Legislature(2015 - 2016)BILL RAY CENTER 208

06/16/2016 03:00 PM FINANCE


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03:24:46 PM Start
03:25:43 PM SB138
05:21:57 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
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.                                                                                                                  
                                                                                                                                

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