04/03/2000 09:05 AM Senate FIN

CS FOR SENATE JOINT RESOLUTION NO. 34(L&C)                                                                                      
Proposing amendments to the Constitution of the State                                                                           
of Alaska relating to departments, agencies, and                                                                                
public corporations.                                                                                                            
                                                                                                                                
                                                                                                                                
This was the first hearing for this bill in the Senate                                                                          
Finance Committee.                                                                                                              
                                                                                                                                
SENATOR RICK HALFORD stated that this issue of appointing                                                                       
officers to state-owned corporations has been before the                                                                        
legislature many times since the creation of the permanent                                                                      
fund. He directed the members' attention to a list of all                                                                       
state-owned corporations. [Copy on file.]                                                                                       
                                                                                                                                
Senator Halford referred to an amendment considered by the                                                                      
Senate Labor and Commerce Committee sponsored by Senator                                                                        
Drue Pearce relating to "overhang commissioners." Although                                                                      
this amendment was not adopted, he stated a related title                                                                       
change was inadvertently made to the legislation.                                                                               
                                                                                                                                
Senator Halford then addressed the constitutional amendment                                                                     
itself explaining how the legislature confirms members to                                                                       
State Of Alaska boards and commissions. However, he                                                                             
stressed, the legislature has no control over the                                                                               
appointment of members to the boards of directors of the                                                                        
Permanent Fund Corporation, the Alaska Housing Finance                                                                          
Corporation (AHFC), the Alaska Industrial Export Authority                                                                      
and the other state-operated corporations.                                                                                      
                                                                                                                                
Senator Halford stated that of all the relating                                                                                 
constitutional amendments he has seen attempting to address                                                                     
this issue, this was the simplest, the most straightforward                                                                     
and the most justified.  He surmised that if corporations                                                                       
of the size and scope of the aforementioned existed at the                                                                      
time of statehood, the framers of the constitution would                                                                        
have included them with the board and commissions'                                                                              
requirements for legislative confirmation of membership                                                                         
appointments.                                                                                                                   
                                                                                                                                
Senator Halford assured that this legislation makes no                                                                          
major changes to the constitution other than to provide for                                                                     
the legislative confirmation of appointments to the boards                                                                      
of state-owned corporations.                                                                                                    
                                                                                                                                
Senator Halford detailed the previous proposals made in the                                                                     
Senate to require these legislative confirmations.                                                                              
                                                                                                                                
Senator Phillips referred to language on page one, line                                                                         
ten, stating that members "may be removed as provided by                                                                        
law" and asked if the standards are the same for the                                                                            
corporations as they are for the other boards and                                                                               
commissions already included in the legislative                                                                                 
confirmation process.                                                                                                           
                                                                                                                                
Senator Halford responded that the standards are not the                                                                        
same, and that they are the standards provided in the law                                                                       
that created the particular state-owned corporations. He                                                                        
said that some board member dismissals can be made only                                                                         
"for cause" and others can be made at the pleasure of the                                                                       
governor.                                                                                                                       
                                                                                                                                
Senator Leman supported the intent of the sponsor and                                                                           
agreed this legislation is simple and necessary but he                                                                          
argued that it was not the simplest and most necessary.                                                                         
                                                                                                                                
Senator Halford responded that he believed if the framers                                                                       
of the state constitution had an indication of the                                                                              
magnitude of these corporations, they would have written                                                                        
the legislative confirmation provision directly into the                                                                        
constitution. He stated that he had not heard opposition by                                                                     
those framers on this matter as had been heard on other                                                                         
matters.                                                                                                                        
                                                                                                                                
Co-Chair Parnell read language from the sponsor statement,                                                                      
"It would ensure that the people who control Alaska's                                                                           
largest assets are subject to a formal appointment,                                                                             
confirmation and removal process, not the whim of a newly                                                                       
elected governor." He asked if the sponsor was aware of any                                                                     
problems with these boards.                                                                                                     
                                                                                                                                
Senator Halford shared that the past two governors had                                                                          
entirely changed the board members of the permanent fund,                                                                       
while the previous governors did not make those drastic                                                                         
changes. While he did not disagree with any of the actual                                                                       
appointments, he did not believe the entire management team                                                                     
of a large corporation should be changed all at once. He                                                                        
pointed out that during a governor's administration,                                                                            
several board member terms would expire and therefore, the                                                                      
governor still has a great impact on the makeup of these                                                                        
boards.                                                                                                                         
                                                                                                                                
Co-Chair Torgerson asked about any necessary statutory                                                                          
changes to implement this constitutional amendment.                                                                             
                                                                                                                                
Senator Halford replied that the Department of Law had made                                                                     
recommendations and that there are certain political                                                                            
implications of this legislation. He stated that the larger                                                                     
corporations would be subject to legislative confirmation                                                                       
but that exemptions could be made for some of the smaller                                                                       
corporations.                                                                                                                   
                                                                                                                                
Senator Adams asked why the legislation includes the Alaska                                                                     
Railroad Corporation and the AHFC when the only board with                                                                      
a significant amount of money under its authority is the                                                                        
Permanent Fund Corporation.                                                                                                     
                                                                                                                                
Senator Halford responded that there was a strong belief                                                                        
that any entity that handles millions of dollars should                                                                         
have some oversight. He gave details on the large holdings                                                                      
of the railroad corporation.                                                                                                    
                                                                                                                                
Amendment #1: This technical, conceptual amendment deletes                                                                      
"department, agencies and" from the title on page 1, line 2                                                                     
of CS SJR 34 (RES).                                                                                                             
                                                                                                                                
Senator Phillips moved to adopt the amendment. There was no                                                                     
objection and it was ADOPTED.                                                                                                   
                                                                                                                                
Senator Phillips offered a motion to report from Committee,                                                                     
SJR 34, 1-LS1373\G, as amended. Without objection, the                                                                          
resolution MOVED FROM COMMITTEE.