CS FOR SENATE JOINT RESOLUTION NO. 34(L&C) Proposing amendments to the Constitution of the State of Alaska relating to departments, agencies, and public corporations. This was the first hearing for this bill in the Senate Finance Committee. SENATOR RICK HALFORD stated that this issue of appointing officers to state-owned corporations has been before the legislature many times since the creation of the permanent fund. He directed the members' attention to a list of all state-owned corporations. [Copy on file.] Senator Halford referred to an amendment considered by the Senate Labor and Commerce Committee sponsored by Senator Drue Pearce relating to "overhang commissioners." Although this amendment was not adopted, he stated a related title change was inadvertently made to the legislation. Senator Halford then addressed the constitutional amendment itself explaining how the legislature confirms members to State Of Alaska boards and commissions. However, he stressed, the legislature has no control over the appointment of members to the boards of directors of the Permanent Fund Corporation, the Alaska Housing Finance Corporation (AHFC), the Alaska Industrial Export Authority and the other state-operated corporations. Senator Halford stated that of all the relating constitutional amendments he has seen attempting to address this issue, this was the simplest, the most straightforward and the most justified. He surmised that if corporations of the size and scope of the aforementioned existed at the time of statehood, the framers of the constitution would have included them with the board and commissions' requirements for legislative confirmation of membership appointments. Senator Halford assured that this legislation makes no major changes to the constitution other than to provide for the legislative confirmation of appointments to the boards of state-owned corporations. Senator Halford detailed the previous proposals made in the Senate to require these legislative confirmations. Senator Phillips referred to language on page one, line ten, stating that members "may be removed as provided by law" and asked if the standards are the same for the corporations as they are for the other boards and commissions already included in the legislative confirmation process. Senator Halford responded that the standards are not the same, and that they are the standards provided in the law that created the particular state-owned corporations. He said that some board member dismissals can be made only "for cause" and others can be made at the pleasure of the governor. Senator Leman supported the intent of the sponsor and agreed this legislation is simple and necessary but he argued that it was not the simplest and most necessary. Senator Halford responded that he believed if the framers of the state constitution had an indication of the magnitude of these corporations, they would have written the legislative confirmation provision directly into the constitution. He stated that he had not heard opposition by those framers on this matter as had been heard on other matters. Co-Chair Parnell read language from the sponsor statement, "It would ensure that the people who control Alaska's largest assets are subject to a formal appointment, confirmation and removal process, not the whim of a newly elected governor." He asked if the sponsor was aware of any problems with these boards. Senator Halford shared that the past two governors had entirely changed the board members of the permanent fund, while the previous governors did not make those drastic changes. While he did not disagree with any of the actual appointments, he did not believe the entire management team of a large corporation should be changed all at once. He pointed out that during a governor's administration, several board member terms would expire and therefore, the governor still has a great impact on the makeup of these boards. Co-Chair Torgerson asked about any necessary statutory changes to implement this constitutional amendment. Senator Halford replied that the Department of Law had made recommendations and that there are certain political implications of this legislation. He stated that the larger corporations would be subject to legislative confirmation but that exemptions could be made for some of the smaller corporations. Senator Adams asked why the legislation includes the Alaska Railroad Corporation and the AHFC when the only board with a significant amount of money under its authority is the Permanent Fund Corporation. Senator Halford responded that there was a strong belief that any entity that handles millions of dollars should have some oversight. He gave details on the large holdings of the railroad corporation. Amendment #1: This technical, conceptual amendment deletes "department, agencies and" from the title on page 1, line 2 of CS SJR 34 (RES). Senator Phillips moved to adopt the amendment. There was no objection and it was ADOPTED. Senator Phillips offered a motion to report from Committee, SJR 34, 1-LS1373\G, as amended. Without objection, the resolution MOVED FROM COMMITTEE.