Legislature(2003 - 2004)
05/06/2003 03:45 PM Senate STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS COMMITTEE
May 6, 2003
3:45 pm
MEMBERS PRESENT
Senator Gary Stevens, Chair
Senator John Cowdery, Vice Chair
Senator Fred Dyson
Senator Gretchen Guess
MEMBERS ABSENT
Senator Lyman Hoffman
COMMITTEE CALENDAR
HOUSE BILL NO. 14 am
"An Act relating to an absence from the state while providing
care for a terminally ill family member for purposes of
determining eligibility for a permanent fund dividend; and
providing for an effective date."
MOVED SCS HB 14(STA) OUT OF COMMITTEE
SENATE BILL NO. 203
"An Act relating to certain administrative hearings; and
establishing the office of administrative hearings and relating
to that office."
MOVED CSSB 203(STA) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 81(STA)
"An Act relating to motor vehicle emissions and to inspection
decals and fines relating to motor vehicle emissions; and
providing for an effective date."
MOVED CSHB 81(STA) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 18
Proposing amendments to the Constitution of the State of Alaska
relating to limiting appropriations from and inflation-proofing
the Alaska permanent fund by establishing a percent of market
value spending limit.
MOVED CSSJR 18(STA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
HB 14 - See State Affairs minutes dated 4/29/03 and 5/1/03
SB 203 - No previous action to record.
HB 81 - See Transportation minutes dated 4/28/03
SJR 18 - See State Affairs minutes dated 5/1/03
WITNESS REGISTER
Jim Pound
Staff to Representative Hugh Fate
Alaska State Capitol, Room 128
Juneau, AK 99801-1182
POSITION STATEMENT: Testified on HB 14
Dave Stancliff
Alaska State Capitol, Room 111
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 203
Benjamin Brown
Alaska State Chamber of Commerce
nd
217 2 Street
Juneau, AK 99801
POSITION STATEMENT: Testified on SB 203
Rick Urion
Director, Division of Occupational Licensing
Department of Community & Economic Development
PO Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Testified on SB 203
Andrew Hemenway
Hearing Officer: Procurement & Longevity Bonus
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Testified on SB 203
Kevin Jardell
Assistant Commissioner
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Testified on SB 203
Representative Kevin Meyer
Alaska State Capitol, Room 513
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor HB 81
Charles Hosack
Deputy Director, Division of Motor Vehicles
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Testified on HB 81
Scott Leist
No address provided
POSITION STATEMENT: Testified on HB 81
Ron King
Program Manager, Air Non-Point & Mobile Sources
Department of Environmental Conservation
410 Willoughby
Juneau, AK 99801-1795
POSITION STATEMENT: Testified on HB 81
James Armstrong
No address provided
POSITION STATEMENT: Testified on HB 81
Robert Storer
Executive Director, Alaska Permanent Fund Corporation
Department of Revenue
PO Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Testified on SJR 18
Bob Bartholomew
Chief Operating Officer, Alaska Permanent Fund Corporation
Department of Revenue
PO Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Testified on SJR 18
ACTION NARRATIVE
TAPE 03-26, SIDE A
CHAIRMAN GARY STEVENS called the Senate State Affairs Committee
meeting to order at 3:45 pm. Present were Senators John Cowdery,
Gretchen Guess, Fred Dyson and Chair Gary Stevens. The first
order of business to come before the committee was HB 14.
HB 14-PERMANENT FUND ALLOWABLE ABSENCES
CHAIR GARY STEVENS explained that the committee substitute (CS)
removes all reference to the term canon law and lists specific
family members that could accompany a terminally ill family
member out of state and maintain eligibility for the Alaska
Permanent Fund Dividend.
SENATOR FRED DYSON made a motion to adopt \D version CS of HB 14
and there was no objection.
JIM POUND, staff to Representative Fate, reported the sponsor had
no objection to the CS as proposed.
SENATOR JOHN COWDERY made a motion to move SCS HB 14(STA) from
committee with individual recommendations and asked for unanimous
consent. There being no objection, it was so ordered.
SB 203-OFFICE OF ADMINISTRATIVE HEARINGS
DAVE STANCLIFF, staff to Senator Gene Therriault, stated the
current administration would like to separate the individuals or
agencies that adjudicate regulations and those that promulgate
regulations. In Alaska there are a number or types of hearing
officers (adjudicators) and hearing examiners and SB 203 deals
with adjudicators that make the decisions when someone contests
administrative law.
Other states have found that by providing protection, separation
and autonomy for their adjudicators, the work quality and
decisional processes improve significantly. The sponsor has
worked extensively with the administration to develop a system of
centralized hearing officers that is cost effective and minimally
disruptive for existing employees. SB 203 establishes that system
within the Department of Administration.
RCA, workers compensation and tariff functions were excluded due
to the need for high expertise or long-term institutional
knowledge. Included was the option for commissioners to assign
final decision-making authorities to an adjudicator. However,
the new rules that will likely be based on the judicial code of
conduct apply to all hearing officers in the state, even those
that don't fall within the central panel.
Adjudicator decisions would be final unless the commissioner
determines that some other action should be taken. In such
instances, the commissioner would be required to take action
within 30 days and substantiate the facts in the public record.
The Alaska Association of Administrative Law Judges and Hearing
Officers examined the bill and had seven recommendations. He
noted the recommendations were listed in a blank committee
substitute (CS).
CHAIR GARY STEVENS asked for a motion to adopt the CS as the
working document.
SENATOR GRETCHEN GUESS made a motion to adopt CSSB 203 \Q version
and there was no objection.
CHAIR GARY STEVENS asked Mr. Stancliff if he had additional
comments.
MR. STANCLIFF emphasized that part of the reason for selecting
the proposed model was because it is cost effective. The bill
includes a liberal transition phrase to allow the administration
to proceed deliberately and not incur heavy costs. That would be
accomplished by having existing agency hearing officers and their
support staff transfer to the central location. He opined the
increased efficiencies would overcome associated startup costs.
BENJAMIN BROWN spoke on behalf of the Alaska State Chamber of
Commerce in support of SB 203 to assert that the bill would be an
investment in long-term cost savings and efficiencies. More
importantly, it would provide transparency and consistency to the
Alaska citizens.
The state chamber works with the administrative law process as
individuals and businesses on a daily basis. When dissatisfaction
with an agency decision occurs, it is problematic that the appeal
must be made to that same agency. SB 203 creates a transparent,
bright-line office of centralized hearings, which would make it
much easer for Alaskans to know that impartiality is at play and
the hearing officer has no inside agenda.
When legislative research prepared an assessment of all the
hearing functions done by state agencies, they found that the
disparity in the turnaround time ranges from several weeks to
over a year. SB 203 would standardize turnaround times and record
keeping, which would work to everyone's benefit.
4:00 pm
CHAIR GARY STEVENS asked whether the new system would protect the
hearing officer from agency influence by removing the hearing
officer from the agency.
MR. BROWN replied that it would remove the appearance of
impropriety. Although his experience is that there isn't a lot of
undue influence exercised, there is both the appearance and the
potential.
SENATOR JOHN COWDERY asked whether hearing decisions have legal
standing.
MR. BROWN explained that an administrative hearing decision is
the final administrative law or agency action before it is
appealed to a court.
SENATOR COWDERY asked if a hearing officer petitions the court
for enforcement of decisions.
MR. BROWN said a court order could be obtained if an
administrative hearing decision were ignored.
RICK URION, Director of the Division of Occupational Licensing,
testified in support of SB 203. His division has just one hearing
officer and a caseload that is far too large for one individual.
Because of this, one of the largest problems the division faces
is the time it takes to reach final adjudication. In some
instances, it has taken over a year for the entire process.
In the interest of speedy adjudication of issues in his
department, he urged passage of SB 203.
CHAIR GARY STEVENS asked whether the number of cases in his
department was consistent.
MR. URION replied the caseload is consistently steady. He added
they have had no difficulty with perceived or real impropriety;
they simply don't have enough people to handle the load.
ANDREW HEMENWAY, hearing officer with the Department of
Administration, stated he worked with Mr. Stancliff and Mr.
Jardell from the Commissioner's office to craft the legislation.
He explained that they removed selected functions such as RCA,
the worker compensation board and fisheries commission from
consideration because they have existing hearing officer panels
and therefore more flexibility in handling caseloads. Beyond
that, they looked at the range of decisions that hearing officers
make to determine whether or not the decisions were policy
oriented or fact oriented. The latter seemed to be more
appropriate to include in the central panel system and the policy
oriented decisions were initially left out.
In terms of the financial impact and efficiency of the hearing
function, he said that his perception is that as his caseload
goes up efficiency goes down. Consolidating the hearings would
spread the caseload so the various agencies could get a
consistent level of service and the hearing officers could have a
consistent caseload.
He referenced Senator Cowdery's previous question and made it
clear that under this legislation the hearing officer would issue
the proposed decision, it would go to the agency for adoption and
enforcement would be up to the agency. The hearing officers have
no role in the investigation or enforcement.
CHAIR GARY STEVENS asked what the qualifications were for hearing
officers and whether they were all attorneys.
MR. HEMENWAY replied that hearing officers must be attorneys for
hearings conducted under the Administrative Procedure Act, which
accounts for less that 50 percent of all administrative hearings.
There is no statutory requirement that the hearing officers be
attorneys in any other hearings.
He noted that all hearing officers that would transfer under the
transitional provisions of the legislation are attorneys.
CHAIR GARY STEVENS asked how professional standards would be
improved.
MR. HEMENWAY said the bill would formalize the current practice
that hearing officers are attorneys with two years practice. With
hearing officers in a central panel, an in-house training process
could be created that might not be financially feasible in a
single agency.
KEVIN JARDELL, Assistant Commissioner of the Department of
Administration, reported they have had success with the
independent hearing officer for tax appeals that works largely
with oil and gas tax issues. Industry believes they are treated
more fairly at hearings even though the win loss record has not
changed. He said they look forward to the same success with the
proposed centralized panel.
He acknowledged that the financial picture is incomplete, but
they project a net increase of about $136,000 in the phase one
personnel shift. Once they receive the financial data from the
minor boards and commissions that can't justify a single hearing
officer and have been contracting private attorneys, they feel
confidant they will show a great savings and the public will
realize increased response efficiency.
CHAIR GARY STEVENS asked if the plan is to eventually expand to
agencies that aren't currently included.
MR. JARDELL replied they want the system to be expansive enough
to ensure that it has a chance to work, but small enough to be
manageable. They hope to continue to bring in agencies to
increase efficiencies and not bring in agencies that are working
well on their own.
SENATOR COWDERY asked how they develop time limits for the
hearings.
MR. JARDELL said the timeline was 180 days at one time, but the
attorney general suggested making it just 90 days. Some hearings
are certainly more complicated in nature and take more time to
develop the record. The concept in the bill is to address a
majority of the cases, give the public a quick turnaround and if
an agency needs a greater amount of time then do it through
regulation and justify the need.
SENATOR GRETCHEN GUESS asked for assurance that the bill wouldn't
change the way regulations are created.
MR. STANCLIFF replied SB 203 does not address the creation of
regulation.
MR. HEMENWAY clarified that the legislation would provide that
the chief hearing officer would promulgate the procedural
regulations that govern the hearing.
MR. STANCLIFF noted that evidence from other states indicates
that when the adjudication bar is high, more care is taken in the
promulgation and enforcement of regulations.
SENATOR GUESS noted the commissioners of education, HESS and DNR
weren't listed in the transitional language even though the
departments were included. She asked if this was because those
departments don't have a hearing officer.
MR. STANCLIFF explained that Tamara Cook [Director, Legislative
Legal Services] developed the list and although changes might
still be made, the sponsor didn't want to "create any different
flow, administratively, in these conforming statutes."
SENATOR GUESS asked for a list of those not included. She then
commented she found it interesting that the Department of
Administration was willing to assume the function and asked why
the Department of Law wasn't selected.
MR. STANCLIFF said they deferred to the national organization
that created the model.
MR. HEMENWAY pointed out the Department of Administration already
has some legal functions and certain labor relations. The
Department of Law is primarily a prosecutorial function of
government and placing adjudication there might create the
appearance of conflict.
MR. STANCLIFF stated they were trying to keep the function in a
neutral place.
SENATOR GUESS asked to whom the chief would report.
SIDE B
4:30 pm
MR. STANCLIFF replied the Legislature would review the budget of
the new entity and the attorney general would review any
complaints made against the chief administrative hearing officer.
SENATOR GUESS asked if there was a reason that the chief hearing
officer wouldn't be approved by the Legislature.
MR. STANCLIFF replied that although they opted for legislative
approval initially, Tamara Cook advised it is a gray area and the
Attorney General's Office determined it might stand a weak
constitutional test. To avoid controversy, they removed the
confirmation process.
SENATOR GUESS noted that hearing officers are partially exempt
and asked whether that is a change.
MR. STANCLIFF said, no they're classified. To make the panel work
they need to be partially exempt or exempt employees, but they
need some protection. As a model, they chose the Division of
Election employee model, which is statute AS 39.
MR. HEMENWAY clarified that some of the hearing officers are now
classified while others are partially exempt. It varies and an
ancillary benefit to this is standardization in job function.
SENATOR GUESS asked what the difference is between exempt and
partially exempt.
MR. STANCLIFF replied he didn't have an answer.
MR. HEMENWAY said he was told it is simply pay scale.
SENATOR GUESS expressed the following concerns with regard to
future administrations:
· The governor would have control over the chief, not the
Legislature
· Partially exempt employees serve at the pleasure of the
governor
MR. STANCLIFF replied they welcome creative suggestions and as
the bill moves through the committee process, they are open to
exploring different ideas.
MR. HEMENWAY said the chief hearing officer is appointed for a
fixed term, which gives some insulation from the political
process while providing some accountability. Although hearing
officers are exempt, they are entitled to the same protections
any other state employee would have. If they are to be
discharged, there must be a hearing and it must be for cause. The
main impact of the exempt status is at hiring.
SENATOR GUESS referred to page 3, line 13 of the CS and said
that, as a legislator, she would like to know whether the process
is working.
MR. STANCLIFF agreed with the point and said it is their intent
that legislators know how well the process is working and whether
or not the public is satisfied.
SENATOR GUESS asked how the chief would prioritize the workload.
MR. STANCLIFF replied the chief would determine areas of
expertise, the workloads and cross training needs. One of the
major efforts of the job would be to determine how to efficiently
work through the caseload. He admitted the key to success is to
hire the right person for the job the first time around.
SENATOR GUESS pointed out a discrepancy between page 5, line 25
and page 8, line 2 and said it was unclear who would have choice
in the matter. She asked whether an agency would have the choice
of having their complaint go to the central office and would the
central office have the choice of taking that complaint.
MR. STANCLIFF said they envisioned it that way.
MR. HEMENWAY explained the hearings that are listed on pages 4
and 5 would be mandatory. Others are at the discretion of the
receiving agency.
SENATOR GUESS expressed concern about setting up a separate
agency to conduct hearings and make rulings because there are
many ways the agency could say they didn't agree with the
decision.
MR. STANCLIFF said that is addressed on page 8. They decided on
the decisional process whereby the decision of the hearing
officer stands if action isn't taken within 30 days. Page 8, line
24 might provide comfort in that it eliminates the temptation to
make an arbitrary reversal of a hearing officers' decision.
MR. HEMENWAY said that from the administration's policy point of
view, it's very important that the final decision authority be
retained with the final decision maker. The key is that the final
decision maker is the person who is accountable to the executive
branch and ultimately to the people.
SENATOR GUESS asked if that means she doesn't have to worry about
page 8, line 21 that says the agency may return the case to the
hearing officer, take additional evidence or make additional
findings.
MR. STANCLIFF replied that this is largely the same language that
is in existing law under the Administrative Procedures Act.
SENATOR GUESS asked if there is an appeal by either party before
going to the court system.
MR. STANCLIFF said that under most statutes there is the
opportunity to request reconsideration.
SENATOR GUESS asked for the difference between a hearing officer
and a hearing examiner and why there was a decision to group the
officers and not the examiners.
MR. STANCLIFF explained that a hearing examiner resolves disputes
for an agency while a hearing officer is an adjudicator between
two parties that are in direct dispute.
MR. HEMENWAY opined the difference is semantic. When he looked at
the classification system he couldn't tell the difference and
administrative law judge is another name that is sometimes used.
SENATOR GUESS noted that agency is a term used throughout the
bill while commissioner is the term used throughout the
testimony. She asked whether they were synonymous.
MR. STANCLIFF replied the buck with the agency ultimately stops
at the commissioner's desk.
SENATOR GUESS pointed out there is a difference between what
happens within an agency and what happens at a commissioner
level.
MR. HEMENWAY said the hearing function is an agency function. The
final decision maker is usually, but not always, the
commissioner. The terminology that is used is to avoid
identifying any individual because it could be any person within
the agency who currently has the final decision making authority.
CHAIR GARY STEVENS announced he wanted to move the bill to the
Judiciary Committee for consideration.
SENATOR COWDERY made a motion to move CSSB 203(STA) and attached
fiscal notes from committee with individual recommendations.
There being no objection, it was so ordered.
HB 81-MOTOR VEHICLE EMISSIONS INSPECTION
REPRESENTATIVE KEVIN MEYER, bill sponsor, explained the bill
streamlines existing law by improving enforcement, providing
consistency between overseeing departments and providing relief
from the extraneous testing requirements.
The purpose for increasing the fine from $200 to as much as $500
is to improve compliance. The benefit is that the air stays clean
and Alaska continues to qualify for federal street and highway
money.
The bill removes the exemption from alternative fuel vehicles and
requires that the registration period not extend beyond the
expiration period on the emission certificate. When the title of
a pre-1987 vehicle is transferred, the emissions test requirement
is changed from not more than a year old to not more than two
years old, which removes extraneous testing.
He said HB 81 is a consumer protection bill in that Anchorage and
Fairbanks residents can be assured that the car they're buying
isn't a lemon. Inspection decals must be displayed on windshields
and the inspection record must be on file at DMV. If a car isn't
compliant, the dealer must be able to explain why it is not. The
bill expands enforcement of the emission standards to include
DMV, DEC and the municipalities of Anchorage and Fairbanks.
SENATOR JOHN COWDERY asked what happens if the inspection decal
is lost.
RON KING, manager of the Air Non-Point & Mobile Sources Program,
said replacement decals would be available through the local
inspection emissions programs in both municipalities. The systems
are computer-linked so they could verify that the vehicle was in
compliance.
CHUCK HOSACK, Deputy Director of the Division of Motor Vehicles,
testified via teleconference in support of HB 81 because it would
reduce the public's confusion with regard to inspections.
SENATOR COWDERY asked what the process would be if you lived in
Anchorage, but registered your car in Juneau.
MR. HOSACK explained the residence address of the vehicle owner
is used as the basis for inspection requirements. There is a
waiver for vehicles that are used outside the emission area, but
once the vehicle is returned to the emission inspection area it
would require inspection.
SCOTT LEIST from Fairbanks testified via teleconference to ask
whether all vehicles in the inspection area would need emission
testing and would the tests be required annually.
RON KING, program manager with the Department of Environmental
Conservation, replied the inspection programs would remain the
same. In Fairbanks, cars that were built after 1974 must be
inspected and in Anchorage the requirement is that cars built
after 1967 must be inspected. By statute, the emission test is
and would remain a biannual program.
MR. LEIST expressed support for the bill.
JAMES ARMSTRONG from Anchorage expressed support for the
legislation.
SENATOR GRETCHEN GUESS made a motion to move HB 81 and attached
zero fiscal note from committee with individual recommendations.
There being no objection, it was so ordered.
SJR 18-CONST. AM: PF APPROPS/INFLATION-PROOFING
CHAIR GARY STEVENS asked for a motion to adopt the committee
substitute (CS) for SJR 18.
SENATOR GRETCHEN GUESS made a motion to adopt CSSJR 18 as the
working document. There being no objection, it was so ordered.
ROBERT STORER, Executive Director of the Alaska Permanent Fund
Corporation, stated that the Permanent Fund Board of Trustees has
concluded there is a need for a constitutional amendment to
adjust inflation proofing on the Alaska Permanent Fund. Limiting
the amount of funds that could be appropriated in any given year
would do that. They propose the methodology be changed to a
percentage of market value (POMV), which is consistent in
approach with about 70 percent of the endowments and foundations
in the country. They suggest limiting the appropriation to no
more than five percent of the five year moving average of the
total fund.
He noted that copies of a power point presentation were in the
members' bill packets and pointed out five key differences.
· Percentage of Market Value offers constitutional
inflation proofing and protection of the entire fund.
Status quo statutorily inflation proofs just the fund
principal.
· The proposed is a spending limit because more than five
percent of the five year moving average could be
appropriated. Status quo is that the entire earnings
reserve may be appropriated.
· POMV improves the stability of the amount that may be
appropriated in any given year. Current methodology of
using realized income is considerably more volatile than
using a POMV.
· Five percent POMV is compatible with the diversified
portfolio the fund has in these volatile times. Current
methodology was established 26 or 27 years ago when there
wasn't a lot of volatility and people thought about fixed
income securities, cash flow and clipping coupons for
interest payments.
· Stability means predictability and is very important from
year to year for decision makers. Currently the dividend
is based on a five year realized income and is a moving
average.
SENATOR JOHN COWDERY asked why data from the previous year
wouldn't be used.
BOB BARTHOLOMEW, Chief Operating Officer of the Alaska Permanent
Fund Corporation, explained that in going back one extra year
legislators would know when the session begins in January exactly
how much would be available for the budget. Forecasts and
predictions wouldn't be necessary.
MR. STORER added the increased predictability works to everyone's
advantage by allowing for more informed decisions.
SENATOR COWDERY asked if they thought that dividends were an
appropriate use of the fund.
MR. STORER replied the Board of Trustees has always felt that how
the money is appropriated is the providence of the Legislature
and they have avoided any discussions or opinions on the subject.
MR. BARTHOLOMEW said he would like to go through the changes
between the original legislation and the CS.
TAPE 03-27, SIDE A
5:15 pm
· The title speaks to the five percent and that the goal is to
protect the fund and its purchasing power from inflation.
The changes are long term not on a year-to-year basis.
· Page 1, line 10 adds subsection b to the constitution.
· Line 11 the word "principal" is removed, which is a
significant policy discussion that the board recommends to
ensure an annual distribution.
· Lines 13 and 14 deletes that all income from the permanent
fund shall be deposited in the general fund unless otherwise
provided. All income will remain in the permanent fund until
appropriated subject to the five percent.
· Page 2 subparagraph b adds a sentence that states how the
permanent fund will be protected going forward.
· Line 7, section 3 is transitional language and clearly a
statement of law that the earnings of the permanent fund
that exist on the date this would pass the vote of the
people are part of the permanent fund.
· Section 4 says that at the next general election in November
2004, the voters of the State of Alaska would decide whether
changes would be made to the way distributions from the
permanent fund are determined.
CHAIR GARY STEVENS asked what happens to the Constitutional
Budget Reserve (CBR). He understood that the Earnings Reserve
Account (ERA) would disappear into the fund itself.
MR. BARTHOLOMEW explained the CBR is a sub-fund of the general
fund and wouldn't be affected by the amendment. Currently, the
permanent fund consists of principal and earnings reserve and
they are all invested the same and the CS would merge the two and
it would be referred to as the fund.
SENATOR FRED DYSON said he hopes to never again see the day that
it's a presumptuous statement to say that limiting the
appropriation to five percent is inflation proofing, but he would
like to hear a comment on that.
MR. STORER said the board spent a great deal of time studying the
issue and has determined that limiting the draw to five percent
would be the high end to achieve their goal. There are times,
like now, that drawing five percent you wouldn't be inflation
proofing, but then there are other times that you would earn well
in excess of that. The key is that the five percent limit creates
discipline in great years. Seventy six years of data indicates
that the five percent is achievable over time.
SENATOR DYSON asked how the board plans to educate the voting
public.
MR. STORER acknowledged their plans aren't fully developed but
the board is sensitive to the issue in statute that prohibits
using corporate or fund assets for political purposes. However,
they believe it is within their providence to educate the public
when they are publicly speaking about the fund performance, which
they do on a regular basis.
SENATOR DYSON asked whether it would be legal to do mass mailings
to voters or to place ads on TV to inform voters of the option
before them when they vote on the proposed constitutional
amendment.
MR. STORER said it is his personal opinion that they could not do
mass mailings or anything that would create that type of expense
to the fund.
SENATOR DYSON expressed concern that some in the capitol building
are pushing for a constitutional amendment to place the dividend
in the constitution. He hopes that those people wouldn't
characterize SJR 18 as being counter to the protection of the
dividend.
MR. STORER replied they believe there is some reasonable
probability that placing the dividend in the constitution would
jeopardize the tax-exempt status of the fund. While the board has
always held that how the money is appropriated is the providence
of the Legislature, they would probably stand mute were the
dividend to be placed in the constitution.
MR. BARTHOLOMEW said two points are critically important when you
educate the public:
· If there isn't leadership coming together from the
House, the Senate and the Executive Office, it will
be very difficult to get a vote from the public.
· Even though the corporation and the board are silent
on how to use the funds, it is important that the
Legislature go on record with regard to how they
want to use money.
SENATOR JOHN COWDERY asked what size dividend might be assured
today were the plan in place six years previous.
MR. STORER said he couldn't give a specific number, but he was
comfortable saying it would encompass both the bull market and
the bear market and would smooth out the highs and lows.
SENATOR COWDERY asked if the dividend might not be between $800
and $1,000.
MR. STORER said the dividend would probably be between $1,000 and
$1,100 if the fiscal year ended that evening because the earnings
reserve is currently about $1.5 million.
Considering the last five year average of the dividend, using
half of the five percent for dividend purposes would give a
$1,000 to $1,100 dividend.
SENATOR COWDERY remarked, "That would make a lot of people happy
and that was free advertising."
SENATOR DYSON made a motion to move CSSJR 18(STA) and attached
fiscal note from committee with individual recommendations.
There being no further business to come before the committee,
Chair Gary Stevens adjourned the meeting at 5:40 pm.
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