Legislature(1995 - 1996)

03/09/1995 03:35 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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              
  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                                                       
 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           
 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           
 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                 
 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                      
 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                       
 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                    
 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                     
 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                   
 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           
 SENATOR DUNCAN comments he doesn't like letting a commission do               
 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.                                                                  

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