04/09/2009 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB37 | |
| HB170 | |
| HB139 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 37 | TELECONFERENCED | |
| + | HB 170 | TELECONFERENCED | |
| + | HB 139 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
April 9, 2009
9:01 a.m.
MEMBERS PRESENT
Senator Linda Menard, Chair
Senator Kevin Meyer, Vice Chair
Senator Hollis French
Senator Albert Kookesh
Senator Joe Paskvan
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 37
"An Act relating to certain investments of the Alaska permanent
fund, the state's retirement systems, the State of Alaska
Supplemental Annuity Plan, and the deferred compensation program
for state employees in companies that do business in Sudan, and
restricting those investments."
MOVED CSSB 37 (STA) OUT OF COMMITTEE
HOUSE BILL NO. 170
"An Act repealing the authority for day fines."
MOVED HB 170 OUT OF COMMITTEE
HOUSE BILL NO. 139
"An Act providing for an exception to allow drivers of public
utility motor vehicles to operate those vehicles with certain
screen devices operating and visible to the drivers."
MOVED HB 139 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 37
SHORT TITLE: DIVEST INVESTMENTS IN SUDAN
SPONSOR(S): SENATOR(S) FRENCH
01/21/09 (S) PREFILE RELEASED 1/9/09
01/21/09 (S) READ THE FIRST TIME - REFERRALS
01/21/09 (S) WTI, STA, FIN
04/03/09 (S) WTI RPT 4DP
04/03/09 (S) DP: MCGUIRE, WIELECHOWSKI, STEVENS,
FRENCH
BILL: HB 170
SHORT TITLE: REPEAL AUTHORITY FOR DAY FINES
SPONSOR(S): REPRESENTATIVE(S) CHENAULT
03/09/09 (H) READ THE FIRST TIME - REFERRALS
03/09/09 (H) JUD
03/27/09 (H) JUD RPT 2DP 3NR
03/27/09 (H) DP: LYNN, RAMRAS
03/27/09 (H) NR: GRUENBERG, COGHILL, DAHLSTROM
04/02/09 (H) TRANSMITTED TO (S)
04/02/09 (H) VERSION: HB 170
04/03/09 (S) READ THE FIRST TIME - REFERRALS
04/03/09 (S) STA, JUD
BILL: HB 139
SHORT TITLE: ALLOW SCREEN DEVICES IN UTILITY VEHICLES
SPONSOR(S): REPRESENTATIVE(S) GATTO
02/18/09 (H) READ THE FIRST TIME - REFERRALS
02/18/09 (H) STA, JUD
03/10/09 (H) STA AT 8:00 AM CAPITOL 106
03/10/09 (H) Moved Out of Committee
03/10/09 (H) MINUTE(STA)
03/12/09 (H) STA RPT 4DP 1NR
03/12/09 (H) DP: SEATON, GRUENBERG, PETERSEN, LYNN
03/12/09 (H) NR: JOHNSON
03/30/09 (H) JUD RPT 3DP 1NR
03/30/09 (H) DP: LYNN, GRUENBERG, RAMRAS
03/30/09 (H) NR: DAHLSTROM
04/03/09 (H) TRANSMITTED TO (S)
04/03/09 (H) VERSION: HB 139
04/06/09 (S) READ THE FIRST TIME - REFERRALS
04/06/09 (S) STA
WITNESS REGISTER
PAT GALVIN, Commissioner
Department of Revenue (DOR)
Juneau AK
POSITION STATEMENT: Spoke in support of SB 37.
MICHAEL BURNS, Executive Director
Alaska Permanent Fund Corporation
Juneau AK
POSITION STATEMENT: Spoke in support of SB 37.
AMY KEARNS, Member
Save Darfur Anchorage
Wasilla AK
POSITION STATEMENT: Spoke in support of SB 37.
DEBORAH BOCK, Member
Save Darfur Anchorage
Anchorage AK
POSITION STATEMENT: Spoke in support of SB 37.
BILL LEIGHTY, Business Owner
Juneau AK
POSITION STATEMENT: Spoke in support of SB 37.
STEVE WOLF
Retired Teacher
Juneau AK
POSITION STATEMENT: Spoke in support of SB 37.
REPRESENTATIVE MIKE CHENAULT
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Presented HB 170 as sponsor.
TOM WRIGHT, Staff
to Representative Chenault
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Provided information on HB 170 on behalf of
the sponsor.
DOUG WOOLIVER, Administrative Attorney
Alaska Court System
Juneau AK
POSITION STATEMENT: Spoke in support of HB 170.
ALLISON LAFFEN, Staff
to Representative Gruenberg
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Presented HB 139 on behalf of the sponsor.
CURTIS THAYER
ENSTAR Natural Gas
Anchorage AK
POSITION STATEMENT: Spoke in support of HB 139.
ACTION NARRATIVE
9:01:19 AM
CHAIR LINDA MENARD called the Senate State Affairs Standing
Committee meeting to order at 9:01 a.m. Senators French,
Paskvan, Meyer, and Menard were present at the call to order.
Senator Kookesh arrived later.
SB 37-DIVEST INVESTMENTS IN SUDAN
9:02:07 AM
CHAIR MENARD announced the consideration of SB 37.
SENATOR MEYER moved to adopt the proposed committee substitute
(CS) to SB 37, labeled 26-LS0240\R, as a working document. There
being no objection, Version R was before the committee.
9:03:10 AM
SENATOR FRENCH said the idea of divesting from Sudan has been
around since 1997 when the U.S. government imposed sanctions
against Sudan. Many states and public entities have decided they
can no longer, in good conscience, invest in companies who work
in Sudan. Investing money in these companies helps the Sudanese
government wage war against its own people. SB 37 gets Alaska's
permanent fund out of companies that do business in Sudan that
help enable and finance that government in systematically
killing thousands and thousands of their own people. There was
resistance to this bill last year, mainly based on the idea that
the investment world should be in the investment world, and
social efforts to change the world should be separate. He feels
that there has been progress in convincing the administration
that "you can do both." Genocide is different from tobacco,
alcohol, and other social ills. There is concern for a slippery
slope of divesting from "a nation you don't like, like Iraq or
North Korea." But a bright line can be drawn around the topic of
genocide. This CS adopts the administration's preferred
mechanism for achieving this goal. He appreciates the efforts by
the administration.
9:05:53 AM
SENATOR MEYER said he is concerned that the state is going down
a slippery slope. How is this different from being concerned
about pharmaceutical companies that sell the morning-after pill
or tobacco companies that kill thousands of people every year?
"You almost get into a value judgment."
SENATOR FRENCH said the systematic killing of a group of human
beings by a government is clearly distinct from issues that we
may disagree on, such as selling alcohol to minors or selling
tainted pharmaceutical products in third world countries. The
United Nations, former President Bush, and the U.S. Congress
have declared this as genocide, and so "we're in a different
moral realm here." The world is nothing but slippery slopes, and
every day people make judgments and draw lines. This is unique
and is the right thing to do.
9:08:12 AM
SENATOR MEYER said he appreciates that explanation. The bill
becomes effective in 90 days, and the board has said it will
stop investing in these companies. Alaska may be losing
thousands of dollars by giving the board a timeline. A gradual
process, which seems to be happening anyway, might work better.
PAT GALVIN, Commissioner, Department of Revenue (DOR), said the
administration is in favor of SB 37. It opposes the activities
in Sudan, and it is important for the state to join the chorus
of those who recognize the moral imperative to stop the
genocide. One thing the state can do is stop investing in the
companies that support those activities. Last year, in the same
committee, he spoke on Sudan for the first time for the
governor. "We were very clear that the governor and the
administration supports the concept of divestiture." There were
some issues with that bill, and he had asked for an opportunity
to work on them. During the interim the administration crafted
this CS that divests in a way that avoids the unintended costs
of a broad brush approach. He said the administration looked for
the things the state could do within its existing authority. The
bill also applies to investments under the Department of Revenue
and the Alaska Retirement Management (ARM) board. He found that
this could not happen with current statute. Even if those three
entities wanted to implement a divestiture policy similar to SB
37, "we do not currently have the authority to do so." All
decisions had to be based on investment value, hence the bill.
9:12:05 AM
COMMISSIONER GALVIN said the question of the slippery slope has
come up. The administration attempted to isolate the issue of
genocide from other types of social investing. This is an
unprecedented situation where the United Nations, the State
Department, and Congress have labeled the genocide. It is not an
issue that is subject to debate. There is unified agreement. The
bill focuses divestiture on those investments that the boards or
the commissioner of DOR have control over. "The things that we
can mandate are divested from certain companies." Previous
versions had a broad brush into investments that "we don't
control that closely in terms of the individual companies that
may be invested." That would have left them unable to use
investment vehicles the state couldn't control, whether they
invested in Sudan or not.
9:14:25 AM
COMMISSIONER GALVIN said the bill exempts those investment
vehicles that the state can't control, but he doesn't anticipate
that those will have Sudanese-related investments. The CS has
support from the permanent fund and ARM boards. Both passed
resolutions supporting divestiture in a manner consistent with
the bill introduced by the governor, which is consistent with SB
37. The requirement for divestiture within 90 days can be
complied with. The structure of the bill is to allow it to be
done in a fairly routine manner by the accounting staff. It can
be incorporated into normal daily compliance implementation. It
can just work into their routines.
SENATOR MEYER said markets are down worldwide, and the state may
suffer a loss if it has to be out of these companies in 90 days.
He suggested changing the 90-day period to a year. "Would that
meet the same purpose of trying to get out of these investments,
but yet do it over a gradual period of time so that, hopefully,
we don't lose quite as much money?"
9:17:27 AM
COMMISSIONER GALVIN said he doesn't anticipate that the amount
divested will be significant. "Generally we don't participate in
a timing issue with regard to individual holdings." They don't
hold something with an anticipation of it going up. The 90-day
term will not result in a significant risk of a loss.
SENATOR MEYER said the bulk of the state investments will be in
the permanent fund. What companies are doing business in Sudan?
COMMISSIONER GALVIN said it is a small number. He has a list of
four companies with about $3.5 million in investments as of
December. He is referring only to the ARM board in the DOR, and
that is out of $20 billion in investment. The administration is
attempting to have the accounting system implement the
divestments, not the managers. "The decision to insure that we
don't have any money invested in a particular stock would be one
that would become automatic as opposed to one where you would
just be saying, 'Well, let's sell this one next week because I
hear something or other.'"
9:21:19 AM
MICHAEL BURNS, Executive Director, Alaska Permanent Fund
Corporation, Juneau, said this has been a difficult issue for
the board for a number of years. "We have a history of being
against social investing." The situation in Darfur rises above
that in everybody's mind. The other side has always has been the
slippery slope, and where it may stop. This bill gives friction
to that slope with its very tight definition. It has been
defined by the U.S. government and international organizations,
and it is a specific geography. The bill takes the board out of
the decision of which companies should be on the divesting list.
His board's tasks are investment policy, risk management, and
asset allocation. The legislature's job is to create the public
policy. If this is public policy and a list is given to the
board, it is absolutely fine. He doesn't want the board meetings
taken up with trying to decide what company should be on the
list. The commissioner will be responsible for creating the
list, and his job will be to enforce it. He doesn't know how
much will be divested because there is not yet a list. Different
organizations have different lists, but it will not involve a
lot of money. He retracted that and said it is a lot of money,
but not in the scale of the portfolio. It is probably less than
$20 million depending on what companies are on the list.
9:24:45 AM
SENATOR MEYER said he is surprised because Mr. Burns was
adamantly against this bill last year. Mr. Burns mentioned some
changes in the bill. What are those changes?
MR. BURNS said the language change includes the tight definition
and the defined geography. Most importantly, his board will not
be making the decision. The accounting or compliance staff can
do the work. The department will come up with the list and
notify those on the list to allow them to rebut the claims. It
will just be a matter of compliance. The board has many tasks,
and an emotional debate is not a good use of its time.
9:26:47 AM
SENATOR MEYER said the legislature has intervened in the past
regarding investing in futures, commodities, and other high-risk
items. "It just seems like it makes your job that much more
difficult when we go out there and say, 'Maximize the return to
our shareholders ... but only invest here, here, and here." If
Mr. Burns doesn't think this bill is tying his hands, "then I'm
fine with it." If the goal is to get out of Sudan, maybe the
state could do it gradually to save a few thousand dollars.
MR. BURNS noted the issue of market timing. It could cost the
state money, but it could actually be the very best day to sell.
He thanked the legislature for untying the board's hands in 2005
regarding the statutory investment list. "We think we've been
able to make some progress." The market has moved against it,
but there is a better structure. "We still have a lot of things
we don't do by policy." He noted bond ratings and concentrations
in any stock. This is another compliance issue that the staff
can do, but the board is not creating the threshold for being in
or out. That takes time and is where the costs would be buried.
Enforcing a rule is not expensive, but being the decider is.
9:29:41 AM
SENATOR FRENCH thanked Mr. Burns for bringing his skills to
this. With his help something can be done.
SENATOR PASKVAN said this comes down to state policy on
genocide. Over 10 years ago the federal government determined
that genocide was occurring. The state has not taken any action
in those 10 years. "I am willing for the state of Alaska to lose
money to make clear its opposition to proven genocide." The
market timing issues are irrelevant. He said he would even
cleanse the funds of the 10 years profit from the genocide.
CHAIR MENARD said this bill intends to send a strong message.
9:31:34 AM
AMY KEARNS, Member, Save Darfur Anchorage, Wasilla, said her
group has been working with the legislature to get this bill
passed. She thanked the legislators for introducing the bill and
for the CS that eliminates a fiscal note. Passing this is more
critical now with recent events in Sudan with aid workers being
ousted from the country. The people of Darfur now have even less
protection. There are people living in Alaska from Darfur who
fled because of the genocide. Some of the atrocities are truly
horrific. She suggested taking a moment to think about those
events. Women in refugee camps have to make a decision to go get
firewood knowing that men are waiting to rape them. Men would be
killed if they were to go get the firewood. This is so far from
our personal experiences. The United States turned its back on
the Rwanda genocide of 1994. George Bush said, "Not on our
watch." "We have an obligation to fulfill that promise."
9:35:11 AM
DEBORAH BOCK, Member, Save Darfur Anchorage, Anchorage, said her
group has spoken with hundreds of Alaskans about the genocide
and have yet to meet a single private citizen who does not
support immediate divestment from Sudan. Two dozen people from
Darfur have been resettled in Anchorage by the state department.
They are strong advocates for divestment. Those few members of
the legislature who are opposed are out of touch with
constituents.
BILL LEIGHTY, Business Owner, Juneau, said he would like to
speak to Senator Meyer's concerns. About 20 years ago he
listened to a prosecutor from the Nuremburg trials speak about
the quandary of what kind of punishment was appropriate for
people who were responsible for the murder of millions. He came
to the conclusion that the only thing humans could do was to ask
that international law be so firm and so powerful that this
behavior is prevented in the future. It has been inadequate; we
still have genocide in several places in the world. It is
impractical to go to Sudan or to prevent China from buying oil
from Sudan. It seems like SB 37 is all that Alaskans can do. The
root causes for markets being down is the lack of attention to
the larger context in which these markets operate. We thought,
in our splendid isolation, that everything was under control. So
we are suffering in international matters like the genocide. In
lacking any other punishment, pass this bill. It is financial
tokenism, but it is an important matter of principle.
9:39:32 AM
STEVE WOLF, Juneau, said he is a retired teacher. He applauded
Senator French's testimony. He appreciates Senator Meyer's
concerns. When his high-minded teenaged son comes home from
college, he would like to tell him Alaska divested from Darfur.
SENATOR FRENCH moved to report the CS to SB 37, labeled 26-
LS0240\R, from committee with individual recommendations and
attached fiscal note(s). There being no objection, CSSB 37(STA)
moved out of committee.
9:41:20 AM
The committee took a brief at-ease.
HB 170-REPEAL AUTHORITY FOR DAY FINES
9:45:00 AM
CHAIR MENARD announced the consideration of HB 170.
REPRESENTATIVE MIKE CHENAULT, Alaska State Legislature, said HB
170 repeals the authority for day fines, which were called for
in HB 119 that passed in 1994. The court system created a
committee to establish the fine schedule, but it found several
problems with the implementation of the fine and recommended
that the legislature solve the problems. Those problems included
not knowing what misdemeanors were included; time delays
associated with the judge making written findings; determining
defendant income; conflicts with ordering substance abuse
treatment; concerns over the levels of fines; and the time
allowed to pay the fines. Legislation was introduced, but not
passed, that addressed the court's issues with the day fines.
Without the changes, courts cannot implement the day-fine
provisions. Occasionally there is a law that doesn't work, and
it is the duty of the legislature to eliminate it.
9:47:57 AM
SENATOR FRENCH asked about the original intent of the bill's
sponsor. Was it to create bigger fines and less jail time?
TOM WRIGHT, Staff, to Representative Chenault, Alaska State
Legislature, said the original bill was introduced by
Representatives Foster and Ulmer. The intent was to rectify some
problems, and the court made recommendations that never worked.
SENATOR FRENCH said, "That was my read of their report. Their
report back was sort of like a throwing up of their hands. We
can't make this work unless the legislature takes more action.
It's never happened." He prosecuted a lot of misdemeanors for
six years, and he never saw a day fine imposed. They are sitting
on the books taking up space. It is good to reduce the clutter.
9:49:36 AM
SENATOR KOOKESH asked what a day fine is.
MR. WRIGHT said there is a definition from 1993. Day fines are
also called structured fines or unit fines. They are immediate
sanctions that allow the court to fine an offender based on the
type of offense and offender's ability to pay. It is based on a
person's gross daily income.
CHAIR MENARD said the word is misleading to the general public.
DOUG WOOLIVER, Administrative Attorney, Alaska Court System,
said the court doesn't take positions on substantive
legislation, but it has no objection to removing a statute that
hasn't ever worked.
9:51:28 AM
SENATOR MEYER moved to report HB 170 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, HB 170 moved out of committee.
The committee took a brief at-ease.
9:52:08 AM
HB 139-ALLOW SCREEN DEVICES IN UTILITY VEHICLES
9:53:08 AM
CHAIR MENARD announced the consideration of HB 139.
ALLISON LAFFEN, Staff to Representative Max Gruenberg, Alaska
State Legislature, said her office has been working with
Representative Gatto on HB 139. It corrects on oversight in HB
88 of 2008, which prohibits vehicle drivers from having a screen
device operating within their view when the car is in motion.
Exceptions were made for cell phones, GPS devices, and for the
Department of Transportation, but it failed to make an exception
to public utility companies. These companies need screen devices
for data acquisition and to receive emergency information.
CURTIS THAYER, ENSTAR Natural Gas, Anchorage, said ENSTAR
supports HB 139, which will clarify statute. Public utilities
use data acquisition in meter readings and for gas leaks and
fire. Municipal Light and Power, Chugach Electric, and Golden
Valley Electric support HB 139. "We believe it was just an
oversight last year when the original bill was passed."
SENATOR FRENCH asked if the bill stopped the company from using
the screen devices.
MR. THAYER said it did not, but a clarification is needed. The
vehicles drive slowly down the street and electronically receive
meter information. If there is a discrepancy the van will pull
off and check the meter.
9:57:25 AM
SENATOR FRENCH asked if the company has received any tickets.
MR. THAYER said no.
SENATOR MEYER said it is frustrating to have to pass a bill to
correct one passed last year. Are there other screen device
users to be addressed, like the Anchorage Police Department?
MS. LAFFEN said she is not aware of any others.
SENATOR MEYER moved to report HB 139 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, HB 139 passed out of committee.
9:59:12 AM
The meeting was adjourned at 9:59 a.m.
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