Legislature(1995 - 1996)
02/14/1995 03:40 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 service." 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 deregulation. 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 consideration. 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 place. 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 statute. 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 amendment. 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 committee. 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.