HOUSE STATE AFFAIRS STANDING COMMITTEE January 26, 1993 8:00 a.m. MEMBERS PRESENT Representative Al Vezey, Chair Representative Pete Kott, Vice Chair Representative Harley Olberg Representative Jerry Sanders Representative Gary Davis Representative Fran Ulmer Representative Bettye Davis OTHER HOUSE MEMBERS PRESENT Representative Terry Martin COMMITTEE CALENDAR *HJR 7: Proposing amendments to the Constitution of the State of Alaska authorizing the use of the initiative to amend the Constitution of the State of Alaska and amending the requirements relating to applications for initiatives and referenda. HELD IN COMMITTEE FOR FURTHER CONSIDERATION *HJR 15: Proposing an amendment to the Constitution of the State of Alaska relating to the duration of a regular session. SSHJR 15 HELD IN COMMITTEE FOR FURTHER CONSIDERATION *HJR 5: Proposing an amendment to the Constitution of the State of Alaska relating to the duration of a regular session. HELD IN COMMITTEE FOR FURTHER CONSIDERATION *HJR 3: Proposing amendments to the Constitution of the State of Alaska limiting tenure in the legislature. HELD IN COMMITTEE FOR FURTHER CONSIDERATION *HB 17: "An Act limiting tenure in the legislature." HELD IN COMMITTEE FOR FURTHER CONSIDERATION *HJR 4: Proposing amendments to the Constitution of the State of Alaska limiting tenure in the legislature. HELD IN COMMITTEE FOR FURTHER CONSIDERATION *HJR 6: Proposing amendments to the Constitution of the State of Alaska limiting the number of terms a person may serve in the legislature. HELD IN COMMITTEE FOR FURTHER CONSIDERATION *HJR 9: Proposing an amendment to the Constitution of the State of Alaska prohibiting the imposition of state personal income taxation, state ad valorem taxation on real property, or state retail sales taxation without the approval of the voters of the state. HELD IN COMMITTEE FOR FURTHER CONSIDERATION *HB 35: "An Act relating to deposits to the budget reserve fund." HELD IN COMMITTEE FOR FURTHER CONSIDERATION (* first public hearing) WITNESS REGISTER Representative Joe Sitton State Capitol, Room 609 Juneau, AK 99811-1182 465-2327 Position Statement: Prime Sponsor of HJR 7 Representative Pete Kott State Capitol, Room 609, Court Juneau, AK 99811-1182 465-2327 Position Statement: Prime Sponsor of SSHJR 15 Representative Terry Martin State Capitol, Room 411 Juneau, AK 99811-1182 465-3783 Position Statement: Prime Sponsor of HJR 3, HB 35, HJR 9 & HB 17 Representative Jim Nordlund State Capitol, Room 608 Juneau, AK 99811-1182 465-4968 Position Statement: Prime Sponsor of HJR 4 Representative Curt Menard State Capitol, Room 405 Juneau, Alaska 99811-1182 465-2679 Position Statement: Prime Sponsor of HJR 5 & HJR 6 Don Wanis, Director Division of Finance Department of Administration P.O. Box 110204 Juneau, AK 99811 465-2240 Position Statement: Supported HB 35 Joe Thomas, State Accountant Division of Finance Department of Administration P.O. Box 110204 Juneau, AK 99811 465-2240 Position Statement: Supported HB 35 PREVIOUS ACTION BILL: HJR 7 SHORT TITLE: USE OF INITIATIVE TO AMEND CONSTITUTION BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) SITTON TITLE: Proposing amendments to the Constitution of the State of Alaska authorizing the use of the initiative to amend the Constitution of the State of Alaska and amending the requirements relating to applications for initiatives and referenda. JRN-DATE JRN-PG ACTION 01/04/93 23 (H) PREFILE RELEASED 01/11/93 23 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 23 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 15 SHORT TITLE: 100 DAY SESSION LIMIT BILL VERSION: SSHJR 15 SPONSOR(S): REPRESENTATIVE(S) KOTT TITLE: Proposing an amendment to the Constitution of the State of Alaska relating to the duration of a regular session. JRN-DATE JRN-PG ACTION 01/14/93 58 (H) READ THE FIRST TIME/REFERRAL(S) 01/14/93 58 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/20/93 113 (H) SPONSOR SUBSTITUTE INTRODUCED/ REFERRALS 01/20/93 113 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 5 SHORT TITLE: 90 DAY SESSION & FEBRUARY CONVENING DATE BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MENARD TITLE: Proposing an amendment to the Constitution of the State of Alaska relating to the duration of a regular session. JRN-DATE JRN-PG ACTION 01/04/93 22 (H) PREFILE RELEASED 01/11/93 22 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 22 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 3 SHORT TITLE: LIMITING TERMS OF LEGISLATORS BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MARTIN,Kott TITLE: Proposing amendments to the Constitution of the State of Alaska limiting tenure in the legislature. JRN-DATE JRN-PG ACTION 01/04/93 22 (H) PREFILE RELEASED 01/11/93 22 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 22 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 17 SHORT TITLE: LIMITING TERMS OF LEGISLATURE BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MARTIN TITLE: "An Act limiting tenure in the legislature." JRN-DATE JRN-PG ACTION 01/04/93 28 (H) PREFILE RELEASED 01/11/93 29 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 29 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 4 SHORT TITLE: LIMITING TERMS OF LEGISLATORS BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) NORDLUND,Carney TITLE: Proposing amendments to the Constitution of the State of Alaska limiting tenure in the legislature. JRN-DATE JRN-PG ACTION 01/04/93 22 (H) PREFILE RELEASED 01/11/93 22 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 22 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/22/93 143 (H) COSPONSOR(S): CARNEY 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 6 SHORT TITLE: CONST. AM: LIMIT LEGISLATIVE TERMS BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MENARD,Brown TITLE: Proposing amendments to the Constitution of the State of Alaska limiting the number of terms a person may serve in the legislature. JRN-DATE JRN-PG ACTION 01/04/93 22 (H) PREFILE RELEASED 01/11/93 22 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 22 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 9 SHORT TITLE: VOTER APPROVAL FOR NEW TAXES BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MARTIN TITLE: Proposing an amendment to the Constitution of the State of Alaska prohibiting the imposition of state personal income taxation, state ad valorem taxation on real property, or state retail sales taxation without the approval of the voters of the state. JRN-DATE JRN-PG ACTION 01/04/93 23 (H) PREFILE RELEASED 01/11/93 23 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 23 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/19/93 (H) STA AT 08:00 AM CAPITOL 102 01/21/93 (H) STA AT 08:00 AM CAPITOL 102 01/21/93 (H) MINUTE(STA) 01/23/93 (H) STA AT 08:00 AM CAPITOL 102 01/23/93 (H) MINUTE(STA) 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 35 SHORT TITLE: DEPOSITS TO THE BUDGET RESERVE FUND BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MARTIN,Therriault TITLE: "An Act relating to deposits to the budget reserve fund." JRN-DATE JRN-PG ACTION 01/04/93 33 (H) PREFILE RELEASED 01/11/93 33 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 33 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/26/93 (H) STA AT 08:00 AM CAPITOL 102 ACTION NARRATIVE TAPE 93-6, SIDE A Number 000 The fourth meeting of the House State Affairs Committee was called to order at 8:00 a.m. on January 26, 1993, by Chairman Al Vezey. He noted a quorum was present. HJR 7: USE OF INITIATIVE TO AMEND CONSTITUTION CHAIRMAN AL VEZEY read the title of HJR 7, and invited the sponsor, Representative Joe Sitton, to testify. Number 011 REPRESENTATIVE JOE SITTON, PRIME SPONSOR of HJR 7, compared HJR 7 to HJR 1 and HJR 8. Number 094 CHAIRMAN VEZEY summarized HJR 1 and HJR 8 from prior committee meetings with regard to majority vote and super majority. Number 105 REPRESENTATIVE BETTYE DAVIS requested a subcommittee be appointed to discuss amendment of the constitution and all the bills related to this topic. Number 108 CHAIRMAN VEZEY stated the differences in the bills were minor and a subcommittee would not be necessary. Number 130 REPRESENTATIVE JERRY SANDERS asked about the difference each bill had with regard to the numbers of voters. Number 138 REPRESENTATIVE SITTON stated the requirements were tighter in HJR 7. A simple majority was too easy and two thirds was too much. The 60% in HJR 7 was a middle ground, he believed. Number 159 REPRESENTATIVE HARLEY OLBERG discussed a committee substitute. Number 169 CHAIRMAN VEZEY stated a committee substitute might be considered, but was not necessary. Number 180 REPRESENTATIVE FRAN ULMER stated any changes by the committee would be in the form of a committee substitute. Number 185 CHAIRMAN VEZEY stated amendments may be attached. Number 192 REPRESENTATIVE SITTON discussed the handouts given to the committee. He also thanked the committee for hearing HJR 7, which was then held in committee for further consideration. Number 202 SSHJR 15: 100 DAY SESSION LIMIT CHAIRMAN VEZEY read the title of SSHJR 15, and invited the sponsor, Representative Pete Kott, to testify. Number 211 REPRESENTATIVE PETE KOTT, PRIME SPONSOR of SSHJR 15, discussed the public's desire to change from 120 session days to 100. He spoke on the history of session length, and stated that twenty six states had shorter sessions than Alaska. Number 215 CHAIRMAN VEZEY asked Representative Kott if he thought SSHJR 15 would pass both legislative bodies and become law. Number 256 REPRESENTATIVE KOTT definitely thought SSHJR 15 would pass both bodies or he would not have brought it before the legislature. Number 257 HJR 5: 90 DAY SESSION & FEBRUARY CONVENING DATE CHAIRMAN VEZEY thanked Representative Kott for his testimony, and asked if there were any comments on HJR 5, which related to the same subject. Number 285 REPRESENTATIVE KOTT discussed the difference between SSHJR 15, which had a 100 day limit to HJR 5, which had a limit of 90 days. He noted that in HJR 5 the first day of session did not count whereas in SSHJR 15 the first day was included, which closed the difference in time to only nine days. The major difference was that in HJR 5 the starting date was the fourth Monday in February, while the starting date in SSHJR 15 was the second Monday in January, with the exception of gubernatorial election years. On those years it would be the third Monday in January, he said. Number 307 CHAIRMAN VEZEY summarized the differences and pointed out the adjournment date in HJR 5 would be later in May. Number 331 REPRESENTATIVE KOTT discussed the scheduling and hearing of bills with a change in the length of session. Number 345 CHAIRMAN VEZEY asked if there were any more comments or testimony regarding HJR 5. There being none, HJR 5 was held in committee for further consideration. HJR 3: LIMITING TERMS OF LEGISLATORS CHAIRMAN VEZEY read the title of HJR 3, and invited the sponsor, Representative Terry Martin, to testify. Number 363 REPRESENTATIVE TERRY MARTIN, PRIME SPONSOR of HJR 3, spoke on the intent of term limitation. He asked the committee to pass HJR 3 and suggested it would allow term limits to be tested for a few years. Number 411 CHAIRMAN VEZEY requested information from Representative Martin regarding the twelve year total of two terms in each body: Four years in the House and eight years in the Senate. Number 417 REPRESENTATIVE MARTIN stated the decision to limit the length of terms resulted from a discussion at the National Conference of State Legislatures (NCSL), and also from talks with the public. Number 433 CHAIRMAN VEZEY referenced a report in members' packets regarding term limits by NCSL. Discussion among committee members ensued with regard to a lifetime ban from the legislature after serving. HB 17: LIMITING TERMS OF LEGISLATURE CHAIRMAN VEZEY referenced HB 17 with regard to term limit and asked if there were any comments. Hearing none, HJR 3 and HB 17 were held in committee for further consideration. HJR 4: LIMITING TERMS OF LEGISLATURE CHAIRMAN VEZEY read the title of HJR 4. He noted HJR 4 would allow for three terms in the House and two in the Senate. He invited the sponsor, Representative Jim Nordlund, to testify. Number 499 REPRESENTATIVE JIM NORDLUND, PRIME SPONSOR of HJR 4, stated term limits were a campaign issue for him. He believed there was a need for more responsive, effective and fair campaigning, and pointed out that HJR 4 did not limit consecutive service in that there was no limit of total time served and no lifetime ban. REPRESENTATIVE NORDLUND stated the incumbent had a benefit of using public staff, money was easier to raise, and there was more name recognition. There was just too much advantage over the general public, and the public desired a term limit. He pointed out fourteen other states had a term limit. Number 547 CHAIRMAN VEZEY asked Representative Nordlund how he decided on the three terms in the House and two in the Senate. Number 544 REPRESENTATIVE NORDLUND decided the first term was needed to learn the process, the second to continue what was started the first term, and a third to be in leadership. There needed to be a balance with the experience in the executive branch to the experience in the legislative branch, he added. Number 583 REPRESENTATIVE KOTT explained another difference in HJR 4 compared to HJR 3, that being a legislator could go from the House to the Senate back to the House and then to the Senate indefinitely. Number 591 REPRESENTATIVE NORDLUND stated the legislator would still have to challenge the incumbent. HJR 6: CONST. AM: LIMIT LEGISLATIVE TERMS Number 600 REPRESENTATIVE VEZEY thanked Representative Nordlund for his testimony, and held HJR 3 for further consideration. On that same topic, HJR 6 sponsored by Representative Curt Menard, was reviewed next. Number 607 REPRESENTATIVE CURT MENARD, PRIME SPONSOR of HJR 6, discussed the support for term limits. He noted HJR 6 allowed four terms in the House and two in the Senate. Number 619 CHAIRMAN VEZEY asked Representative Menard where the wording came from or the reason for two terms in the House and one term in the Senate along with a lifetime limit. Number 626 REPRESENTATIVE MENARD stated a two or four year separation was not as important as the idea itself. A lifetime ban was not a requirement either, he added. Number 633 CHAIRMAN VEZEY discussed the break in power for the incumbent. Number 639 REPRESENTATIVE KOTT asked the difference between HJR 6 and HJR 3. Number 644 REPRESENTATIVE MENARD was unfamiliar with HJR 3. Number 645 REPRESENTATIVE KOTT stated he believed HJR 6 and HJR 3 were basically the same except for the 12 year break. Number 651 CHAIRMAN VEZEY, as a point of information to the committee, stated that SJR 3 had passed the Senate State Affairs Committee. TAPE 93-6, SIDE B Number 000 HJR 9: VOTER APPROVAL FOR NEW TAXES CHAIRMAN VEZEY read the title of HJR 9, and asked the sponsor, Representative Martin, if he would like to testify on behalf of the resolution. Number 041 REPRESENTATIVE MARTIN, PRIME SPONSOR of HJR 9, discussed the history of taxation in this country, including the Boston Tea Party and King James loosing his head. Because government controlled the money, people should have the power to limit taxation, he said, and noted the public had supported an increase in tax for specific purposes and would vote it in when needed. Number 146 REPRESENTATIVE ULMER stated Alaska had the lightest tax per household. She discussed an article from Money Magazine related to taxation of States. Number 189 REPRESENTATIVE SANDERS supported a Republic, and trusted the public more than the legislature because he felt the legislature had a tendency to lose perspective. He said he would vote down any sort of tax. Yet, if the constituents wanted a tax they should exercise control by voting through the initiative process. He recommended the committee vote to pass HJR 9. CHAIRMAN VEZEY stated because of the Saturday teleconference he would hold HJR 9 over for public testimony. He encouraged written testimony. Number 215 HB 35: DEPOSITS TO THE BUDGET RESERVE FUND The committee then addressed HB 35, related to deposits to the budget reserve fund. Number 292 REPRESENTATIVE MARTIN, PRIME SPONSOR of HB 35, discussed the need for protecting the fund and having money for future generations so they would not be heavily taxed to support government. Number 350 CHAIRMAN VEZEY discussed how monies would be paid back and how the budget reserve fund had been created. Number 376 REPRESENTATIVE MARTIN discussed revenue shortfalls. Number 408 CHAIRMAN VEZEY discussed how money was to be deposited into the fund. Number 417 REPRESENTATIVE ULMER inquired into the necessity of HB 35. She thought the Department of Administration was required to deposit funds. Number 426 REPRESENTATIVE MARTIN stated there was no statute that required funds to be deposited. Number 432 REPRESENTATIVE ULMER discussed deposits to the fund. Number 441 REPRESENTATIVE MARTIN stated the legislature was to establish procedures through the law yet had not done so. CHAIRMAN VEZEY stated HB 35 would fulfill the legislative requirement. He asked a question regarding monies for the fund. Number 457 REPRESENTATIVE MARTIN spoke about the constitutional provision. He stated the monies borrowed had to be returned by December 16th. REPRESENTATIVE SANDERS asked if the budget reserve fund was like a revolving loan fund. Number 479 REPRESENTATIVE MARTIN stated the budget reserve fund was like a revolving loan fund that would have to be paid back each following year. In reality it was a spending account, not a saving account, he added. Number 487 REPRESENTATIVE SANDERS discussed with Representative Martin the fact that the budget reserve fund drew interest. Number 493 REPRESENTATIVE BETTYE DAVIS asked if any monies had been drawn from the fund. Number 495 REPRESENTATIVE MARTIN stated at this time no monies from the budget reserve fund had been touched. Number 504 REPRESENTATIVE KOTT inquired into the current balance of the fund. Number 506 REPRESENTATIVE MARTIN advised that currently there was $625,000,000 in the budget reserve fund. Number 522 DON WANIS, DIRECTOR, DIVISION OF FINANCE, DEPARTMENT OF ADMINISTRATION (the Department), and JOE THOMAS, State Accountant for the Division, discussed the December 16 date for depositing funds. They suggested November 1 would be too soon because the balance would not be available to the general fund by that date. CHAIRMAN VEZEY discussed the deposit being made on December 16. Number 540 MR. WANIS stated a report would be available to the public on the first week of December regarding the monies in the account. REPRESENTATIVE ULMER asked how the Department would proceed without HB 35. MR. THOMAS stated there were constitutional regulations to take monies out, but there needed to be statutory authority to put monies back into the account. Number 564 REPRESENTATIVE ULMER discussed accounting procedures. MR. THOMAS discussed accounting procedures. CHAIRMAN VEZEY clarified the Department advocated passage of HB 35 to make execution of accounting duties clear. Number 603 MR. WANIS stated the Department supported passage of HB 35. Number 608 REPRESENTATIVE SANDERS restated authority was in place to take funds out of the account but there was no authority to repay it. He stated the Department was advocating this way to put monies back in the fund. Number 615 MR. WANIS concurred. Number 616 CHAIRMAN VEZEY summarized the testimony, asked Mr. Wanis again if HB 35 was necessary to put monies back into the account. Number 625 MR. WANIS replied in the affirmative. He added that authority was needed in the law in some fashion. Number 626 CHAIRMAN VEZEY discussed monies to be placed into the account. Number 633 MR. WANIS asked if the balance in the general fund was available and monies were owed to the reserve account, would only monies that were available be used to pay the account back. Number 641 CHAIRMAN VEZEY clarified the debt would continue forward and that only surplus monies would be available to replenish the account. ADJOURNMENT With no further comments on HB 35, Chairman Vezey Adjourned the meeting at 9:35 a.m.