03/08/1995 09:00 AM Senate FIN

                                                                               
       SENATE JOINT RESOLUTION NO. 14                                          
       Proposing an amendment to the Constitution of the State                 
  of       Alaska relating to certain public corporations.                     
                                                                               
  Co-chair  Halford stated  that  SJR 14  did  not go  through                 
  Judiciary   Committee.     He  asked   Senator  Taylor   for                 
  information regarding SJR  14.   Senator Taylor stated  that                 
  the  bill  is  straight  forward  and  didn't  feel  it  was                 
  necessary to go to Judiciary.                                                
                                                                               
  Senator Phillips asked State Affairs and wanted to get it on                 
  the  record that it  didn't go through  Judiciary.  Co-chair                 
  Halford stated  that it could go to  Judiciary after Finance                 
  as long as the fiscal notes do not change.                                   
                                                                               
  Co-chair Halford asked  Jim Baldwin, Dept.  of Law, to  step                 
  forward.   Jim Baldwin stated  his concern.  In 1955-56  the                 
  framers  got  together  and  produced  a  spectacular  state                 
  constitution. It is considered the best in the nation if not                 
  in the  world, some  very fine  distinctions were  made.   A                 
  system was set  up of  checks and balances,  which was  very                 
  finely balanced.  One of the  checks on the governor's power                 
  of  appointment is  the  legislature's  ability  to  confirm                 
  certain appointments.   He  contends that  the framers  made                 
  some very specific decisions to make it a limited check on a                 
  broad power because  the governor should be  responsible for                 
  the management of the executive  branch of state government.                 
                                                                               
                                                                               
  Since the adoption of the constitution, there have been some                 
  very good amendments.  He would ask the committee to proceed                 
  very deliberately on a further amendment of the constitution                 
  in this area because  it does tip the balance in  a way that                 
  was not intended by the original framers.                                    
                                                                               
  Mr. Baldwin spoke about  the ambiguities.  He stated  that a                 
  public corporation that manages  state assets is  ambiguous.                 
  He would encourage Judiciary to look  at it with the thought                 
  in mind to fine tune the language.   He cited as an example,                 
  he heard  the amendment  being described  as one  that would                 
  apply to all public corporations.   He stated that he wasn't                 
  sure that  was the case because the  public corporations, as                 
  the court  has observed,  are of  varying  degrees of  under                 
  state control.  The enabling act of AHFC, says that it  is a                 
  public corporation with  a legal existence that  is separate                 
  and independent from the state.   If the language is applied                 
  literally,  then are the assets of AHFC really state assets,                 
  or are they  the assets  of a political  subdivision of  the                 
  state?                                                                       
                                                                               
  Senator Rieger  asked what  is  the definition  of a  public                 
  corporation?    Mr.  Baldwin  stated  that there  isn't  one                 
  definitely.  Basically,  it  is  a  corporate body  that  is                 
  chartered by the state itself.   Private corporations have a                 
  code that specifies how to be chartered.  The state does not                 
  have articles  of incorporation  other than  state law  that                 
  creates it.   It's  a corporate  body established either  by                 
  law,  such  as  AHFC,  or  the  constitution,  such  as  the                 
  university.  Co-chair  Halford stated  that this is  exactly                 
  the definition that this  bill reaches.  He stated  that Mr.                 
  Baldwin's definition  of public  corporation is  just as  he                 
  described it, and it manages state assets.                                   
                                                                               
  Senator  Rieger asked if a board  could be set up without it                 
  being a  corporation to  manage a billion  dollars of  state                 
  assets?   He stated that  theoretically it would escape this                 
  constitutional provision.  Mr. Baldwin stated that it could.                 
  There are two different entities that can issue bonds within                 
  the state.  Public corporations issue revenue bonds.   State                 
  agencies issue  bonds for  example, international  airports.                 
  He stated that the  assets that belong to AHFC  for example,                 
  are  not  assets that  the  state  would want  to  have. Mr.                 
  Baldwin  stated  that  he  recommended  that  SJR  14 go  to                 
  Judiciary. Co-chair Halford asked that  the resolution go to                 
  the Judiciary Committee.   He felt it should be  returned in                 
  two weeks to the committee.                                                  
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 10:25 a.m.