Legislature(2021 - 2022)ANCH LIO DENALI Rm
10/13/2021 10:00 AM House WAYS & MEANS
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| Audio | Topic |
|---|---|
| Start | |
| HB4003 | |
| HB4009 | |
| HB4010 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB4003 | TELECONFERENCED | |
| *+ | HB4008 | TELECONFERENCED | |
| *+ | HB4009 | TELECONFERENCED | |
| *+ | HB4010 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB4003-PERMANENT FUND DIVIDEND; 25/75 POMV SPLIT
10:29:19 AM
CHAIR SPOHNHOLZ announced that the first order of business would
be HOUSE BILL NO. 4003, "An Act relating to use of income of the
Alaska permanent fund; relating to the amount of the permanent
fund dividend; relating to the duties of the commissioner of
revenue; and providing for an effective date."
10:29:39 AM
CHAIR SPOHNHOLZ introduced HB 4003, on behalf of the House
Special Committee on Ways and Means. She provided a PowerPoint
presentation, titled "HB 4003: Updated Permanent Fund POMV Split
25%/75%" [hard copy included in the committee packet]. On slide
2, she summarized the main elements of the proposed fiscal plans
in front of the legislature.
10:30:46 AM
CHAIR SPOHNHOLZ turned to slide 3, which read as follows
[original punctuation provided]:
HB 4003: Updates the Dividend Formula
Rewrite the dividend formula as follows:
The 5% Percent of Market Draw from the Permanent Fund
will be split as follows:
25% to dividends
75% all else
CHAIR SPOHNHOLZ continued to slide 4, which outlined the impact
that HB 4003 would have on the budget and the permanent fund
dividend (PFD). She noted that the proposed legislation would
produce a dividend of $1,248 in FY 23, increasing to $1,575 in
FY 28. She advanced to slide 5, which reviewed the projected
deficits of the various split formulas. She explained the HB
4003 was designed to reduce cuts and/or taxes that would be
required to balance the budget.
10:33:10 AM
REPRESENTATIVE PRAX inquired about the impact that HB 4003 would
have on the Alaska Mental Health Trust Authority fund. He
requested a sectional analysis of the bill.
10:34:03 AM
MEGAN HOLLAND, Staff, Representative Ivy Spohnholz, Alaska State
Legislature, on behalf of Representative Spohnholz, presented a
sectional analysis of HB 4003 [included in the committee
packet], which read as follows [original punctuation provided]:
Section 1: Amends AS 14.17.300 adding new language
allowing the foundation formula for public education
to be funded through a percentage of the POMV draw.
Clarifies that in the case that the percentage of the
POMV is not sufficient, foundation funding may be
provided by the general fund.
Section 2: Amends AS 37.13.140, clarifying that the
amount available for appropriation may not exceed the
balance of the earnings reserve account. Repeals the
old formula for calculating PFDs.
Section 3: Amends AS 37.13.145(b) to allow
appropriations from the earnings reserve account in
accordance with AS 37.13.140(b), (the POMV statute),
as follows: 25% to the dividend fund under AS
43.23.045 and 75% to the general fund. Of the 75%
distributed to the general fund, no less than 50% may
go to the public education fund for state aid to
school districts to satisfy the foundation formula.
Section 4: Amends AS 37.13.145(c) to clarify that an
appropriation is required to move funds from the
earnings reserve account to the principal of the
permanent fund for purposes of inflation proofing.
Section 5: Amends AS 37.13.145(d) to stipulate funds
associated with the Amerada Hess settlement are not
included in the calculation of the percent of market
value under AS 37.13.140(b).
Section 6: Adds a new subsection that states, of the
75% distributed to the general fund, no less than 50%
may go to the public education fund for state aid to
school districts to satisfy the foundation formula.
Additionally, this section provides that if this
percentage of the POMV draw does not satisfy the
foundation formula, the remaining funds may come from
the general fund. And, if it exceeds the formula, the
excess may be distributed according to the foundation
formula.
Section 7: Amends AS 37.13.300(c) to specify that
income from the mental health trust fund is not
included in the calculation of the percent of market
value under AS 37.13.140(b).
Section 8: Amends AS 37.14.031(c) to require the
Alaska Permanent Fund Corporation calculate the net
income of the mental health trust fund annually on the
last day of the fiscal year, excluding any unrealized
gains or losses.
Section 9: Amends AS 43.23.025(a) to clarify that
funds must be appropriated to the dividend fund,
rather than transferred as current statute provides.
Section 10: Repeals AS 37.13.145(e) and (f). These
sections restricted to appropriations from the
earnings reserve account to the general fund to not
more than was available for appropriation. Similar
language is now found in Section 2 of this bill.
Section 11: Provides an effective date of July 1,
2022.
CHAIR SPOHNHOLZ asked whether Representative Prax had a question
about Section 5.
10:36:44 AM
REPRESENTATIVE PRAX opined that it wasn't necessary to make any
changes to the Alaska Mental Health Trust Authority fund. He
asked why that was being proposed in the bill.
CHAIR SPOHNHOLZ explained that Alaska Permanent Fund Corporation
(APFC) managed the Alaska Mental Health Trust Authority's
investments. For the purposes of the proposed legislation, she
believed that it was not necessary to include Alaska Mental
Health Trust Authority funds in the dividend calculation.
10:38:02 AM
REPRESENTATIVE STORY asked how much money would come from the
education tax.
CHAIR SPOHNHOLZ returned to slide 2 and reported that HB 189,
the employment tax for education, would produce $65 million in
FY 23 and FY 24 and $66 million in the subsequent three fiscal
years (FY 25 through FY 27).
REPRESENTATIVE STORY sought clarification on the base student
allocation (BSA) increase.
10:40:28 AM
CONOR BELL, Fiscal Analyst, Legislative Finance Division,
offered to follow up on the requested information.
10:40:55 AM
CHAIR SPOHNHOLZ announced that HB 4003 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 4009 Sponsor Statement.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4009 |
| HB 4003.PDF |
HW&M 10/13/2021 10:00:00 AM |
|
| HB 4010.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4010 |
| HB 4003 Presentation.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4003 |
| HB 4009 Presentation.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4009 |
| HB 4009.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4009 |
| HB 4009 Fiscal Note, OMB.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4009 |
| HB 4010 Sponsor Statement.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4010 |
| HB 4010 Sectional Analysis.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4010 |
| HB 4010 Fiscal Note, OMB.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4010 |
| HB 4010 Presentation 10.13.21.pdf |
HW&M 10/13/2021 10:00:00 AM |
HB4010 |