Legislature(1995 - 1996)

02/14/1995 03:40 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                      SENATE STATE AFFAIRS                                     
                      February 14, 1995                                    
                           3:40 p.m.                                           
  MEMBERS PRESENT                                                              
 Senator Bert Sharp, Chairman                                                  
 Senator Randy Phillips, Vice-Chairman                                         
 Senator Loren Leman                                                           
 Senator Jim Duncan                                                            
  MEMBERS ABSENT                                                               
 Senator Dave Donley                                                           
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 54                                                            
 "An Act relating to exclusive service areas for utilities                     
 certificated to provide electric utility service and to the                   
 definition of 'general public' for utilities furnishing electric              
 SENATE BILL NO.  5                                                            
 "An Act prescribing the use and characteristics of voting booths              
 employed in elections and the color of ballots used in state                  
 primary elections."                                                           
 SENATE BILL NO. 51                                                            
 "An Act relating to income of the permanent fund; and providing for           
 an effective date."                                                           
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 54 - No previous senate committee action.                                  
 SB 5 - No previous senate committee action.                                   
 SB 51 - No previous senate committee action.                                  
  WITNESS REGISTER                                                             
 David Hutchens, Executive Director                                            
 Alaska Rural Electric Cooperative Association, Inc.                           
 703 W. Tudor, #200, Anchorage, AK 99503¶463-3636                              
   POSITION STATEMENT: supports  SB 54                                         
 Jim Arneson                                                                   
 Commercial Refuse                                                             
 1825 Ship Avenue, Anchorage, AK 99501¶277-3725                                
   POSITION STATEMENT: testified on SB 54                                      
 Jimmy Jackson, GCI                                                            
 2550 Denali Street, Anchorage, AK 99503¶265-5545                              
   POSITION STATEMENT: opposes SB 54                                           
 Patricia Grenier, Aide to Senator Kelly                                       
 State Capitol, Juneau, Alaska, 99801-1182¶465-3822                            
   POSITION STATEMENT: prime sponsor of SB 5                                   
 David Koivuniemi, Acting Director                                             
 Division of Elections                                                         
 P.O. Box 110017, Juneau, AK 99811-0017¶465-4611                               
   POSITION STATEMENT: testified on SB 5                                       
 Senator Steve Rieger                                                          
 State Capitol, Juneau, Alaska, 99801-1182¶465-3879                            
   POSITION STATEMENT: prime sponsor of SB 51                                  
 Jim Kelly, Research & Liaison Officer                                         
 Alaska Permanent Fund Corporation                                             
 P.O. Box 25500, Juneau, AK 99802-5500¶465-2047                                
   POSITION STATEMENT: testified on SB 51                                      
  ACTION NARRATIVE                                                             
 TAPE 95-5, SIDE A                                                             
 Number 001                                                                    
 SSTA - 2/14/95                                                                
          SB  54 ELECTRIC UTIL & SOLID WASTE REMOVAL                         
 CHAIRMAN SHARP calls the Senate State Affairs Committee to order at           
 3:40 p.m and brings up SB 54 as the first order of business before            
 the committee.  The chairman informs the committee that the                   
 proposed committee substitute for SB 54 corrects a drafting error.            
 On page 1, line 14, the language to be deleted should be [AND                 
 PRESENTLY OR FORMERLY SERVED BY], and not simply [PRESENTLY OR                
 FORMERLY], as was specified in the original version of the bill.              
 The chairman also notes that the committee has received written               
 testimony from the Alaska Rural Electric Cooperative Association,             
 Inc. (ARECA) and Commercial Refuse.                                           
 CHAIRMAN SHARP states it is his intent to take as much testimony as           
 possible today to hear input for possible changes to SB 54.  The              
 committee will hold SB 54 in order to work on the bill, and will              
 hear it again next week.  The chairman calls the first witness.               
 Number 070                                                                    
 DAVE HUTCHENS, Executive Director, Alaska Rural Electric                      
 Cooperative Association, Inc. (ARECA), asserts that utilities are             
 most efficient when they are monopolies.  In lieu of competition,             
 services and rates are regulated by the APUC (Alaska Public                   
 Utilities Commission), unless the consumers of a particular utility           
 vote to opt out of regulation.  Mr. Hutchens repeats information              
 already submitted to the committee in his written statement.  Mr.             
 Hutchens states ARECA supports SB 54.                                         
 Number 165                                                                    
 CHAIRMAN SHARP asks Mr. Hutchens if he thinks the wording change in           
 the proposed committee substitute is required.                                
 MR. HUTCHENS thinks it is required.                                           
 Number 170                                                                    
 JIM ARNESON, Commercial Refuse, testifying from Anchorage via                 
 teleconference, states he has already provided written copy of his            
 comments to the committee.  Mr. Arneson would like to see either              
 full or partial deregulation of the refuse industry.  He does not             
 think the refuse industry possesses the characteristics of a                  
 natural monopoly.  Mr. Arneson repeats the information already                
 submitted to the committee in writing.                                        
 Number 228                                                                    
 SENATOR RANDY PHILLIPS asks Mr. Arneson how many certificates have            
 been issued for refuse hauling in the Anchorage area.                         
 MR. ARNESON lists four companies with certification.                          
 SENATOR RANDY PHILLIPS asks Mr. Arneson if he is asking for                   
 deregulation of the certificates.                                             
 MR. ARNESON responds he is asking for some sort of deregulation,              
 either partial or total.  He is cautious about asking for total               
 Number 257                                                                    
 SENATOR RANDY PHILLIPS asks Mr. Arneson if he is currently only               
 serving commercial operations.                                                
 MR. ARNESON replies that is correct.                                          
 SENATOR RANDY PHILLIPS asks if the other operations are serving               
 commercial and residential operations.                                        
 MR. ARNESON replies that is correct.                                          
 SENATOR RANDY PHILLIPS asks Mr. Arneson if he thinks the other                
 companies would object to his suggestion of deregulation.                     
 MR. ARNESON responds the other companies would object, mainly                 
 because they do not want any competition.                                     
 Number 295                                                                    
 SENATOR LEMAN comments he philosophically agrees with Mr. Arneson.            
 Senator Leman is interested in taking a look possibly implementing            
 some of Mr. Arneson's suggestions.                                            
 CHAIRMAN SHARP reminds the committee that SB 54 will be held in               
 order to consider suggestions.                                                
 Number 307                                                                    
 SENATOR RANDY PHILLIPS asks Mr. Arneson how he heard about SB 54.             
 MR. ARNESON answers he tries to stay informed.  He came across SB
 54 while doing some research at the Anchorage Legislative                     
 Information Office.                                                           
 Number 320                                                                    
 JIMMY JACKSON, Attorney for GCI, states that, though GCI is not               
 directly affected by SB 54, maintaining the possibility of                    
 competition in all utility markets is in the best interest of the             
 public.  Therefore, GCI opposes SB 54, and particularly section 1.            
 Mr. Jackson thinks SB 54 is unnecessary.  The APUC already has                
 ample authority to prevent harmful competition.  He also thinks SB
 54 would be harmful.  Mr. Jackson says the trend in many places is            
 towards competition, not towards protecting service areas.  The               
 affect of SB 54 may very well be to deny Alaska's citizens the                
 benefits of competition.                                                      
 Number 355                                                                    
 SENATOR LEMAN says he was instrumental in passing legislation                 
 allowing intrastate telephone competition.  At the time, the                  
 company that had the monopoly on intrastate telephone service said            
 allowing competition would not work.  Time has shown that                     
 competition is good for telephone companies and consumers.  Senator           
 Leman asks Mr. Jackson if GCI's revenues have increased.                      
 MR. JACKSON says GCI's revenues have increased.  He is not sure if            
 Alascom's revenues have increased though.  On the national level,             
 Mr. Jackson says both MCI and AT&T's revenues have increased with             
 competition.  Mr. Jackson states monopolists will always assert               
 that competition cannot work.  He does not think people will demand           
 that an extra set of wires be put down the street.                            
 Number 385                                                                    
 CHAIRMAN SHARP comments, wires were put down both sides of the                
 street in some areas of Anchorage, until exclusive service areas              
 were established.  So he has a problem allowing competition to come           
 in and "cherry-pick" the large, profitable loads.  He is a strong             
 supporter of deregulating the whole system.                                   
 Number 405                                                                    
 SENATOR RANDY PHILLIPS asks Mr. Hutchens if the CEA (Chugach                  
 Electric) or MEA (Matanuska Electric) has a position on SB 54.                
 MR. HUTCHENS does not think that CEA and MEA are opposed to SB 54.            
 He thinks MEA supports SB 54, but does not think there is an                  
 official position from CEA.                                                   
 Number 420                                                                    
 CHAIRMAN SHARP asks if anyone else wishes to testify on SB 54.                
 Hearing none, he announces that SB 54 will be held for future                 
 SSTA - 2/14/95                                                                
                   SB   5 ELECTION BALLOTS                                   
 SENATOR SHARP brings up SB 5 as the next order of business before             
 the Senate State Affairs Committee and calls the first witness.               
 Number 425                                                                    
 PATRICIA GRENIER, Aide to Senator Kelly, prime sponsor of SB 5,               
 reads the sponsor statement.                                                  
 Number 442                                                                    
 SENATOR LEMAN comments he was not even aware of the different                 
 colored ballots until someone pointed it out to him.  He thinks it            
 is probably a good idea to make some of the changes, but is not               
 sure it is a big problem.                                                     
 Number 465                                                                    
 SENATOR RANDY PHILLIPS did not know it was a problem either.  The             
 biggest problem he heard was a change in the location of a polling            
 Number 475                                                                    
 CHAIRMAN SHARP asks if the difference between the original bill and           
 the proposed committee substitute is the deletion of section 4.               
 MS. GRENIER replies that is correct.                                          
 SENATOR LEMAN asks if there currently is a definition in statute on           
 "voting booth".                                                               
 MS. GRENIER responds that there is already a definition in the                
 SENATOR LEMAN notices the statute is amended by adding a new                  
 paragraph to read....  So that apparently was not in statute.  New            
 paragraph 37.  Which you've deleted.  Because the other definitions           
 throughout are satisfactory.                                                  
 (There is not currently a definition in statute on "voting booth".)           
 Number 490                                                                    
 SENATOR RANDY PHILLIPS makes a motion to adopt CSSB 5(STA) in lieu            
 of the original bill.                                                         
 CHAIRMAN SHARP, hearing no objection, states the committee                    
 substitute has been adopted.                                                  
 Number 495                                                                    
 SENATOR RANDY PHILLIPS asks the chairman if he noticed problems in            
 his precinct with the curtains on the voting booths.                          
 CHAIRMAN SHARP responds that there weren't problems in his                    
 precinct: he helped put the curtains up.  He did not hear of any              
 problems in the Fairbanks precincts.  The only complaint he heard             
 regarded the different colored ballots.                                       
 Number 525                                                                    
 DAVID KOIVUNIEMI, Acting Director, Division of Elections, states he           
 is available to answer question.  The division neither supports nor           
 opposes SB 5.                                                                 
 SENATOR RANDY PHILLIPS asks Mr. Koivuniemi if the division received           
 any complaints relating to the problems addressed by SB 5.                    
 MR. KOIVUNIEMI replies the division did receive some complaints,              
 mainly from the Anchorage area.  The problem with non-curtained               
 "blue suitcase" type voting booths did not occur for lack of                  
 regulations.  Set-up of voting booths is contracted out, and the              
 contract specifies that the vendor is responsible for an even mix             
 of different types of voting booths at each precinct.  Mr.                    
 Koivuniemi adds that the definition section was deleted because               
 there was a problem with the portion specifying voting booths must            
 be at least six feet tall: none of the handicapped polling booths             
 are six feet tall.                                                            
 MR. KOIVUNIEMI states that, as far as the different colored                   
 election ballots, Lieutenant Governor Ulmer wanted him to express             
 to the committee that she was not happy with the different colored            
 primary ballots.  As far as she is concerned, that would never                
 happen during her regime.  Mr. Koivuniemi shows a sample ballot to            
 the committee.  The ballots are stapled to a backing, and the                 
 Division of Elections could have a white ballot with different                
 colored backings.  He does not know why the ballots were designed             
 differently during this last primary.                                         
 Number 562                                                                    
 SENATOR LEMAN asks if it is important that the ballot be on white             
 paper, or important that it be all one color.                                 
 MR. KOIVUNIEMI responds the importance is in having one color, but            
 that white is probably less expensive.  He notes that ballots are             
 required to be printed on white paper for the general election.               
 Number 571                                                                    
 SENATOR RANDY PHILLIPS asks Mr. Koivuniemi which areas of Anchorage           
 had complaints.                                                               
 MR. KOIVUNIEMI says he does not know, but can check with the                  
 Anchorage supervisor.  There were complaints from around the state            
 regarding the ballot color.                                                   
 Number 579                                                                    
 SENATOR LEMAN offers amendment #1 to CSSB 5(STA).                             
 Amendment #1: on page 2, line 17, delete the words, "as for the               
 general election ballot".                                                     
 TAPE 95-5, SIDE B                                                             
 SENATOR LEMAN...delete those six words.  Senator Leman moves his              
 CHAIRMAN SHARP repeats Senator Leman's amendment, which would leave           
 the language: "The director shall print the ballot on white paper             
 and place the names...".                                                      
 CHAIRMAN SHARP asks if there is any objection to amendment #1.                
 Hearing no objection, amendment #1 has been adopted.                          
 SENATOR RANDY PHILLIPS makes a motion to discharge SB 5 from the              
 Senate State Affairs Committee with individual recommendations.               
 CHAIRMAN SHARP, hearing no objection, orders SB 5 released from               
 committee with individual recommendations.                                    
 SSTA - 2/14/95                                                                
         SB  51 DISPOSITION OF PERMANENT FUND INCOME                         
 SENATOR SHARP brings up SB 51 as the next order of business before            
 the Senate State Affairs Committee and calls the first witness.               
 Number 560                                                                    
 SENATOR RIEGER, prime sponsor of SB 51 reads his sponsor statement.           
 Number 515                                                                    
 SENATOR RIEGER states the Legislative Budget & Audit Committee                
 (LB&A) hired Ibbotsen & Associates to look at the asset allocation            
 of the Alaska Permanent Fund Corporation.  Their report prescribed            
 a change in asset allocation.  Senator Rieger has noticed that the            
 corporation is moving in the direction the Ibbotsen report                    
 recommended.  He thinks this will improve the longer term                     
 investment performance of the permanent fund, and in turn, improve            
 the real earnings of the fund.                                                
 SENATOR RIEGER says he will answer questions and urges the                    
 committee's favorable consideration.                                          
 Number 505                                                                    
 SENATOR LEMAN asks Senator Rieger if he thinks the consumer price             
 index (cpi) should continue to be used to value the permanent fund            
 earnings, or if there is a better index that could be used.                   
 SENATOR RIEGER replies since the actual use of permanent fund                 
 earnings is not spelled out anywhere, there is no right answer as             
 to which index should be used.  Since the only prescribed use of              
 earnings right now are for dividends, which go to consumers, he               
 supposes that the consumer price index is as good an index to use             
 as any.                                                                       
 Number 470                                                                    
 SENATOR RIEGER points out that the concept contained in SB 51 was             
 recommended in the Governor's Transition Report.                              
 Number 465                                                                    
 CHAIRMAN SHARP wants a clarification on whether SB 51 would set in            
 statute that inflation-proofing of the fund would continue to be              
 appropriated by the legislature.                                              
 SENATOR RIEGER responds that the wording in the constitutional                
 amendment basically says: the returns on the permanent fund shall             
 be deposited in the general fund, unless otherwise provided by law.           
 It has been argued that language would allow a way to inflation-              
 proof the fund automatically, and bypass the legislative                      
 appropriation process.  He does not think the constitutional                  
 language is clear.  The legislature might put it in the front                 
 section anyway.  But the idea is to not create a mistaken                     
 impression that there is more money available in any given fiscal             
 year than there really should be.  Senator Rieger thinks as money             
 continues to get tight, there will be proposals to not inflation-             
 proof the fund.                                                               
 Number 443                                                                    
 JIM KELLY, Research & Liaison Officer, Alaska Permanent Fund                  
 Corporation, states the board has not yet discussed SB 51, but                
 plans to meet on February 24, at which time they will review the              
 bill.  Historically, the board is in favor of any proposal which              
 would protect the principal of the permanent fund.  Mr. Kelly                 
 thinks the board would certainly support the portion of SB 51 which           
 specifies inflation proofing the fund.  However, he does not think            
 the board would take any position one way or the other on the other           
 portion of the bill.  Mr. Kelly discusses the financial projections           
 he submitted to the committee and says that the only way the amount           
 of money the fund earns will be larger is if one, the fund earns              
 more money, or two, the permanent fund gets larger.  The only way             
 the permanent fund will get larger is if an appropriation is made             
 to the permanent fund.                                                        
 Number 410                                                                    
 MR. KELLY states inflation proofing used to be automatic, but that            
 changed during the Cowper administration.  Also, the corporation              
 likes to use the cpi because it is a number people can understand.            
 As for using an average balance on which to measure earnings, Mr.             
 Kelly would just as soon use an average balance of the fiscal year,           
 rather than the calendar year.                                                
 Number 395                                                                    
 CHAIRMAN SHARP asks Mr. Kelly if he is referring to the cost or the           
 market value of measuring the average balance.                                
 MR. KELLY responds that at this time, it is done in cost.                     
 Number 390                                                                    
 SENATOR RANDY PHILLIPS asks Mr. Kelly if the board is going to look           
 at SB 51 and make a recommendation.                                           
 MR. KELLY says he expects the board to make a recommendation.                 
 SENATOR RANDY PHILLIPS asks Mr. Kelly if the board will make a                
 formal endorsement.                                                           
 MR. KELLY responds that they will.                                            
 CHAIRMAN SHARP says the committee will hold the bill until next               
 week to wait for information from the Alaska Permanent Fund                   
 Corporation's board and to get input from all members of the                  
 Number 343                                                                    
 SENATOR RIEGER comments it would probably be good to switch to                
 fiscal year from calendar year for measuring earnings.  That is               
 something no one has ever thought of before.                                  
 CHAIRMAN SHARP states his gut feeling is to deposit as large an               
 amount as is possible into the corpus of the fund.                            
 Number 310                                                                    
 CHAIRMAN SHARP adjourns the Senate State Affairs Committee meeting            
 at 4:56 p.m.                                                                  

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