Legislature(1995 - 1996)
03/09/1995 03:35 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE March 9, 1995 3:35 p.m. MEMBERS PRESENT Senator Bert Sharp, Chairman Senator Randy Phillips, Vice-Chairman Senator Loren Leman Senator Jim Duncan Senator Dave Donley COMMITTEE CALENDAR SENATE BILL NO. 89 "An Act relating to the members of the board and staff of the Alaska Permanent Fund Corporation." SENATE BILL NO. 90 "An Act establishing the Public Officers Compensation Commission; relating to the compensation of the governor, lieutenant governor, members of the legislature, heads of the principal departments of the executive branch of government, supreme court justices, judges of the court of appeals, judges of the superior court, and district court judges; and providing for an effective date." SENATE JOINT RESOLUTION NO. 16 Proposing an amendment to the Constitution of the State of Alaska relating to the duration of a regular session. 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." PREVIOUS SENATE COMMITTEE ACTION SB 89 - No previous senate committee action. SB 90 - No previous senate committee action. SJR 16 - No previous senate committee action. SB 54 - See State Affairs minutes dated 2/14/95 and 3/9/95. WITNESS REGISTER Jerry Jackson, Attorney GCI Anchorage, AK ¶265-5545 POSITION STATEMENT: Dave Hutchens, Executive Director Alaska Rural Electric Cooperative Association 703 W. Tudor, #200, Anchorage, AK 99503¶463-3636 or 561-6103 POSITION STATEMENT: Ray Latcham Anchorage, AK POSITION STATEMENT: Senator Steve Rieger State Capitol, Juneau, Alaska, 99801-1182¶465-3879 POSITION STATEMENT: prime sponsor of SB 89 C.S. Christensen, Alaska Court System 303 K. Street, Anchorage, AK 99501¶264-8228 POSITION STATEMENT: prime sponsor of SB 90 Mike McMullen, Acting Director Div. of Personnel/EEO, Dept. of Administration P.O. Box 110201, Juneau, AK 99811-0201¶465-4430 POSITION STATEMENT: Senator Robin Taylor State Capitol, Juneau, Alaska, 99801-1182¶465-3873 POSITION STATEMENT: prime sponsor of SJR 16 ACTION NARRATIVE TAPE 95-10, SIDE A Number 001 SSTA - 3/9/95 SB 54 ELECTRIC UTIL & SOLID WASTE REMOVAL CHAIRMAN SHARP calls the Senate State Affairs Committee to order at 3:35 p.m. and brings up SB 54 as the first order of business before the committee. The chairman calls the first witness. Number 018 JIMMY JACKSON, Attorney for GCI, testifying from Anchorage, states GCI is in favor of competition, particularly in local exchange telephone service. GCI was concerned that SB 54 would promote the idea that competition was not viable other than in long-distance telephone service. GCI has been working on adding intent language to SB 54 saying the bill would apply only to electric utility service, and in no way implies that any other utility has exclusive service area. GCI supports such language, and with the addition of such language, the bill would not affect GCI's interests' one way or the other. CHAIRMAN SHARP notes the committee does have a committee substitute for SB 54 which would incorporate language. Number 052 SENATOR DONLEY has questions about the bill that he wants answered before the cs is adopted. He would like to know who requested the legislation be introduced. Number 075 DAVE HUTCHENS, Alaska Rural Electric Cooperative Association (ARECA), states ARECA was the requestor of SB 54. SENATOR DONLEY asks Mr. Hutchens why ARECA wants SB 54. MR. HUTCHENS responds, "...several years ago there was legislation enacted that attempted to accomplish much the same thing that was introduced as a House Labor & Commerce Committee bill, chaired by then Representative Donley. Unfortunately when the bill got to the senate, there was an amendment put in that Section 2 uh, would, would take out, and uh, then the Section 1 of the bill, uh excuse me, in the cs it would be Section 2, that uh, it would, is the new statement here to make it clear, just to clearly state the policy, and so Section 3 would be the amendment to the legislation that you, Representative Donley at that time, had sponsored, to get it back to the original language of your bill." SENATOR DONLEY again asks Mr. Hutchens why he wants SB 54. MR. HUTCHENS says he will be glad to submit testimony at the appropriate time. CHAIRMAN SHARP states he would like to finish with the people on teleconference first, then Mr. Hutchens can testify. Number 112 SENATOR RANDY PHILLIPS asks Mr. Latcham if he has seen the latest cs for SB 54. MR. LATCHAM does not know if he has for sure. Number 125 CHAIRMAN SHARP states there is a cs dated 3/7/95 by Cramer. MR. LATCHAM responds he has that version. CHAIRMAN SHARP informs Mr. Latcham that is the version the committee is looking at; it has not been adopted yet, but it is the result of the work that has been done so far. RAY LATCHAM, President of Northern Eclipse, Incorporated, testifying from Anchorage, states Northern Eclipse, Inc. is a natural gas concern. Northern Eclipse, Inc. opposes SB 54, and has sent a letter of opposition to the committee. Mr. Latcham believes all committee members have received a copy of the letter. Mr. Latcham states he was involved in the original legislation to which Mr. Hutchens referred. Mr. Latcham thinks the electric utilities are probably the most inefficient group of utilities, and they have been very resistant to new technology. If SB 54 is passed, it will preclude Northern Eclipse, Inc. from getting its' electricity from an independent power producer. Electric companies do have the benefit of economy of scale, and if they cannot compete with an independent power producer, they have a problem. SENATOR RANDY PHILLIPS asks Mr. Latcham if he has the cs in front of him. MR. LATCHAM responds he does. SENATOR RANDY PHILLIPS asks Mr. Latcham if he still opposes SB 54 in that form as well. Number 175 MR. LATCHAM replies he certainly does. The words, "and presently or formerly served by" were part of the compromise worked out several years ago. Now the electric companies are trying to un-do the compromise. Number 180 CHAIRMAN SHARP asks Mr. Latcham what stage the Point MacKenzie development is at. MR. LATCHAM responds the land has been acquired. It is a pilot project; it is a 10,000 gallon a day liquefaction unit. Liquid natural gas (lng) will be transported by truck to markets within the state. CHAIRMAN SHARP asks Mr. Latcham if his company has a gas source. MR. LATCHAM responds it is Beluga River. Number 210 MR. HUTCHENS states ARECA is interested in SB 54 because the utility business is an inherent monopoly. The investment a utility must have in a distribution system is not conducive to duplicate facilities. However, the staff at APUC wants to encourage regulated competition. Mr. Hutchens does not know how that could be done. He wants a clean statement giving direction to the commission, and that is what SB 54 would do. Number 265 SENATOR DONLEY comments he is starting to remember the issues. MR. HUTCHENS states the idea is to prevent a company from providing power just to the most desirable customers. People could still generate their own power, but a business couldn't just provide power to the most desirable customers. SENATOR DONLEY states he understands SB 54 now, and has no objection to the cs. Number 287 SENATOR LEMAN asks if a store owner who generates his own power could sell power to eight other customers, and still be consistent with SB 54. MR. HUTCHENS responds, no, not if it is within a certificated service area to a utility. The language "ten or more" applies to all other kinds of utilities. Mr. Hutchens, in responding to Mr. Latcham, states Mr. Latcham's company will be required to contact Matanuska Electric and negotiate a rate. That rate would then have to be approved by the APUC. Mr. Hutchens is confident Matanuska Electric would be able to effectively compete with any independent power producer. He does not think SB 54 would interfere with Mr. Latcham's proposal. Number 320 SENATOR RANDY PHILLIPS makes a motion to adopt the committee substitute for SB 54. CHAIRMAN SHARP notes that the cs adds the intent language that has been worked out to satisfy the telephone companies concern that somehow SB 54 would affect the telephone companies. There was also an omission on line 10 which has been corrected, adding the word "electric." The chairman, hearing no objection, states the committee substitute for SB 54. Number 348 SENATOR RANDY PHILLIPS makes a motion to discharge SB 54 from the Senate State Affairs Committee with individual recommendations. CHAIRMAN SHARP, hearing no objection, orders SB 54 released from committee with individual recommendations. CHAIRMAN SHARP announces a brief at ease for a floor session. CHAIRMAN SHARP calls the Senate State Affairs Committee back to order at 4:20 p.m. SSTA - 3/9/95 SB 89 PERMANENT FUND BOARD MEMBERS & STAFF SENATOR SHARP brings up SB 89 as the next order of business before the Senate State Affairs Committee and calls the first witness. Number 360 SENATOR RIEGER briefly summarizes the sponsor statement. Senator Rieger summarizes the feedback from the Alaska Permanent Fund Corporation (APFC), saying the corporation is neutral on SB 89. He has received two suggestions for amendments. The first suggestion was that the language, "recognized competence and wide experience in investment portfolio management" is to demanding a requirement for all members of the board to have. So Senator Rieger asks that the bill be changed to require just two members of the board to have that kind of experience. The second suggestion was that the term, "for cause" was very broad and vague. So in the second amendment, Senator Rieger attempts to spell out what that term would entail. He models the definition of "for cause" on other definitions already in Alaska Statutes. SENATOR LEMAN wants to know under the term, "for cause" if there would be instances of personal behavior or activities for which a board member could be removed. SENATOR RIEGER states the definition is modeled after references to the Commissioner of the Department of Education, and address only performance in office and performance related to the duties in office. Where "for cause" is spelled out, performance has to do with performance in office, and not performance outside of office. SENATOR LEMAN comments there are some things that are so vile, he thinks everyone would want to see that person removed from office. SENATOR RIEGER states the more broad that definition is, the harder it will be to determine whether the removal really was done for cause. At some point, the outside action of a member may trigger dismissal under paragraph (1), which addresses inability to perform duties. SENATOR LEMAN comments, such as if the person was in jail. Number 440 CHAIRMAN SHARP also adds a governor could probably dismiss a member with the reason that there was an overwhelming lack of public confidence in a member's performance or ability to perform. SENATOR LEMAN makes a motion to adopt the amendment to SB 89. CHAIRMAN SHARP, hearing no objection, states the amendment has been adopted. Number 450 SENATOR DUNCAN asks if there has been any response requested from the administration. SENATOR RIEGER responds there has been no response requested from the administration, other than the response from APFC. SENATOR DUNCAN thinks a response should be requested from the administration. CHAIRMAN SHARP agrees with Senator Duncan. The chairman asks that a response from the administration be requested so that the next committee of referral (Senate Finance Committee) will have that. Number 470 SENATOR LEMAN makes a motion to discharge SB 89 from the Senate State Affairs Committee with individual recommendations. Number 472 CHAIRMAN SHARP, hearing no objection, orders SB 89 released from committee with individual recommendations. SSTA - 3/9/95 SB 90 PUBLIC OFFICERS COMPENSATION COMMISSION Number 475 SENATOR SHARP brings up SB 90 as the next order of business before the Senate State Affairs Committee and calls the first witness. Number 477 CHRIS CHRISTENSEN, General Counsel, Alaska Court System, prime sponsor of SB 90, reads the sponsor statement for SB 90. Mr. Christensen explains how the commission would work, as outlined in SB 90 and a letter submitted to the committee by the court system. Number 528 SENATOR LEMAN asks Mr. Christensen if the legislature could make specific changes to a report from the compensation commission, or would it have to reject a report in its' entirety. Number 531 MR. CHRISTENSEN responds the report would have to be rejected in its' entirety. The first time the commission does an order, it will have to do an order for everyone. Following the first time, the commission will be able to do separate orders. However, with each specific order the legislature receives from the commission, the legislature would have to reject an order in its' entirety. SENATOR LEMAN asks Mr. Christensen if he expects the order to consist of all offices at once, or if it would come down individually. Number 540 MR. CHRISTENSEN replies the bill is silent to that question, but he expects the first order would include an adjustment for everyone, since that hasn't been done in quite some time. SENATOR DUNCAN asks if the legislature would have to take an action of rejection or approval on an order. MR. CHRISTENSEN responds the legislature must reject an order within 60 days by enacting legislation. If they do not enact legislation to reject an order, and an appropriation is put in the operating budget, then it automatically takes effect. Number 548 SENATOR DUNCAN asks Mr. Christensen who suggested the change made in Section 7. It includes, "Salaries, per diem if authorized by order of the Public Officers Compensation Commission...." Number 552 MR. CHRISTENSEN believes the drafter added that particular language because the existing statute refers to per diem. Once the commission is created, it is the commission that will be setting per diem, not the council. SENATOR DUNCAN asks where it says that, and if that is the only place it says that. He is not sure he agrees with that. He is not sure how Section 7 works anyway, because right now, "other allowances" aren't vouchered. This language would mean "other allowances" would have to be vouchered. He guesses that would include the office allowance. He asks if AS 24.10.120 is presently in statute, and the only new language is that which is underlined. MR. CHRISTENSEN replies that is correct: the only new language in Section 7 is that which is underlined, "Salaries, per diem if authorized by order of the Public Officers Compensation Commission...." SENATOR DUNCAN asks if legislators are currently required by law to voucher their office allowances. Senator Duncan disagrees that legislators are currently required to voucher their office allowances. MR. CHRISTENSEN responds that the existing law requires legislators to voucher their office allowances, but he realizes there are a lot of laws on the books that are not followed the way they were originally intended. SENATOR DUNCAN doesn't know why the court system keeps getting involved in other branches of government's business. He is not anxious to turn per diem and everything else over to some commission. Number 566 CHAIRMAN SHARP comments he would not want to take the heat for the actions a commission might take over which he would have no control. If he has to take heat for anything, he would just as soon have it be for his own actions. It is his intention to hold SB 90 in order to better educate himself on the legislation. Number 574 SENATOR DUNCAN likes better the approach currently used, which is that the legislature must adopt recommendations, not reject recommendations. MR. CHRISTENSEN adds that the reason nine other jurisdictions have adopted this method, is because they viewed it as a good way of actually reducing the heat, since the commission has the authority to set salaries, and the legislature is not required to approve the salaries. SENATOR DUNCAN comments he doesn't like letting a commission do that. Number 586 MIKE MCMULLEN, Acting Director, Division of Personnel/EEO, Department of Administration, states the administration is sympathetic to the question of judges' salaries, and has no problem with addressing that question. The legislature attempted to address the problem by tying judges' salary changes to... TAPE 95-10, SIDE B MR. MCMULLEN: ...changes in AS 39.27.011, which hasn't changed since it was adopted. So this set that scheme back, in terms of trying to keep judges' salaries competitive, in order to attract judges. Mr. McMullen states, where the administration has problems with this bill is the same way you've just been talking about. If the legislature's elected representatives are able to have their salaries changed, they should be up front and taking a vote and taking the heat. Likewise, the governor should be in a position to see that coming through for his salary, and have his choice in terms of vetoing or letting it become law by signature or without signature. The mechanism set up here allows the order of the commission to become effective, changing legislative salaries, governor's salary, lieutenant governor's salary, his commissioners' salaries without any affirmative action by the legislative body or the governor. The solution to that would be for the recommendation to come to the legislature, but it would take affirmative action to put those into effect. That would resolve that problem. MR. MCMULLEN states, the other problem the administration has with SB 90 is the list of factors in Section 17. This section would have an unexpected impact on collective bargaining. State employees, all public employees in fact, who are class I (not able to strike) have a binding arbitration process for setting the terms and conditions of their collective bargaining agreement. The arbitrators who hear these kinds of cases abhor a vacuum. Right now there are no standards in Alaska law on what an arbitrator should be looking at when he or she is setting these salaries. This is a good list. It is modeled after another state. In the past, we have had arbitrators specifically look at the State of Oregon as an example of the things arbitrators traditionally look at in setting salaries. Adopting this standard in Alaska Law, in any place, will invite arbitrators to look at those standards. The arbitrator will be in the position of having this independent body making its' review and making a recommendation on salaries. This may or may not be consistent with the position of the current administration, with regard to the terms in the bargaining agreement. In effect, the commission would be setting the pattern for arbitrator decisions. We need to recognize that this is going to happen, and fully debate the impact SB 90 will have on collective bargaining. If it is not intended that SB 90 have an impact on collective bargaining, then it should be stated that SB 90 is not intended to set a pattern in collective bargaining, or the arbitrators are not to use it, or some other factor. We need to either recognize that SB 90 will become the standard, or we need to amend the bill to prevent it from becoming the standard. Mr. McMullen mentions that the administration has submitted a zero fiscal note for SB 90. Number 550 CHAIRMAN SHARP states SB 90 will be held for further information. SSTA - 3/9/95 SJR 16 LIMIT LEGISLATIVE SESSION TO 90 DAYS SENATOR SHARP brings up SJR 16 as the next order of business before the Senate State Affairs Committee and calls the first witness. Number 540 SENATOR TAYLOR, prime sponsor of SJR 16, states he personally supports SB 90, the bill heard in the Senate State Affairs Committee immediately prior to SJR 16. SENATOR DUNCAN asks Senator Taylor if he really supports SB 90. SENATOR TAYLOR responds he does, and comments the legislature hasn't had the guts to vote itself a salary since he got here. SENATOR TAYLOR states SJR 16 is very simple; it would reduce the length of legislative session to 90 days. Senator Taylor introduces an amendment to SJR 16 which would require the legislature to recess in order to hold committee meetings at different locations throughout the state. SENATOR DUNCAN asks what per diem rate legislators would get during the recess. SENATOR TAYLOR responds the legislature would get to set the per diem rate; SB 90 (the Public Officers Compensation Commission) has not been adopted yet. Number 524 SENATOR LEMAN comments he likes SJR 16 as introduced, and though he does not dislike the idea of recessing to hold interim meetings, he thinks the amendment to SJR 16 would have the effect of not shortening session at all. Senator Leman would support the amendment if session was still constrained to 90 days total. Number 509 CHAIRMAN SHARP adds he has a problem with the amendment, in that he wouldn't care to continue renting an apartment in Juneau and not receive per diem for it during a break in session. Number 500 SENATOR TAYLOR states the subject of SJR 16 has been around before, but has never gotten enough of a consensus in the legislature to pass. He states that after having talked with several legislators about their concerns, he thought the amendment might soften the approach in order to get us closer. He is not fixed on any particular dates or times. The amendment was just an idea that has been floated, and he thought the committee should have the benefit of it. Number 495 SENATOR DUNCAN comments he likes the approach of the amendment. It is important to get the legislature out to other communities and to allow the committees to take action while holding meetings in other communities. So he likes the amendment, but he doesn't like the original bill. Senator Duncan is concerned that shortening session would hand more power to the bureaucracy; it would weaken the representative branch of government. Number 474 SENATOR LEMAN disagrees with Senator Duncan's conclusion that shortening the length of legislative sessions would erode the power of the legislature, because legislators remain legislators, even when not in session. He thinks it will cause the legislature to get its' work done in a shorter time frame. It will be a little more rigorous; there will probably be fewer weekends and fewer three-day weekends. Senator Leman thinks if short sessions can work in Wyoming, they can also work in Alaska, because the two states have a lot in common. SENATOR DUNCAN thinks there will be an erosion of power with shorter sessions. If he was a lobbyist, he would love a shorter session, because it puts it in the hands of people whose main job is to make sure something doesn't happen. Senator Duncan does not think Alaska is comparable to Wyoming. However, he appreciates the approach of the amendment and wants to work with Senator Taylor on improving access to the legislature. Number 430 CHAIRMAN SHARP states SJR 16 will be rescheduled. CHAIRMAN SHARP adjourns the Senate State Affairs Committee meeting at 5:00 p.m.