Legislature(2015 - 2016)BILL RAY CENTER 208
06/16/2016 03:00 PM FINANCE
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CS FOR SENATE BILL NO. 128(FIN) "An Act relating to the Alaska Permanent Fund Corporation, the earnings of the Alaska permanent fund, and the earnings reserve account; relating to management of the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska) by the Alaska Permanent Fund Corporation; relating to procurement by the Alaska Permanent Fund Corporation; relating to the mental health trust fund; relating to deposits into the dividend fund; relating to the calculation of permanent fund dividends; relating to unrestricted state revenue available for appropriation; and providing for an effective date." Co-Chair Neuman MOVED to ADOPT the proposed committee substitute for CSSB 128(FIN), Work Draft 29-GS2859\O (Wallace/Martin, 6/16/16). There being NO OBJECTION, it was so ordered. Co-Chair Thompson stated that Brodie Anderson would present the changes in the committee substitute. 3:26:30 PM BRODIE ANDERSON, STAFF, REPRESENTATIVE STEVE THOMPSON, reviewed the changes reading from a prepared statement. · There has been two portions of the Title that have been removed to conform to changes in the bill. · Page 1, Lines 10-11 - Clarifies the intent language of the review of the entire act created by the bill. · Sections 2, 3, and 12 of the "U" version have been removed, these sections exempted the Alaska Permanent Fund Corporation from the state procurement code. · Portions of Section 9 which was Section 11 in the "U" version have been removed, this was the portion of the section that distributed surplus funds into the CBR and corpus. · Page 3, Lines 25-26 - After the revenue limit of $1.2 billion it reduces the POMV payout, in the old version it was a dollar for dollar, now it is eighty cents to a dollar. · Page 6, Lines 12-18 - Adds new subsections that guarantees a $1500 PFD for 2017 and 2018 and establishes a $2000 dividend cap adjusted for inflation. · Page 8, Line 10 - Repeals the two $1500 dividend guarantees in 2019. · Page 8, Lines 19-21 - Conforming language for certain sections of the bill. · Page 8, Line 23 - The $2000 inflation proofed PFD $2000 cap begins after July 1, 2019. · Page 8, Line 24-25 - Effective immediately for the rest of the bill not specifically mentioned in a previous section. Mr. Anderson mentioned that there were other technical and re-numerated changes to the bill as well. 3:31:18 PM Representative Munoz referred to page 4. She asked Mr. Anderson to explain the revenue limit and the multiplier of 4 beginning on line 4. Mr. Anderson deferred to Mr. Teal and Commissioner Hoffbeck. Co-Chair Thompson directed Mr. Teal and Commissioner Hoffbeck to the table. 3:32:24 PM RANDALL HOFFBECK, COMMISSIONER, DEPARTMENT OF REVENUE, introduced himself. DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION, placed himself on record. 3:32:37 PM Representative Munoz asked about the revenue limit and the multiplier on page 4 of the bill. Co-Chair Thompson added that it was on page 4, lines 4-7. Representative Munoz responded in the affirmative. Mr. Teal responded that there was a revenue limit that was in place until the earnings reserve balance was high (4 times the payout). He approximated that it would be a $10 billion to $11 billion reserve balance. He added that when reserves were that high the payout limit of $.80 cents on the dollars would not apply and additional money would flow to the general fund (GF). Representative Gara referred to the 4 times reserve item that was in some version of the governor's bill and in a version that came out of the Senate - defined the same way as it was in the bill that came out of the Senate. Commissioner Hoffbeck responded affirmatively. He relayed that the 4 times reserve had been in all of the various versions of the bill. Vice-Chair Saddler asked members to speak louder, as he was having difficulty hearing. Co-Chair Thompson indicated that the committee would be taking a 45 minute at ease to allow time for members to review the changes to the bill. He asked members that had submitted amendments to review the new version and let Mr. Anderson know if they wanted to submit amendments for version "O". He specified that6 no new amendments would be allowed at the present time. 3:34:49 PM AT EASE 3:34:57 PM RECONVENED Representative Wilson asked for a copy of the changes. Co-Chair Thompson responded that Mr. Anderson would be providing members copies of the changes. 3:35:20 PM AT EASE 5:21:39 PM RECONVENED Co-Chair Thompson indicated that they would be setting the bill aside. He relayed that the next House Finance Committee meeting would be on the following day at 9:00 a.m. CSSB 128 (FIN) was HEARD and HELD in committee for further consideration.