Legislature(1997 - 1998)
01/27/1998 01:43 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 27, 1998
1:43 P.M.
TAPE HFC 98 - 8, Side 1
TAPE HFC 98 - 8, Side 2
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee
meeting to order at 1:43 p.m.
PRESENT
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Foster Representative Mulder
Representative Grussendorf
Representative Kelly
Co-Chair Hanley was absent from the meeting.
ALSO PRESENT
Senator Dave Donley; Patrick Eggers, Alaska State
Firefighters Association; Richard Duncan, Alaska State
Firefighters Association; Margot Knuth, Assistant Attorney
General, Department of Law; Jim Sampson, Fairbanks; Jim
Kelly, Alaska Permanent Fund Corporation; Peter Bushre,
Chief Financial Officer, Alaska Permanent Fund Corporation;
Sandy Perry-Provost, Special Assistant, Department of Public
Safety; Mike Corkhill, Anchorage.
SUMMARY
HB 308 "An Act making a supplemental appropriation to the
Alaska Permanent Fund Corporation; and providing
for an effective date."
HB 308 was HELD in Committee for further
consideration.
HB 334 "An Act relating to wavier of tuition and fees for
certain family members of a police officer killed
in the line of duty; and providing for an
effective date."
CSHB 334 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with a fiscal
impact note by the University of Alaska.
SB 63 "An Act providing for automatic waiver of juvenile
jurisdiction and prosecution of minors as adults
for certain violations of laws by minors who use
deadly weapons to commit offenses that are crimes
against a person, and relating to the sealing of
the records of those minors."
SB 63 was HELD in Committee for further
consideration.
SENATE BILL NO. 63
"An Act providing for automatic waiver of juvenile
jurisdiction and prosecution of minors as adults for
certain violations of laws by minors who use deadly
weapons to commit offenses that are crimes against a
person, and relating to the sealing of the records of
those minors."
SENATOR DAVE DONLEY provided members with a new proposed
committee substitute for SB 63, work draft 0-LS029\K,
1/27/98 (copy on file). He explained that the language in
subsection (3) of the proposed committee substitute should
be amended on page 2, line 11. He suggested that "a crime
against a person punishable as a felony" be deleted and
"class B felony and the felony is a crime against a person"
be inserted.
Co-Chair Therriault MOVED to ADOPT work draft 0-LS029\K,
1/27/98, as the version before the Committee. There being
NO OBJECTION, the motion was adopted.
Co-Chair Therriault MOVED to ADOPT a verbal Amendment #1 to
delete "a crime against a person punishable as a felony" and
insert "class B felony and the felony is a crime against a
person". There being NO OBJECTION, the motion was adopted.
Senator Donley explained that the committee substitute would
limit the applicability of the automatic waiver to
approximately three cases a year. A second class B felony
offense committed with a deadly weapon, not a dangerous
instrument, would be added.
Co-Chair Therriault explained that the Department of Health
and Social Services determined that three additional cases a
year would be waived.
Representative Davies provided members with Amendment # 2
(copy on file). He explained that the amendment would
clarify that "a crime against a person" modifies class A and
unclassified felonies. He observed that this is the current
interpretation by the Department of Law. He asserted that
serious crimes are currently being waived under existing
law. He observed that there is an over the counter version
of aspirin in Canada, 222, which contains the controlled
substance codeine. Under the proposed committee substitute,
a minor could be automatically waived in to adult court for
giving a 222.
Representative Davies MOVED to ADOPT Amendment #2.
Senator Donley spoke against the amendment. He emphasized
that the original legislation intended that waiver of
unclassified felonies would not be dependent on being a
crime against a person. He noted that Senator Halford, the
original sponsor, is opposed to the amendment.
Co-Chair Therriault clarified that a minor would have to be
under the age of 19 and deliver a controlled substance to a
person whom is at least three years younger to be impacted
by the amendment.
MARGOT KNUTH, ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION,
DEPARTMENT OF LAW spoke against the amendment. In response
to a question by Representative Davies, Ms. Knuth observed
that the Department of Law and the Department of Health and
Social Services interprets "a crime against a person" to
modify both unclassified and class A felonies. She asserted
that the change would be beyond the scope of the bill's
title.
Senator Donley observed that the original legislation was
the result of a conference committee compromise. He noted
that the original Senate version was not limited to a crime
against a person. The House version was limited to a crime
against a person. He maintained that the compromise did not
limit unclassified felonies to crimes against a person.
Class A felonies were limited to crimes against a person.
Ms. Knuth stated that the title indicates that the
legislation is an Act providing for automatic waiver of
juvenile jurisdiction and prosecution of minors as adults
for certain violations of laws by minors who use deadly
weapons to commit offenses that are crimes against a person.
The amendment would expand automatic waiver to unclassified
felonies that are not crimes against a person.
Senator Donley argued that the title difficulty is only
based on an interpretation from the Department of Law. He
stated that he could equally argue the other side based on
the conference committee history. He maintained that the
conference committee intent was clear.
Co-Chair Therriault OBJECTED to the adoption of Amendment
Ms. Knuth noted that there are other unclassified offenses
that are not crimes against a person. She observed that, in
addition to controlled substances in the first degree that
tampering with the pipeline would be an unclassified offense
that is not a crime against a person. She reiterated that
unclassified felony offenses, that are also crimes against a
person, are appropriate for an automatic waiver. She
stressed that the Department of Law has not considered the
propriety of automatic waiver for unclassified felony
offenses that are not crimes against a person.
Senator Donley emphasized that prosecutors can use
discretion by charging a lesser offense.
Representative Davies maintained that based on cases that
have been waived since 1997, waivers are occurring on
offenses below the level of concern addressed by the
legislation.
Senator Donley stressed that the legislation would not
require a prior history of serious crimes to seek the
automatic waiver. He maintained that there is a serious
problem in the juvenile justice system of repeat offenders
of violent crimes. He asserted that current waivers are the
result of a history of violent crimes. He did not think
that less serious crimes are waived without a history of
offenses.
Ms. Knuth emphasized that the safe guard of the juvenile
criminal system should not be based on the ability of
prosecutors to under charge offenses. She maintained that
prosecutors should be allowed to enforce the law in the form
that it is legislated.
Senator Donley stressed that prosecutors commonly use
discretion. He noted that it is difficult to craft laws
that cover every possible scenario.
Ms. Margot acknowledged that there are cases were
prosecutors use discretion.
She noted that prosecutors might decide to use a lesser plea
to avoid a trial that would further victimize the victim.
Representative Kelly noted that one of the reasons the state
of Alaska has open court is to protect the rights of the
accused. He asserted prosecutors would not prosecute the
case of a minor who gave his sister aspirin with codeine.
He emphasized that the amendment would give prosecutors the
ability to go after the "really bad kid."
Ms. Knuth noted that the House Finance Committee is the last
committee of referral for the legislation. She emphasized
that the amendment represents a substantive change of law.
She expressed concern that the issue has not been addressed
in any other hearings and is not reflected in the title of
the bill.
Representative Davies spoke in support of Amendment #2. He
reiterated that the discretion to waive juveniles into adult
court already exists.
Co-Chair Therriault noted that he would hold the bill to
determine if the amendment would present a title problem.
SB 63 was HELD in Committee for further consideration.
HOUSE BILL NO. 334
"An Act relating to wavier of tuition and fees for
certain family members of a police officer killed in
the line of duty; and providing for an effective date."
Representative Kelly spoke in support of HB 334. He
provided members with a proposed committee substitute, work
draft 0-LS1380\E, 1/27/98 (copy on file). He reviewed
changes incorporated by the work draft. He observed that
the proposed committee substitute would clarify that the
tuition waiver would be for undergraduate studies. The
proposed committee substitute also added a retroactive
clause.
SANDY PERRY-PROVOST, SPECIAL ASSISTANT, DEPARTMENT OF PUBLIC
SAFETY estimated that two or three dependents would be
eligible under the retroactive clause.
Co-Chair Therriault MOVED to ADOPT, work draft 0-LS1380\E,
1/27/98. There being NO OBJECTION, the motion was adopted.
PATRICK EGGERS, ALASKA STATE FIREFIGHTERS ASSOCIATION spoke
in support of the legislation. He asked that firefighters,
who face daily peril in their jobs, be included in the
legislation. He observed that no dependents of firefighters
would be covered under the retroactive clause.
RICHARD DUNCAN, ALASKA STATE FIREFIGHTERS ASSOCIATION
provided members with information on the deaths of the
following Alaskan firefighters killed in the line of duty:
Hugh Rudolph, Thomas Dunnigan, Harry Newell, Donald Hyde,
Charles Whitehorn, and Christine Pennington (copy on file).
JIM SAMPSON, JUNEAU spoke in support of HB 334. He observed
that John Kevin Lamm, a Fairbanks police officer was
recently killed while on duty. On behalf of Mr. Lamm's
dependents, he expressed his appreciation for the
legislation and urged its adoption.
Representative Foster MOVED to ADOPT Amendment #1 (copy on
file). Amendment #1 would add spouses and dependents of
firefighters, killed in the line of duty, to HB 334. Co-
Chair Therriault OBJECTED for the purpose of discussion.
(Tape Change, HFC 98 - 8, Side 2)
Co-Chair Therriault observed the difficulty of "drawing a
line." He questioned where the line should be drawn.
Representative Kelly stated that he would draw the line
based on the scope of a person's duties. He compared a
security guard that is working to protect the assets and
patrons of a bank, to military personnel, police officers
and firemen that are protecting society at large.
Co-Chair Therriault and Representative Davis expressed
concern that the legislation could become too inclusive.
Representative Martin stressed that the State needs to
encourage people that are willing to sacrifice themselves,
daily, for the citizens on the street and in the
neighborhoods to live safely.
Co-Chair Therriault WITHDREW his OBJECTED. There being NO
OBJECTION, the motion to adopt Amendment #1 was passed.
Representative Grussendorf MOVED to ADOPT Amendment #2 (copy
on file). Amendment #2 would add village public safety
officers (VPSO) to HB 334. He emphasized that village
public safety officers are the police in rural areas. He
observed that a VPSO officer was killed in an ambush on his
way to investigate a domestic violence assault, in 1986. No
village public safety officers have been killed in the line
of duty since that time.
There being NO OBJECTION, Amendment #2 was adopted.
Representative Mulder MOVED to ADOPT Amendment #3.
Amendment #3 would adopt a title change to reflect the
amendments adopted by the Committee. He stressed that the
title should be tightened to prevent addition.
Representative Kelly spoke in support of Amendment #3.
There being NO OBJECTION, Amendment #3 was adopted.
MIKE CORKHILL, ALASKA POLICE OFFICERS ASSOCIATION, ANCHORAGE
testified via the teleconference network in support of HB
334. He spoke in support of expanding the legislation to
cover other police officers such as village public safety
officers. He asked if an unborn child would be covered by
the legislation. He suggested that clarification be made
that current, not former, spouse be covered by the
legislation. He expressed concern regarding residential
requirements. He noted that police officers can be hired by
municipal agencies from outside the State. He felt that an
officer working in Alaska should not be excluded from the
benefits of the legislation.
Co-Chair Therriault observed that an unborn child would be
covered as the officer's dependent.
Representative Mulder MOVED to report CSHB 334 (FIN) out of
Committee with the accompanying fiscal note.
CSHB 334 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a fiscal impact note by the
University of Alaska.
HOUSE BILL NO. 308
"An Act making a supplemental appropriation to the
Alaska Permanent Fund Corporation; and providing for an
effective date."
JIM KELLY, DIRECTOR OF COMMUNICATIONS, ALASKA PERMANENT FUND
CORPORATION testified in support of HB 308. He observed
that the Permanent Fund performed better than expected in
the current fiscal year. Assets under management grew from
$22.1 to $23 billion dollars between June and December 1997.
This growth is in addition to the $747 million dollars that
were paid in dividends.
Mr. Kelly noted that the Fund's total return was flat to
modestly positive during the last three months. The first
quarter of the fiscal year the Fund earned a period return,
not annualized, of 5.04 percent. He noted that U.S.
equities performed at 8.84 percent. This equals an
annualized return of more than 35 percent. He observed that
manager fees are based on the value of assets under
management. When the Fund goes up in value, the manager
fees increase.
Mr. Kelly noted that the Board has put mitigating factors
into place that has reduced the growth of manager fees. A
greater percentage of equity assets were moved into passive
index accounts. Fees for passive management are just a
fraction of active management fees. He added that there was
a temporary movement of billions of dollars of equity assets
into a passive transition account during the Fund's
restructuring. Restructuring was undertaken to accomplish
the Board-directed shift in asset allocation into passive
management, international equities and emerging markets. He
explained that most of this restructuring took place in the
last quarter.
Mr. Kelly observed that the Fund experienced a number of
positive outcomes from restructuring. Significant capital
gains have been realized. The net income for the Permanent
Fund during the first half of the year was $1.5 billion. A
net income of $2.1 billion dollars is projected for the
year.
Mr. Kelly cautioned that future expectations are not as
high. He did not think that the kind of returns
institutional and individual investors have been earning in
the past few years would continue. The Fund is expecting
single digit returns from all asset classes for the
intermediate-term, with the exception of small-cap U.S.
stocks which the Fund's investment consultant, Callan
Associates, projects at an average of 10.1 percent for the
next five years.
He emphasized that expectations are also for increased
short-term volatility. He stressed that the Corporation
requests that SB 200 be amended and reduced to $4,494
thousand dollars. He estimated that this would provide
sufficient corporate receipts to pay managers for the
remainder of the year. He asserted that money budgeted for
manager fees will be used solely for manager fees. If
there is a surplus the unused corporate receipts will lapse.
Mr. Kelly observed that fees for the first six months total
$11,079,800. The supplemental will allow an additional
$14,106,200 for the last two quarters of the year. For
every dollar of net income the Fund earns this year, manager
fees will cost 1.19 cents.
Co-Chair Therriault noted that the fee structure was
negotiated down for a saving.
PETER BUSHRE, CHIEF FINANCIAL OFFICER, ALASKA PERMANENT FUND
CORPORATION explained that custody fees were negotiated down
by $625 thousand dollars. The supplemental request is for
manager fees. Contract negotiations have reduced a number
of manger fees during the current fiscal year. Custody fees
and manager fees are both paid with corporate receipts.
Co-Chair Therriault asked if savings in custody fees were
taken into consideration in the shift of authorization.
Mr. Bushre replied that a portion of the savings was taken
into consideration. A portion was also used to cover
deficits in other categories.
Mr. Kelly noted that the Alaska Permanent Fund Corporation
is committed to lapse funds left over from manager fees. He
observed that the funds left over from custody fees have not
been obligated in other categories at this time. He noted
that the year is only half over.
In response to a question by Co-Chair Therriault, Mr. Bushre
observed that the request is for the last quarter of the
fiscal year.
Representative Davies reiterated that any remaining funds
will be lapsed. Mr. Kelly agreed that any corporate
receipts authorized to pay manager fees would not be shifted
to other categories, but would be lapsed back to the Fund.
Representative Martin maintained that the current
arrangement is working well. He stressed that managers
should be paid for their success, but cautioned that manager
fees should not become a vehicle for supplemental funding.
Co-Chair Therriault clarified that the intent is to
scrutinize expenditures, even if they are corporate
receipts. He stated that it does not make sense to lapse
money if it can be shifted over to reduce other costs. He
asked for more information regarding the $625 thousand
dollars that were saved in custody fees.
Mr. Bushre clarified that $625 thousand dollars is a
projected surplus in the custody fee budget for FY 99. The
supplemental request is for FY 98. He added that new
contracts have recently gone into effect. There are some
savings as a result of the new contracts.
HB 308 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 2:59 p.m.
House Finance Committee 5 1/27/98
| Document Name | Date/Time | Subjects |
|---|