05/08/1994 01:30 PM Senate FIN

  SCSCSHB 494(STA):   An Act changing the Alaska State Pension                 
                      Investment Board to  the Alaska  Pension                 
                      Investment Authority and relating to the                 
                      authority;   and   providing    for   an                 
                      effective date.                                          
                                                                               
                      Darrel      Rexwinkel,     Commissioner,                 
                      Department of Revenue, and Gayle R. Oba,                 
                      Vice   Chair,   Alaska   State   Pension                 
                      Investment Board, spoke to HB 494 and to                 
                      the fiscal  notes.  Discussion  was held                 
                      regarding fiscal notes  and amendment  2                 
                      which was ADOPTED in the previous Senate                 
                      Finance  meeting.   A motion  to rescind                 
                      amendment 2 FAILED.  Amendments  3 and 4                 
                      by Senator Rieger were ADOPTED.  SCSCSHB
(STA) was REPORTED  out of  committee                 
                      with individual recommendations,  a zero                 
                      fiscal  note  for   the  Department   of                 
                      Administration, and fiscal notes for the                 
                                                                               
                                                                               
                      Department  of  Revenue  for $497.0  and                 
                      $398.5.                                                  
                                                                               
  SENATE CS FOR CS FOR HOUSE BILL NO. 494(FIN):                                
                                                                               
       An  Act changing  the Alaska  State Pension  Investment                 
       Board  to the  Alaska Pension Investment  Authority and                 
       relating  to  the  authority;  and   providing  for  an                 
       effective date.                                                         
                                                                               
  Co-chair  Pearce  announced  that  HB  494  was  before  the                 
  committee.    She reviewed  the  fact that  amendment  1 had                 
  FAILED and amendment 2 was ADOPTED in a prior meeting.                       
                                                                               
  In answer  to Senator  Kerttula regarding  amendment 2,  Co-                 
  chair Pearce pointed out that Senator Rieger's view was that                 
  there was not a  sufficient labor pool in Juneau  of skilled                 
  people who were not already either working for the Permanent                 
  Fund or other  funds from  which to choose  a new  executive                 
  director.   Senator Kelly  said the  same argument  could be                 
  used for moving the Permanent Fund.                                          
                                                                               
  Co-chair Frank  said  he did  not  support amendment  2  and                 
  opposed  putting that constraint  on the  Pension Investment                 
  Authority.   He  then asked  why the  fiscal note  contained                 
  general fund money and not all pension fund money.                           
                                                                               
  DARREL REXWINKEL, Commissioner, Department of Revenue, spoke                 
  on behalf of the  board and as Commissioner of  Revenue, and                 
  explained  the  complicated   fiscal  notes  regarding   the                 
  reorganization of the Treasury Division  and creation of the                 
  Pension  Investment Authority.    Co-chair  Frank asked  the                 
  department  to redo the existing  fiscal notes so they could                 
  be easily understood.                                                        
                                                                               
  In returning to discussion over  amendment 2, Senator Rieger                 
  recalled a  problem in  1989 or  so when  the Department  of                 
  Revenue  was  sorely lacking  in staff.    There was  no one                 
  unemployed in Juneau that  could fill those vacancies.   The                 
  solution was that the department robbed two top employees of                 
  the Permanent  Fund.   He did not  want that scenario  to be                 
                                                                               
                                                                               
  repeated  with this  new  organization.    Senator  Kerttula                 
  opposed moving the  Authority because of information  he had                 
  received regarding the inter-relationships of the trusts and                 
  in-house,  multiple  units  involving   both  organizations.                 
  Senator  Rieger  reiterated  his  feelings  that,  with  the                 
  addition of eight more employees which included an executive                 
  director, and drawing on the same  talent pool, it could not                 
  offer  improved management to the Authority.   He would also                 
  like to restrict the area to Alaska in amendment 2.                          
                                                                               
  GAYLE R. OBA,  Vice Chair,  Alaska State Pension  Investment                 
  Board, asked to speak on amendment 2.                                        
                                                                               
  Senator Kerttula MOVED to rescind  the adoption of amendment                 
  2.                                                                           
                                                                               
  Ms.  Oba agreed  that  it did  not make  sense  to move  the                 
  Pension  Fund   operation  to   Anchorage.     It  was   her                 
  understanding that it  would be easier to move the Permanent                 
  Fund to  Anchorage.  Because  of the degree  of coordination                 
  between the Department of Revenue regarding SBS and deferred                 
  compensation,  it would  not  be  an  efficient move.    She                 
  suggested   that  during  1989,   the  situation   was  much                 
  different.   Since then,  Wall Street  alone had  lost about                 
  50,000 white collar positions.  Now,  if the State recruited                 
  for new  positions, she  believed well  qualified candidates                 
  would be willing to move even to Juneau.                                     
                                                                               
  End SFC-93 #91, Side 1                                                       
  Begin SFC-93 #91, Side 2                                                     
                                                                               
  Senator Rieger agreed  to consider a delayed  effective date                 
  on the bill but would not  support the bill unless there was                 
  a way to access better management for the Pension Fund.                      
                                                                               
  Co-chair Pearce called for a show of hands and the motion to                 
  rescind the adoption of amendment 2 FAILED (Senator Kerttula                 
  was  in  support of  the  motion, Co-chair  Pearce, Senators                 
  Kelly, Sharp, Rieger and Jacko were opposed).                                
                                                                               
  Senator  Rieger  MOVED  amendment  3  that added  the  words                 
  "Alaskan" before the words "metropolitan  area" in amendment                 
  2.  Co-chair Pearce called for a show of hands and amendment                 
  3 was  ADOPTED on a  vote of 5  to 1 (Co-chairs  Pearce, and                 
  Frank,  Senators  Kelly,  Sharp, Rieger  and  Jacko  were in                 
  support.  Senator Kerttula was opposed.).                                    
                                                                               
  Senator Rieger then  MOVED amendment 4 making  the effective                 
  date for Section 3, July 1, 1995.  No objection being heard,                 
  amendment 4 was ADOPTED.                                                     
                                                                               
  Senator Jacko  MOVED for  passage of  SCSCSHB 494(FIN)  from                 
  committee with  individual recommendations.   Senator  Kelly                 
  OBJECTED.  Co-chair  Pearce called for  a show of hands  and                 
                                                                               
                                                                               
  the motion to MOVE the bill from committee carried on a vote                 
  of 4 to 3 (Co-chairs Pearce,  and Frank, Senators Rieger and                 
  Jacko were in  support, Senators Kerttula, Kelly,  and Sharp                 
  were  opposed).    SCSCSHB  494(FIN)  was  REPORTED  out  of                 
  committee  with individual  recommendations,  a zero  fiscal                 
  note for the Department of  Administration, and fiscal notes                 
  for the Department  of Revenue for  $497.0 and $398.5.   Co-                 
  chairs  Pearce   and  Frank   signed  "no   recommendation."                 
  Senators  Rieger  and  Jacko  signed  "do pass."    Senators                 
  Kerttula, Kelly and Sharp signed "do not pass."