02/06/2008 01:00 PM House JUDICIARY

HJR 28 - CONST. AM: PRODUCTION TAX REVENUE FUND                                                                               
                                                                                                                                
1:10:27 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS announced that the  first order of business would be                                                               
HOUSE  JOINT RESOLUTION  NO. 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.   [Left pending from the  meeting on 2/4/08 was  the motion                                                               
to  adopt the  proposed  committee substitute  (CS)  for HJR  28,                                                               
Version 25-LS1217\E,  Cook, 1/29/08, as the  work draft; included                                                               
in members' packets was a  new proposed committee substitute (CS)                                                               
for HJR 28, Version 25-LS1217\M, Cook, 2/5/08.]                                                                                 
                                                                                                                                
1:10:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM  moved to  adopt the  proposed committee                                                               
substitute (CS)  for HJR 28,  Version 25-LS1217\M,  Cook, 2/5/08,                                                               
as the work draft.                                                                                                              
                                                                                                                                
REPRESENTATIVE HOLMES objected for the purpose of discussion.                                                                   
                                                                                                                                
REPRESENTATIVE  SAMUELS, speaking  as the  sponsor, relayed  that                                                               
Version  M   contains  all  the  provisions   the  committee  had                                                               
expressed favor  with during the  resolution's last hearing.   In                                                               
Version M, the  production tax revenue fund is  separate from the                                                               
existing Constitutional  Budget Reserve Fund (CBRF);  there is no                                                               
longer a  statutory reference to the  "progressivity" monies, and                                                               
those   monies  are   instead   just   described  via   language;                                                               
appropriations to the  proposed fund will no  longer be mandatory                                                               
as  of January  1,  2015;  the annual  payout  from  the fund  is                                                               
limited  to 5  percent of  a  five-year average  and won't  begin                                                               
until  2013;  and  transitional language  is  included  to  allow                                                               
payouts based on  a shorter average for the years  2013 and 2014.                                                               
He  mentioned  that  he'd  received  some  information  from  the                                                               
Department of Revenue (DOR) regarding  the estimated payouts, and                                                               
some acronyms for the proposed fund.                                                                                            
                                                                                                                                
REPRESENTATIVE DOOGAN  indicated that he, too,  has some acronyms                                                               
for the proposed fund.                                                                                                          
                                                                                                                                
REPRESENTATIVE DAHLSTROM  sought assurance  that Version  M won't                                                               
release the legislature  from its responsibility to  pay back the                                                               
monies owed to the CBRF.                                                                                                        
                                                                                                                                
REPRESENTATIVE SAMUELS  relayed that it won't  because it doesn't                                                               
affect the  existing provisions of the  Alaska State Constitution                                                               
regarding the CBRF.                                                                                                             
                                                                                                                                
REPRESENTATIVE COGHILL expressed disfavor  with placing start and                                                               
stop dates into the Alaska State Constitution.                                                                                  
                                                                                                                                
REPRESENTATIVE SAMUELS  offered that  as production  continues to                                                               
decline, the  production tax revenue  might instead be  needed to                                                               
balance the  budget, hence  the proposed  stop date.   Meanwhile,                                                               
establishment of the proposed fund  will allow the legislature to                                                               
save a little bit of that revenue.                                                                                              
                                                                                                                                
REPRESENTATIVE  COGHILL noted  that historically  the legislature                                                               
has been  very good at  managing its savings, the  permanent fund                                                               
being a good example of that.                                                                                                   
                                                                                                                                
REPRESENTATIVE HOLMES  referred to page  2, lines 6-8,  and noted                                                               
that  the  payout  would  be  based on  the  first  five  of  the                                                               
preceding six years.                                                                                                            
                                                                                                                                
REPRESENTATIVE  SAMUELS  said  that  language  ensures  that  the                                                               
payout average will  be based on firm numbers and  not include an                                                               
estimate of a current fiscal  year.  He offered his understanding                                                               
that that language came out of [other legislation].                                                                             
                                                                                                                                
CHAIR  RAMRAS  characterized  Version  M  as  a  clean  piece  of                                                               
legislation.                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES  removed her  objection to the  adoption of                                                               
Version M as  the work draft.  There being  no further objection,                                                               
Version M was before the committee.                                                                                             
                                                                                                                                
1:20:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAHLSTROM moved  to  report the  proposed CS  for                                                               
HJR 28, Version 25-LS1217\M, Cook,  2/5/08, out of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being  no objection,  CSHJR 28(JUD)  was reported  from the                                                               
House Judiciary Standing Committee.