Legislature(2003 - 2004)

05/06/2004 09:08 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                          May 6, 2004                                                                                           
                           9:08 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bruce Weyhrauch, Chair                                                                                           
Representative Jim Holm, Vice Chair                                                                                             
Representative John Coghill                                                                                                     
Representative Bob Lynn                                                                                                         
Representative Paul Seaton                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARING(S)                                                                                                         
                                                                                                                                
Commissioner of Administration                                                                                                
                                                                                                                                
     Ray Matiashowski, Deputy Commissioner - Douglas                                                                            
                                                                                                                                
     - CONFIRMATION(S) ADVANCED                                                                                                 
                                                                                                                                
HOUSE BILL NO. 544                                                                                                              
"An Act providing that public members of the Board of Trustees                                                                  
of the Alaska Permanent Fund Corporation may be removed only for                                                                
cause; and providing for an effective date."                                                                                    
                                                                                                                                
     - MOVED CSHB 544(STA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
CS FOR SENATE BILL NO. 354(STA) am(efd fld)                                                                                     
"An Act relating to complaints filed with, and investigations,                                                                  
hearings, and orders of, the State Commission for Human Rights;                                                                 
and making conforming amendments."                                                                                              
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
CS FOR SENATE JOINT RESOLUTION NO. 33(STA)                                                                                      
Urging our United States Senators to work to allow a timely vote                                                                
on the floor on all judicial nominations.                                                                                       
                                                                                                                                
     - WAIVED OUT OF COMMITTEE                                                                                                  
                                                                                                                                
CS FOR SENATE BILL NO. 379(FIN)                                                                                                 
"An Act providing that public members of the Board of Trustees                                                                  
of the Alaska Permanent Fund Corporation may be removed only for                                                                
cause; and providing for an effective date."                                                                                    
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 544                                                                                                                  
SHORT TITLE: PERM FUND BOARD PUBLIC MEMBER REMOVAL                                                                              
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/25/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/25/04       (H)       STA                                                                                                    
04/22/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
04/22/04       (H)       Heard & Held                                                                                           
04/22/04       (H)       MINUTE(STA)                                                                                            
05/06/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
                                                                                                                                
BILL: SB 354                                                                                                                  
SHORT TITLE: HUMAN RIGHTS COMMISSION PROCEDURES                                                                                 
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/27/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/27/04       (S)       STA, JUD                                                                                               
03/23/04       (S)       STA AT 3:30 PM BELTZ 211                                                                               
03/23/04       (S)       Heard & Held                                                                                           
03/23/04       (S)       MINUTE(STA)                                                                                            
04/01/04       (S)       STA AT 3:30 PM BELTZ 211                                                                               
04/01/04       (S)       Moved CSSB 354(STA) Out of Committee                                                                   
04/01/04       (S)       MINUTE(STA)                                                                                            
04/02/04       (S)       STA RPT CS FORTHCOMING 1DP 2NR                                                                         
04/02/04       (S)       NR: STEVENS G, STEDMAN; DP: COWDERY                                                                    
04/05/04       (S)       STA CS RECEIVED     SAME TITLE                                                                         
04/14/04       (S)       JUD AT 5:30 PM BUTROVICH 205                                                                           
04/14/04       (S)       Scheduled But Not Heard                                                                                
04/20/04       (S)       JUD RPT CS(STA) 1DP 3NR                                                                                
04/20/04       (S)       DP: SEEKINS                                                                                            
04/20/04       (S)       NR: THERRIAULT, OGAN, FRENCH                                                                           
04/20/04       (S)       JUD AT 8:00 AM BUTROVICH 205                                                                           
04/20/04       (S)       Moved CSSB 354(STA) Out of Committee                                                                   
04/20/04       (S)       MINUTE(JUD)                                                                                            
05/02/04       (S)       TRANSMITTED TO (H)                                                                                     
05/02/04       (S)       VERSION: CSSB 354(STA) AM(EFD FLD)                                                                     
05/03/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/03/04       (H)       STA, JUD                                                                                               
05/04/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
05/04/04       (H)       Heard & Held                                                                                           
05/04/04       (H)       MINUTE(STA)                                                                                            
05/05/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
05/05/04       (H)       Heard & Held                                                                                           
05/05/04       (H)       MINUTE(STA)                                                                                            
05/05/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
05/05/04       (H)       Scheduled But Not Heard                                                                                
05/06/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
05/06/04       (H)       JUD AT 3:00 PM CAPITOL 120                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RAY MATIASHOWSKI, Acting Commissioner                                                                                           
Office of the Commissioner                                                                                                      
Department of Administration                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as appointed commissioner of the                                                                 
Department of Administration.                                                                                                   
                                                                                                                                
MICHAEL BARNHILL, Assistant Attorney General                                                                                    
Commercial/Fair Business Section                                                                                                
Civil Division (Juneau)                                                                                                         
Department of Law                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of the department                                                                      
during the hearing on HB 544.                                                                                                   
                                                                                                                                
LISA FITZPATRICK, Chair                                                                                                         
Human Rights Commission                                                                                                         
Office of the Governor                                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Responded to committee questions on behalf                                                                 
of the commission during the hearing on SB 354.                                                                                 
                                                                                                                                
SCOTT J. NORDSTRAND, Deputy Attorney General                                                                                    
Civil Division                                                                                                                  
Office of the Attorney General                                                                                                  
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on SB
354.                                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-80, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  BRUCE WEYHRAUCH  called the  House State  Affairs Standing                                                             
Committee meeting  to order at  9:08 a.m.   Representatives Holm,                                                               
Seaton, Lynn,  and Weyhrauch were  present at the call  to order.                                                               
Representatives Coghill, Berkowitz, and  Gruenberg arrived as the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
^CONFIRMATION HEARING(S)                                                                                                        
                                                                                                                                
^Commissioner of Administration                                                                                                 
                                                                                                                                
Number 0066                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  announced  the  first order  of  business,  the                                                               
confirmation hearing  on the appointment  of Ray  Matiashowski as                                                               
Commissioner   of   Administration.       He   noted   that   Mr.                                                               
Matiashowski's   appointment    follows   the    resignation   of                                                               
Commissioner Mike Miller.                                                                                                       
                                                                                                                                
Number 0089                                                                                                                     
                                                                                                                                
RAY   MATIASHOWSKI,   Acting    Commissioner,   Office   of   the                                                               
Commissioner,   Department  of   Administration,  testifying   as                                                               
appointed commissioner of the  Department of Administration, told                                                               
the committee  that he  has been the  Deputy Commissioner  at the                                                               
department for the  last 14 months.   He also noted that  he is a                                                               
lifelong Alaskan, born  and raised in Ketchikan, who  owns a real                                                               
estate firm in Ketchikan that he started in 1985.                                                                               
                                                                                                                                
ACTING  COMMISSIONER MATIASHOWSKI  revealed  that the  department                                                               
has  several significant  initiatives  underway.   He stated  his                                                               
goal is  to complete  those projects.   He  mentioned information                                                               
technology  integration and  an  ongoing  consolidation of  human                                                               
resource managers.   He  described the  department as  a catchall                                                               
agency  which is  primarily charged  with  the responsibility  to                                                               
manage  state  government.   The  department  conducts  the  back                                                               
office operations for state government;  it writes payroll checks                                                               
and warrants  for purchases, leases  and procures  items, manages                                                               
and provides the information technology  for state government and                                                               
retirement  and benefits  for  state employees.    He noted  that                                                               
there is another  side of the department which  "touches upon the                                                               
public more."  He said that  side includes:  the Public Defender,                                                               
the  Office  of  Public  Advocacy,  and  the  Division  of  Motor                                                               
Vehicles.   Acting  Commissioner Matiashowski  said he  finds the                                                               
assignment fun, exciting, challenging, and "fairly interesting."                                                                
                                                                                                                                
Number 0243                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH asked, "Where are we on employee contracts?"                                                                    
                                                                                                                                
ACTING  COMMISSIONER  MATIASHOWSKI  replied that  he  thinks  the                                                               
department is  doing well;  it has  signed six  bargaining units,                                                               
and two  of those  have ratified,  while the  others remain.   He                                                               
listed the bargaining  units signed.  He explained  that as [each                                                               
bargaining unit]  is signed, it  is forwarded to  the legislature                                                               
and  to  the Office  of  Management  &  Budget.   He  listed  the                                                               
remaining [bargaining units].                                                                                                   
                                                                                                                                
Number 0333                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM asked,  "Where  are we  in our  negotiations                                                               
with  the  unions and  employees,  with  regards to  the  [Public                                                               
Employees' Retirement System (PERS)] difficulties that we have?"                                                                
                                                                                                                                
ACTING  COMMISSIONER MATIASHOWSKI  answered  that the  department                                                               
doesn't  bargain on  PERS and  [the  Teachers' Retirement  System                                                               
(TRS)].  He  said those are set  up in statute.   He added, "What                                                               
we  are  doing  with  the  PERS  and  TRS  boards  right  now  is                                                               
undertaking a  process where we  are reviewing whether or  not we                                                               
should set up an additional tier -  a Tier IV for PERS and a Tier                                                               
III  for  TRS  -  which  would  lessen  the  liability  that  the                                                               
employers  - the  State of  Alaska, the  municipalities, and  the                                                               
school districts  have going  forward."   He explained  that with                                                               
the  defined benefit  plan of  PERS, the  employer takes  all the                                                               
risk  regarding investment  loss  and increasing  costs, such  as                                                               
health care.   He  added, "So,  we're kind of  upside down  on it                                                               
right now, trying to catch up."   He said that's a stark contrast                                                               
to where things were in the  late 1990s when "we" were going into                                                               
an  over-funded status  and  were  cutting employer  contribution                                                               
rates.                                                                                                                          
                                                                                                                                
Number 0430                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  noted that he  had had a  conversation the                                                               
other  day   with  Acting  Commissioner   Matiashowski  regarding                                                               
attempting   to  offer   employees  the   option  of   a  defined                                                               
contribution  plan, such  as the  University of  Alaska has.   He                                                               
asked Acting Commissioner Matiashowski to comment on that.                                                                      
                                                                                                                                
ACTING  COMMISSIONER MATIASHOWSKI  said  he  appreciated a  prior                                                               
conversation  with Representative  Seaton,  as well  as a  letter                                                               
Representative  Seaton had  sent  along  with backup  information                                                               
describing  what the  University of  Alaska  had done.   For  the                                                               
benefit  of the  committee, he  explained that  if a  Tier IV  is                                                               
designed, it may  be a defined contribution plan,  which puts the                                                               
investment risk  on the employee.   If a Tier  IV is chosen  as a                                                               
vehicle to  move forward for  all state employees, that  can only                                                               
be done  prospectively "going forward  for new hires."   He noted                                                               
that  [in their  prior conversation],  Representative Seaton  had                                                               
indicated the  possibility of making a  defined contribution plan                                                               
an  elective  benefit  that  current employees  may  be  able  to                                                               
select.   He  stated that  that [possibility]  has been  analyzed                                                               
more  than he  realized  and he  is close  to  having a  response                                                               
regarding whether or not that would be an option.                                                                               
                                                                                                                                
REPRESENTATIVE SEATON noted that  last year the legislature moved                                                               
the  Alaska Vocational  Technical Center  (AVTEC) in  Seward from                                                               
the  Department  of  Education   and  Early  Development  to  the                                                               
Department of  Labor & Workforce  Development.   Furthermore, the                                                               
legislature  allowed  anyone who  was  in  TRS continue  in  that                                                               
system.   He offered his understanding  that current negotiations                                                               
are saying  that someone who  has a  teaching degree who  goes to                                                               
AVTEC would be  required to change from TRS to  PERS, because the                                                               
job  doesn't  require  a  teaching  degree.    He  asked  for  an                                                               
explanation.                                                                                                                    
                                                                                                                                
ACTING COMMISSIONER  MATIASHOWSKI said  he doesn't know  what the                                                               
ultimate resolution to that is, but he will look into that.                                                                     
                                                                                                                                
Number 0674                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  asked  what  the   worst  thing  is  about  the                                                               
Department of Administration.                                                                                                   
                                                                                                                                
ACTING  COMMISSIONER  MATIASHOWSKI  responded  that  he  couldn't                                                               
reply negatively  about the  department.  He  stated that  it has                                                               
been  intriguing for  him to  go  from being  a private  business                                                               
owner to being  a government employee again.  He  said when he is                                                               
in private  business, he  can change his  mind and  do something,                                                               
and  by the  end of  the day  it's happening.   Conversely,  when                                                               
running a department  with hundreds of employees,  the process of                                                               
implementing  ideas takes  much longer.    He said  he finds  the                                                               
department interesting because it is so diverse.                                                                                
                                                                                                                                
Number 0758                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON,  in regard  to the consolidation  of human                                                               
resources, asked if  the department has looked at  an analysis of                                                               
the  dollars  that  are  being   charged  to  all  the  different                                                               
departments,  versus  the  dollars that  those  departments  were                                                               
individually expending  prior to  [the consolidation].   He noted                                                               
that  some   budget  subcommittees  have  been   charged  by  the                                                               
Department  of  Administration more  than  the  service had  cost                                                               
previously.                                                                                                                     
                                                                                                                                
ACTING  COMMISSIONER MATIASHOWSKI  answered that  money is  being                                                               
saved  "on a  consolidated view";  the department  had to  show a                                                               
savings or  the Office  of Management &  Budget would  never have                                                               
allowed  [the consolidation]  to  happen.   He  noted that  Kevin                                                               
Jardell has  been "bird-dogging"  the consolidation.   He offered                                                               
his  recollection that  the savings  has  been between  $500,000-                                                               
$700,000 annually.  He explained  that all the different agencies                                                               
were  brought  in  to  the   department  under  the  Division  of                                                               
Personnel.  He  noted that the current  administration has chosen                                                               
to  look  at state  government  with  an enterprise  perspective,                                                               
statewide,  rather  than   department-by-department.    With  the                                                               
statewide view, he explained, sometimes  cost savings is achieved                                                               
as a  whole, but in  unique circumstances  one agency may  "go up                                                               
because of  unique needs."   He  noted another  consolidation has                                                               
been to centralize mail operations  to within the facility in the                                                               
State Office Building.   He said the department has  to prove its                                                               
fiscal and financial  case to each department  when it undertakes                                                               
a consolidation.                                                                                                                
                                                                                                                                
Number 0888                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  asked Acting Commissioner  Matiashowski to                                                               
return  during  the next  legislative  session  with part  of  an                                                               
overview with  a specific  breakdown on  the actual  charges that                                                               
are being made to all the departments and the savings.                                                                          
                                                                                                                                
ACTING COMMISSIONER MATIASHOWSKI said he would love to do that.                                                                 
                                                                                                                                
Number 0925                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM noted  that  the  current regulatory  reform                                                               
occurring in  both the House  and Senate  is an attempt  to bring                                                               
the control for  the regulatory process back  to the legislature.                                                               
He  asked for  Acting Commissioner  Matiashowski's comments  with                                                               
regard to his acceptance or resistance to that move.                                                                            
                                                                                                                                
ACTING  COMMISSIONER  MATIASHOWSKI  responded   that  he  is  not                                                               
familiar with  that issue and  would therefore have an  open mind                                                               
to it.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  HOLM surmised  that the  thought process  is that                                                               
the  Administrative Procedures  Act gives  too much  "control for                                                               
the administration versus legislative intent."                                                                                  
                                                                                                                                
CHAIR  WEYHRAUCH asked,  "If  you  can only  do  one thing  while                                                               
you're commissioner, what do want to do?"                                                                                       
                                                                                                                                
ACTING COMMISSIONER  MATIASHOWSKI answered, "If I  could walk out                                                               
the  door  with  successfully  signed labor  contracts  ...  that                                                               
clearly show that we respect  and appreciate the great value that                                                               
state employees give  the State of Alaska,  while recognizing the                                                               
fiscal constraints (indisc. - coughing),  I would feel very, very                                                               
good about that."  He emphasized  that there is so much more that                                                               
he wants to address, but that  is "the current fire burning" that                                                               
he is "anxious to have a successful conclusion to."                                                                             
                                                                                                                                
Number 1049                                                                                                                     
                                                                                                                                
REPRESENTATIVE   GRUENBERG    asked   if    Acting   Commissioner                                                               
Matiashowski, whose  experience has  primarily been  in Southeast                                                               
Alaska, will be sensitive to the needs of all parts of Alaska.                                                                  
                                                                                                                                
ACTING   COMMISSIONER   MATIASHOWSKI   answered   "Yes,   without                                                               
question."   He said it  is a great  honor to  be in a  seat that                                                               
truly transcends where he comes from.                                                                                           
                                                                                                                                
REPRESENTATIVE   GRUENBERG    asked   if    Acting   Commissioner                                                               
Matiashowski  will attempt  to be  sensitive  and bipartisan  and                                                               
work with people form both parties.                                                                                             
                                                                                                                                
ACTING  COMMISSIONER MATIASHOWSKI  again answered,  "Yes, without                                                               
question."                                                                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked Acting  Commissioner Matiashowski                                                               
to reconfirm that he would be  as sensitive to the needs of labor                                                               
as well as management.                                                                                                          
                                                                                                                                
ACTING COMMISSIONER  MATIASHOWSKI responded,  "Certainly, without                                                               
question."  He stated that he  feels good about the fact that six                                                               
contracts  are already  signed.   He added,  "I believe  that's a                                                               
great  ... show  of our  willingness  to bargain  in good  faith,                                                               
which we will continue to do."                                                                                                  
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked Acting  Commissioner Matiashowski                                                               
to  remember  the aforementioned  questions  and  his answers  to                                                               
them, because "the people of the state depend on you."                                                                          
                                                                                                                                
Number 1132                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL  thanked Acting  Commissioner Matiashowski                                                               
for  being  willing  to  step  up and  fill  the  position.    He                                                               
emphasized the importance of "the  face of government" and making                                                               
the  public  comfortable  with   engaging  its  government.    He                                                               
mentioned  the [Division]  of Motor  Vehicles (DMV)  and said  he                                                               
would like "to  see us become more consumer friendly."   He asked                                                               
Acting  Commissioner Matiashowski  to  be  aware that  government                                                               
tends to be difficult to engage.                                                                                                
                                                                                                                                
ACTING COMMISSIONER  MATIASHOWSKI spoke  of taking  great strides                                                               
towards  user  access  so  that people  can  interface  with  the                                                               
government  online.    For example,  he  mentioned  applying  for                                                               
driver's licenses  and fishing licenses online.   He acknowledged                                                               
that [the face of government]  also pertains to cleaner buildings                                                               
and smiling faces,  for example.  He stated, "We  want to make it                                                               
easy.  I mean, we're here for them - for the public."                                                                           
                                                                                                                                
Number 1289                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH noted that Acting  Commissioner Matiashowski is a                                                               
Ketchikan  native with  ties  in  that city  in  the real  estate                                                               
market  and  the political  scene.    He mirrored  Representative                                                               
Gruenberg's concern by asking the  acting commissioner to confirm                                                               
that he  understands clearly that  he is representing  the state.                                                               
He said, "Sometimes  you're going to have to  make decisions that                                                               
don't benefit Ketchikan and your  friends and your business."  He                                                               
said Acting  Commissioner Matiashowski may actually  have to make                                                               
decisions that may harm them and it would be difficult to do.                                                                   
                                                                                                                                
ACTING COMMISSIONER MATIASHOWSKI agreed that  it would be hard to                                                               
do,  but he  stated that  he takes  the position  of commissioner                                                               
quite  seriously.     He  said,  "I'm  painfully   aware  of  the                                                               
responsibility  I  take  on  as   becoming  commissioner  of  the                                                               
department.                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH explained  that  he asked  because  there was  a                                                               
contentious issue  that occurred this  year in moving  the Alaska                                                               
Marine Highway System  [to Ketchikan].  He  mentioned leases that                                                               
the department had  to sign and real estate issues.   He said, "I                                                               
imagine there's  a lot  of people in  Ketchikan that  may believe                                                               
now they  have a friend  in the Department of  Administration and                                                               
... you may have to say no."                                                                                                    
                                                                                                                                
ACTING COMMISSIONER MATIASHOWSKI responded  that he can only hope                                                               
that  everyone, no  matter where  in  the state  he/she is  from,                                                               
would feel there  is someone to call at the  department that will                                                               
respond courteously and efficiently to  his/her request.  He said                                                               
his intent  is not  to serve  only the people  of Ketchikan.   He                                                               
remarked that  he appreciates the comments  [from the committee],                                                               
and he said  that clearly it's a sensitive issue.   He concluded,                                                               
"You can  expect and take  comfort in the  fact that I  will deal                                                               
with that professionally and transparently."                                                                                    
                                                                                                                                
Number 1338                                                                                                                     
                                                                                                                                
REPRESENTATIVE LYNN  remarked, "We're all from  someplace; we all                                                               
look for the greater good of Alaska."                                                                                           
                                                                                                                                
Number 1385                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG clarified that  he certainly didn't mean                                                               
to  single out  Acting  Commissioner Matiashowski.    He said  he                                                               
intends to ask future commissioner designees the same question.                                                                 
                                                                                                                                
Number 1414                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL  moved  to  forward the  name  of  Acting                                                               
Commissioner Matiashowski to  the joint session of  the House and                                                               
Senate  for   confirmation.    There  being   no  objection,  the                                                               
confirmation  of Acting  Commissioner  Matiashowski was  advanced                                                               
from the House State Affairs Standing Committee.                                                                                
                                                                                                                                
HB 544-PERM FUND BOARD PUBLIC MEMBER REMOVAL                                                                                  
                                                                                                                                
Number 1450                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE BILL NO. 544, "An Act  providing that public members of the                                                               
Board of  Trustees of the  Alaska Permanent Fund  Corporation may                                                               
be removed only for cause; and providing for an effective date."                                                                
                                                                                                                                
Number 1465                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  the committee  substitute                                                               
(CS) for  HB 544,  Version 23-GH2142\H, Cook,  5/4/04, as  a work                                                               
draft.   [No objection was  stated and  Version H was  treated as                                                               
before the committee.]                                                                                                          
                                                                                                                                
Number 1483                                                                                                                     
                                                                                                                                
MICHAEL  BARNHILL,  Assistant Attorney  General,  Commercial/Fair                                                               
Business  Section, Civil  Division (Juneau),  Department of  Law,                                                               
said HB 544  would limit removal of permanent  fund trustees only                                                               
for cause.  He noted that  the last committee substitute (CS) for                                                               
HB  544 that  was adopted  before the  committee was  Version 23-                                                               
GH2142\D, Cook,  5/4/04, and it  included language  regarding the                                                               
types  of cause,  a  provision for  a hearing,  and  filing of  a                                                               
decision with the  lieutenant governor.  He  recollected that, at                                                               
the last hearing of the  bill, Representatives Seaton, Gruenberg,                                                               
and Holm expressed concerns about  "all the bells and whistles in                                                               
the  bill."   Subsequently, the  bill  was trimmed  down so  that                                                               
public members of  the permanent fund board of  trustees could be                                                               
removed only for cause.  He continued as follows:                                                                               
                                                                                                                                
     We took  that version  to the Senate  side.   It passed                                                                    
     out  of [the  Senate  Finance Committee],  went to  the                                                                    
     floor yesterday,  [and] passed out of  the Senate floor                                                                    
     20-0.  In  the mean time, a request for  a House CS was                                                                    
     sent over to [Legislative  Legal and Research Services]                                                                    
     and they prepared  Version H, which is  before you now,                                                                    
     and that  added this first  sentence to clarify  that a                                                                    
     governor may remove a nonpublic  member from the board.                                                                    
     That sentence is not in  the Senate version that passed                                                                    
     out yesterday,  and it's my  view that that  concept is                                                                    
     absolutely understood in the  Senate version and is not                                                                    
     necessary.  It  can be in there; it doesn't  have to be                                                                    
     in there.  But certainly  we've all along intended that                                                                    
     the  governor  may  remove  nonpublic  members  -  [for                                                                    
     example] the commissioner of  the Department of Revenue                                                                    
     and the  other cabinet member  - from the board  at any                                                                    
     time.                                                                                                                      
                                                                                                                                
Number 1578                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  offered his understanding  that the  synonym for                                                               
nonpublic is private.                                                                                                           
                                                                                                                                
MR. BARNHILL responded, "I suppose that's one interpretation."                                                                  
                                                                                                                                
CHAIR WEYHRAUCH concluded that the  governor may remove a private                                                               
member from the board.                                                                                                          
                                                                                                                                
MR.  BARNHILL  replied  that  that's not  what  was  intended  by                                                               
Legislative  Legal  and  Research   Services.    He  said,  "They                                                               
intended that to  refer to the commissioner of  the Department of                                                               
Revenue and the other cabinet members.                                                                                          
                                                                                                                                
REPRESENTATIVE  GRUENBERG, in  response to  a comment  from Chair                                                               
Weyhrauch, said he  thinks the term "public" in "this  area" is a                                                               
term of art  which means, "the people who are  appointed not from                                                               
the administration."                                                                                                            
                                                                                                                                
Number 1612                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  said he doesn't think  that the additional                                                               
wording that  was added is really  necessary.  He said  he thinks                                                               
when it says  the governor may remove a public  member that it is                                                               
fully known what that means.                                                                                                    
                                                                                                                                
Number 1637                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL  said  he   thinks  the  governor  has  a                                                               
constitutional right  to move  his commissions,  at will,  and he                                                               
doesn't know that  language needs to be added  to reinforce that.                                                               
He  suggested,  "Putting   it  in  here  might   create  a  chain                                                               
reaction."                                                                                                                      
                                                                                                                                
REPRESENTATIVE  GRUENBERG suggested  deleting  the sentence  that                                                               
read:   "The  governor may  remove  a nonpublic  member from  the                                                           
board."                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH   clarified  that  Version  H   was  before  the                                                               
committee.                                                                                                                      
                                                                                                                                
Number 1703                                                                                                                     
                                                                                                                                
CHAIR   WEYHRAUCH  clarified   that  Representative   Gruenberg's                                                               
[Amendment 1]  would delete the  previously stated  sentence from                                                               
page  1, line  6,  of Version  H.    He asked  if  there was  any                                                               
objection  to  [Amendment  1].    There being  none,  it  was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
Number 1725                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  moved to  report  CSHB  544, Version  23-                                                               
GH2142\H,  Cook,  5/4/04,  as  amended,  out  of  committee  with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being no  objection, CSHB 544(STA) was reported  out of the                                                               
House State Affairs Standing Committee.                                                                                         
                                                                                                                                
The committee took an at-ease from 9:39 a.m. to 9:46 a.m.                                                                       
                                                                                                                                
SB 354-HUMAN RIGHTS COMMISSION PROCEDURES                                                                                     
                                                                                                                                
Number 1749                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH announced that the  last order of business was CS                                                               
FOR SENATE  BILL NO.  354(STA) am(efd fld),  "An Act  relating to                                                               
complaints filed  with, and investigations, hearings,  and orders                                                               
of, the State Commission for  Human Rights; and making conforming                                                               
amendments."                                                                                                                    
                                                                                                                                
CHAIR WEYHRAUCH reminded  the committee that the  motion to adopt                                                               
Amendment 2  on May 5,  2004, had been  left pending in  order to                                                               
wait   for  response   from   Lisa   Fitzpatrick,  Human   Rights                                                               
Commission, to questions from the  committee.  [Amendment 2 would                                                               
delete paragraphs (4), (6), (8), and  (9), on page 3, lines 2, 5,                                                               
7, and 8, and renumber accordingly.]                                                                                            
                                                                                                                                
Number 1785                                                                                                                     
                                                                                                                                
LISA FITZPATRICK,  Chair, Human Rights Commission,  Office of the                                                               
Governor, responding  to the committee's  questions on  behalf of                                                               
the commission, indicated that the  commission is concerned about                                                               
leaving  in  language  [on  page  3,  paragraphs  (6)  and  (9)].                                                               
Paragraph (6) read:   "(6) a hearing will not  represent the best                                                               
use  of  commission  resources;".   Paragraph  (9)  read:    "(9)                                                               
proceeding  to a  hearing will  not serve  the public  interest."                                                               
She explained that the commission  is concerned that its caseload                                                               
is becoming  overwhelming again,  to the point  of backlog.   She                                                               
offered an example where an individual  may only be entitled to a                                                               
nominal  amount  of relief  and  it  may  not  be in  the  public                                                               
interest to proceed to  a hearing on a case like  that.  She said                                                               
the  commission  would  like  some   latitude  to  exercise  some                                                               
discretion in the degree to which  a caseload is worked, in order                                                               
to "be successful in housekeeping the caseload."                                                                                
                                                                                                                                
MS. FITZPATRICK, in response to  a request for clarification from                                                               
Representative   Seaton,   said   the   commission   would   like                                                               
[paragraph] (6)  and either [paragraphs]  (8) or (9) [on  page 3]                                                               
to remain in the bill.                                                                                                          
                                                                                                                                
Number 1970                                                                                                                     
                                                                                                                                
SCOTT  J. NORDSTRAND,  Deputy Attorney  General, Civil  Division,                                                               
Office of  the Attorney General,  Department of Law,  in response                                                               
to  a question  from Representative  Gruenberg as  to whether  he                                                               
sees  any  benefit in  keeping  both  [paragraphs] (6)  and  (9),                                                               
answered that  the department  would defer  to the  commission on                                                               
what  it wants  in terms  of  its prosecutorial  discretion.   He                                                               
stated that the  department agrees with the  commission that "the                                                               
necessity of number (8) is very important."                                                                                     
                                                                                                                                
Number 1980                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  directed attention to Amendment  2 and clarified                                                               
that the committee  is faced with deleting  [paragraph] (4), [and                                                               
is considering] leaving  in [paragraph] (8).  He  said, "Then the                                                               
committee has a policy decision to  make on whether [to] leave in                                                               
[paragraphs] (6) and (9)."                                                                                                      
                                                                                                                                
Number 1995                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  moved [Amendment 1] to  Amendment 2, to                                                               
delete  from Amendment  2, [paragraph]  (8).   He explained  that                                                               
that would keep [paragraph] (8) in the bill.                                                                                    
                                                                                                                                
CHAIR  WEYHRAUCH offered  his understanding  that  by leaving  in                                                               
[paragraph] (8) - which read,  "(8) the probability of success of                                                               
the complaint on the  merits is low; or" - the  concern is that a                                                               
prejudgment would be made without  really hearing the alternative                                                               
side to the story.                                                                                                              
                                                                                                                                
REPRESENTATIVE  GRUENBERG  interjected,  "No, that's  not  it  at                                                               
all."                                                                                                                           
                                                                                                                                
CHAIR WEYHRAUCH clarified  that that was a concern  that had been                                                               
stated by a previous testifier.                                                                                                 
                                                                                                                                
REPRESENTATIVE GRUENBERG stated:                                                                                                
                                                                                                                                
     Any litigator needs to weigh  the merits of their case,                                                                    
     and if  they feel they  have a very low  probability of                                                                    
     success, they  definitely need  to have  the discretion                                                                    
     not to pursue it or,  if they're a defendant, to settle                                                                    
     the matter.   This is  the heart of being  an attorney.                                                                    
     It's  bad policy  to force  litigation when  there's no                                                                    
     chance of success; that's just not good.                                                                                   
                                                                                                                                
CHAIR  WEYHRAUCH offered  his  understanding  that the  executive                                                               
director  would  determine  the probability  of  success  of  the                                                               
complainants, based on merits.                                                                                                  
                                                                                                                                
REPRESENTATIVE GRUENBERG  responded, "I would hope  ... that this                                                               
is really a  form of litigation, and it may  be a legal question,                                                               
it may  be that  the facts  are weak.   And ...  if it's  a legal                                                               
question  I  assume  the commission  director  would  be  getting                                                               
advice from the assistant attorney general."                                                                                    
                                                                                                                                
Number 2083                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON told Chair Weyhrauch:                                                                                     
                                                                                                                                
     As the bill's originally there,  I agreed with you, but                                                                    
     now that we've  amended it so that there has  to be ...                                                                    
     concurrence  of  the  commission, I  think  that  we've                                                                    
     taken  care  of  the   arbitrariness  of  an  executive                                                                    
     director.   So,  there's  got to  be that  concurrence.                                                                    
     So,  if ...  the facts  were being  ... misjudged,  the                                                                    
     commission could  say, "No, we  need to take a  look at                                                                    
     this  anyway."    So, I  think  I'm  not  uncomfortable                                                                    
     leaving that one in with the previous amendment.                                                                           
                                                                                                                                
Number 2140                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  clarified that  [Amendment  1]  to Amendment  2                                                               
would  delete [paragraph]  (8) from  Amendment  2.   He asked  if                                                               
there was  any objection to  Amendment 1  to Amendment 2.   There                                                               
being none, it was so ordered.                                                                                                  
                                                                                                                                
CHAIR  WEYHRAUCH stated  that the  question before  the committee                                                               
now was whether to delete [paragraph] (6) or (9).                                                                               
                                                                                                                                
Number 2150                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON noted  that  paragraphs (6)  and (9)  have                                                               
subtle  differences;  the  former addresses  finance,  while  the                                                               
latter addresses  the public  interest.   He suggested  that they                                                               
both be  removed from  Amendment 2, thereby  leaving them  in the                                                               
bill.                                                                                                                           
                                                                                                                                
Number 2170                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ stated  his  preference  to leave  both                                                               
paragraphs  (6) and  (9) in  [Amendment 2].   He  noted that  the                                                               
cases in question are those  brought by an individual; therefore,                                                               
there could  conceivable be instances  where the  public interest                                                               
is  marginally  served.    Having   been  a  prosecutor  who  has                                                               
dismissed cases  because they  have been  too expensive,  he said                                                               
that doing  so is  something that  must be  noted.   He indicated                                                               
that  if he  had to  pick one  of the  paragraphs to  delete from                                                               
Amendment 2, it would be [paragraph] (6).                                                                                       
                                                                                                                                
CHAIR  WEYHRAUCH suggested  combining  [paragraphs]  (6) and  (9)                                                               
with an "or".                                                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he would like  to keep [paragraph]                                                               
(6) in the bill [thus removing  it from Amendment 2] for the same                                                               
reason Representative  Berkowitz just stated.   He said  he would                                                               
like to further  discuss whether to retain  or delete [paragraph]                                                               
(9).  He asked if the two  paragraphs could be addressed one at a                                                               
time.                                                                                                                           
                                                                                                                                
Number 2244                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM concurred  with  Representative Seaton  that                                                               
there is oversight by the commission.   He said, "It would appear                                                               
to  me you'd  want to  keep this  in so  that you  wouldn't -  as                                                               
Representative Berkowitz says - ...  have cases where it would be                                                               
so  terribly [expensive]  you couldn't  afford to  do them."   He                                                               
noted,  "The State  of Alaska  - we  don't print  the money;  the                                                               
[federal government] prints the money ...."                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG   [moved  to   adopt  Amendment   2  to                                                               
Amendment 2], to delete "(6)".                                                                                                  
                                                                                                                                
CHAIR WEYHRAUCH asked  if there was any objection  to Amendment 2                                                               
to Amendment  2.   [No objection  was stated  and Amendment  2 to                                                               
Amendment 2 was treated as adopted.]                                                                                            
                                                                                                                                
Number 2305                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG said he would  like at least one example                                                               
of  the kind  of  case  that would  fall  under  the category  of                                                               
[paragraph (9)].                                                                                                                
                                                                                                                                
Number 2317                                                                                                                     
                                                                                                                                
MR.  NORDSTRAND said  he  thinks  the commission  would  be in  a                                                               
better position  to talk  about examples  of cases.   He  said he                                                               
thinks the administration would  be comfortable in keeping either                                                               
[paragraph]  (6) or  (9).   He said  if [paragraph]  (6) is  more                                                               
specific   and  therefore   "more  palatable,"   that  would   be                                                               
acceptable.  He  stated, "There may be circumstances ...  - and I                                                               
don't have  an example for you  - where in the  public interest a                                                               
case should be  dismissed.  And it might be  easy to characterize                                                               
it as a resource issue, and  it might be better to [require] them                                                               
... to  say, 'Yes, it  is, in fact,  in the public  interest, and                                                               
here's why.'"                                                                                                                   
                                                                                                                                
REPRESENTATIVE BERKOWITZ asked, "Why  was this section drafted in                                                               
there?"                                                                                                                         
                                                                                                                                
MR. NORDSTRAND answered that the  Department of Law tried to come                                                               
up  with a  list that  made sense,  in terms  of what  discretion                                                               
should be exercised.   He noted that some  original language said                                                               
that  [cases] may  be dismissed  for administrative  convenience.                                                               
He  said that  language was  problematic for  the Senate  and was                                                               
removed.   He explained  that there was  some thought  that there                                                               
shouldn't  be  limits, and  an  effort  was  made to  find  "some                                                               
description of discretion that we could be comfortable with."                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG asked Ms.  Fitzpatrick for an example of                                                               
"something that would fall in  that category [that] wouldn't fall                                                               
in some other category."                                                                                                        
                                                                                                                                
TAPE 04-80, SIDE A                                                                                                            
Number 2378                                                                                                                     
                                                                                                                                
MS. FITZPATRICK  offered an  example where  there is  no monetary                                                               
loss to  the individual  but the  situation has  been remediated.                                                               
She said  that might be  a situation that could  conceivably fall                                                               
under the ambit of [paragraph] 9.                                                                                               
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said that  satisfies  him.   He  asked                                                               
Representative Berkowitz for his feedback.                                                                                      
                                                                                                                                
Number 2324                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ responded:                                                                                             
                                                                                                                                
     When you  are making a prosecutorial  decision, I think                                                                    
     it's  fundamentally  incompatible to  smith  individual                                                                    
     justice, which  is what  we do  in our  justice system,                                                                    
     ...  taking a  step back  and saying,  "Well, how  does                                                                    
     this fit in the best interest of the system?"                                                                              
                                                                                                                                
     I can think  of a circumstance ...,  for example, where                                                                    
     someone has  been horribly discriminated against  by an                                                                    
     institution  that's  vitally  important to  the  state.                                                                    
     And what  do [we] say  to that  person?  "Oh  no, we're                                                                    
     not going to  pursue your case, because  it might bring                                                                    
     injury to an institution  that's of vital importance to                                                                    
     the  state."   And  so,  ... we're  going  to deny  the                                                                    
     individual justice, because  the state's best interests                                                                    
     aren't served.   So, I think deletion  of [paragraph] 9                                                                    
     from the bill is appropriate.                                                                                              
                                                                                                                                
MR. NORDSTRAND  reiterated that the  department will  support the                                                               
commission's position.                                                                                                          
                                                                                                                                
Number 2274                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL asked,  "If  we  delete this  [paragraph]                                                               
out, would  it take  away the discretion  for that  very scenario                                                               
that  the commissioner  brought before  us?"   He indicated  that                                                               
what is  being talked about  is "a dismissal  without prejudice."                                                               
He said, "I  understand the other extremity of  the argument, but                                                               
there's  also a  place where  satisfaction has  been brought  and                                                               
we're  still compelled  to take  action."   He indicated  that he                                                               
wouldn't  worry about  deleting the  language if  he had  comfort                                                               
from  the commissioner  that  the discretion  would  still be  in                                                               
place.                                                                                                                          
                                                                                                                                
Number 2213                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH clarified  that  the previously  stated idea  to                                                               
delete paragraph (9)  from Amendment 2 would  be called Amendment                                                               
3  to Amendment  2.   He  asked  if there  was  any objection  to                                                               
Amendment 3 to Amendment 2.                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL responded:                                                                                               
                                                                                                                                
     Only with  one caveat  that if we  keep the  wording of                                                                    
     [paragraph]   (6)  in   there,  that   it's  with   the                                                                    
     understanding  that, if  there is  remedy found  in ...                                                                    
     the circumstances  given that that's what  that applies                                                                    
     to.  So, I won't object.                                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG  said, "I  think that's  the legislative                                                               
history."                                                                                                                       
                                                                                                                                
CHAIR  WEYHRAUCH  asked  again  if there  was  any  objection  to                                                               
Amendment 3 to Amendment 2.                                                                                                     
                                                                                                                                
Number 2176                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ objected.                                                                                              
                                                                                                                                
Number 2165                                                                                                                     
                                                                                                                                
A roll call  vote was taken.  Representatives  Holm, Coghill, and                                                               
Lynn   voted  in   favor   of  Amendment   3   to  Amendment   2.                                                               
Representatives   Berkowitz,  Gruenberg,   and  Weyhrauch   voted                                                               
against it.   Therefore, Amendment 3  to Amendment 2 failed  by a                                                               
vote of 3-3.                                                                                                                    
                                                                                                                                
Number 2132                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  asked  if  there   was  objection  to  adopting                                                               
Amendment 2, as amended.   [The objection to Amendment 2, without                                                               
amendments, originally  stated by Representative Holm  during the                                                               
previous  hearing on  SB  354, on  May 5,  2004,  was treated  as                                                               
withdrawn.]    There  being  no  objection  to  Amendment  2,  as                                                               
amended, it was so ordered.                                                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The House  State Affairs Standing Committee  meeting was recessed                                                               
at  10:08  a.m.  to a  call  of  the  chair.   [The  meeting  was                                                               
reconvened May 8, 2004.]                                                                                                        

Document Name Date/Time Subjects