Legislature(2009 - 2010)CAPITOL 120
04/09/2010 09:00 AM House RULES
| Audio | Topic |
|---|---|
| Start | |
| HB363 | |
| SB163 | |
| SJR28 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| HB 363 | |||
| SB 163 | |||
| SJR 28 | |||
ALASKA STATE LEGISLATURE
HOUSE RULES STANDING COMMITTEE
April 9, 2010
9:04 a.m.
MEMBERS PRESENT
Representative Nancy Dahlstrom, Chair
Representative Bob Herron, Vice Chair
Representative Mark Neuman
Representative Kurt Olson
Representative Berta Gardner
Representative Beth Kerttula
MEMBERS ABSENT
Representative Charisse Millett
COMMITTEE CALENDAR
HOUSE BILL NO. 363
"An Act relating to the membership of the Alaska Industrial
Development and Export Authority."
- MOVED CSHB 363(FIN) OUT OF COMMITTEE
SENATE BILL NO. 163
"An Act increasing the allowances for injury, disability, or
heart attack payable from the fisherman's fund; and providing
for an effective date."
- MOVED HCS CSSB 163(RLS) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 28
Relating to the Ecumenical Patriarchate and religious rights.
- MOVED SJR 28 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 363
SHORT TITLE: AIDEA MEMBERSHIP
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
02/23/10 (H) READ THE FIRST TIME - REFERRALS
02/23/10 (H) L&C
03/17/10 (H) L&C AT 3:15 PM BARNES 124
03/17/10 (H) Heard & Held
03/17/10 (H) MINUTE(L&C)
03/22/10 (H) L&C AT 3:15 PM BARNES 124
03/22/10 (H) Moved CSHB 363(L&C) Out of Committee
03/22/10 (H) MINUTE(L&C)
03/23/10 (H) L&C RPT CS(L&C) 5DP 1NR
03/23/10 (H) DP: NEUMAN, LYNN, BUCH, T.WILSON, OLSON
03/23/10 (H) NR: HOLMES
03/23/10 (H) FIN REFERRAL ADDED
04/07/10 (H) FIN AT 9:00 AM HOUSE FINANCE 519
04/07/10 (H) Heard & Held
04/07/10 (H) MINUTE(FIN)
04/07/10 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/07/10 (H) Moved CSHB 363(FIN) Out of Committee
04/07/10 (H) MINUTE(FIN)
04/08/10 (H) FIN RPT CS(FIN) 6DP 4NR
04/08/10 (H) DP: THOMAS, GARA, AUSTERMAN, KELLY,
N.FOSTER, JOULE
04/08/10 (H) NR: DOOGAN, SALMON, STOLTZE, HAWKER
04/09/10 (H) RLS AT 9:00 AM CAPITOL 120
BILL: SB 163
SHORT TITLE: FISHERMEN'S FUND
SPONSOR(s): PASKVAN
03/25/09 (S) READ THE FIRST TIME - REFERRALS
03/25/09 (S) L&C, FIN
04/02/09 (S) L&C AT 1:00 PM BUTROVICH 205
04/02/09 (S) Moved SB 163 Out of Committee
04/02/09 (S) MINUTE(L&C)
04/03/09 (S) L&C RPT 5DP
04/03/09 (S) DP: PASKVAN, MEYER, THOMAS, BUNDE,
DAVIS
02/08/10 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/08/10 (S) Heard & Held
02/08/10 (S) MINUTE(FIN)
02/23/10 (S) FIN AT 2:30 PM SENATE FINANCE 532
02/23/10 (S) Moved SB 163 Out of Committee
02/23/10 (S) MINUTE(FIN)
02/24/10 (S) FIN RPT 5DP 1NR 1AM
02/24/10 (S) DP: STEDMAN, HUGGINS, THOMAS, EGAN,
ELLIS
02/24/10 (S) NR: HOFFMAN
02/24/10 (S) AM: OLSON
03/15/10 (S) TRANSMITTED TO (H)
03/15/10 (S) VERSION: SB 163
03/17/10 (H) READ THE FIRST TIME - REFERRALS
03/17/10 (H) FIN
03/17/10 (H) FIN REFERRAL REMOVED
03/17/10 (H) (HB 207 COMPANION BILL)
04/09/10 (H) RLS AT 9:00 AM CAPITOL 120
BILL: SJR 28
SHORT TITLE: ECUMENICAL PATRIARCHATE OF TURKEY
SPONSOR(s): MEYER
02/18/10 (S) READ THE FIRST TIME - REFERRALS
02/18/10 (S) JUD
03/26/10 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/26/10 (S) -- MEETING CANCELED --
03/29/10 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/29/10 (S) Heard & Held
03/29/10 (S) MINUTE(JUD)
03/31/10 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/31/10 (S) Moved SJR 28 Out of Committee
03/31/10 (S) MINUTE(JUD)
04/01/10 (S) JUD RPT 3DP
04/01/10 (S) DP: FRENCH, COGHILL, WIELECHOWSKI
04/05/10 (S) TRANSMITTED TO (H)
04/05/10 (S) VERSION: SJR 28
04/06/10 (H) READ THE FIRST TIME - REFERRALS
04/06/10 (H) RLS
04/09/10 (H) RLS AT 9:00 AM CAPITOL 120
WITNESS REGISTER
ROB EARL, Staff
Representative Bob Herron
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As staff for the House Community and
Regional Affairs Standing Committee, which Representative Herron
co-chairs, explained the changes embodied in CSHB 363, Version
26-LS1503\C, Cook, 4/8/10.
JAN SIEBERTS, Director
Real Estate
Washington Capital Management
Anchorage, Alaska
POSITION STATEMENT: Discussed the changes embodied in CSHB 363,
Version C.
TED LEONARD, Executive Director
Alaska Industrial Development & Export Authority (AIDEA)
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Expressed concern with CSHB 363, Version C.
SENATOR JOE PASKVAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of SB 163.
JAKE HAMBURG, Staff
Senator Joe Paskvan
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of the sponsor, Senator Paskvan,
reviewed the changes embodied in HCS CSSB 163, Version R.
SENATOR MEYER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of SJR 28.
CHRISTINE MARASIGAN, Staff
Senator Kevin Meyer
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During hearing of SJR 28, answered
questions.
ACTION NARRATIVE
9:04:30 AM
CHAIR NANCY DAHLSTROM called the House Rules Standing Committee
meeting to order at 9:04 a.m. Representatives Dahlstrom, Olson,
Neuman, Kerttula, and Gardner were present at the call to order.
Representative Herron arrived as the meeting was in progress.
9:05:04 AM
CHAIR DAHLSTROM mentioned that at the last meeting she allowed
legislators quite a bit of leeway in terms of discussion of the
legislation. She reminded members that the purpose of the
committee is to consider technical changes to ensure legislation
is in its proper form for the entire body to consider.
HB 363-AIDEA MEMBERSHIP
9:05:32 AM
CHAIR DAHLSTROM then turned the committee's attention to the
first order of business, HOUSE BILL NO. 363, "An Act relating to
the membership of the Alaska Industrial Development and Export
Authority." [Before the committee is CSHB 363(FIN).]
9:05:52 AM
REPRESENTATIVE OLSON moved to adopt CSHB 363, Version 26-
LS1503\C, Cook, 4/8/10, as the working document.
REPRESENTATIVE KERTTULA objected for discussion.
9:06:43 AM
ROB EARL, Staff, Representative Bob Herron, Alaska State
Legislature, reviewed the changes incorporated in Version C. He
paraphrased from the following written remarks [original
punctuation provided]:
The only change is the addition of Section 5 (p.2,
line 20). This Section deals with [Alaska Industrial
Development & Export Authority] AIDEA's Loan
Participation Program.
AIDEA is not a direct lender, but through this
Program, AIDEA purchases a portion of a loan that is
sponsored and originated by an eligible financial
institution. (This allows AIDEA to offer, on its
portion of the loan, a lower interest rate and a
longer term.)
Section 5 expands the definition of "eligible
financial institutions" that are eligible for AIDEA's
loan participation program as loan "originators."
Currently who is eligible is not addressed in statute,
but in regulation. And currently (1) and (2) (p.2,
lines 25 & 26) (CFAB [Commercial Fishing and
Agriculture Bank] and commercial banks, etc.) - those
are already in the list of who is eligible in
regulation, but (on p.3, line 3, subsection (3)) these
entities are not:
· An investment manager regulated by the [U.S.
Securities and Exchange Commission] SEC
(including managers to pensions and other
retirement funds)
So it would seem the salient points to consider in
adopting the RULES CS would be:
1. Whether to elevate from regs into statute who is
eligible for AIDEA's loan participation program
(which would obviously reduce AIDEA's flexibility
on changing in the future who is eligible); and
2. Whether investment management entities described
in subsection (3) should be eligible at all
9:08:58 AM
REPRESENTATIVE KERTTULA surmised that Version C would allow a
loan to be made to an individual with an income of $200,000
annually and $1 million in the bank. She inquired as to who
would be eligible for the loans.
MR. EARL deferred to AIDEA.
9:09:30 AM
REPRESENTATIVE GARDNER asked if the change on page 3, line 3,
was discussed in committee.
MR. EARL answered that today would be the first time it's
discussed.
9:09:45 AM
CHAIR DAHLSTROM noted that she had agreed to hear this amendment
in this committee. In response to Representative Neuman, Chair
Dahlstrom confirmed that Version C includes an amendment to
Version A that he had seen prior.
9:10:28 AM
REPRESENTATIVE GARDNER asked if the change establishing
eligibility in statute rather than regulation was done to
include Section 3, which expands the eligibility.
MR. EARL answered that he believes that is correct.
9:11:23 AM
JAN SIEBERTS, Director, Real Estate, Washington Capital
Management, began by informing the committee that Washington
Capital Management is an investment advisor to pension funds.
He further informed the committee that he has been in the
finance industry for 42 years, and thus has considerable
knowledge of the AIDEA programs. He clarified that although his
comments reflect Washington Capital Management, the discussion
is about a class of potential participants in the AIDEA program
being all pension funds. The aforementioned could expand
AIDEA's capacity to create economic development in the state.
Mr. Sieberts then provided the following comments:
Our interest in becoming a participant with AIDEA and
creating economic development in the State of Alaska,
we believe our experience, knowledge of [the] Alaska
market and technical systems meet the qualifications
to become an AIDEA originator. As an investment
advisor, we currently manage approximately $1.7
billion in real estate investments for our pension
fund clients. Many of these beneficiaries of these
funds are residents of the State of Alaska and we've
made numerous real estate investments within the
state. Our income fund would likely be a participant
with AIDEA. Question Capital is an investment advisor
to the fund. Bank of New York Mellon is the trustee
of these funds. A mortgage income fund is an open-
ended co-mingled fund with 40 investors, all of which
are pension funds. The income fund is funded by cash;
there is no leverage. To my knowledge, there is no
bank headquartered in Alaska that has this large of a
capital account. And by nature, the banks are heavily
leveraged.
Many of the beneficiaries of our funds are Alaska
residents. It is clear to us that the intent of the
founding AIDEA legislation anticipated the inclusion
of pension and retirement funds. Under section 44.88
it states: "Stimulating commercial and industrial
growth and expansion by encouraging an increase of
private investment by banks, investment houses,
insurance companies, and other financial institutions,
including pension and retirement funds, to help
satisfy the need for economic expansion.
I do not find any language in this chapter that leads
me to believe there is any intent to limit pension
fund participation in AIDEA programs. On the other
hand, in AIDEA regulations financial institutions mean
a federally or state chartered institutions authorized
to perform banking functions within the State of
Alaska.
It limits the participation in the programs to banks.
This seems in conflict with the intention of the
original law. We would recommend changes to the law
so that participants could include financial
institutions, including pension and retirement funds.
The underwriting expertise, historical performance,
knowledge of the market to underwrite loans, and
license to do business within the state, and in our
case, we have an office in the state. AIDEA has
become an important secondary source of long-term
financing for businesses in Alaska. And in the late
'80s and early '90s precipitated the economic recovery
from an era when half the banks in the state
(indisc.). It seems that in these uncertain times,
it would be desirable for AIDEA to have partners that
are structured differently than the commercial banking
system that has struggled nationwide.
9:15:58 AM
MR. SIEBERT, in response to Representative Neuman, explained
that Washington Capital is an investment advisor, such as those
to the permanent fund and the state retirement system. For many
of its clients, Washington Capital pools together real estate
investments. The two primary funds of Washington Capital are
the real estate investment fund and the real estate loan fund.
The loan funds would be the participant with AIDEA. He pointed
out that Washington Capital put up over $30 million, which
facilitated building the JL Towers in Midtown Anchorage.
Washington Capital is the largest owner of that building and is
a 90 percent owner of St. Elias Long-term Acute Care Hospital.
Washington Capital, he noted, has loans on numerous projects.
9:17:17 AM
REPRESENTATIVE NEUMAN surmised then that Washington Capital is a
broker of banking opportunities. He questioned whether
Washington Capital is an investment capital group.
MR. SIEBERT specified that under the US SEC rules, Washington
Capital is an investment advisor. He explained that as an
investment advisor, Washington Capital put together real estate
investments for pension funds. The assets of the fund are held
by the Bank of New York in a trust.
9:18:02 AM
CHAIR DAHLSTROM acknowledged that Version C embodies very
substantive changes, and therefore she would like to continue to
hear testimony.
9:18:48 AM
REPRESENTATIVE OLSON asked if the amendment incorporated in HB
363 is something he has considered for some time.
MR. SIEBERT replied yes, adding that he began speaking with the
AIDEA board in 2006.
REPRESENTATIVE OLSON inquired then why this amendment is being
presented so late in the process rather than at the beginning of
the process when it could've been vetted by the committees to
which the legislation was referred.
MR. SIEBERT said that he hadn't anticipated legislation.
However, he related that when he talked to a number of
legislators regarding the problem and trying to get AIDEA to
change its regulations to include the participants originally
anticipated in the underlying legislation. Ultimately, it was
suggested that an amendment be made to the legislation. Mr.
Siebert ensured the committee that this isn't a devious attempt
to propose this at the last moment.
9:19:57 AM
REPRESENTATIVE OLSON pointed out that first reading of HB 363
was March 2nd, which is over a month ago. Therefore, bringing
this amendment forward the day before the legislation is
scheduled for the floor seems suspect. He opined that it's not
the proper way to go about this.
MR. SIEBERT interjected that he isn't a lobbyist or part of the
legislative process. He then related that he has been involved
in this process and stone-walled for four years, and then
members of the legislature suggested he offer an amendment. Mr.
Siebert specified that what the amendment proposes isn't any
more than what was the original underlying intent of the law.
9:21:12 AM
REPRESENTATIVE OLSON asked if Mr. Siebert discussed the
amendment with the sponsor.
MR. SIEBERT said he isn't sure who all the sponsors are.
9:22:08 AM
TED LEONARD, Executive Director, Alaska Industrial Development &
Export Authority (AIDEA), Department of Commerce, Community, &
Economic Development, expressed concern with putting provisions
in statute that need the flexibility of being in regulation,
[particularly] in light of the fact that financial markets
change. As mentioned earlier, there are several different
entities identified in [AS 44.88], including insurance
companies, investment houses. Mr. Leonard opined that all of
the aforementioned entities should be reviewed by ADIEA if they
approached AIDEA requesting to be loan originators. He further
opined that the proper vehicle would be through regulation. Mr.
Leonard noted that AIDEA has met with Mr. Sieberts and AIDEA is
willing to discuss this matter. He further noted that Mr.
Sieberts has been reviewing this matter for many years.
However, AIDEA is in the process of changing and recognizing the
investment of pension funds would be a valuable source. He then
highlighted that AS 44.88.010 goes throughout the program. Mr.
Leonard opined that he isn't sure that loan participation is the
best program or whether statute should include a new program
that could better address those types of companies. The goal of
AIDEA is to bring new investment into the state. In conclusion,
Mr. Leonard reiterated that his main concern is with placing in
statute a provision that would limit AIDEA's ability, through
regulation, to bring in new capital. Therefore, he said he was
worried that the result of the amended language would be the
opposite of what is intended.
9:24:58 AM
CHAIR DAHLSTROM remarked that CSHB 363, Version C, needs more
vetting than this committee has the authority to do. Therefore,
she indicated the need to consider CSHB 363(FIN), which she
requested Mr. Earl address.
9:25:38 AM
MR. EARL explained that CSHB 363(FIN) merely added language
specifying that members of the AIDEA board would serve at the
governor's pleasure in order to ensure that the governor has the
ability to appoint and remove public members.
9:26:36 AM
REPRESENTATIVE GARDNER asked if the language regarding serving
at the pleasure of the governor is found elsewhere for other
authorities, commissions, or boards.
MR. EARL answered that the language is found elsewhere in
statute.
9:27:15 AM
REPRESENTATIVE OLSON withdrew his motion to adopt CSHB 363,
Version 26-LS1503\C, Cook, 4/8/10, as the working document.
There being no objection, the motion was withdrawn.
9:27:47 AM
REPRESENTATIVE OLSON moved to report CSHB 363(FIN) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 363(FIN) was
reported from the House Rules Standing Committee.
9:28:05 AM
The committee took an at-ease from 9:28 a.m. to 9:30 a.m.
SB 163- FISHERMEN'S FUND
9:30:17 AM
CHAIR DAHLSTROM announced that the next order of business would
be SENATE BILL NO. 163, "An Act increasing the allowances for
injury, disability, or heart attack payable from the fisherman's
fund; and providing for an effective date."
9:30:30 AM
REPRESENTATIVE OLSON moved to adopt HCS CSSB 163, Version 26-
LS0781\R, Bailey, 4/7/10, as the working document. There being
no objection, Version R was before the committee.
9:30:47 AM
SENATOR JOE PASKVAN, Alaska State Legislature, explained that SB
163 updates the Alaska Fishermen's Fund benefit limit to
$10,000, which would result in the program providing a
meaningful level of assistance. He characterized the fund as a
payer of last resort for commercial fishermen and crew who
sustain injuries or illness while fishing.
9:31:41 AM
JAKE HAMBURG, Staff, Senator Joe Paskvan, Alaska State
Legislature, speaking on behalf of the sponsor, reviewed the
changes embodied in HCS CSSB 163, Version R. He explained that
although under current statute the commissioner is to make
decisions on claims and appeals, the practice has been for the
council to make those decisions. Therefore, one of the two
changes in Version R would allow the Fishermen's Fund Advisory
and Appeals Council to continue the aforementioned practice.
The other change embodied in Version R would allow vessel owners
with indemnity insurance with a deductible of $10,000 or more to
seek a 50 percent reimbursement for the deductible of an injured
crewmember's claim against that insurance. He explained that 50
percent was chosen in order to provide an incentive for the
vessel owner to maintain a safe vessel.
9:32:56 AM
REPRESENTATIVE GARDNER inquired as to whom would pay the vessel
owner for the claim. If the claim was paid by the insurance
company, would it reduce the amount of the claim awarded to the
injured worker, she asked.
SENATOR PASKVAN explained that the fund is funded by a portion
of the license fees that are collected. If the deductible is
$10,000, the fund would only pay up to $5,000 to the injured
crewmember. He echoed earlier testimony that the fund is the
payer of last resort.
REPRESENTATIVE GARDNER surmised then that the payment wouldn't
impact a crew member.
MR. HAMBURG related that the vessel owner is required to pay the
deductible. The vessel owner would be reimbursed by the
fishermen's fund in the amount of up to 50 percent of the
deductible [or $5,000, whichever is less]. Therefore, the only
impact would be to the fund.
9:34:41 AM
CHAIR DAHLSTROM related her understanding then that the second
change being discussed was strictly to the dollar amount.
SENATOR PASKVAN replied yes.
9:35:06 AM
REPRESENTATIVE KERTTULA requested an explanation of Section 3.
She related her understanding that the legislation doesn't
control what the insurance company gives to the vessel owner,
but rather how much the fund pays the vessel owner.
SENATOR PASKVAN answered that is correct.
9:36:32 AM
REPRESENTATIVE OLSON moved to report HCS CSSB 163, Version 26-
LS0781\R, Bailey, 4/7/10, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, HCS CSSB 163(RLS) was reported from the House
Rules Standing Committee.
9:36:50 AM
The committee took an at-ease from 9:36 a.m. to 9:39 a.m.
9:39:45 AM
SJR 28-ECUMENICAL PATRIARCHATE OF TURKEY
9:39:51 AM
CHAIR DAHLSTROM turned the committee's attention to the final
order of business SENATE JOINT RESOLUTION NO. 28, Relating to
the Ecumenical Patriarchate and religious rights.
9:39:55 AM
REPRESENTATIVE OLSOM moved to adopt SJR 28 as the working
document. There being no objection, it was so ordered.
9:40:19 AM
SENATOR MEYER, Alaska State Legislature, related that SJR 28 has
helped him to learn about the religious challenges in Turkey.
He informed the committee that 25 state legislatures have
adopted resolutions similar to SJR 28. This resolution urges
the U.S., the European Union, and the United Nations to
encourage the government of Turkey to end its discrimination and
pledge to uphold and safeguard religious rights without
compromise. The State of Alaska has a substantial Orthodox
Christian community. This fall the US State Department will
deliver copies of these resolutions that have been adopted
throughout the state to the Turkish Foreign Minister.
9:42:45 AM
REPRESENTATIVE HERRON mentioned that there are several
communities in his district in which Orthodox Christianity is
the dominant faith. He asked if the prejudice against [the
Ecumenical Patriarchate] is a recent phenomenon or a long time
phenomenon.
9:43:30 AM
CHRISTINE MARASIGAN, Staff, Senator Kevin Meyer, Alaska State
Legislature, speaking on behalf of the sponsor, answered that
this prejudice has being going on for quite some time. In fact,
every president since President Carter has sent envoys and
messages to the government of Turkey regarding this matter.
There has been progress in the last five years and thus there is
the desire to continue pressure on the matter.
9:44:24 AM
REPRESENTATIVE GARDNER, drawing upon her experience in Turkey
last year, related that this prejudice started before the
Crusades.
9:44:44 AM
REPRESENTATIVE KERTTULA asked if the Secretary of State, since
she will deliver these resolutions, should be included in the
list to which the resolutions are sent.
MS. MARASIGAN related her understanding that the resolution will
be provided to the ambassador of the area.
9:45:38 AM
CHAIR DAHLSTROM commented that she has many constituents and a
church of this faith in her district.
9:45:53 AM
REPRESENTATIVE OLSON moved to report SJR 28 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, SJR 28 was reported from the
House Rules Standing Committee.
9:46:06 AM
ADJOURNMENT
There being no further business before the committee, the House
Rules Standing Committee meeting was adjourned at 9:46 a.m.
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