the Alaska Aerospace Development                                                              
Corporation, wanted  to clarify that  the portion in  statute that                                                              
refers to  leasing Poker  Flat has to  do with the  origination of                                                              
AADC  because the  launch complex  was  initially meant  to be  at                                                              
Poker Flat.  The language is in statute  so that AADC could,  as a                                                              
corporation, be allowed to use Poker Flat.                                                                                      
                                                                                                                                
Regarding  public scrutiny  of the Kodiak  Launch Facility,  there                                                              
have been  four environmental assessments  done by  three separate                                                              
federal government  agencies. The  public did have  an opportunity                                                              
to participate in  the process and they all resulted  in a finding                                                              
of no  significant impact.  The Ballistic  Missile Defense  Office                                                              
has made  it clear that  they anticipate conducting  environmental                                                              
documentation that complies with the law at the Kodiak facility.                                                                
                                                                                                                                
UNIDENTIFIED  SPEAKER  wanted  to  respond  to  Senator  Stevens's                                                              
comments and  said the language that  would be repealed  refers to                                                              
appropriations over  $1 million. He said  he used to work  for the                                                              
Army  Corp of  Engineers  and is  familiar  with  how federal  and                                                              
private  appropriations  work.  There is  a  significant  planning                                                              
cycle  required  for appropriations  of  that  size and  he  can't                                                              
imagine  that there  would be  any difficulty  tying the  planning                                                              
cycle into the regular legislative  session. With that in mind, he                                                              
didn't think  there was a big  problem that needs to  be addressed                                                              
by the passage of this bill.                                                                                                    
                                                                                                                                
There was no further testimony.                                                                                                 
                                                                                                                                
CHAIRMAN THERRIAULT  said the bill  is straightforward,  but there                                                              
is misunderstanding  on how it impacts the budgeting  system. Once                                                              
again he clarified  that the bill would still  require Legislative                                                              
oversight and interaction  before any client could go  to AADC and                                                              
propose that a capital project be undertaken.                                                                                   
                                                                                                                                
There was no committee substitute and no amendments were offered.                                                               
He noted the zero fiscal note from the aerospace corporation.                                                                   
                                                                                                                                
He asked for the will of the committee.                                                                                         
                                                                                                                                
SENATOR STEVENS made a motion to move SB 313 and attached fiscal                                                                
note from committee with individual recommendations.                                                                            
                                                                                                                                
There being no objection, SB 313 moved from committee.                                                                          
                                                                                                                                
CHAIRMAN THERRIAULT adjourned the meeting at 4:50 p.m.                                                                          
                                                                                                                                
                                                                                                                                

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