01/22/2004 08:00 AM House STA

HJR  3-CONST. AM: PERMANENT FUND                                                                                              
                                                                                                                                
Number 2323                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the last  order of  business was                                                               
HOUSE  JOINT  RESOLUTION  NO.  3,  Proposing  amendments  to  the                                                               
Constitution  of  the State  of  Alaska  relating to  the  Alaska                                                               
permanent fund.                                                                                                                 
                                                                                                                                
CHAIR WEYHRAUCH opened public testimony.                                                                                        
                                                                                                                                
Number 2370                                                                                                                     
                                                                                                                                
ROGER GAY  told the committee that  he is from Big  Lake, Alaska.                                                               
He stated his  objection to the legislature  and governor "always                                                               
trying to  set their sights  on the  permanent fund."   He stated                                                               
his belief  that the state has  assets that it refused  to use to                                                               
pay  its bills.   While  the state  owns practically  all of  the                                                               
coal,  zinc, lead,  timber, gold,  oil, gas,  and land,  he said,                                                               
"you" depict  the state as  being poor.   He suggested  the state                                                               
sell some of its land, dig up some  of its gold, or drill for its                                                               
own oil.   The state should make  its own money, he  opined.  Mr.                                                               
Gay said  the people  [of Alaska]  own less  than one  percent of                                                               
"what's up here."   He added, "And of the  land we allegedly own,                                                               
we only  control the surface rights,  and we pay taxes  on that."                                                               
He stated that the state has  had plenty of time to have "forward                                                               
funded" the government,  but has failed to do so.   He said, "And                                                               
now you want  to reach into my  pocket instead of your  own."  He                                                               
opined   that  [the   legislature's]  duty   is  to   defend  the                                                               
constitution, including Article 9, Section  15; and when it tries                                                               
to change  the constitution  it is  not protecting  and defending                                                               
it.                                                                                                                             
                                                                                                                                
CHAIR   WEYHRAUCH   noted  that   [HJR   3]   would  change   the                                                               
constitution.    He  asked  Mr.   Gay  if  he  is  testifying  in                                                               
opposition to the resolution.                                                                                                   
                                                                                                                                
MR. GAY responded  that he is opposed  to HJR 3.   He stated that                                                               
he  thinks  [the  legislature]  has  been  irresponsible  in  not                                                               
properly conducting  its financial  affairs.  He  reiterated that                                                               
he thinks  the legislature should  not use the permanent  fund to                                                               
solve its fiscal  problems, because people need the  money to pay                                                               
for their food and  medical bills.  He said, "The  state is not a                                                               
living entity  and the people  of the  state are."   He suggested                                                               
that [the  legislature] could  sell enough  land to  forward fund                                                               
its bills  for a year,  and then "you'd  be ahead of  the curve."                                                               
He indicated this  step should be taken before  taking money from                                                               
the people  of the state.   He said,  "You've got lots  of money,                                                               
and  you're  just not  looking  at  it,  you're looking  at  that                                                               
permanent fund."                                                                                                                
                                                                                                                                
Number 2548                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  noted that  the state  has been  trying to                                                               
give incentives  to increase development  in the state.   He said                                                               
there  are  five major  world-class  mines  that "might  come  on                                                               
line."   He added that [due  to the cost of  getting] those mines                                                               
going, and [because of] the  way the tax structure is, basically,                                                               
the state will  receive no money from those mines.   He asked Mr.                                                               
Gay  if  he is  suggesting  that  the  legislature redo  the  tax                                                               
structure  on  those kinds  of  developments  so that  the  state                                                               
garners significant  quantities of  money to  pay its  bills from                                                               
that  development, even  if it  would stop  that development  and                                                               
those jobs from going forward.                                                                                                  
                                                                                                                                
Number 2602                                                                                                                     
                                                                                                                                
MR. GAY  replied, "You own  the land  and you own  the resources,                                                               
and if you wanted to, you  could develop them yourselves and make                                                               
money."  He gave  the example of the gas pipeline.   He said [the                                                               
state] could build and own the gas  pipeline if it wanted to.  He                                                               
listed state investments,  such as the Delta  barley project, the                                                               
grain mill in  Seward, and the farms out on  Point Mackenzie, and                                                               
he said,  "They're not  good."   However, as  far as  the state's                                                               
land  holdings, he  suggested  that the  state  divest itself  of                                                               
those by  giving them to local  governments who would in  turn be                                                               
encouraged to  sell those to  the people to gain  revenue through                                                               
the taxes  that the people  would pay on  the land.   Instead, he                                                               
said, [the  state] is just holding  on to that land  and claiming                                                               
that it's broke.                                                                                                                
                                                                                                                                
Number 2637                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  continued  his  line  of  questioning  as                                                               
follows:                                                                                                                        
                                                                                                                                
     So  then,  you're testimony  would  be  that you  would                                                                    
     favor the  state, as a  state itself,  developing those                                                                    
     mines, and  also probably using  the permanent  fund to                                                                    
     finance and construct the gasoline.                                                                                        
                                                                                                                                
MR. GAY replied, "If those  are appropriate uses of the permanent                                                               
fund  investments,  then I  would  say  yes."   He  opined,  "The                                                               
permanent fund should  invest its money in  Alaskan projects that                                                               
benefit  Alaska,  instead  of  sending  the  money  to  New  York                                                               
bankers."                                                                                                                       
                                                                                                                                
Number 2696                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH stated  that, based on all the  amount of e-mails                                                               
he received on  this issue, he is shocked that  there aren't more                                                               
people who want to testify on  this resolution.  He expressed his                                                               
reluctance to  close public participation; therefore,  he said he                                                               
would not close it  at this time.  He also said  he wants to give                                                               
the resolution the benefit of the full committee.                                                                               
                                                                                                                                
Number 2743                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ERIC  CROFT,  Alaska State  Legislature,  as  co-                                                               
sponsor of HJR  3, in response to a question  by Chair Weyhrauch,                                                               
said he  and co-sponsor Representative Harry  Crawford would like                                                               
to  see  the  resolution  move forward  to  the  House  Judiciary                                                               
Standing Committee and do so as quickly as possible.                                                                            
                                                                                                                                
[HJR 3 was heard and held.]