Legislature(2005 - 2006)HOUSE FINANCE 519
01/24/2006 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB144 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 144 | ||
HOUSE BILL NO. 144
"An Act authorizing an advisory vote on whether income
of the Alaska permanent fund in the earnings reserve
account should be used for a community dividend
program."
1:38:18 PM
REPRESENTATIVE BILL THOMAS, SPONSOR, explained the need for
HB 144 due to the elimination of state revenue sharing for
communities, increasing costs, and the need for a
sustainable source of income. Income from the Alaska
permanent fund, in the form of dividends, would go to local
governments to spend on budget shortfalls. The question
posed by HB 144 is if the legislature should appropriate up
to $150 million annually from the unreserved earnings of the
permanent fund to a community dividend program.
1:41:48 PM
Representative Thomas mentioned his role as a member of the
House Community and Regional Affairs Committee and his
dealings with community requests for financial aid. He
pointed out that after 10 years, the bill would have only a
minimal $50 impact on permanent fund recipients. He
referred to a handout "Financial projection comparison of
the Alaska Permanent Fund under current statutes versus HB
144" (copy on file.) The money would be inflation-proofed
first before it is applied toward a community dividend. He
referred to the continuation of the 30-year old state
community dividend program as a model for the distribution
plan.
Representative Thomas noted that the House State Affairs
Committee changed the language of HB 144 regarding inflation
proofing. He observed that the change allowed for more
flexibility.
IAN FISK, STAFF, REPRESENTATIVE BILL THOMAS, interjected
that language of intent was added on page 1, line 6, which
clarifies the sponsor's intent to follow the current
community dividend program. The definition of a social unit
is included.
Representative Thomas highlighted amounts that various
cities would receive under this bill in the handout on
"Community Dividend Estimates" (copy on file.) He termed
HB 144 as a way to share the state's wealth. He stated,
"The rainy day is here".
1:48:27 PM
Co-Chair Meyer asked if Representative Thomas would agree to
an amendment that would take away the advisory vote.
Representative Thomas replied yes; the bill is a fair way
dividends can be paid back to communities without any
political urban/rural issues.
Representative Weyhrauch voiced a concern about the
political undertones involving an advisory vote, which would
lead to inaccurate debates about taking money away from
permanent fund dividends. He maintained that the
legislature should take responsibility for making the
decision to get rid of the advisory vote and use the funds
as they were intended, to help Alaskans.
Representative Thomas agreed. He reiterated that he is for
a community dividend.
1:51:06 PM
Representative Kerttula asked if Representative Thomas had
considered using an endowment fund. Representative Thomas
replied that he looks at the permanent fund earnings as an
endowment, rather than creating one.
Representative Kerttula inquired if Representative Thomas'
staff is working on the possible problem that some
communities might receive double amounts. Representative
Thomas responded that the method that has been in place for
30 years is being refined to make sure it fits today's
situation.
1:52:49 PM
Representative Kelly asked for a definition of "social unit"
on page 2, line 5 of the bill. Representative Thomas said
25 or more people. Representative Kelly asked if it applies
to tribal governments. Representative Thomas replied that
it does - as unorganized municipalities under the old plan.
It gives tribes an incentive to organize as a municipality.
1:54:30 PM
WAYNE STEVENS, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE,
explained that one of the Chamber's top six legislative
priorities is to implement a community dividend program. He
read as follows:
The State Chamber of Commerce urges the Legislature to
implement a sustainable community dividend using an
endowment management method to provide local tax relief
to business and families, and to assist in providing
basic public services throughout Alaska.
He applauded Representative Thomas' efforts on HB 144. He
pointed out that the bill is important for many reasons. He
urged adoption of a community dividend program.
Co-Chair Meyer noted that a community dividend could be used
for local tax relief. Mr. Stevens agreed.
1:57:08 PM
Representative Hawker referred to the policy statement by
the Chamber of Commerce and the subject of sustainability.
He inquired if spending permanent fund earnings might lessen
the long-term value of the fund. He wondered if a percent
of market value (POMV) endowment method might be an equally
valid method of creating a community dividend program. Mr.
Stevens agreed that the POMV is one of the many tools with
which to manage one's resources and should be discussed. He
pointed out that it would be prudent for citizens of the
state to recognize that the original ballot language said to
create a rainy day account. It did not say to create a
check in perpetuity. It is important now to define "rainy
day".
Representative Hawker asked if the Chamber of Commerce has a
preferred method of funding for a community dividend
program. Mr. Stevens reported that a discussion about the
method of funding is important, but that the Chamber has no
preference as to which method.
Representative Stoltze wondered if the Alaska Municipal
League received notice of the meeting.
Representative Joule noted that they were at two prior
hearings. Representative Thomas explained a change of heart
by the League last year.
2:03:41 PM
In response to a question by Representative Weyhrauch, Mr.
Stevens explained that he works full time for the Chamber of
Commerce. Representative Weyhrauch thanked him for his
testimony.
Representative Kelly wondered if funding for this plan would
be in jeopardy if oil prices decrease. Mr. Stevens replied
that there would be a problem, and that is why this plan
must be sustainable, otherwise programs will be cut. A
discussion should happen on ways to make the funding
sustainable.
Representative Kelly agreed that sustainability is
important.
2:08:14 PM
HB 144 was heard and HELD in Committee for further
consideration.
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