Legislature(2015 - 2016)BELTZ 105 (TSBldg)

02/17/2015 01:30 PM LABOR & COMMERCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

Audio Topic
01:29:30 PM Start
01:31:10 PM Overview: Alaska Maritime Workforce Development Plan
01:53:31 PM SB41
02:18:20 PM SB33
02:23:25 PM SB34
02:32:49 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview of Alaska Maritime Workforce TELECONFERENCED
Development Plan
-- Testimony <Invitation Only> --
*+ SB 41 PSYCHOLOGIST & ASSOC CRIM HISTORY CHECKS TELECONFERENCED
Moved SB 41 Out of Committee
*+ SB 33 FEES FOR TIRES TELECONFERENCED
Heard & Held
*+ SB 34 PCE ENDOWMENT FUND INVESTMENT TELECONFERENCED
Heard & Held
-- Public Testimony --
              SB  34-PCE ENDOWMENT FUND INVESTMENT                                                                          
                                                                                                                                
2:23:25 PM                                                                                                                    
CHAIR  COSTELLO announced  the consideration  of  SB 34. "An  Act                                                             
relating to  investment of the power  cost equalization endowment                                                               
fund; and providing for an effective date."                                                                                     
                                                                                                                                
2:23:41 PM                                                                                                                    
PAM LEARY, Director, Division of  Treasury, Department of Revenue                                                               
(DOR) explained  that the  fund purpose is  to annually  fund the                                                               
power  cost equalization  endowment fund  and the  rural electric                                                               
capitalization fund,  and to reimburse  the cost of  managing the                                                               
fund. The  amount that  can be appropriated  is seven  percent of                                                               
the monthly  average of  the fund for  the previous  three fiscal                                                               
years.  The annual  appropriation is  used  to fund  the cost  of                                                               
energy in areas that are experiencing high energy costs.                                                                        
                                                                                                                                
The  fund   was  established   in  2000   with  a   $100  million                                                               
appropriation   from  the   Constitutional  Budget   Reserve.  It                                                               
received an  additional $89.6 million  in 2002 from  the proceeds                                                               
of  the  Four  Dam  Pool   project.  There  were  two  additional                                                               
appropriations: one in 2007 for  $182.7 million and the second in                                                               
2012  for $400  million.  On  January 31,  2015  the  fund had  a                                                               
balance of $950.7 million.                                                                                                      
                                                                                                                                
SB 34  removes the  7 percent stated  nominal return  target from                                                               
statute and  allows the revenue  commissioner to invest  the fund                                                               
at potentially  a lower rate  while still meeting  the objectives                                                               
of the  program. The bill has  a zero fiscal note  and additional                                                               
funds will not be required to continue to manage the fund.                                                                      
                                                                                                                                
2:23:45 PM                                                                                                                    
GARY  BADER,  Chief  Investment  Officer,  Trusts  and  Portfolio                                                               
Management, Department of Revenue (DOR)  advised that the goal is                                                               
to  achieve the  highest  rate  of return  with  the lowest  risk                                                               
possible.  Current  law  directs   the  revenue  commissioner  to                                                               
achieve a  specific return  without regard  to risk.  He directed                                                               
attention to  the page in  the packet titled 2015  Capital Market                                                               
Expectations  from  Callan  Associates  that  estimates  what  is                                                               
likely to  be achieved  over the  next ten  years in  the capital                                                               
market.  It demonstrates  that in  order to  achieve a  7 percent                                                               
return, the commissioner of revenue  would have to adopt an asset                                                               
allocation that  is almost entirely equities.  The projected risk                                                               
or  standard deviation  means  it  could drop  20  percent to  30                                                               
percent in  one year.  That is very  risky and no  way to  run an                                                               
investment program, he said.                                                                                                    
                                                                                                                                
He summarized  that SB  34 would allow  the commissioner  to meet                                                               
the goals  of the program  without having to  try to achieve  a 7                                                               
percent nominal return.                                                                                                         
                                                                                                                                
2:30:49 PM                                                                                                                    
SENATOR  STEVENS asked  if the  fund  has achieved  7 percent  in                                                               
recent history.                                                                                                                 
                                                                                                                                
MR. BADER answered  yes; the fund has done very  well. He offered                                                               
to follow up with the numbers.                                                                                                  
                                                                                                                                
CHAIR COSTELLO asked the genesis of the legislation.                                                                            
                                                                                                                                
MR. BADER replied  this legislation has been  proposed before and                                                               
supported by previous commissioners.                                                                                            
                                                                                                                                
2:32:03 PM                                                                                                                    
CHAIR COSTELLO announced she would hold SB 34 in committee.                                                                     

Document Name Date/Time Subjects
SB41 Sponsor Statement Psych&Assoc Crim History Checks.pdf SL&C 2/17/2015 1:30:00 PM
SB 41
SB41 Psychologist & Assoc Crim History Checks vsn H.pdf SL&C 2/17/2015 1:30:00 PM
SB 41
SB41 Support Lisa Turner 2-17-15.doc SL&C 2/17/2015 1:30:00 PM
SB 41
SB 41 Support Psychologist 2-12-15.pdf SL&C 2/17/2015 1:30:00 PM
SB 41
SB33 Fiscal Note-0044-DOR-TAX-1-16-15.pdf SL&C 2/17/2015 1:30:00 PM
SB 33
SB33 Sponsor Statement.pdf SL&C 2/17/2015 1:30:00 PM
SB 33
SB33 Supporting Document - DOR Hearing Request Letter.pdf SL&C 2/17/2015 1:30:00 PM
SB 33
SB33 Supporting Documents-Additional Explanation.pdf SL&C 2/17/2015 1:30:00 PM
SB 33
SB33 ver A.pdf SL&C 2/17/2015 1:30:00 PM
SB 33
SB 34 Fiscal Note-0018-DOR-TRS-1-16-15.pdf SL&C 2/17/2015 1:30:00 PM
SB 34
SB 34 Sponsor Statement.pdf SL&C 2/17/2015 1:30:00 PM
SB 34
SB34 Supporting Documents - DOR Hearing Request Letter.pdf SL&C 2/17/2015 1:30:00 PM
SB 34
SB34 ver A.pdf SL&C 2/17/2015 1:30:00 PM
SB 34
SB 34 PCE presentation.pptx SL&C 2/17/2015 1:30:00 PM
SB 34
Alaska Maritime Workforce Development Plan.pdf SL&C 2/17/2015 1:30:00 PM
Alaska Maritime Workforce Development Plan
SB41 Sectional Analysis vsn H.pdf SL&C 2/17/2015 1:30:00 PM
SB 41