Legislature(2021 - 2022)GRUENBERG 120

04/20/2021 03:00 PM STATE AFFAIRS

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Audio Topic
03:05:16 PM Start
03:08:52 PM Confirmation Hearing|| Department of Public Safety, Commissioner
03:53:29 PM HJR7|| HB73
04:46:07 PM HB5
06:28:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
- Dept. of Public Safety: Commissioner James
Cockrell
-- Public Testimony --
*+ HJR 7 CONST. AM: PERM FUND & PFDS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
*+ HB 73 PERM FUND; ADVISORY VOTE TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= HB 5 SEXUAL ASSAULT; DEF. OF "CONSENT" TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
               HJR  7-CONST. AM: PERM FUND & PFDS                                                                           
                HB  73-PERM FUND; ADVISORY VOTE                                                                             
                                                                                                                                
3:53:29 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  announced that  the next order  of business                                                               
would be  HOUSE JOINT  RESOLUTION NO.  7 Proposing  amendments to                                                               
the Constitution  of the State  of Alaska relating to  the Alaska                                                               
permanent fund,  appropriations from the permanent  fund, and the                                                               
permanent fund  dividend and HOUSE  BILL NO. 73 "An  Act relating                                                               
to use  of income of the  Alaska permanent fund; relating  to the                                                               
amount of the permanent fund  dividend; relating to the duties of                                                               
the commissioner of revenue; relating  to an advisory vote on the                                                               
permanent fund; providing for an  effective date by repealing the                                                               
effective date of sec. 8, ch.  16, SLA 2018; and providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
3:54:03 PM                                                                                                                    
                                                                                                                                
BRIAN BREFCZYNSKI, Office of the  Governor, relayed that securing                                                               
Alaska's fiscal  future was the  governor's top priority  for the                                                               
state and its  residents.  The first step  towards achieving that                                                               
goal,  he said,  was to  protect  the Alaska  Permanent Fund  and                                                               
ensure the continuation of the  Permanent Fund Dividend (PFD) for                                                               
future generations of Alaskans.   He pointed out that after years                                                               
of  Constitutional  Budget  Reserve (CBR)  and  Statutory  Budget                                                               
Reserve (SBR)  spending, the Earnings  Reserve Account  (ERA) and                                                               
its potential depletion  was a topic of discussion.   He said the                                                               
governor recognized  the risks associated with  that conversation                                                               
and offered this legislation in  response.  HB 73 would establish                                                               
a statutory framework  to protect the permanent  fund and provide                                                               
for a sustainable  annual draw; further, of  the amount available                                                               
for  appropriation,   fifty  percent  would  be   designated  for                                                               
dividends.   He conveyed the  governor's belief that the  will of                                                               
the  people must  be included  in this  decision; therefore,  the                                                               
proposed constitutional  resolution [HJR 7] would  require a vote                                                               
of the people.   It would also require that  any future change to                                                               
the dividend  formula be  approved by  the voters.   HB  73 would                                                               
further  provide that  a statewide  election be  held to  take an                                                               
advisory vote  on whether the  statutory changes proposed  in the                                                               
bill were  favorable.  In  closing, he emphasized  the governor's                                                               
desire  for  the  public  to  be  involved  in  this  process  of                                                               
protecting the permanent fund and the dividend.                                                                                 
                                                                                                                                
3:57:20 PM                                                                                                                    
                                                                                                                                
MIKE  BARNHILL,  Deputy   Commissioner,  Department  of  Revenue,                                                               
introduced  a PowerPoint  presentation, titled  "HJR 7:  Amending                                                               
Constitution  re  Permanent  Fund;  HB 73:  statutory  50/50  PFD                                                               
Formula" [hard copy included in  the committee packet].  He began                                                               
on slide 3,  which outlined the objectives of HJR  7: protect the                                                               
permanent  fund; constitutionally  protect the  PFD; adopt  a one                                                               
account  structure;   preserve  the   ERA  balance;   and  engage                                                               
Alaskans.    To  protect  the   fund  [first  bullet  point],  he                                                               
discussed  aligning   the  permanent  fund  with   a  traditional                                                               
endowment fund  by implementing  management practices  that would                                                               
protect the inflation adjusted value  forever, thus balancing the                                                               
needs  of  both present  and  future  generations and  protecting                                                               
intergenerational   equity.     In  regard   to  constitutionally                                                               
protecting  the   PFD  [second  bullet  point],   the  resolution                                                               
required that  a portion  of funds  withdrawn from  the permanent                                                               
fund  would  be  used  for  a   dividend.    He  noted  that  the                                                               
legislature  would  control  how  much  of  the  allocation  went                                                               
towards the PFD.  Adopting  a one account structure [third bullet                                                               
point] would  be more efficient  from an  investment perspective,                                                               
he said,  and exhaustion of  the fund's income account,  the ERA,                                                               
would be avoided [fourth bullet point].   He explained that for a                                                               
number  of years,  the permanent  fund's  trustees had  expressed                                                               
concern  about potentially  depleting  the ERA.    The amount  of                                                               
distribution from  the permanent fund  for both the  dividend and                                                               
the  government  spending had  increased  year  over year,  which                                                               
heightened  the  risk of  prematurely  exhausting  the ERA.    He                                                               
reiterated that  transitioning to  a one-account  structure would                                                               
eliminate that risk.   He reported that  engaging Alaskans [fifth                                                               
bullet    point]    addressed    the   governor's    desire    to                                                               
constitutionalize the  public's role in approving  any changes to                                                               
PFD allocations.                                                                                                                
                                                                                                                                
4:01:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CLAMAN   considered  a  scenario  in   which  the                                                               
legislature approved a change to  the dividend formula under this                                                               
proposal,  but  the voters  did  not  approve the  constitutional                                                               
change.  He asked whether the formula change would take effect.                                                                 
                                                                                                                                
MR. BARNHILL  believed that a  formula change by  the legislature                                                               
would  be  effective  regardless of  whether  the  constitutional                                                               
measure was enacted.  He explained  that an advisory vote did not                                                               
have legal  implications and  that a  statutory change  was still                                                               
the legislature's responsibility.                                                                                               
                                                                                                                                
REPRESENTATIVE CLAMAN  asked whether  the advisory vote  would be                                                               
required if  the constitutional  amendment did get  the necessary                                                               
two-thirds  vote  in  the  legislature or  was  rejected  by  the                                                               
voters.                                                                                                                         
                                                                                                                                
MR. BARNHILL  said it  would not be  required; however,  he noted                                                               
that the advisory vote  was a provision in HB 73,  so it would be                                                               
required if the bill were to pass.                                                                                              
                                                                                                                                
4:03:58 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS pointed out  that slide 3 summarized several                                                               
points of agreement, including the  notion that ad hoc draws were                                                               
bad; a  one-account structure  was better  than the  current two-                                                               
account structure; and to protect  the permanent fund forever for                                                               
future   generations  of   Alaskans.     He  asked   whether  the                                                               
administration was of the same opinions.                                                                                        
                                                                                                                                
MR.  BARNHILL  confirmed  and   expressed  appreciation  for  the                                                               
chair's  acknowledgement.    He  believed that  there  were  more                                                               
shared  opinions  than  points  of contention,  adding  that  the                                                               
administration put forward  these proposals in an  effort to find                                                               
maximum consensus.                                                                                                              
                                                                                                                                
4:05:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN questioned what  "the time of adoption" on                                                               
page 3, line 8, of HJR 7 referred to.                                                                                           
                                                                                                                                
MR. BARNHILL  explained that the constitutional  measure required                                                               
a two-thirds  vote by  each body  of the  legislature.   It would                                                               
then be on the ballot for  approval by voters at the next general                                                               
election - the earliest being November  2022.  If it were to pass                                                               
by a  majority vote, the measure  would take effect 90  days from                                                               
the date of  the election.  He further  noted that Representative                                                               
Eastman was  referring to transitional  language in Section  3 of                                                               
HJR 7, which would apply to the FY 24 budget.                                                                                   
                                                                                                                                
4:07:20 PM                                                                                                                    
                                                                                                                                
BILL  MILKS,  Assistant  Attorney  General,  Department  of  Law,                                                               
directed Representative  Eastman to  Section 1 of  [Article XIII]                                                               
in the Constitution of the  State of Alaska, which specified that                                                               
a new amendment becomes effective  30 days after certification of                                                               
the election returns.                                                                                                           
                                                                                                                                
REPRESENTATIVE EASTMAN sought verification  that an amendment was                                                               
"adopted" 30 days after the election certification.                                                                             
                                                                                                                                
MR. MILKS  believed it would  be reasonable to interpret  that an                                                               
amendment would be adopted when it becomes effective.                                                                           
                                                                                                                                
REPRESENTATIVE  EASTMAN   proposed  a  scenario  in   which  "the                                                               
legislature were to pass a law  ... after the vote but before the                                                               
amendment  [was]  effective."   He  asked  whether the  amendment                                                               
would  "tie  back  to"  the   newly  passed  legislation  or  the                                                               
legislation passed prior to the public vote.                                                                                    
                                                                                                                                
MR. MILKS  clarified that the  only public vote that  was legally                                                               
effective  was  the  vote  on a  constitutional  amendment.    He                                                               
pointed out that HB 73 had  a provision pertaining to an advisory                                                               
vote, which would not create law.                                                                                               
                                                                                                                                
MR. BARNHILL resumed the presentation  on slide 4, which reviewed                                                               
the  mechanics  of  HJR  7.    He  explained  that  the  proposed                                                               
resolution  would  transition the  permanent  fund  to a  single,                                                               
protected  account.   It would  also  add the  percent of  market                                                               
value (POMV) distribution  method to the constitution.   He noted                                                               
that in 2018, the legislature  statutorily enacted a POMV formula                                                               
in Senate Bill  26, which applied the  distribution percentage to                                                               
a lagging  five-year market  average of the  permanent fund.   He                                                               
defined a  "lagging five-year average"  as the first five  of the                                                               
last six  years.   Further, under  this proposal  the legislature                                                               
would be  responsible for  specifying a  distribution percentage;                                                               
the  legislature  would  also  have the  authority  to  fix  that                                                               
distribution percentage  by statute.   He added  that ultimately,                                                               
enshrining that  percentage in a constitutional  measure could be                                                               
accomplished at  the legislature's discretion.   He conveyed that                                                               
HJR 7 would  establish the PFD in the  constitution by specifying                                                               
that a percentage  of the POMV distribution must  be allocated to                                                               
the dividend.   He reiterated that the governor  was proposing to                                                               
leave the specification of that  percentage to the legislature to                                                               
enact  by  statute.    Alternatively,  in  HB  73,  the  governor                                                               
proposed that  the legislature enact  a 50 percent  allocation to                                                               
the PFD.   He further noted that the proposed  resolution [HJR 7]                                                               
would require a  vote of the people to approve  any change to the                                                               
PFD program.                                                                                                                    
                                                                                                                                
4:12:35 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  questioned whether  DOL was of  the opinion                                                               
that with  passage of  HJR 7 as  written, the  statutory formula,                                                               
whatever  it may  be,  shall be  appropriated  and supersede  the                                                               
legislature's "subjective desires for appropriation."                                                                           
                                                                                                                                
MR. BARNHILL deferred to Mr. Milks.                                                                                             
                                                                                                                                
MR.  MILKS remarked  that  as  drafted, HJR  7  specified that  a                                                               
portion of  the appropriation  from the  permanent fund  shall be                                                               
allocated  for the  PFD.   Further,  Section  2, subsection  (c),                                                               
stated  that  the amount  allocated  for  the dividend  shall  be                                                               
provided by law.                                                                                                                
                                                                                                                                
CHAIR  KREISS-TOMKINS  said he  understood  the  language in  the                                                               
proposed  resolution.   He asserted  that  he was  looking for  a                                                               
direct  answer to  a  direct  question: whether  DOL  was of  the                                                               
opinion  that the  formula  was  constitutionally guaranteed  and                                                               
effectively superseded the  legislature's constitutional right to                                                               
appropriate an amount other than the formula.                                                                                   
                                                                                                                                
MR. MILKS said, "that is what HJR 7 provides in Section 2."                                                                     
                                                                                                                                
CHAIR KREISS-TOMKINS  asked for  confirmation that Mr.  Milks and                                                               
DOL believed that "that is what would happen constitutionally."                                                                 
                                                                                                                                
MR. MILKS  replied that's how  HJR 7  was drafted.   He suggested                                                               
that it was  consistent with Wielechowski v. State  of Alaska, in                                                             
which the court decided that  without a constitutional amendment,                                                               
the PFD amount would be decided by the legislature.                                                                             
                                                                                                                                
CHAIR  KREISS-TOMKINS asserted  that he  had not  heard a  direct                                                               
answer to his question.  He  pointed out that the language in the                                                               
proposed  resolution  was not  as  specific  as a  constitutional                                                               
amendment  that were  to provide  for the  dividend formula.   He                                                               
asked if  the broader  language in  HJR 7  would constitutionally                                                               
guarantee whatever  formula was in statute,  thus superseding the                                                               
legislature's constitutional right to appropriation.                                                                            
                                                                                                                                
MR.   MILKS  answered   yes,  this   constitutional  [resolution]                                                               
(indisc.) the  dividend and  shall provide for  a portion  of the                                                               
amount to the dividend.                                                                                                         
                                                                                                                                
4:17:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VANCE,  referring to the language  "as provided by                                                               
law" in Section  2, subsection (c), asked  whether that provision                                                               
would be  satisfied "if the legislature  chose to come up  with a                                                               
number as an appropriation."                                                                                                    
                                                                                                                                
MR. MILKS  explained that "by law"  referred to a statute,  not a                                                               
law that  was enacted as  an appropriation bill, as  specified in                                                               
Section 3, subsection (d), of HJR 7.                                                                                            
                                                                                                                                
4:18:45 PM                                                                                                                    
                                                                                                                                
MR.  BARNHILL  continued  the  presentation   on  [slide  5]  and                                                               
outlined considerations  for a distribution percentage  in regard                                                               
to HJR  7.   He relayed  that the  permanent fund  was "manually"                                                               
inflation proofed  through an annual  appropriation from  the ERA                                                               
to the  Principal, which was  calculated by a  statutory formula.                                                               
However,  in   a  modern  one-account   structure,  such   as  an                                                               
endowment,  the   inflation  proofing   would  occur   through  a                                                               
distribution  percentage.   Slide  5  read  as follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
        • Legislature  establishes     the    distribution                                                                      
          percentage in statute                                                                                                 
          -POMV is currently 5% of the lagging 5-year                                                                           
          average market value                                                                                                  
        • Limits spending while allowing the fund to grow                                                                       
          to keep up with inflation                                                                                             
        • Spend only the real return over time.                                                                                 
          -Example:                                                                                                             
             square4 Total return: 7%                                                                                           
             square4 Inflation: 2%                                                                                              
             square4 Real return: 5%                                                                                            
        • Liming spending to 5% inflation-proofs the                                                                            
          Permanent Fund.                                                                                                       
                                                                                                                                
MR. BARNHILL  explained that  the real  return was  calculated by                                                               
subtracting  annual  inflation  from  total return.    In  modern                                                               
institutional fund practice,  inflation proofing was accomplished                                                               
by only  spending the real  return while retaining  the inflation                                                               
return,  thus preserving  the growth  associated with  inflation.                                                               
He emphasized that  inflation could change over  time and returns                                                               
could be  volatile.  He  reported that the permanent  fund's real                                                               
return  and spending  rate varied  over time;  however, for  most                                                               
years, the  spending rate  was less than  the real  return, which                                                               
indicated growth.  He noted that  in HJR 7, the governor proposed                                                               
that the  distribution percentage  could be  statutorily adjusted                                                               
by the  legislature to  prevent overspending from  the fund.   He                                                               
pointed out  that the inherent  flexibility in HJR 7  was similar                                                               
to  HJR 1,  which used  the phrased  "not more  than 5  percent."                                                               
That language would allow the  legislature to monitor the rate of                                                               
spending  versus the  rate of  return and  prevent the  fund from                                                               
erosion by inflation, he said.                                                                                                  
                                                                                                                                
4:23:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR, returning  to  Section  2, subsection  (c),                                                               
inquired about  the timing in  which the legislature  was relayed                                                               
the total return and inflation  rates.  She understood that those                                                               
rates  were   assessments  of   economic  conditions   that  were                                                               
typically received "after the fact."                                                                                            
                                                                                                                                
MR. BARNHILL indicated that there  was an established practice of                                                               
using the  lagging five-year  market average;  consequently, when                                                               
entering  a budget  cycle,  it  was clear  what  the formula  was                                                               
proposing  with  respect to  spending.    He suggested  that  the                                                               
lagging  five-year  rolling return  could  be  used to  determine                                                               
whether it was  under or over the spending level.   He added that                                                               
his overarching  recommendation was to  keep an eye on  things by                                                               
reporting these figures annually.                                                                                               
                                                                                                                                
REPRESENTATIVE TARR observed that  a reporting requirement, which                                                               
was absent from  the current language, could which  be a friendly                                                               
inclusion to strengthen the proposal.                                                                                           
                                                                                                                                
MR. BARNHILL acknowledged  that it could be  included in statute.                                                               
He noted that  the effective rate of spending  had been presented                                                               
to the House Special Committee on  Ways and Means.  He maintained                                                               
that  he was  discussing  these figures  to  emphasize to  policy                                                               
makers that  this was  the method  to avoid  eroding the  fund by                                                               
inflation.                                                                                                                      
                                                                                                                                
4:26:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VANCE  asked why five percent  was the appropriate                                                               
POMV rate for the fund's long-term sustainability.                                                                              
                                                                                                                                
MR. BARNHILL conveyed  that the governor proposed 5  percent as a                                                               
starting place with  an expectation of continued  discussion.  He                                                               
explained  that   5  percent  was   standard  in  the   world  of                                                               
endowments, institutional funds, and  foundations.  He noted that                                                               
in  foundations,  5  percent  was  hardwired  into  the  internal                                                               
revenue code to  maintain tax exempt status.   He understood that                                                               
5  percent was  raising some  anxiety because  there was  concern                                                               
that  the current  bull  market  would settle,  and  it could  be                                                               
harder to  accomplish a  real return  of 5  percent.   He assured                                                               
members that 5  percent was currently sound  and that investments                                                               
had been "phenomenal" this year.                                                                                                
                                                                                                                                
REPRESENTATIVE VANCE inquired about 5  percent in relation to the                                                               
tax-exempt status.                                                                                                              
                                                                                                                                
MR. BARNHILL clarified  that he did not intend to  imply that the                                                               
permanent fund was  subject to the internal revenue  code laws on                                                               
foundations.    He explained  that  the  permanent fund  was  tax                                                               
exempt  on the  grounds of  being a  state fund.   He  noted that                                                               
there had been three opinions  rendered by outside counsel in the                                                               
past 30 years, all of which had affirmed that tax exempt status.                                                                
                                                                                                                                
4:30:47 PM                                                                                                                    
                                                                                                                                
CHAIR  KREISS-TOMKINS  inquired  about policy  calls  that  could                                                               
jeopardize the permanent fund's tax-exempt status.                                                                              
                                                                                                                                
MR.   BARNHILL  offered   to  follow   up   with  the   requested                                                               
information.    He recalled  that  the  last opinion,  which  was                                                               
rendered in 2003 by the law  firm of Steptoe & Johnson, indicated                                                               
that the  permanent fund would  be tax exempt  as long as  it was                                                               
managed as a state fund.                                                                                                        
                                                                                                                                
CHAIR KREISS-TOMKINS  asked whether  the administration  would be                                                               
opposed to a lower POMV draw of  4.5 percent in statute or in the                                                               
constitution.  He relayed that a more restrictive draw would                                                                    
                                                                                                                                
MR.   BARNHILL   declined   to   comment   on   behalf   of   the                                                               
administration.   He  recommended  treating the  present and  the                                                               
future as  equally as possible.   Therefore, by growing  the fund                                                               
at the  rate of inflation,  today's beneficiaries would  have the                                                               
same access  to the fund  as the  beneficiaries of tomorrow.   He                                                               
emphasized that  the the notion  of intergenerational  equity was                                                               
important  to  endowments  and cautioned  against  anything  that                                                               
would  "hardwire"  underspending of  the  fund  to save  for  the                                                               
future.                                                                                                                         
                                                                                                                                
4:34:46 PM                                                                                                                    
                                                                                                                                
MR.  MILKS,  in  response  to   a  question  from  Representative                                                               
Eastman, said  the process  proposed in HJR  7 would  provide for                                                               
one  way  in  which  the permanent  fund  distribution  could  be                                                               
changed: a law  passed by the legislature that  was then affirmed                                                               
by a majority of voters.                                                                                                        
                                                                                                                                
REPRESENTATIVE  EASTMAN  clarified  that   he  was  asking  about                                                               
calculating the amount  for the dividend amount  and whether that                                                               
could be passed through a ballot measure.                                                                                       
                                                                                                                                
MR. MILKS explained  that [subsection (b)] in Section 2  of HJR 7                                                               
would set  a POMV draw  from the  permanent fund, as  provided by                                                               
law;  subsection (c)  of Section  2 specified  that a  portion of                                                               
that  amount  would  be  allocated   for  dividend  payments,  as                                                               
provided by  law; subsection (d)  of Section 2  further specified                                                               
that changing  the amount allocated  for dividend  payments would                                                               
require  a  law passed  by  the  legislature  that must  then  be                                                               
approved by voters.   He summarized that  the proposed resolution                                                               
offered  a  unique process  to  change  the allocation  regarding                                                               
dividends involving legislation then confirmation by voters.                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN stated  that his constituents periodically                                                               
suggested "[taking]  the permanent fund  and ... [paying]  it out                                                               
to  Alaskans  and be  done  with  the  whole permanent  fund  and                                                               
dividends, etcetera."  He asked  if this resolution were to pass,                                                               
how that idea could be achieved.                                                                                                
                                                                                                                                
MR. MILKS said that concept  would still require a constitutional                                                               
amendment if HJR was adopted.                                                                                                   
                                                                                                                                
4:38:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN   considered  a  scenario  in   which  32                                                               
legislators  voted  to set  the  percentage  at 100  percent  and                                                               
designated the entirety  to dividends.  He  questioned what would                                                               
stop that situation from happening.                                                                                             
                                                                                                                                
MR. MILKS acknowledged the resolution  provided that an amount of                                                               
the POMV  may be appropriated and  that the POMV would  be set by                                                               
law.  Additionally,  it would require that an amount  of that sum                                                               
be paid in  dividends, as provided by law.   He reiterated that a                                                               
change would require the voters' approval.                                                                                      
                                                                                                                                
MR. BARNHILL  in response to Representative  Eastman, pointed out                                                               
that the  constitution utilized the word  "permanent," which must                                                               
mean something,  he said.   Secondly, he touched on  the emerging                                                               
concept   of  prudent   spending,   noting  that   Representative                                                               
Eastman's  suggestion  would fall  into  the  realm of  imprudent                                                               
spending.    He  resumed  the  presentation  on  [slides  6]  and                                                               
explained  that  HB 73  would  implement  HJR  7 by  setting  the                                                               
statutory POMV at  5 percent and the statutory  PFD allocation at                                                               
50 percent.   The bill  would also  schedule an advisory  vote on                                                               
the PFD  formula to be  held 90-120  days after adjournment.   He                                                               
noted that  HB 73 would stand  on its own without  the passage of                                                               
HJR 7.                                                                                                                          
                                                                                                                                
4:41:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VANCE returned  to subsection (b) in  Section 2 of                                                               
HJR 7,  which stated that  "the legislature may  appropriate from                                                               
the permanent fund  to the general fund an amount  as provided by                                                               
law".   She asked what would  occur if the legislature  chose not                                                               
to appropriate  from the permanent  fund to the general  fund, as                                                               
subsection (c) specified that there  "shall" be an allocation for                                                               
dividends.                                                                                                                      
                                                                                                                                
MR. BARNHILL deferred  to Mr. Milks.   Nonetheless, he questioned                                                               
whether  the  legislature  would  ever find  themselves  in  that                                                               
scenario.                                                                                                                       
                                                                                                                                
MR.  MILKS acknowledged  that page  2,  line 1,  states that  the                                                               
legislature "may" appropriate from  the permanent fund while line                                                               
6 states  that a  portion "shall"  be appropriated  for dividend.                                                               
He concluded  that if any money  came from the permanent  fund, a                                                               
portion shall be allocated for dividends.                                                                                       
                                                                                                                                
CHAIR  KREISS-TOMKINS   understood  that  despite   the  unlikely                                                               
scenario, the  administration had confirmed  that it would  be an                                                               
elective decision.                                                                                                              
                                                                                                                                
MR.  BREFCYNSKI  said  despite  the   wording,  it  was  not  the                                                               
governor's intent that the dividend  would be elective.  He added                                                               
that  the   administration  was  fully  prepared   to  engage  in                                                               
conversations about amending that language if necessary.                                                                        
                                                                                                                                
4:44:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  VANCE  requested a  fiscal  model  of the  fund's                                                               
potential growth  under this proposal to  understand its economic                                                               
impact.                                                                                                                         
                                                                                                                                
MR.  BARNHILL said  he would  be happy  to prepare  that for  the                                                               
committee.                                                                                                                      
                                                                                                                                
4:45:55 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  announced that  HJR 7 and  HB 73  were held                                                               
over.                                                                                                                           
                                                                                                                                

Document Name Date/Time Subjects
James Cockrell Resume_Redacted.pdf HSTA 4/20/2021 3:00:00 PM
HJR 7 Fiscal Note - 1-2-021821-GOV-N.PDF HSTA 4/20/2021 3:00:00 PM
HJR 7
HJR 7 Transmittal Letter - 01.19.21.pdf HSTA 4/20/2021 3:00:00 PM
HJR 7
HJR 7 Version A.PDF HSTA 4/20/2021 3:00:00 PM
HJR 7
HB 73 Fiscal Note - 1-2-021821-REV-N.PDF HSTA 4/20/2021 3:00:00 PM
HB 73
HB 73 Fiscal Note - 2-2-021821-GOV-Y.PDF HSTA 4/20/2021 3:00:00 PM
HB 73
HB 73 Fiscal Note - 3-2-021821-GOV-Y.PDF HSTA 4/20/2021 3:00:00 PM
HB 73
HB 73 Transmittal Letter - 01.19.21.pdf HSTA 4/20/2021 3:00:00 PM
HB 73
HB 73 Version A.PDF HSTA 4/20/2021 3:00:00 PM
HB 73
HJR 7 and HB 73 Hearing Request Memo.pdf HSTA 4/20/2021 3:00:00 PM
HB 73
HJR 7
HJR 7 and HB 73 PowerPoint - Dept of Revenue 041921 - Final.pdf HSTA 4/20/2021 3:00:00 PM
HB 73
HJR 7