Legislature(2005 - 2006)CAPITOL 106
05/03/2005 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB277 | |
| HB283 | |
| HB189 | |
| SB132 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 277 | TELECONFERENCED | |
| += | HB 283 | TELECONFERENCED | |
| + | HB 189 | TELECONFERENCED | |
| + | SB 132 | TELECONFERENCED | |
| + | HB 28 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 283-AK HOUSING FINANCE CORP BOARD COMP. 8:23:40 AM CHAIR SEATON announced that the next order of business was HOUSE BILL NO. 283, "An Act relating to the compensation for board members of the Alaska Housing Finance Corporation; and providing for an effective date." 8:23:48 AM MIKE O'HARE, Staff to Representative Pete Kott, Alaska State Legislature, presented HB 283 on behalf of Representative Kott, sponsor. He said the bill would increase the board meeting compensation levels for public board members from the current level of $100 to $400 per meeting. The $100 amount has been in place since the inception of the corporation in 1971. He explained that the Alaska Housing Finance Corporation (AHFC) Board is asked to consider and review topics having to do with bonding, the mortgage industry, public housing, and many other complex technical financial matters. The board members do not draw a salary from AHFC. They are tasked to consider and approve bond programs valued between $600 million and $1 billion. MR. O'HARE said that with such responsibility, members must spend a considerable amount of time educating themselves regarding the issues. He said the proposed legislation will allow the corporation to ensure having the most capable people on the board. He stated that the per board meeting compensation is applicable only to the four public board members of the seven-member board of directors. The fiscal note is $14,400 in corporate receipts per fiscal year. 8:25:52 AM BRIAN BUTCHER, Director, Government Relations and Public Affairs, Alaska Housing Finance Corporation (AHFC), added that AHFC is a completely self-supporting corporation that does not receive any state general funds and pays a $103 million dividend to the state annually. In response to a question from Chair Seaton regarding information pertaining to compensation rates of other boards that he had requested at the prior hearing of HB 283, Mr. Butcher affirmed that he provided that information with Chair Seaton's staff [included in the committee packet]. 8:27:10 AM REPRESENTATIVE GARDNER noted that the sponsor statement reveals that board members spend a lot of their own time studying and preparing for meetings. She asked for confirmation that the bill proposes to increase the amount of reimbursement for only the members' meeting time. 8:27:26 AM MR. BUTCHER answered that's correct. He offered further details. In response to Representative Gatto, he said the board usually meets in Anchorage, but sometimes in Juneau or "different places where we have public housing units." In response to follow-up questions from Representative Gatto, he said a board member's airfare and hotel rate is covered by the corporation; the stipend in question is above and beyond those costs and is considered compensation pay for the board meeting time. He agreed with Representative Gatto that the stipend is, essentially, like a salary. However, he pointed out that in many cases board members have to take a day off work for a meeting. He clarified that in many cases it costs board members to participate in meetings. He reminded the committee that $400 is currently what Permanent Fund Corporation and Alaska Railroad Board members receive. He said, comparatively, AHFC receives less than most in terms of compensation. 8:29:58 AM REPRESENTATIVE RAMRAS offered his belief that the Permanent Fund Corporation trustees are paid annually, and he asked if the AHFC Board members are. 8:30:13 AM MR. BUTCHER answered no. In response to a follow-up question from Representative Ramras, he said the aggregate fund that AHFC manages is $5 billion. 8:30:46 AM REPRESENTATIVE RAMRAS stated his support of the bill. 8:31:33 AM REPRESENTATIVE GRUENBERG asked if any other boards use the term "or portion of the day" [on page 1, line 6,] regarding compensation, and if the board would be paid for meeting only 15 minutes. 8:31:51 AM MR. BUTCHER, to the first question, replied that he doesn't know. Regarding the second question, he said the compensation is applied "to the date of the board meeting." He said the meetings tend to last 3-5 hours. [VICE CHAIR GATTO was handed the gavel.] 8:32:26 AM DANIEL R. FAUSKE, Chief Executive Officer (CEO)/Executive Director, Alaska Housing Finance Corporation (AHFC), said the length of meetings are five to six hours. Sometimes the meetings carry over to the next day. Sometimes a subcommittee will meet the day before a regular meeting, so that it can make a recommendation to the board the next day. He said he has never heard of a meeting that has lasted only 15 minutes and it would not be proper to pay someone $400 for stopping by the office to sign a paper, for example. 8:33:57 AM VICE CHAIR GATTO asked if that means Mr. Fauske would act negatively on any request. 8:34:13 AM MR. FAUSKE responded that he has a good relationship with the board and would deny someone if he felt that the intent of the compensation was being abused. 8:34:36 AM VICE CHAIR GATTO offered a scenario whereby board members meet for dinner and talk business, have a meeting the next day, and meet for breakfast the next morning and conduct business. He asked if that would be an unlikely scenario. 8:35:11 AM MR. FAUSKE said he cannot envision that happening. 8:35:22 AM REPRESENTATIVE ELKINS asked, "So, you're telling me on the days they travel they get no per diem?" 8:35:31 AM MR. FAUSKE answered in the affirmative. He said the purpose of the bill is to increase the amount of money board members receive solely for the meetings they attend. 8:36:21 AM REPRESENTATIVE ELKINS pointed out that a member from Wrangell [attending a meeting in Anchorage] loses three days pay for attending a meeting. He said he doesn't think it's right not to be reimbursed for days of travel. He stated, "I have a hard time supporting the $400, but not supporting the travel days is harder for me than supporting the $400." 8:36:37 AM REPRESENTATIVE GARDNER noted that the bill refers to AS 39.20.180, which she said is legislation that provides for transportation and per diem expenses. She added, "So, my understanding is that members would get transportation and per diem on the days they're traveling as well as the days they're actually meeting." 8:36:57 AM MR. FAUSKE offered the following correction to his previous statements: "They do get paid that day for travel. If they're traveling on corporate business coming here, they do get their pay for the day." [CHAIR SEATON took back the gavel.] 8:37:24 AM CHAIR SEATON stated, "I would like to note on another portion that we are looking at the same compensation rate for the Alaska Retirement Board. That's built into that piece of legislation, as well." 8:37:34 AM REPRESENTATIVE GRUENBERG suggested standardizing the rate for all boards and incorporating into HB 283 a section asking the administration or appropriate entity to review all the boards and submit a report to the legislature at the beginning of the next session. 8:38:35 AM CHAIR SEATON recommended the committee make that request of the administration in a separate piece of legislation. 8:38:44 AM REPRESENTATIVE GARDNER noted that the fiscal note states that the members would receive the $400 compensation per meeting. She said that is incorrect, because members would actually receive the reimbursement per day. 8:39:03 AM MR. BUTCHER confirmed that Representative Gardner is correct, and he said he would change that. 8:39:15 AM REPRESENTATIVE GARDNER questioned whether that would increase the [amount of the fiscal note]. 8:39:21 AM CHAIR SEATON asked, "Were the calculations based on the way the compensation was ... actually done, or [were] the calculations in the fiscal note based just on an anticipated meeting date?" 8:39:46 AM MR. BUTCHER replied that it was based on what the anticipated cost to the corporation would be should the proposed legislation pass. CHAIR SEATON asked if that was based on the idea that the compensation would be only on the day of the meeting, or whether that included the travel days, as well. MR. BUTCHER answered that of the four public members, one lives in Anchorage and two others frequently participate by teleconference; therefore, multiple-day meetings are "not applicable in most cases." He said, "I don't know that it would be a big difference; maybe a difference of a thousand dollars, or so, depending on how you looked at it." 8:40:17 AM CHAIR SEATON said he would not hold the bill up, but would like Mr. Butcher to ensure that the issue is revised before the bill is heard before the House Finance Committee. He said he would like the House State Affairs Standing Committee to focus on the policy issue of whether $400 is adequate for someone serving on the board, rather than looking at the absolute terms of the fiscal note. 8:41:23 AM REPRESENTATIVE GRUENBERG said, "If we decide that, for example, ... $400 a day is more than we should be spending for these folks, we're not going to be able to roll this board back. By doing this now, we are setting a precedent for what we're going to be quite possibly doing with these other boards." 8:42:16 AM CHAIR SEATON closed public testimony. 8:42:26 AM REPRESENTATIVE LYNN declared a potential conflict of interest; he revealed that he is a licensed real estate associate broker who has done business with AHFC in the past and may do so again in the future. 8:42:44 AM CHAIR SEATON noted Representative Lynn's conflict and stated, "I make a ruling that it's not significant at this time." 8:42:57 AM REPRESENTATIVE GARDNER moved Amendment 1, to delete "or portion of a day". She explained that she is troubled by that phrase. She said she read AS 18.56.030 and doesn't know that "a day" is defined anywhere. 8:43:32 AM CHAIR SEATON said he would like Representative Gardner to clarify if the intent of the amendment is to say that a board member has to work for a specific amount of time for it to count as a day. He indicated that that is the problem he has with Amendment 1. 8:44:49 AM REPRESENTATIVE GARDNER asked if a breakfast meeting on the day of departure would be counted as a workday. 8:45:01 AM CHAIR SEATON reminded Representative Gardner that since the travel day is compensated, it doesn't matter whether or not there is a breakfast meeting. He said the $400 a day compensation rate is not really high when consideration is made to the caliber of people being asked to make decisions for AHFC. He said, "So, I think we may be getting into more technicalities than we really want to." 8:45:47 AM REPRESENTATIVE ELKINS said he has a hang up with any board or commission member being paid more than a legislator. He said he thinks it would be proper "that their per diem rate be tied to ours." 8:46:26 AM CHAIR SEATON clarified that although the money in question is called a per diem, it really is a salary, not just expense compensation. He added, "So, you'd have to compare it to our salary, and I don't think we want to compare very many people to our salaries, otherwise we wouldn't have anybody doing anything." 8:47:29 AM REPRESENTATIVE GRUENBERG asked if any other statutes for any other boards use the phrase, "or portion of a day". 8:48:09 AM MR. BUTCHER responded that he doesn't know. He said the request to Legislative Legal and Research Services was to change the amount from $100 to $400 and "this is how it was drafted." 8:48:32 AM REPRESENTATIVE GRUENBERG said he supports Amendment 1. He explained that if the phrase "or portion of a day" is used only in HB 283 and not in other statutes pertaining to other boards, the result may be that "this statute" is interpreted differently. REPRESENTATIVE GARDNER restated Amendment 1 for clarification purposes. She added, "And I'd like to say, if 'day' is not defined, a 'portion of a day' is covered." REPRESENTATIVE GRUENBERG added, "I would ask that that be done with the understanding that I'll be offering that motion." 8:50:18 AM CHAIR SEATON, upon a query from the committee secretary, stated that he had objected to Amendment 1. 8:50:28 AM A roll call vote was taken. Representatives Gardner, Gruenberg, Gatto, Elkins, and Lynn voted in favor of Amendment 1. Representatives Ramras and Seaton voted against it. Therefore, Amendment 1 passed by a vote of 5-2. CHAIR SEATON asked Representative Gruenberg if he wanted to restate his request. REPRESENTATIVE GRUENBERG said, "I will do that after we move the bill; if you're going to move the bill." 8:51:36 AM REPRESENTATIVE GARDNER interpreted: My reading of this, because it includes AS 39.20.180, means that they do get per diem rate at essentially the same rate as the legislature, according to the regulations, on the travel date. So, what they would now get is $400 a day for travel day, as well as the same per diem that everybody else gets. Is that correct? 8:51:40 AM MR. BUTCHER responded that's correct. He said, "For the day they're in Anchorage, they receive $40, or whatever the meal per diem is for that day." 8:51:47 AM REPRESENTATIVE GATTO referred to the language: "may be reimbursed by the corporation for actual and necessary expenses". He indicated that the language "sounds like we're telling them we're going to reimburse their hotel cost - 'actual and necessary expense' - and their food cost." He continued, "But what you told us was that that's already covered and this is more of a salary. And yet, the language conflicts with that." 8:52:54 AM MR. BUTCHER explained that the corporation pays for the air fare, hotel rate, and meal allowance, all of which are separate from the $100 [or $400 if the bill is adopted] compensation for the board meeting. 8:54:31 AM REPRESENTATIVE GARDNER noted that the language that Representative Gatto is asking about already exists in statute. She said, "The only change we're making is the dollar amount." 8:54:51 AM REPRESENTATIVE RAMRAS asked Mr. Butcher to remind him how much the dividend is that AHFC "throws off annually." MR. BUTCHER answered that it's been $103 million a year for about the last 8-10 years. 8:55:15 AM REPRESENTATIVE RAMRAS responded: So, a billion dollars over the last 10 years has gone to the general fund and we're arguing about moving the per diem from $100 a day to $400 a day for a fiscal note of $14,000 a year? For over 10 years, that would be $140,000 dollars, and [AHFC] has thrown off a billion dollars into the general fund for the use of the state. Is that right? 8:55:28 AM MR. BUTCHER replied, "In the last 10-15 years it's been about $1.5 billion." 8:55:41 AM REPRESENTATIVE RAMRAS remarked, "We're probably not going to change the per diem for awhile ..., so it could be $140,000 over the next 10 years. And we may see another billion or two in dividends over the next 10 years?" 8:55:48 AM MR. BUTCHER responded that that's a possibility. 8:55:58 AM REPRESENTATIVE GARDNER said, "Point taken." REPRESENTATIVE GARDNER moved to report HB 283, as amended, out of committee with individual recommendations and the accompanying fiscal note that will also be amended. There being no objection CSHB 283(STA) was reported out of the House State Affairs Standing Committee. 8:57:01 AM REPRESENTATIVE GRUENBERG presented a concept for a letter to be transmitted from the committee as follows: The House State Affairs Committee requests the administration ... to provide a written response to the following questions concerning all boards and commissions, compensated and noncompensated .... 1) Should any [other] noncompensated boards and commissions be compensated? ... 2) Should the compensation rate or rates be adjusted or standardized and, if so, at what rates? 3) Should the following language be added to those statutes that provide compensation at a daily rate "or a portion of a day"? ... If legislation is warranted, the committee would welcome proposed legislation. 8:58:41 AM CHAIR SEATON said unless the committee has a burning desire to address the letter with a committee action, he would prefer to transmit the letter individually and "get the information back." 8:58:49 AM
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