04/06/2004 02:08 PM House FIN

HOUSE JOINT RESOLUTION NO. 26                                                                                                 
                                                                                                                                
     Proposing  amendments to the  Constitution of  the State                                                                   
     of Alaska  relating to and limiting  appropriations from                                                                   
     and  inflation proofing  the  Alaska  permanent fund  by                                                                   
     establishing a percent of market value spending limit.                                                                     
                                                                                                                                
Co-Chair  Harris MOVED  to WITHDRAW  the  previous MOTION  to                                                                   
MOVE adoption  of Amendment #3, #23-LS1006\V,  Cook, 3/22/04.                                                                   
There being NO OBJECTION, the motion was withdrawn.                                                                             
                                                                                                                                
Co-Chair  Harris  MOVED  to ADOPT  work  draft  version  #23-                                                                   
LS1006\Z,  Cook, 4/6/04, as  the version  of the bill  before                                                                   
the Committee.                                                                                                                  
                                                                                                                                
Representative  Croft commented that  version "Z" would  be a                                                                   
"pure  percent of  market  value (POMV)  form"  of the  bill.                                                                   
There being NO OBJECTION, it was adopted.                                                                                       
                                                                                                                                
PETE   ECKLUND,  STAFF,   REPRESENENTATIVE   BILL   WILLIAMS,                                                                   
explained the  changes made  to the work  draft version.   He                                                                   
noted that  it would be  classified as  a pure POMV  bill and                                                                   
would  place all the  Permanent  Fund into  one fund.   There                                                                   
would be no distinction between  the Earnings Reserve Account                                                                   
and the  principle.   The bill would  appropriate 5%  of that                                                                   
amount  annually   for  whatever  purposes   the  Legislature                                                                   
desires.  Mr. Ecklund noted the  one difference added to Page                                                                   
2,  Line  10,  Paragraph  (b), a  transition  section.    The                                                                   
language  in   that  section  clarifies  that   if  the  POMV                                                                   
amendment is  adopted in 2004,  the POMV mechanism  would not                                                                   
come into effect until the FY 2006 budget.                                                                                      
                                                                                                                                
Co-Chair  Harris observed  that the proposed  version  of the                                                                   
bill  would  do  nothing  to protect  the  principle  in  the                                                                   
Constitution  nor  would  it   constitutionally  authorize  a                                                                   
dividend.    It  would  only provide  5%,  regardless.    Mr.                                                                   
Ecklund  said that  was correct  and that there  would  be no                                                                   
distinction between principle and earnings reserve.                                                                             
                                                                                                                                
Representative Foster MOVED to  report CS HJR 26 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative Hawker  OBJECTED, noting a letter  in the file                                                                   
from the  Permanent Fund Corporation.   (Copy on File).   The                                                                   
letter  notes   withdrawing  their  request   for  additional                                                                   
authority for the  out reach concepts.  He  believed it would                                                                   
zero  out  the  fiscal  note.     Co-Chair  Williams  agreed.                                                                   
Representative Hawker WITHDREW his OBJECTION.                                                                                   
                                                                                                                                
Representative Fate voiced concern  that the bill would erode                                                                   
the ability of  the Legislature to raise and  allocate funds.                                                                   
He  recommended the  bill receive  full debate  on the  House                                                                   
Floor.                                                                                                                          
                                                                                                                                
Representative Foster noted that  the MOTION to MOVE the bill                                                                   
from  Committee also  included the  two zero  notes from  the                                                                   
Department  of Revenue and  the Office  of the Lt.  Governor.                                                                   
There being NO further OBJECTION, it was so ordered.                                                                            
                                                                                                                                
CS  HJR  26   (FIN)  was  reported  out  of   Committee  with                                                                   
"individual recommendations" and  with a new zero note by the                                                                   
Office of the Governor and zero  note #2 by the Department of                                                                   
Revenue.