Legislature(2007 - 2008)HOUSE FINANCE 519
02/22/2008 01:35 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB310 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 273 | TELECONFERENCED | |
| += | HJR 28 | TELECONFERENCED | |
| += | HB 310 | TELECONFERENCED | |
| += | HB 312 | TELECONFERENCED | |
1:54:47 PM HOUSE JOINT RESOLUTION 28 Proposing an amendment to the Constitution of the State of Alaska relating to the production tax revenue fund, dedicating a portion of the petroleum production tax to the fund, and limiting appropriations from the fund. REPRESENTATIVE RALPH SAMUELS, SPONSOR, presented a graphed handout, entitled TIME: YOUR INVESTMENT ALLY". He proposed two varying versions of HJR 28. The short version changes the Constitutional Budget Reserve (CBR) to an endowment type account. The money would be placed into a progressivity account and the payout would start immediately at five percent. The Legislature could choose to reinvest the money or, if not, the money would automatically fall into the General Fund. The long version would phase into an endowment, however, would begin as a separate account, with all progressivity funds going separately into the CBR. In 2015, both accounts would then merge into an endowment. Representative Samuels added, over time in either version, the money would end up in about the same place. In the proposed long version, the payouts would not start for about five years; in the short version", the payout begins immediately, thus making cash available. 1:57:48 PM Representative Kelly asked which version the sponsor favored. Representative Samuels responded that he prefers the short version, as it saves the money immediately and creates the endowment. Representative Kelly inquired if it was correct that the Constitutional Budget Reserve (CBR) and the short version are all captured from the Constitutional Budget Reserve's current balance. He wondered if the payout between the zero start day and 2015, would be a possible path for accessing the CBR, and then later, the Percent of Market Value Access (POMV). Representative Samuels believed that in the short version it would switch to an endowment payout and the three-quarter vote would be gone. In the long version, there would remain two accounts: • One with the new progressivity money coming in and with a three quarter vote for remaining money; and then • In 2015, the two accounts merging. Representative Samuels explained the difference. The three-quarter money is available and there is no pay-out; the money automatically is reinvested to grow the fund. In the short version, when dollars are needed, pay-outs start at day one. The money could also be reinvested into the endowment. 2:00:34 PM Representative Gara inquired about revenue projections. He agreed that the State has a phenomenal amount of money, which could be saved over the next two years, with projections amounting to $4 billion dollars. He favored the short version approach. He believed the short version represented more money, in current dollars, than the long version. Representative Gara noted that in 2010, the Committee would be taking the high price oil revenue dollars to project what upcoming budget deficient's or surpluses could be. Representative Samuels stated there can be many projections based on multiple variables. In the long version, there would be more money for the future. If money is simply put into the CBR, it will be spent, without looking toward future needs of the State. Representative Gara requested graphed projected deficient spending numbers indicating the future dollar illustration. He strongly urged that available dollars be saved now. 2:03:17 PM Vice-Chair Stoltze agreed that looking ahead is a good thing for the State to do. It is good to put away for future generations in Alaska. Representative Crawford additionally, affirmed that forward thinking is good. He preferred the short version to save the money now for Alaska's future. 2:05:26 PM Representative Nelson reminded the Committee that Alaska has a proud history of saving money for future generations, in places such as the Permanent Fund. Alaska is a resource government that is wealthy enough to give back and not tax, the citizens. The Constitutional Budget Reserve and the Permanent Fund have caused some unintentional obstacles. She agreed that the proposed process is the next logical step for saving money that is available now. Representative Nelson favored the short version of the proposal. HJR 28 was HEARD and HELD in Committee for further consideration. 2:07:19 PM
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