Legislature(2019 - 2020)SENATE FINANCE 532

07/27/2019 11:00 AM FINANCE

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Heard & Held
Moved SCS CSHB 2001(FIN) AM Out of Committee
Heard & Held
CS FOR HOUSE BILL NO. 2001(FIN) am                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs;    capitalizing   funds;    making                                                                    
     supplemental   appropriations,  reappropriations,   and                                                                    
     other  appropriations;  making appropriations  for  the                                                                    
     operating   and  capital   expenses   of  the   state's                                                                    
     integrated  comprehensive  mental health  program;  and                                                                    
     providing for an effective date."                                                                                          
3:10:38 PM                                                                                                                    
CAROLINE   SCHULTZ,  STAFF,   SENATOR  NATASHA   VON  IMHOF,                                                                    
reviewed   the   bill   that  would   make   operating   and                                                                    
supplemental appropriations.  She turned  to page 12  of the                                                                    
legislation and  highlighted the total  unrestricted general                                                                    
fund (UGF) appropriation of  approximately $249 million. The                                                                    
bill contained  most of  the operating  items vetoed  by the                                                                    
governor  that had  been included  in  the operating  budget                                                                    
passed  by  the legislature.  The  bill  also contained  one                                                                    
supplemental operating  budget item  of $800,000  for senior                                                                    
benefits.  She suggested  referring  to Legislative  Finance                                                                    
Division  (LFD) transaction  detail packets  (copy on  file)                                                                    
that  included  vetoed  items  restored   by  the  bill.  An                                                                    
additional  LFD transaction  detail  packet  (copy on  file)                                                                    
showed  vetoed   items  that  were   not  restored   by  the                                                                    
3:11:36 PM                                                                                                                    
AT EASE                                                                                                                         
3:12:40 PM                                                                                                                    
Ms. Schultz clarified she was  referring to two separate LFD                                                                    
packets  that  showed  a list  of  appropriations  and  fund                                                                    
sources. One of  the packets included vetoed  items that had                                                                    
been added back in HB 2001  and the other included a list of                                                                    
vetoed items that had not been restored in HB 2001.                                                                             
Co-Chair Stedman requested an overview of the packets.                                                                          
Ms. Schultz complied. She reviewed  that the legislature had                                                                    
passed a  budget of  $4.4 billion and  $379 million  UGF had                                                                    
been vetoed by  the governor. After the  vetoes, the enacted                                                                    
budget had  totaled roughly $4.056  billion. The  bill would                                                                    
restore $283  million UGF of  the vetoed items.  She offered                                                                    
to review some of the items.                                                                                                    
Co-Chair  Stedman  asked for  a  highlight  of the  restored                                                                    
Ms.  Schultz relayed  that the  LFD packets  were posted  on                                                                    
BASIS  and  available  to  the  public.  She  detailed  that                                                                    
packets   were   divided   alphabetically   by   department,                                                                    
beginning  with   the  Department  of   Administration.  She                                                                    
highlighted  vetoed  items restored  by  the  bill such  as,                                                                    
public broadcasting, public  communications, and funding for                                                                    
the Office of  Public Advocacy (OPA). She  detailed that the                                                                    
bill included  about $2 million for  public broadcasting and                                                                    
$87 million GF  for OPA. Page 2 pertained  to the Department                                                                    
of   Commerce,  Community   and  Economic   Development  and                                                                    
included  restored funding  for  the  Alaska Legal  Services                                                                    
Corporation in the amount of $450,000 UGF.                                                                                      
Ms. Schultz turned to page 3  showing a list of vetoed items                                                                    
added  back  for  the  Department  of  Education  and  Early                                                                    
Development  (DEED).   Funds  were  added  back   for  early                                                                    
learning  coordination;  the  Alaska State  Council  on  the                                                                    
Arts; the  Mt. Edgecumbe  boarding school; the  Alaska State                                                                    
Libraries, Archives  and Museums  Online with  Libraries and                                                                    
Live Homework  Help programs; and  the Alaska  Commission on                                                                    
Postsecondary  Education. Restored  items  for DEED  totaled                                                                    
$13.9 million.                                                                                                                  
3:16:26 PM                                                                                                                    
Mr. Ecklund  highlighted a  couple of  the larger  items the                                                                    
bill would  restore funding for  including $110  million for                                                                    
the University  and $30 million to  capitalize the Community                                                                    
Assistance   Fund.  He   relayed  that   funding  for   many                                                                    
additional items would be restored by the legislation.                                                                          
Co-Chair Stedman  asked for more  detail for the  public. He                                                                    
noted that  the legislation  was a House  bill and  had gone                                                                    
through  the process  in the  House before  arriving in  the                                                                    
Senate Finance Committee.                                                                                                       
Ms.  Schultz turned  to page  9  of the  LFD report  showing                                                                    
vetoed funding  that would be  restored by  the legislation.                                                                    
Page  9 pertained  to the  Department of  Health and  Social                                                                    
Services and represented a fairly  large portion of funding,                                                                    
particularly  in  the  Senior   Benefits  Program  of  $20.7                                                                    
million UGF.  Page 10 included  a $50  million appropriation                                                                    
for  the   Medicaid  program  and  $27   million  for  Adult                                                                    
Preventative Dental. The items  reflected some of the larger                                                                    
vetoed items restored by the legislation.                                                                                       
Mr. Ecklund turned  to the Department of Law on  page 11 and                                                                    
highlighted  funds restored  for prosecutors  and attorneys.                                                                    
The  bill  would  restore  funding   for  the  Court  System                                                                    
therapeutic courts  and would provide  raises to  keep court                                                                    
employees on par with other state employees.                                                                                    
Ms. Schultz  moved to restored  items within  the Department                                                                    
of Natural Resources  on page 13. She noted  that some items                                                                    
that  had received  considerable public  testimony had  been                                                                    
added   back,  including   funding  for   the  Division   of                                                                    
Agriculture  Northern Latitude  Plant  Material Center,  the                                                                    
Agriculture Revolving Loan  Program, and programs supporting                                                                    
the state's farming industry.                                                                                                   
Ms. Schultz highlighted that $1  billion of the 5.25 percent                                                                    
of market  value (POMV) structured  draw from  the Permanent                                                                    
Fund Earnings Reserve  Account (ERA) had been  vetoed by the                                                                    
governor.  The  funds  had  been  restored  in  the  numbers                                                                    
section of the legislation.                                                                                                     
3:20:01 PM                                                                                                                    
Mr. Ecklund added  that the bill would  restore the transfer                                                                    
of $5.4 billion from the ERA  to the corpus of the Permanent                                                                    
Fund. Additionally, it would restore  $198 million for 25 to                                                                    
50 percent  of royalty deposits  (that were not made  in the                                                                    
corpus of the Permanent Fund) for FY 18 and FY 19.                                                                              
Co-Chair Stedman  asked for  verification that  the transfer                                                                    
of funds  from the ERA to  the corpus of the  Permanent Fund                                                                    
was internal. He noted that  the legislature had the ability                                                                    
to appropriate  funds from  the ERA  with a  simple majority                                                                    
vote,  but  it could  not  access  the  corpus of  the  fund                                                                    
without a public vote.                                                                                                          
Mr. Ecklund  agreed that the  restoration was a  transfer of                                                                    
funds that occurred via appropriation.                                                                                          
Co-Chair  Stedman clarified  that  the  legislature was  not                                                                    
spending the  funds. The action  would place the funds  in a                                                                    
constitutionally protected "lock box."                                                                                          
3:21:14 PM                                                                                                                    
Senator  Hoffman  remarked  that  normally  the  Power  Cost                                                                    
Equalization (PCE) fund was funded  in the operating budget.                                                                    
He  explained that  initially the  governor had  included an                                                                    
allocation in the operating budget  to fund PCE with general                                                                    
funds. He  detailed that the legislature  had disagreed with                                                                    
the action.  He asked  for verification  the issue  had been                                                                    
addressed in the capital budget.                                                                                                
Mr. Ecklund  replied in the affirmative.  He elaborated that                                                                    
an affirmative  supermajority vote (required for  use of the                                                                    
CBR) on the capital budget would take care of the issue.                                                                        
Senator  Hoffman asked  for  verification  the action  would                                                                    
include  the appropriations  from  the earnings  of the  PCE                                                                    
Mr. Ecklund agreed.                                                                                                             
3:22:16 PM                                                                                                                    
Senator Olson  looked at the  Village Public  Safety Officer                                                                    
(VPSO) program on page 14 of  the LFD packet and asked about                                                                    
vetoed funding that would be restored by the legislation.                                                                       
Mr. Ecklund  replied that  $3 million  had been  vetoed from                                                                    
the  VPSO  program.  He  detailed that  if  the  funds  were                                                                    
restored, the money could be  used to hire additional VPSOs.                                                                    
Additionally, there  was intent language in  various budgets                                                                    
to use  some VPSO  funds to  increase VPSO  pay in  order to                                                                    
recruit and retain officers.                                                                                                    
Senator Olson  asked if  there was a  change in  the funding                                                                    
Mr. Ecklund answered that the  proposal to use general funds                                                                    
had not changed.                                                                                                                
Senator Micciche  commented that  the bill combined  SB 2001                                                                    
with House bills.  He asked why the legislation  did not use                                                                    
Senate  numbers for  the University.  He  remarked that  the                                                                    
House  number [for  the  University]  was approximately  $65                                                                    
million higher.                                                                                                                 
Co-Chair  Stedman replied  that  it was  the  number in  the                                                                    
final operating budget passed by the legislature.                                                                               
3:24:14 PM                                                                                                                    
Senator Micciche  felt that combining the  two [bills] meant                                                                    
the legislature was reliving a  past experience. He observed                                                                    
there had  obviously been negotiations  with the  House, but                                                                    
he  wondered  if  there  had   been  negotiations  with  the                                                                    
administration on  the restorations. He did  not support all                                                                    
of  the restorations.  Additionally, he  noted there  were a                                                                    
couple of  items he  believed were  important that  had been                                                                    
left out  of the  restorations. He  shared that  the current                                                                    
bill  was not  what he  would  support. He  asked about  the                                                                    
logic of adding all of the items back in.                                                                                       
Co-Chair  Stedman   replied  that   the  committee   was  in                                                                    
possession  of the  House bill;  the next  step would  be to                                                                    
adopt a  committee substitute (CS)  that would  combine both                                                                    
House bills  under consideration  by the committee.  At that                                                                    
point, the  committee would  undergo the  amendment process.                                                                    
He clarified  that the committee  was not finished  with its                                                                    
action and was  laying the two subject matters  on the table                                                                    
to have a discussion.                                                                                                           
3:26:02 PM                                                                                                                    
AT EASE                                                                                                                         
3:27:30 PM                                                                                                                    
Co-Chair Stedman relayed that a CS had been disseminated.                                                                       
Co-Chair von  Imhof MOVED to ADOPT  the committee substitute                                                                    
for    CSSB    2001(FIN)am,     Work    Draft    31-LS1103\I                                                                    
(Wallace/Caouette, 7/27/19).                                                                                                    
Co-Chair Stedman OBJECTED for discussion.                                                                                       
Co-Chair  Stedman asked  Mr. Ecklund  to explain  changes in                                                                    
the CS that combined HB 2001 and HB 2003.                                                                                       
Mr. Ecklund complied.  He explained that the  CS combined HB
2001 and  HB 2003  with one exception.  He detailed  that on                                                                    
the House  floor an  amendment had  been adopted  that would                                                                    
add $5 million  to the Alaska Marine  Highway System (AMHS),                                                                    
which   was  beyond   the  vetoed   restoration.  The   AMHS                                                                    
appropriation   had  been   left  out   of  the   CS,  which                                                                    
constituted  the   only  change  from  the   two  bills  the                                                                    
committee  had  just  reviewed. [Note:  see  3:31  p.m.  for                                                                    
Co-Chair Stedman  asked for clarification.  He asked  if the                                                                    
$5 million for AMHS was included in the CS.                                                                                     
Mr. Ecklund replied  in the negative. He relayed  it was the                                                                    
only change from the two  bills previously described for the                                                                    
committee.  He reiterated  his previous  explanation. [Note:                                                                    
see 3:31 p.m. for correction.]                                                                                                  
3:29:36 PM                                                                                                                    
AT EASE                                                                                                                         
3:31:18 PM                                                                                                                    
Co-Chair  Stedman stated  that  in the  haste of  assembling                                                                    
some  of the  documents there  had been  some confusion.  He                                                                    
asked Mr. Ecklund to restate  his previous testimony related                                                                    
to a $5  million appropriation for AMHS that  had been added                                                                    
in the  House. He  remarked it  was the  only change  in the                                                                    
legislation;  all  other  items  had been  included  in  the                                                                    
operating budget.                                                                                                               
Mr. Ecklund corrected his previous  testimony related to the                                                                    
appropriation.  He explained  there  had been  a $5  million                                                                    
appropriation added on the House  floor that exceeded a veto                                                                    
restoration. He  clarified that  the appropriation  had been                                                                    
maintained in  the CS.  He elaborated  that it  had required                                                                    
adjusting the dividend appropriation amount by $5 million.                                                                      
Co-Chair Stedman asked why the adjustment was necessary.                                                                        
Mr. Ecklund  replied the adjustment  was necessary  in order                                                                    
to minimize withdrawal from savings.                                                                                            
Co-Chair Stedman added the adjustment  was also necessary in                                                                    
order to have a balanced budget.                                                                                                
Mr.  Ecklund  agreed. He  noted  that  the proposed  funding                                                                    
source for HB 2002 was CBR direct.                                                                                              
3:33:03 PM                                                                                                                    
Senator  Wilson  requested  a brief  overview  of  page  17,                                                                    
Section 8, which was important  for his constituents. He was                                                                    
interested in the  total amount and fund  sources related to                                                                    
the Permanent Fund.                                                                                                             
Mr. Ecklund asked if Senator  Wilson was concerned about the                                                                    
entire   section   or   specifically  about   the   dividend                                                                    
appropriations in the section.                                                                                                  
Senator  Wilson  answered  that  he  was  interested  in  an                                                                    
overview of the  fund sources for the PFD and  in the amount                                                                    
each Alaskan would receive.                                                                                                     
Mr.  Ecklund turned  to  page  17 and  noted  the first  few                                                                    
appropriations were 25 percent  royalty paybacks and did not                                                                    
impact the  current dividend. The appropriation  amounts for                                                                    
the  PFD were  $172,200,000  from the  SBR and  $896,470,000                                                                    
from  the General  Fund,  which  would result  in  a PFD  of                                                                    
approximately $1,600.                                                                                                           
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, Work Draft 31-LS1103\I was ADOPTED.                                                                          
3:35:48 PM                                                                                                                    
AT EASE                                                                                                                         
3:43:31 PM                                                                                                                    
Co-Chair Stedman  communicated that the adopted  CS included                                                                    
a PFD of roughly $1,600.  He noted an amendment sponsored by                                                                    
Senator Shower was being disseminated.                                                                                          
3:44:41 PM                                                                                                                    
Senator Shower  MOVED to ADOPT Conceptual  Amendment 1 (copy                                                                    
on file):                                                                                                                       
     Insert a new subsection in Section 8, pages 17 and 18                                                                      
     of this bill to read:                                                                                                      
     The amount necessary, when  added to the appropriations                                                                    
     made in (f)  and (g) of this section to  fund the total                                                                    
     amount authorized  under AS 37.13.14S(b)   for transfer                                                                    
     by the  Alaska Permanent  Fund Corporation on  June 30,                                                                    
     2019,  estimated to  be  $875,330,000, is  appropriated                                                                    
     from  the earnings  reserve account  (AS 37.13.145)  to                                                                    
     the dividend fund (As 43.23.04S(a))  for the payment of                                                                    
     permanent  fund dividends  and  for administrative  and                                                                    
     associated costs  for the fiscal  year ending  June 30,                                                                    
Co-Chair Stedman OBJECTED for discussion.                                                                                       
Co-Chair Stedman  acknowledged that the  following committee                                                                    
members requested  to be added  as cosponsors  on Conceptual                                                                    
Amendment   1:  Senator   Olson,  Senator   Wilson,  Senator                                                                    
Micciche, and Senator Wielechowski.                                                                                             
3:46:04 PM                                                                                                                    
Co-Chair Stedman requested an explanation of the amendment.                                                                     
Senator Shower  explained that Conceptual Amendment  1 would                                                                    
take an extra draw from the  ERA to increase the dividend to                                                                    
the statutory amount of roughly $3,000.                                                                                         
Co-Chair Stedman  rephrased that the amendment  would result                                                                    
in a PFD  of $3,000 and would increase the  ERA draw to $875                                                                    
million,  which  would  exceed the  5.25  percent  statutory                                                                    
draw.  He  noted  there  were  ample funds  in  the  ERA  of                                                                    
approximately $18 billion to $19 billion.                                                                                       
3:47:08 PM                                                                                                                    
AT EASE                                                                                                                         
3:47:47 PM                                                                                                                    
Senator Wilson  vocalized his support  for a  full dividend.                                                                    
He saw  the proposal as a  way to have a  compromise on many                                                                    
of  the issues  the legislature  had been  addressing during                                                                    
its second special  session. He hoped they  could get things                                                                    
back on track  for the state and to help  change some of the                                                                    
credit ratings.  He believed the  job market had been  up in                                                                    
the past  few months.  He stated  his understanding  that if                                                                    
the  legislature passed  an appropriation  bill with  a full                                                                    
dividend, the  bill would supersede current  law, meaning SB
26 would not be violated.                                                                                                       
Co-Chair   Stedman  clarified   that  the   ultimate  ruling                                                                    
document  was the  state constitution.  There were  statutes                                                                    
the  legislature  could  pass,  modify,  or  change  with  a                                                                    
majority  vote  and  the   governor's  signature.  When  the                                                                    
legislature  acted  on an  appropriation  bill  that may  be                                                                    
contradictory to  statute, it had the  authority to override                                                                    
statute; however,  changing the constitution took  a vote of                                                                    
the people.  The 5.25  percent POMV draw  rate from  the ERA                                                                    
was currently in statute. He  remarked that some legislators                                                                    
hoped  the rate  would  eventually be  in the  constitution,                                                                    
which  would make  it  impossible to  exceed  the draw  rate                                                                    
without a  vote of the people.  He continued that it  was in                                                                    
the  legislature's authority  to pass  the amendment  in the                                                                    
legislation legally.  He thought there was  confusion in the                                                                    
public  about  the pecking  order  of  the constitution  and                                                                    
statute.  He  clarified  that  the  constitution  ruled.  He                                                                    
stated that the amendment was legitimate and germane.                                                                           
3:50:47 PM                                                                                                                    
Senator  Hoffman   shared  that  he  had   been  in  several                                                                    
discussions  that were  germane  to the  issue. He  detailed                                                                    
that SB  26 limited  the draw  from the  ERA to  the General                                                                    
Fund to  5.25 percent.  The amendment did  not ask  that the                                                                    
money go  from the  ERA to  the General  Fund. He  noted the                                                                    
amendment bypassed  the General Fund and  directed the money                                                                    
to the PFD  source. He believed the  amendment complied with                                                                    
SB 26.                                                                                                                          
Senator Hoffman  continued that the committee  had discussed                                                                    
the  issue   and  it  had   been  verified  by   David  Teal                                                                    
[Legislative Finance Division director].                                                                                        
Co-Chair Stedman  believed there  was legal interest  in the                                                                    
subject matter. He observed it  was less than clear cut, but                                                                    
there was  no ambiguity that  the amendment was  germane. He                                                                    
noted the  issue highlighted by  Senator Hoffman was  yet to                                                                    
be thoroughly  defined. He referenced  the existence  of the                                                                    
Wielechowski v. State case [related  to the Permanent Fund].                                                                    
He stated  that the legislature had  the appropriating power                                                                    
of the dividend.                                                                                                                
3:52:35 PM                                                                                                                    
Co-Chair  von  Imhof opposed  the  amendment.  She found  it                                                                    
fascinating  that  people  looked for  ways  to  rationalize                                                                    
their  behavior. She  remarked on  ways people  rationalized                                                                    
getting  around state  law. She  underscored  that math  was                                                                    
math.  She noted  there  was  $18 billion  in  the ERA.  She                                                                    
stressed  that the  legislature had  set up  a 5.25  percent                                                                    
draw to take  from the ERA for any purpose  once a year. She                                                                    
remarked that  a 5.25 percent  draw had been a  stretch. She                                                                    
emphasized that  taking any additional money,  regardless of                                                                    
the time of year, violated  SB 26 and the recommendations by                                                                    
experts (including  Callan Associates)  that it  would erode                                                                    
the  Permanent  Fund  Dividend over  time  by  taking  extra                                                                    
draws. She  reiterated her opposition to  the amendment. She                                                                    
stated the CS was a  balance and compromise. She highlighted                                                                    
that a  $1,600 PFD was larger  than the average in  the last                                                                    
40  years.  The legislature  had  left  $91 million  in  the                                                                    
governor's  vetoes intact.  She  supported the  bill in  its                                                                    
current form. She reiterated that  the amendment would erode                                                                    
the value of the Permanent Fund by $875 million.                                                                                
3:54:38 PM                                                                                                                    
Senator Micciche supported the  amendment. He understood the                                                                    
math  and  could not  disagree  with  it.  He noted  it  was                                                                    
another case where it was  necessary to choose which statute                                                                    
to break. His  district had been clear about  its desire for                                                                    
a full dividend. He believed  the dividend was unsustainable                                                                    
and  he supported  additional  cuts to  try  to average  the                                                                    
cost. He  wanted a  durable solution  in perpetuity.  He did                                                                    
not want  to make a quick  reduction at present and  to have                                                                    
the people of  Alaska decide they had  been shortchanged. He                                                                    
believed  the  amendment  rebuilt  some of  the  angst  from                                                                    
reduced dividends  in the past  and allowed  the legislature                                                                    
to sit  down in the coming  months to discuss the  real math                                                                    
and  possibility of  reducing  the budget,  what a  dividend                                                                    
could look  like, and  how Alaskans  could agree  with their                                                                    
legislators on a fair shake for their PFD.                                                                                      
Senator  Micciche   noted  the   importance  of   the  topic                                                                    
discussed   by  Senator   Wilson.  He   remarked  that   the                                                                    
legislature  had  already  been  down the  "this  road."  He                                                                    
believed they were back considering  everything on the table                                                                    
and trying to figure out how  to move forward. He thought it                                                                    
would  take  a  compromise.  He stressed  that  the  capital                                                                    
budget and federal matching funds  were at risk. He believed                                                                    
the legislature  needed to  work with  the governor  to fund                                                                    
necessary  services,  a  PFD,  and  to  bring  in  important                                                                    
federal  dollars for  capital  projects.  He reiterated  his                                                                    
support for  the amendment. He  thought it was  important to                                                                    
keep the  issue on the  table in order  to arrive at  a true                                                                    
compromise  recognizing  all  caucuses and  regions  in  the                                                                    
3:57:08 PM                                                                                                                    
Senator Wilson  supported the amendment. He  thought that if                                                                    
numbers "of our  count" really mattered, the  numbers he had                                                                    
drafted  from LFD  showed that  the governor's  vetoes would                                                                    
leave enough  funds in the CBR  for another year or  so, the                                                                    
ERA  draw  would be  lower,  and  there  would be  a  larger                                                                    
balance in  the budget  reserve account. He  understood that                                                                    
some people felt the budgets  were social contracts - he did                                                                    
not necessarily  agree or  disagree. The  legislature wanted                                                                    
to fund  certain items within  the appropriation.  He stated                                                                    
that if  the legislature wanted more  sustainable, long-term                                                                    
growth, it  would allow  the accounts  to grow  by accepting                                                                    
the governor's vetoes.  He noted that was not  the case. The                                                                    
legislature felt that some of  the services were valuable to                                                                    
the people. He was committed  to fight for the service until                                                                    
it was possible  to educate people on the cash  flows of the                                                                    
state.  He  supported  the  amendment,  but  agreed  it  was                                                                    
necessary to fix the problem  of taking from reserves in the                                                                    
future.  He  stated  if legislators  only  cared  about  the                                                                    
numbers, they would have a  different conversation about the                                                                    
other contents in the CS.                                                                                                       
3:58:42 PM                                                                                                                    
Senator Bishop opposed  the amendment. He shared  he did not                                                                    
intend to  talk about numbers  but would talk  about people.                                                                    
He considered  the amendment and  the amount taken  from the                                                                    
ERA. He  stressed that the  legislature had talked  for five                                                                    
years about how  to proceed and it had come  a long way with                                                                    
SB  26, albeit  not all  the  way. He  underscored that  $12                                                                    
billion had  been spent along  the way. He stated  they were                                                                    
still  "jawboning"  and were  about  to  spend close  to  $1                                                                    
billion out of the $18 billion  [in the ERA]. He pointed out                                                                    
that  real  people were  losing  their  jobs and  homes.  He                                                                    
reiterated his opposition to the amendment.                                                                                     
4:00:07 PM                                                                                                                    
Senator  Olson  supported  the  amendment.  He  thanked  the                                                                    
sponsor of  the amendment and Co-Chair  Stedman for allowing                                                                    
the  sentiment  of  the  collective  constituents  who  were                                                                    
looking at  the legislature with  a fair amount  of disdain.                                                                    
He believed  the amendment would  redeem the  legislature in                                                                    
the eyes of  many constituents in terms  of what legislators                                                                    
had been sent to Juneau to do.                                                                                                  
4:00:55 PM                                                                                                                    
Co-Chair Stedman noted that  Senator Wielechowski was online                                                                    
and  had  the  opportunity  to   comment  and  vote  on  the                                                                    
Senator Wielechowski supported the amendment.                                                                                   
Co-Chair  Stedman opposed  the amendment.  He was  concerned                                                                    
about the propensity to draw  from savings. He detailed that                                                                    
over $10 billion had been drawn  from the CBR. He noted that                                                                    
the last large pot of money was  the ERA and it was too easy                                                                    
to overdraw. He noted that  regardless of what statutes said                                                                    
or  did  not  say,  the investment  performance  could  only                                                                    
produce so much.  He pointed out that inflation  "is a thief                                                                    
that robs  us in the night."  He cautioned that if  they did                                                                    
not  keep  track  of  performance   and  inflation  and  the                                                                    
portfolio was overdrawn, it would  erode the future value of                                                                    
the  fund  for  the  decedents in  perpetuity.  He  did  not                                                                    
believe it  was worth it. He  thought there had been  a good                                                                    
run  with the  oil  boom in  the  last 30  to  40 years.  He                                                                    
believed it was  important to leave the  portfolio intact as                                                                    
much as possible for their grandchildren's children.                                                                            
Co-Chair Stedman  did not want  to overdraw the  ERA because                                                                    
it  was too  difficult  to make  the  hard budget  decisions                                                                    
dealing with  budget reductions and/or  telling constituents                                                                    
there was  not enough  money to  run AMHS  and pay  a $3,000                                                                    
PFD. He noted it was necessary  to make choices and he chose                                                                    
to default  to the  future generations  of Alaska,  with the                                                                    
knowledge  that the  state's forefathers  had done  the same                                                                    
when  they   established  the  Permanent  Fund   for  future                                                                    
Co-Chair  Stedman  MAINTAINED  his OBJECTION  to  Conceptual                                                                    
Amendment 1.                                                                                                                    
4:03:35 PM                                                                                                                    
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Micciche, Olson, Shower, Wielechowski, Wilson                                                                         
OPPOSED: Hoffman, Bishop, von Imhof, Stedman                                                                                    
The  MOTION to  ADOPT Conceptual  Amendment 1  PASSED (5/4).                                                                    
There being NO further OBJECTION, it was so ordered.                                                                            
Co-Chair Stedman  relayed that the motion  had been approved                                                                    
and   the  PFD   would  be   approximately  $3,000   in  the                                                                    
legislation. He  asked members if there  were any additional                                                                    
comments on the bill.                                                                                                           
4:04:07 PM                                                                                                                    
Senator  Micciche thanked  Co-Chair  Stedman  for the  clean                                                                    
amendment process. He did not  know what would happen on the                                                                    
Senate floor.  He believed there would  be additional vetoes                                                                    
[by the governor], which the  legislature would have to deal                                                                    
with later. He  noted it was another  process altogether. He                                                                    
relayed  that   he  did   not  support   all  of   the  veto                                                                    
restorations  in the  bill. He  also believed  there were  a                                                                    
couple of items that had  not been restored that he believed                                                                    
were important to  Alaskans. He was amenable  to letting the                                                                    
bill continue through the process.                                                                                              
Co-Chair Stedman  asked Senator  Wielechowski if he  had any                                                                    
comments on the bill.                                                                                                           
Senator Wielechowski  replied in the negative.  He supported                                                                    
passage of the legislation.                                                                                                     
Co-Chair von  Imhof MOVED to  REPORT SCS CSHB  2001(FIN), as                                                                    
amended, from  committee. There being  NO OBJECTION,  it was                                                                    
so ordered.                                                                                                                     
SCS CSHB  2001(FIN) was REPORTED  out of committee  with one                                                                    
"do pass" recommendation,  four "amend" recommendations, and                                                                    
two "no recommendation" recommendations.                                                                                        

Document Name Date/Time Subjects
072719 SB2001 Work Draft v.E Explanation.pdf SFIN 7/27/2019 11:00:00 AM
SB 2001 work draft version E.pdf SFIN 7/27/2019 11:00:00 AM
072719 7 27 19 Short Fiscal Summary.pdf SFIN 7/27/2019 11:00:00 AM
072719 HB2001 Included TransDetail.pdf SFIN 7/27/2019 11:00:00 AM
072719 HB2001 Vetoes not restored TransDetail.pdf SFIN 7/27/2019 11:00:00 AM
072719 work draft version I HB2001.pdf SFIN 7/27/2019 11:00:00 AM
HB 2001 Conceptual Amendment 1 - Shower.pdf SFIN 7/27/2019 11:00:00 AM