State Affairs Does NOT Pass HB 241 Iran Divestiture Out of Committee
This hearing picked up House Bill (HB) 421 where things left off last week.
The vote on Rep. Gatto's (R) (Wasilla) bill to have the state funds divest companies that do business in Iran was 3-3.
Yes: Gatto; Lynn (R) Anchorage; Gruenberg (D) Anchorage
No: Seaton (R) Homer; P. Wilson (R) Wrangell, Petersen (D) Anchorage
Rep. C. Johnson (R) Anchorage was out on an excused absence.
What happened? At the last hearing, the Commissioner of Revenue and the Executive Director of the Permanent Fund both said they could handle the bill without too much disruption.
Here are the concerns I heard Tuesday:
1. Minor concerns about how the companies would be identified. The committee made changes so that the language put the Alaska bill in line with Federal standards and so the Department of Revenue could utilize the lists created by other states rather than do the investigation based on slightly different Alaska standards. It sounded like these weren't problems, but the language wasn't totally resolved.
2. Concerns of inconsistent message sent by the bill because the bill requires the various state funds - the Permanent Fund, the retirement funds, the State of Alaska Supplemental Annuity Plan, and the deferred compensation program for state employees - to divest their holdings of companies identified as doing business in Iran. But the bill does not require the state to stop doing business with such companies.
3. Concern over the impact of the notification provision. There is a provision in the bill that requires notification of companies that they are being put on the list so they have a 'due process' right to clear their name if they are on the list in error. Rep. Gruenberg was concerned because there is right to prevent a fund from selling your stock and he didn't want some company lawyer to use this to fight the state's selling his client's company. Others argued this was aimed at giving companies the right to challenge their incusion on the list. Rep. Wilson asked whether the Dept. of Revenue expected companies to reply and Commissioner Galvin said he didn't expect many replies.
4. Impact on investments. Deputy Commissioner Barnett said we have about $900 million invested in stocks and bonds currently on the list. There was a question about whether having to sell these in 90 days would mean we might have to sell at a loss. Rep. Gatto pointed out that with various states getting rid of their investments in these stocks, it was likely the prices would go down, so now is a good time to sell anyway.
5. Too many changes not yet made. From here the bill goes to the Finance Committee. If I understand this right, they will only look at the financial impacts of the bill, not the substantive issues. Four of the members had concerns that there were still significant changes to be made and were reluctant to release the bill to Finance in the condition it was in. Seaton said that substantive changes should be made in this committee and not passed on to Finance. Gatto said you can amend it on the floor of the House if you still have problems then.
5. Finally, at the end, Rep. Seaton raised an objection based on his questioning of the original justification of the bill. Here's the audio of his objection. I've added a rough transcript below because the volume is so low. Just click the black arrow on the yellow square.
HB 241 Iran Divestiture Rep. Seaton Objections by AKRaven
Finally, Rep. Gatto, obviously concerned that there may not be enough votes to pass the bill out of the committee Tuesday, made a last effort to convince the other members.
HB 241 Iran Divestiture Rep. Gatto Supporting by AKRaven
Gatto: This bill has been scrubbed here. There are three conceptual amendments. So much language has been removed. Commissioner said he could deal with it even before the changes. We’ve essentially made it easier for the Commissioner to do what he does best, make decisions on what the substance of the bill is. Not a difficult bill. Sec. of STate Clinton has said Iran is on its way to becoming a military dictatorship. We know what they intend to do. I don’t think anyone is sitting here saying, well, they just want some peaceful nuclear energy. If you’re ok, I’m not ok. I’m not ok with allowing them to go on and then sit by like an idle little object saying boy I hope things go well there. Cause they’re not going well over there. It’s not going to change a lot of behavior, but it makes a stand for us. And if you say the bill’s too difficult to deal with I don’t know what the difficulty is, your going to sell something and maybe make some money, maybe lose some money. Buy something else, maybe make some money maybe lose some money. That’s the net effect of the bill, it doesn’t do anything else. It doesn’t arm soldiers, doesn’t put them on ships and send them overseas. It just says what do you want to do in the invetment portfolio. It’s not a policy of the state. It’s just saying what can we do in our investments in this state to make a statement that we’ll join 20 other states in saying that we object to this country. Because I think If I asked you, you’d admit that you do object to what’s going on in Iran. I do. And I think almost everyone in this room, if not everyone in this room does objects to what’s going on in Iran. And all we’re asking is something pretty simple. We could take this bill and we could hold it in here It’s already been here over a week. We’ve had ample opportunity to look at it and remove bits and pieces, which we’ve done. Goes to the second committee. When it’s on the floor, and if you don’t like the bill, say, you know, I’m going to offer an amendment. I thought we covered this back but it looks like we missed something so I’d like to make an amendment. That’s what we do. If you don’t want to pass the bill out, if you think it oughta stay here two more weeks well fine. That’s your vote, but it’s not my vote.
Rep. Johnson (R) Anchorage, had an excused absence. It's not clear which way he would vote. Last week he raised concerns about alienating companies that do business in Alaska.
The vote on Rep. Gatto's (R) (Wasilla) bill to have the state funds divest companies that do business in Iran was 3-3.
Yes: Gatto; Lynn (R) Anchorage; Gruenberg (D) Anchorage
No: Seaton (R) Homer; P. Wilson (R) Wrangell, Petersen (D) Anchorage
Rep. C. Johnson (R) Anchorage was out on an excused absence.
What happened? At the last hearing, the Commissioner of Revenue and the Executive Director of the Permanent Fund both said they could handle the bill without too much disruption.
[From left to right: Rep. Lynn; Rep. Gruenberg; Rep. Peggy Wilson; Rep. Petersen]
Here are the concerns I heard Tuesday:
1. Minor concerns about how the companies would be identified. The committee made changes so that the language put the Alaska bill in line with Federal standards and so the Department of Revenue could utilize the lists created by other states rather than do the investigation based on slightly different Alaska standards. It sounded like these weren't problems, but the language wasn't totally resolved.
2. Concerns of inconsistent message sent by the bill because the bill requires the various state funds - the Permanent Fund, the retirement funds, the State of Alaska Supplemental Annuity Plan, and the deferred compensation program for state employees - to divest their holdings of companies identified as doing business in Iran. But the bill does not require the state to stop doing business with such companies.
3. Concern over the impact of the notification provision. There is a provision in the bill that requires notification of companies that they are being put on the list so they have a 'due process' right to clear their name if they are on the list in error. Rep. Gruenberg was concerned because there is right to prevent a fund from selling your stock and he didn't want some company lawyer to use this to fight the state's selling his client's company. Others argued this was aimed at giving companies the right to challenge their incusion on the list. Rep. Wilson asked whether the Dept. of Revenue expected companies to reply and Commissioner Galvin said he didn't expect many replies.
4. Impact on investments. Deputy Commissioner Barnett said we have about $900 million invested in stocks and bonds currently on the list. There was a question about whether having to sell these in 90 days would mean we might have to sell at a loss. Rep. Gatto pointed out that with various states getting rid of their investments in these stocks, it was likely the prices would go down, so now is a good time to sell anyway.
5. Too many changes not yet made. From here the bill goes to the Finance Committee. If I understand this right, they will only look at the financial impacts of the bill, not the substantive issues. Four of the members had concerns that there were still significant changes to be made and were reluctant to release the bill to Finance in the condition it was in. Seaton said that substantive changes should be made in this committee and not passed on to Finance. Gatto said you can amend it on the floor of the House if you still have problems then.
5. Finally, at the end, Rep. Seaton raised an objection based on his questioning of the original justification of the bill. Here's the audio of his objection. I've added a rough transcript below because the volume is so low. Just click the black arrow on the yellow square.
HB 241 Iran Divestiture Rep. Seaton Objections by Seaton: I want to go back to the public testimony that started this about radical Islam and 911 and all that. We know 911 was the perpetrators of that was Al Qaeda which is affiliated with Sunni Muslim. We know the participants were from Saudi Arabia, Yemen, and Egypt, none from Iran. We had testimony about Iraq and we had a huge war there, and that’s Sunni, Saddam Hussein was Sunni, not Shiite. Shiite is Iran. There’s a a total mixing of these kinds of metaphors about what's happening. We talked about weapons in Afghanistan suppled by Iran. We have no evidence. Testimony I hear under oath by our Supreme Military Commander before Congress on C-Span is that Iran could be much more unhelpful than they currently are. They’re not really helpful as they could be but we hear all the time about attacks across the border. That border is not the Iranian border. You never hear about us having drone flights over Iran and shooting terrorists on the Iranian side. It’s always the Pakistani side. The Pakistani side is the one that already has nuclear weapons. We’re worried about Iran for other reasons. The basis for this bill is evidence I don’t think we have on the table here. I think I think we have some news reports of what may or may not be hapening in Iran. I’m not really supporting Iran here, I have friends of 15 years ago in Homer who barely escaped Iran in a very torturous process who are Bahai who had extremely difficult time. I don’t know currently if that’s still going on or not. I’m not aware of that. I don’t have the evidence of that so, I’m not meaning that we have a situation where I could make this decison based on the facts that we have in evidence. They are counter to what I hear counter evidence when Admiral Baldwin General Petraes testify before Congress. The western half of Afghanistan is fairly calm. We’re not having big problems there. Part of the reason is because the state is supplied electricity by Iran and it could be turned off at a moment’s notice. We have 500,000 Afghanis or more to a million they were evicted or left the Taliban and are residing in Iran right now who could be deported any moment and be a huge problem for us to try to deal with in Afghanistan. That’s been the testimony that we’ve seen. We have some real problems but I don’t see we have enough factual basis to make decision at this time.
Finally, Rep. Gatto, obviously concerned that there may not be enough votes to pass the bill out of the committee Tuesday, made a last effort to convince the other members.
HB 241 Iran Divestiture Rep. Gatto Supporting by Gatto: This bill has been scrubbed here. There are three conceptual amendments. So much language has been removed. Commissioner said he could deal with it even before the changes. We’ve essentially made it easier for the Commissioner to do what he does best, make decisions on what the substance of the bill is. Not a difficult bill. Sec. of STate Clinton has said Iran is on its way to becoming a military dictatorship. We know what they intend to do. I don’t think anyone is sitting here saying, well, they just want some peaceful nuclear energy. If you’re ok, I’m not ok. I’m not ok with allowing them to go on and then sit by like an idle little object saying boy I hope things go well there. Cause they’re not going well over there. It’s not going to change a lot of behavior, but it makes a stand for us. And if you say the bill’s too difficult to deal with I don’t know what the difficulty is, your going to sell something and maybe make some money, maybe lose some money. Buy something else, maybe make some money maybe lose some money. That’s the net effect of the bill, it doesn’t do anything else. It doesn’t arm soldiers, doesn’t put them on ships and send them overseas. It just says what do you want to do in the invetment portfolio. It’s not a policy of the state. It’s just saying what can we do in our investments in this state to make a statement that we’ll join 20 other states in saying that we object to this country. Because I think If I asked you, you’d admit that you do object to what’s going on in Iran. I do. And I think almost everyone in this room, if not everyone in this room does objects to what’s going on in Iran. And all we’re asking is something pretty simple. We could take this bill and we could hold it in here It’s already been here over a week. We’ve had ample opportunity to look at it and remove bits and pieces, which we’ve done. Goes to the second committee. When it’s on the floor, and if you don’t like the bill, say, you know, I’m going to offer an amendment. I thought we covered this back but it looks like we missed something so I’d like to make an amendment. That’s what we do. If you don’t want to pass the bill out, if you think it oughta stay here two more weeks well fine. That’s your vote, but it’s not my vote.
Rep. Johnson (R) Anchorage, had an excused absence. It's not clear which way he would vote. Last week he raised concerns about alienating companies that do business in Alaska.
