Legislature(2001 - 2002)
04/16/2002 03:40 PM Senate STA
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ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS COMMITTEE
April 16, 2002
3:40 p.m.
MEMBERS PRESENT
Senator Gene Therriault, Chair
Senator Randy Phillips, Vice Chair
Senator Rick Halford
Senator Ben Stevens
Senator Bettye Davis
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 216(RES)
"An Act relating to the emergency order authority of the
commissioner of fish and game and to meetings of the Board of
Fisheries."
MOVED SCS HB 216(STA) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 13
Proposing amendments to the Constitution of the State of Alaska
relating to inflation- proofing the permanent fund.
MOVED CSSJR 13(STA) OUT OF COMMITTEE
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 254(FIN)
"An Act relating to the teachers' retirement system, the judicial
retirement system, and the public employees' retirement system
and to the tax qualification under the Internal Revenue Code of
those systems; amending the definition of 'actuarial adjustment'
in the teachers' retirement system and the public employees'
retirement system; repealing certain provisions of the teachers'
retirement system and the public employees' retirement system;
amending the statutory limitation on payment of warrants to make
an exception for warrants making benefit payments or refunds
under various state retirement and benefit programs; and
providing for an effective date."
MOVED CSHB 254(FIN) OUT OF COMMITTEE
SENATE CONCURRENT RESOLUTION NO. 9
Approving the open meetings guidelines proposed by the Select
Committee on Legislative Ethics.
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
HB 216 - See State Affairs minutes dated 4/9/02
SJR 13 - See State Affairs minutes dated 4/26/01, 2/21/02,
3/21/02
HB 254 - See State Affairs minutes dated 4/11/02
SCR 9 - No previous action to record.
WITNESS REGISTER
Joe Balash
Staff to Senate State Affairs Committee
Alaska State Capitol, Room 121
Juneau, AK 99801-1182
POSITION STATEMENT: Explained CS for SJR 13
Jim Kelly
Director of Communications
Alaska Permanent Fund Corporation
P.O. Box 25500
Juneau, AK 99802-5500
POSITION STATEMENT: Testified on SJR 13
Representative Drew Scalzi
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor HB 216
Shirley A. McCoy
Ethics Committee
P.O. Box 33475
Juneau, AK 99803
POSITION STATEMENT: Testified on SCR 9
ACTION NARRATIVE
TAPE 02-22, SIDE A
CHAIRMAN GENE THERRIAULT called the Senate State Affairs
Committee meeting to order at 3:40 p.m. Present were Senators
Davis, Stevens, Phillips and Chairman Therriault. Senator Halford
arrived shortly.
SJR 13-CONST. AM: PERMANENT FUND
JOE BALASH, staff to Senate State Affairs, explained the proposed
committee substitute (CS) for SJR 13 differed considerably from
the original amendment proposed by the trustees. Rather than
describe all income as running into the fund itself and then
putting a limit on how much may be appropriated from the fund,
all income would be deposited into a separate earnings account.
Section 2, subsection (b), establishes that appropriations would
be made from the earnings reserve account. The purpose for doing
that was to maintain a strict distinction between the earnings
appropriations and the principal of the fund. Legal advice
indicated the prior language could be problematic in that it used
the word principal and restricted what principal could be used
for, but then allowed appropriations from the fund. Rather than
leave it an open question to be debated in court, they
established the separate earnings reserve account within the
fund.
A second change occurs on page 2, lines 2 through 4. The original
proposal relied on a five-year market value for the fund. The CS
adds a lag year so that when a governor is beginning to formulate
the budget in late November or early December, there will be hard
numbers as to how much of the permanent fund will be available
for dividends and other uses. The affect would be to reduce the
amount that would be available under the formula, but if the
assumptions of the trustees were correct, 8.25 percent on an
annual basis would result in about 4.5 percent being available
for appropriation each year.
Section 3 is a transition section. There was a legal question
about whether the earnings in the statutorily created earnings
reserve account within the fund would be protected under the
language proposed by the trustees. Rather than waiting for a
court challenge, they propose that the transition section would
transfer the amount in the statutorily created earnings reserve
into the constitutionally created earnings reserve thereby
protecting it and limiting its availability to the state.
CHAIRMAN THERRIAULT asked for further discussion on the lag year
because Senator Halford was somewhat concerned about the five
percent. However, when it all works together it reduces to a
little less than five percent.
MR. BALASH explained that the amount depends on the assumptions
made on whether the earnings amount would be 8 or 8.25 percent. A
reasonable estimate for a five-year moving average as proposed by
the trustees would result in 4.7 to 4.8 percent available for
appropriation. Depending on the actual returns, adding a lag year
would result in 4.5 percent to 4.7 percent being available for
appropriation. The higher the growth in each subsequent year, the
wider the gap would be over the course of the five years, which
would reduce the effective payout rate.
CHAIRMAN THERRIAULT said the transition section says that money
is placed in a category that makes just the five percent averaged
draw available. It's not available with a simple majority vote.
JIM KELLY, Director of Communications for the Permanent Fund
Corporation, said the board hadn't had the opportunity to
evaluate the proposed CS so he couldn't speak for the entire
board. However, the intent to maintain the prohibition against
spending principal as described by Mr. Balash is also the intent
of the board and it appears as though the language accomplishes
that intent. No problem was immediately apparent, but if a
question arose they could discuss it in the next committee of
referral.
There were no questions and no additional testimony.
CHAIRMAN THERRIAULT stated the bill would go to the Judiciary
Committee next and as a member of that committee, he intended to
continue to work with the trustees.
The Version R, Cook committee substitute (CS) was before the
committee. There were no amendments offered and there was one
$1,500.00 fiscal note. He asked for the will of the committee.
SENATOR DAVIS made a motion to move CSSJR 13(STA) and attached
fiscal note from committee with individual recommendations
(Version R). There being no objection, it was so ordered.
HB 216-BD OF FISHERIES MEETINGS/EMERGENCY ORDERS
CHAIRMAN THERRIAULT informed committee members he had prepared a
committee substitute (CS) for HB 216. On page 2, line 19, new
language was inserted into the intent section. His concern was
that there are a number of statements under the findings section
that use limiting language such as "rare instances" but the
similar limiting language did not present itself in the first
intent section clause that spoke to that section of the bill. He
asked the drafters to insert language so the findings section
flowed to the intent. His concern was that if the courts were
looking at that section of statutes, they would look to the
Legislature's intent. He didn't know that they would look at the
findings and determine the stated finding was clearly legislative
intent. This is of particular concern when an intent section
doesn't have the same limiting language.
He asked Representative Scalzi whether he had any comments on the
CS.
REPRESENTATIVE SCALZI said he was trying to understand the
comfort level, but he had no problem with the added language, "in
rare circumstances where immediate action is necessary," on page
2, line 19.
CHAIRMAN THERRIAULT said his suggestion, as Chairman, was that if
they couldn't make the clarification, he would have preferred to
be silent on the intent and findings.
He asked Senator Halford whether he intended to make a motion to
adopt his proposed amendment.
SENATOR HALFORD said he didn't intend to move the entire
amendment and he needed a few moments before he could proceed.
CHAIRMAN THERRIAULT called a brief at ease at 4:55 p.m. and
gaveled the meeting back to order at 4:57 p.m.
SENATOR HALFORD referred members to page 3, line 20 through 22 of
the 4/12/02 CS (Version P). He made a motion to delete, "if the
commissioner concurs in the determination of the board that a
fishery conservation issue exists and that the issue cannot be
resolved under current regulations,". The language substantially
changes the relationship of the board and the commissioner to the
detriment of the board. Other than the day-to-day management, the
board should set the policy, not the department. This
commissioner of this department is selected from a roster
provided by the board. The board transitions through different
governors and has more continuity than the commissioners.
CHAIRMAN THERRIAULT asked Representative Scalzi for verification
that this section came from regulation and the language that
would be deleted was the language he was trying to add into
statute.
REPRESENTATIVE SCALZI replied that was correct. Senator Halford's
proposed change would keep the language that is currently in
regulation. It would be a moot point to the bill for that
section. The intent is to get the commissioner in concurrence
with the board and with the conservation issue that does exist.
He agreed that the governor appoints the commission based on the
applicants presented by the board. However, in the legislative
intent, the commissioner is the biological manager and that is
the argument of the bill. There must not only be consultation,
but also concurrence that a biological issue or concern does
exist. He said the commission is more than just a figurehead, he
is the steward of the resource and that is why the language is
written that way.
CHAIRMAN THERRIAULT said Senator Halford moved proposed amendment
1. He asked whether there was objection from committee.
SENATOR DAVIS asked the Chairman whether she missed something.
She wondered why they weren't addressing the other parts of the
proposed amendment.
SENATOR HALFORD said he didn't offer the entire amendment as
written. He said he just offered the change as outlined above,
but the sponsor said his amendment deletes Section 3 from the
bill.
REPRESENTATIVE SCALZI agreed. The purpose of the bill is the
sentence Senator Halford wanted to remove by amendment. It is
currently the board's regulatory language except for the addition
that the commissioner concurs in the determination of the board.
He wants the regulatory language and also the concurrence of the
commissioner that a conservation issue exists.
SENATOR STEVENS asked the sponsor for further explanation.
REPRESENTATIVE SCALZI replied the board could amend their own
agenda, that's not an issue. An agenda change request, which is
what the bill speaks to, is to add something to the agenda in an
out of cycle meeting. If they were to take up an issue out of
cycle, they would do it for one of three reasons (1) address an
unforeseen consequence (2) correct an error in regulation (3) a
conservation issue or purpose. So they don't take it out of cycle
as an abuse to the system, scientific data should be presented to
show that a conservation issue does exist. You get that
concurrence with the commissioner of fish and game.
CHAIRMAN THERRIAULT added you would get that concurrence through
the area manager.
REPRESENTATIVE SCALZI said the commissioner would have to go to
the biologists to get the correct data.
SENATOR STEVENS asked if that wasn't the same pool of resource
that the board of fish is supposed to draw their scientific
knowledge from so in reality it would all be the same scientific
evidence. Both the commissioner and the board would be using the
same pool to concur.
REPRESENTATIVE SCALZI said that is correct. The board has the
same pool. They have the ability to listen to their biological
managers.
SENATOR STEVENS said that by passing this law they would be
forcing the board to use the scientific information that is there
because if they don't the commissioner will.
REPRESENTATIVE SCALZI said they couldn't choose to ignore it if
this legislation is passed.
SENATOR HALFORD said the issue is the basic philosophy of whether
this department is run at the will of the board or the board is
run at the will of the department. This is their own internal
agenda. The catch all that they use to go back to another issue
is the one that is being amended to require the concurrence of
the administration. He believes this substantially reduces the
power of the board in terms of what it is going to consider. If
they wanted to do that they would probably have the legislative
liaison in charge of the executive branch in charge of the Rules
Committee.
CHAIRMAN THERRIAULT said he has heard that the workload of the
board is heavy and in part that is because of all the out of area
and out of turn issues that are put on the agenda.
SENATOR HALFORD replied the board's attorney said he didn't think
the board would support the legislation. It's a matter of balance
shift. He believes the administration has a great deal of power
in the process and this would enhance the executive branch direct
power and reduce the constitutionally created authority of this
board system of management. He agreed they have lots to do, but
during his tenure the up river down river, commercial non-
commercial interests have gone back and forth on this issue
depending on whether they feel they have board or administration
support. This legislation proposes to change a basic process that
has been in existence for a long time. "I think it's balanced now
and I think this would change that balance."
SENATOR STEVENS said if the effort were for a power shift they
would be addressing the commissioner's concurrence to all three
of the components. This only goes to the one conservation issue.
The board still has the authority to amend the agenda based on an
error or unforeseen consequences of a regulation.
SENATOR HALFORD replied this is a board that frequently ends up
in court on specific issues. To correct an error you must prove
it was done in error and something in the record is wrong.
Regarding unforeseen consequences, if a minority on the board
argued that something was going to happen and then it did, it's
not an unforeseen consequence. It was expected but not the
prevailing side of the issue. This is a board that has a
continuous record of challenges on these types of issues. The
point that is proposed for amendment is challenged the most and
he thought Representative Scalzi would agree.
REPRESENTATIVE SCALZI said he did agree. Seven times in the last
ten years they have used that point in one area in particular.
They used it twice in the Copper River area and the legislative
intent is that there is stability in the board process. Recently
in the Lower Cook Inlet and Kodiak area he had sports fisherman
angry with him because they limited the Kodiak area to five King
Salmon. He told them it is an allocation issue and the board's
purview. They responded the board didn't base it on scientific
data and they were told the board didn't have to. He believes the
integrity of the board process is at stake and that's what the
public is asking for. It has nothing to do on how they manage the
issues, but if something is taken out of cycle the conservation
argument shouldn't be used without scientific verification.
CHAIRMAN THERRIAULT objected to the amendment and asked whether
there were any questions.
SENATOR DAVIS asked Representative Scalzi for verification that
he did not support the amendment.
REPRESENTATIVE SCALZI replied he did not support the amendment.
Although the Senate and the House have cut the budget of the
board of fish because they were taking too many meetings out of
cycle, it didn't change the behavior. This would be a more
productive and stabilizing action.
CHAIRMAN THERRIAULT asked for a roll call on amendment #1. The
amendment failed three to two with Senators Stevens, Davis and
Chairman Therriault voting no and Senators Phillips and Halford
voting yes.
There were no other amendments offered. There was one zero fiscal
note. He asked for the will of the committee.
SENATOR STEVENS made a motion to pass \P version SCS CSHB
216(STA) from committee with attached fiscal note and individual
recommendations. There being no objection, it was so ordered.
HB 254-STATE RETIREMENT SYSTEMS/WARRANTS
CHAIRMAN THERRIAULT reminded members that amendment 1 was on the
table.
SENATOR HALFORD announced he intended to pursue the issue but he
would withdraw the amendment at that time.
CHAIRMAN THERRIAULT stated the version of the bill that was
passed from the House was before the committee. He had no
prepared CS and there were no amendments offered. He asked for
the will of the committee.
SENATOR STEVENS made a motion to move CSSS HB 254(FIN) and
attached fiscal note from committee with individual
recommendations. There being no objection, it was so ordered.
SCR 9-APPROVING LEG. OPEN MEETINGS GUIDELINES
SHIRLEY McCoy, representative from the Select Committee on
Legislative Ethics, said the Legislature enacted a law in 1993
requiring that they abide by open meeting guidelines. The Select
Committee of Legislative Ethics was formed in 1994 and they were
mandated to provide the Legislature with a guide to allow closed
caucuses and private informal meetings to discuss political
strategy without violating open meeting guidelines. The Ethics
Committee has done that; they have submitted guidelines, held
public hearings, talked with Legislators and the public. They
have spent considerable time trying to get guidelines to
Legislators that allowed them to do their best job for the State
of Alaska while honoring the public's desire to know what that
business is. To date the guidelines have not been enacted.
SENATOR HALFORD said the things that are prohibited include a
group of Legislators representing a geographic area or political
subdivision. Any time as few as two people decide or agree upon a
course of action with regard to their particular region or area
they could be affected by this prohibition. This standard is very
broad and could be violated in conversation on a continuous
basis. He asked whether there was a specific number that would
constitute a group.
MS. McCoy replied her understanding is that the proposed
guideline would not prohibit conversations between any number of
people. They gave a definition for both a meeting and a vote,
which clears up some of the ambiguities that have been felt.
CHAIRMAN THERRIAULT thought Senator Halford was concerned about
the concept of a legislative body taking action or agreeing upon
a course of action because the definition of a legislative body
could include the Interior delegation. They could fall under this
prohibition when they get together to strategize on how to deal
with another geographic area.
MS. McCoy replied the problem some public members have is
defining the difference between caucuses versus legislative
bodies and other gatherings. The public would generally prefer
all meetings to be open, but realizes this isn't always possible
because of political strategizing.
The Ethics Committee feels the guideline gives Legislators the
opportunity to complete the business that needs to be completed
without prohibitions.
SENATOR PHILLIPS asked what she meant when she says the general
public wants this.
MS. McCoy replied, "define general public, the people in the
State of Alaska that aren't legislative members."
SENATOR PHILLIPS then asked whether "somebody stopped you in the
store."
MS. McCoy replied they have had lots of members of the public
ask, "When are we going to get open meetings. Why haven't open
meeting guidelines been adopted?" The committee is mandated to
submit guidelines by January 16 every year and they have
faithfully done so since 1995. The committee realizes the entire
legislative body will probably never totally agree on the
guidelines but there must be a starting point. Most of the
committee members, some of whom are Legislators, felt that the
current resolution didn't go to the extremes that most of the
public would like to see, but it was a beginning.
SENATOR PHILLIPS asked what other states have in this regard.
MS. McCoy didn't believe the majority of states have a closed
caucus and most don't require an ethics committee to establish
guidelines.
SENATOR HALFORD apologized for saddling Ms. McCoy with the job
and complemented her on her diligence in trying to complete an
impossible task. The Legislature should have kept this within
their own purview and not asked her to continue to make
recommendations that would probably never be accepted.
MS. McCoy agreed the task was formidable then noted the
Legislature has passed laws requiring adherence from every other
elected official, but they won't do the same for themselves.
SENATOR PHILLIPS replied, "Alaska is full of paradoxes." He then
commented on access and said he'd like to see more people at the
meetings and the guidelines could come later.
CHAIRMAN THERRIAULT closed public comment on SCR 9 and held it in
committee.
ADJOURNMENT
There being no further business before the committee, the Senate
State Affairs Committee meeting was adjourned at 4:15 p.m.
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