Legislature(2019 - 2020)BUTROVICH 205
03/28/2019 03:30 PM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SJR4 | |
| SJR5 | |
| Public Testimony on Sjr 5 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 4 | TELECONFERENCED | |
| *+ | SJR 5 | TELECONFERENCED | |
| + | TELECONFERENCED |
SJR 5-CONST. AM.:PERMANENT FUND & DIVIDEND
4:27:46 PM
CHAIR SHOWER reconvened the meeting and announced the
consideration of SENATE JOINT RESOLUTION NO. 5, Proposing
amendments to the Constitution of the State of Alaska relating
to the Alaska permanent fund and the permanent fund dividend.
4:28:30 PM
BRUCE TANGEMAN, Commissioner, Department of Revenue, Fairbanks,
reported that for over three decades the permanent fund dividend
calculation and the amount of the dividend was never questioned.
This because an issue when the dividend was politicized and it
created mistrust for many Alaskans. He explained that SJR 5 does
three things. First, the dividends would be guaranteed by
initiating an automatic transfer rather than being subject to
appropriation. Second, the PFD could not be reduced by the
legislature or a governor's veto. Third, any changes to the
statutory PFD formula would require a vote of the people.
Finally, he said, SJR 5 is just one part of Governor Dunleavy's
fiscal plan that seeks to ensure that Alaskans are included in
deciding the size and scope of their government.
4:30:03 PM
BILL MILKS, Assistant Attorney General, Civil Division, Labor
and State Affairs Section, Department of Law, Juneau, delivered
the following sectional analysis for SJR 5.
Section 1: This would provide a conforming amendment
to the existing language in order to authorize a
portion of permanent fund income to be used for
dividends as set forth in Section 2.
Section 2: This section would create two new
subsections in the permanent fund amendment.
Subsection (b) would require that a portion of the
permanent fund income be used, without an
appropriation, solely for the purpose of paying
permanent fund dividends to state residents. Those
payments would occur according to the dividend program
and formula currently set forth in statute. Subsection
(b) would also allow the legislature to change the
dividend program, including amount and eligibility,
subject to the approval of the voters in subsection
(c).
Subsection (c) would require that any law passed by
the legislature to amend the permanent fund dividend
program, including the amount and the eligibility
requirements, would not take effect unless the voters
approved the proposed law at the next statewide
election. If approved by the voters, it would take
effect 90 days after certification of the election.
Section 3: This transition provision specifies that
the dividend program in place on January 1, 2019 would
remain in place until the legislature and the voters
approved a change to the program.
Section 4: This section would require that the
constitutional amendment be placed on the general
election ballot in 2020.
4:33:19 PM
CHAIR SHOWER reminded everyone that SJR 5 will also be vetted in
both the judiciary and finance committees. This committee will
address the policies but because some members will only hear the
bill in this committee, he'll allow more latitude in the
questions.
SENATOR REINBOLD said she didn't realize initially that the
voters would determine who is and is not eligible for a PFD. She
asked if the voters will be making policy decisions about
military families, prisoners, restitution, hold harmless
clauses, and garnishments.
MR. MILKS answered yes; the voters will make decisions about
eligibility and the amount of the dividend.
SENATOR REINBOLD asked if the voters will be involved in
decisions about garnishing a dividend for child support.
MR. MILKS replied SJR 5 would not change the existing law that
provides for that so garnishment procedures would continue.
SENATOR REINBOLD commented that there's conflicting information
because eligibility is also in existing law and that's changing
whereas garnishing is not changing.
MR. MILKS said the intent is that the existing eligibility rules
will continue.
SENATOR REINBOLD asked if the voters would weigh in on the hold-
harmless clause.
MR. MILKS asked for clarification of the question.
SENATOR REINBOLD explained that the state will pay the federal
government about $17 million [this year] because of the PFD
hold-harmless statutes that allow low income Alaskans to receive
their PFD and also continue to receive their welfare benefits.
She highlighted that this annual payment to the federal
government results in a lower PFD for all Alaskans.
MR. MILKS said the existing statutory eligibility requirements
will remain. He added that this is the first hearing and he
would review all the questions on that subject to ensure he
fully understood what she asked.
4:39:32 PM
SENATOR COGHILL observed that this puts the concept of a
fundamental right of the dividend and the fundamental right of
the legislature to act in tension by sweeping in four Articles
of legislative power pertaining to things like effective dates
and veto powers. He said it's something to think about because
this appears to touch a live wire of changing our constitutional
structure for an individual fundamental right. He said another
wrinkle is that this would assume a constitutional right for
some statutory provisions outside of a ratification, but it's
not quite an initiative and it's not quite legislative
authority. He said he might start by asking if this is a
revision to constitutionalize existing statutory language.
MR. MILKS responded that there is always a question about
whether a proposed change to the constitution is an amendment or
a revision. SJR 5 was drafted to be a constitutional amendment.
He cited a recent court case where the Alaska Supreme Court said
that absent another constitutional amendment, the Permanent Fund
Dividend Program must compete for annual legislative funding
just like other state programs. He said the Department of Law
sees the issues that Senator Coghill identified, but their view
is that this is not so sweeping as to be a revision. It's an
effort to provide a program that has an automatic dividend
payment.
SENATOR COGHILL said he understands that, but he struggles with
changing the "legislature act of law" for a single issue, which
is the dividend. He stated his intent to review the documents
related to the founding of the constitution and the
conversations surrounding the statements that all power resides
with the people and all lawmaking power resides in the
legislature. SJR 5 says those powers are tied so instead of a
check and balance it's become a way to addressing a fundamental
right. He said that's a fundamental change that he'll think
about very carefully.
4:49:01 PM
CHAIR SHOWER asked Mr. Milks to explain the legal difference
between an amendment to the constitution and a revision of the
constitution.
MR. MILKS said the basic difference is that an amendment is a
small change and a revision is a more sweeping structural
change. However, the Alaska Supreme Court has said it is
possible for an amendment to change the basic constitutional
rules to such an extent that it should be considered a revision.
A revision of the constitution requires a constitutional
convention. He said that in Bess vs. Ulmer, the Alaska Supreme
Court looked at the California constitutional framework on the
amendment versus revision piece and came up with an Alaska test
that looks at the balance between the quantitative and the
qualitative changes. He acknowledged the limitation of having
just one Alaska case.
CHAIR SHOWER asked him to clarify whether this is about
enshrining an individual right to a dividend or the program but
not necessarily the amount of the dividend in the constitution.
MR. MILKS said SJR 5 seeks to respond to the issue that came out
of having a statutory dividend program that many people thought
would occur automatically but is actually subject to
appropriation and is therefore also subject to governor veto in
full or part. He said he believes that, as written, SJR 5 does
not give anybody a lifetime fundamental right to a dividend of a
certain dollar amount, but it does say that there is going to be
a dividend program and some of the permanent fund income is
going to provide for a dividend.
CHAIR SHOWER asked what would happen if this becomes part of the
constitution and there isn't enough income to pay a dividend in
5-10 years. He specifically asked if the legislature would be
forced to initiate a tax to pay the dividend.
MR. MILKS responded that SJR 5 only talks about using a portion
of the income of the Alaska Permanent Fund for a dividend. It
does not talk about any other income stream.
CHAIR SHOWER said he'd need to think about this a little more
because this sets the legislature up to be at odds with the
people.
4:59:17 PM
SENATOR REINBOLD stated for the record that she did not support
either the taking of the dividend or the POMV. She went on to
say there are two schools of thought on this issue, the first of
which is to tax all resources and put the revenue in the
permanent fund so there will be a long-term permanent fund. The
second aspect is to tax just oil. However, with that approach
she, too, questions what will happen if oil revenue drops to
nothing and there's no money going into the permanent fund.
"Where do we go with that?" she asked.
MR. MILKS said the proposed constitutional amendment provides
that dividends will only be paid if there is permanent fund
income.
CHAIR SHOWER commented that this brings up interesting things to
think about.
SENATOR MICCICHE said the reality is that there is no relief
valve if the oil and gas infrastructure fails, and that should
be part of the discussion.
5:03:57 PM
CHAIR SHOWER recessed the meeting until 6:00 p.m.
^Public Testimony on sjr 5
6:05:40 PM
CHAIR SHOWER reconvened the meeting and opened public testimony
on SJR 5.
6:06:26 PM
LYNETTE CLARK, representing self, Fox, stated support for SJR 5.
She said this constitutional amendment is needed to restore the
peoples' trust in government. The previous administration
destroyed that trust when the governor cut the dividend and the
next year the legislature reduced the dividend. Enshrining the
dividend in the constitution will help to restore that trust.
6:09:01 PM
MIKE COONS, President, Alaska Chapter of Association of Mature
American Citizens(AMAC), Palmer, stated full support for SJR 5.
He said the Governor's clear intent in this constitutional
amendment is for the people to control their money. He said
legislators serve at the consent of the governed and last year
they took away the peoples' money without their consent. Through
SJR 5 and the other proposed constitutional amendments the
people are taking back their government. He echoed the previous
speaker about restoring the peoples' trust.
6:11:03 PM
JEB STUART, representing self, Deadhorse, said the people voted
for Governor Dunleavy because he said he would restore the
dividends and cut spending and he'd like to see that happen.
Responding to a question from the Chair, he said he supports SJR
5.
6:11:48 PM
At ease
6:13:45 PM
CHAIR SHOWER reconvened the meeting.
6:13:54 PM
JIM CLARK, representing self, Fairbanks, stated that he was
standing up to say that the government needs to learn to live
within its means. Governor Dunleavy is trying to draw the line.
Responding to a question from the Chair, he said he supports SJR
5.
6:14:22 PM
SENATOR MICCICHE joined the committee.
6:15:47 PM
KAREN PERRY, representing self, Chugiak, said she struggles with
SJR 5 because everyone knows that legislators ignore the
statutes and she wonders if there should be a constitutional
amendment that would require legislators to go to prison for
that. She opined that legislators need to go on the record and
let their constituents know where they stand on this and other
issues. She also commented on her lack of faith in the election
process. Responding to a question from the Chair, she said she
couldn't decide whether or not she supports SJR 5.
6:17:42 PM
GARY MCDONALD, representing self, Anchorage, stated support for
SJR 5. He singled out Senator Reinbold for special recognition.
6:18:20 PM
WILLIAM TOPEL, representing self, Anchorage, stated support for
SJR 5.
6:18:36 PM
KYLER DIAS, representing self, Wasilla, testified in support of
SJR 5. He described the way people are approaching the permanent
fund as crazy nonsense. He said he supports SJR 5 if it protects
the principal of the PFD. He spoke in support of cutting waste,
reducing the size of government, and capping the PFD for people
who make more than $100,000 a year. He also questioned
continuing to put money into the PFD because it's in the stock
market and is self-sustaining. He favors guaranteeing a PFD for
generations to come.
6:20:54 PM
VIKKI JO KENNEDY, representing self, Kodiak, testified in
support of SJR 5. She drew an analogy between SJR 5 and the
Distant Early Warning (DEW) line. They were both designed to
protect Alaskans, she said.
6:23:01 PM
RANDY FINCH, representing self, Nikiski, stated support for SJR
5. He said the people should vote on this; the burden should not
be on the legislature.
6:23:52 PM
JACK JOHNSON, representing self, North Pole, stated support for
SJR 5. He is a senior on a fixed income and the dividend is more
than just a little helpful.
6:24:51 PM
FREDLAIN ELLIS, representing self, Wasilla, stated support for
SJR 5. She wants to vote on this issue. "It means too much to
too many of us whether we're seniors or not," she said.
6:25:46 PM
SUSAN JOHNSON, representing self, North Pole, stated support for
SJR 5.
6:26:23 PM
MATTHEW HELLER, representing self, Fairbanks, stated support for
SJR 5. "That's it; I support it," he said.
6:27:22 PM
MARK SESLER, representing self, Soldotna, stated support for SJR
5. "Put it into the constitution," he said.
6:27:48 PM
SALLY JOHNSON, representing self, Palmer, stated, "Put SJR 5 in
the constitution as it was [written] by Jay Hammond." She shared
that she is on a very limited income and she believes the
legislature needs to tighten its belt.
6:28:53 PM
DEBORAH HOLLAND, representing self, Anchorage, said she was
calling in support of SJR 5. She said she wants it in the
constitution so legislators can't get their hands on the
people's money.
6:29:42 PM
TANIA KITKA, representing self, Kodiak, stated support for SJR
5.
6:30:06 PM
At ease
6:32:33 PM
CHAIR SHOWER reconvened
6:32:47 PM
JOHN MOROPOULOS, representing self, Anchorage, stated support
for SJR 5. He believes that expenditures of the permanent fund
should be in the hands of Alaskans.
6:33:23 PM
At ease
6:36:43 PM
CHAIR SHOWER reconvened the meeting.
6:36:49 PM
SANDRA ST. JOHN, representing self, Sutton, stated support for
SJR 5 and having the PFD added to the constitution.
6:37:13 PM
MELANIE GLATT, representing self, Palmer, stated support for SJR
5 and expressed disappointment that the legislature has failed
to deliver a gas line. That could have solved many problems, she
said.
6:37:50 PM
LAWRENCE SALZMAN, representing self, Fairbanks, stated that he
currently supports SJR 5. He believes it is a beginning to
protect the permanent fund and he believes the $12 billion from
the Constitutional Budget Reserve should be repaid. His views
are similar to a majority of Alaskans who voted for Governor
Dunleavy.
6:38:52 PM
At ease
6:41:47 PM
CHAIR SHOWER reconvened the meeting.
6:41:56 PM
DENISE BOGUE-SKONIECZKI, representing self and her husband,
Anchorage, said leave our PFDs alone and return what has been
taken. She opined that legislators should not be paid for any
special sessions and schools can cut management positions.
Responding to a question from Senator Micciche, she said she
supports SJR 5.
6:43:42 PM
SHERRY PARSONS, representing self, Wasilla, said the people need
a say in how the permanent fund is distributed. She believes the
government should stay out of it because the money belongs to
the people who will spend it wisely. Responding to a question
from the Chair, she said she supports SJR 5.
6:45:22 PM
At ease
6:49:04 PM
CHAIR SHOWER reconvened the meeting.
6:49:09 PM
CHERYL SHUPE, representing self, Fairbanks, said she believes
that the PFD should be constitutionally protected and restored
to its original form. The state should live within its means.
6:49:46 PM
KEN BROWN, representing self, Soldotna, stated support for SJR 5
to constitutionalize the PFD. The state needs to downsize and
keep money in the private sector, he said.
6:50:20 PM
GREG PARSONS, representing self, Wasilla, stated support for SJR
5. The legislature needs to figure out how to pay for government
without using the dividend, he said.
6:51:12 PM
At ease
7:00:15 PM
CHAIR SHOWER reconvened the meeting.
7:00:19 PM
ALBERT NINGEULOOK, representing self, Shishmaref, said he hopes
the Governor keeps the PFD intact and does not use it for the
state budget. The people in rural areas need their money.
Responding to a question from the Chair, he said he couldn't say
whether he supports SJR 5, but he is in favor of saving the PFD
and using it wisely.
7:01:45 PM
KIM BERGEY, representing self, Palmer, said she is calling to
state support for SJR 5 to enshrine the PFD in the constitution
and not use it for government spending. She said, "I know that
we the people can use it diligently and wisely for our needs."
7:02:21 PM
At ease
7:07:01 PM
CHAIR SHOWER reconvened the meeting.
7:07:09 PM
GEORGE PIERCE, representing self, Kasilof, stated support for
SJR 5. The PFD should be enshrined in the constitution and not
be used by government.
7:08:03 PM
DEAN KASISCHKE, representing self, Seward, said he supports SJR
5, full constitutional protection of the PFD, and no change to
the PFD without a public vote.
7:08:39 PM
At ease
7:11:24 PM
CHAIR SHOWER reconvened the meeting.
7:11:29 PM
RODERICK PERRY, representing self, Chugiak, stated support for
SJR 5 to enshrine the PFD in the constitution by a vote of
Alaskans. "Stop ignoring the rule of law and follow the
statutes," he said.
7:12:04 PM
RON GILLHAM, representing self, Soldotna, stated support for SJR
5. He believes the permanent fund should be in the constitution
so his kids and grandkids can have it for the future.
CHAIR SHOWER advised that Senator Coghill and Senator Micciche
were attending other meetings.
7:13:05 PM
At ease
7:17:36 PM
CHAIR SHOWER reconvened the meeting.
7:17:40 PM
DEBRA KIRK, representing self, Kodiak, stated opposition to SJR
5 because she is pleased with the infrastructure that has built
up around the state the last 40-50 years and she'd hate it to go
backwards.
7:18:14 PM
JANET FAURE, representing self, Juneau, stated opposition to SJR
5. She and her husband appreciate the services and
infrastructure the state has provided for its citizens.
7:18:55 PM
At ease
7:25:15 PM
CHAIR SHOWER reconvened the meeting.
7:25:19 PM
WILLIAM WARREN, representing self, Nikiski, stated support for
SJR 5. He said he is amazed at the "hard and fast grab" for the
permanent fund dividend and he believes putting it in the
constitution is the only way to protect it. He highlighted that
the Alaska LNG pipeline will eventually be built and provide
revenue to the state but in the meantime the dividend should be
enshrined.
7:27:24 PM
At ease
7:29:39 PM
CHAIR SHOWER reconvened the meeting.
7:29:52 PM
MARY FORBES, representing self, Kodiak, stated opposition to SJR
5. She disagreed with the previous caller and related her belief
that the permanent fund dividend is not a God-given right to the
citizens of Alaska. Rather, the permanent fund was intended to
be partially used to fund government once the oil ran out. She
said her research indicates that was Jay Hammond's intention.
She doesn't want to see Alaskans' quality of life to deteriorate
to the point that they leave the state and Governor Dunleavy
opens the state to the highest bidder to "rape and pillage"
Alaska's resources. Responding to a question from the Chair, she
confirmed that she opposes SJR 5.
7:30:57 PM
CAROL CARMAN, representing self, Palmer, stated support for SJR
5 and complete disagreement with the last caller. The research
she's done on the permanent fund and the dividend itself
demonstrates that the dividend was intended to give the royalty
share to Alaskans for their [loss of] mineral rights. She
explained that once Alaska became a state the people as a whole
assumed ownership of the minerals rights and received royalty
payments in lieu of individual ownership rights. Her belief is
that it is necessary to enshrine the PFD in the constitution to
keep government from taking what is the people's portion.
7:32:22 PM
At ease
7:34:47 PM
CHAIR SHOWER reconvened the meeting.
7:34:54 PM
KACI GILLHAM, representing self and family, Sterling, stated
support for SJR 5 to enshrine the PFD in the constitution.
7:35:34 PM
NEVA MILLS, representing self, Chatanika, stated support for SJR
5 to protect the permanent fund. She highlighted the waste in
the budget and opined that the dividend should never have been
stolen from the people. She said, "it's been stated in research
papers" that about 7,000 jobs would be eliminated if Governor
Dunleavy's budget is adopted. Her understanding is that
departments are receiving money for vacant positions. She said
she knows that the university wastes several hundred thousand
dollars at the end of the fiscal year just to qualify for the
same amount of money the next fiscal year. That needs to stop.
She emphasized that parents, not teachers, need to step up and
raise their children so teachers have time to teach. She warned
that if the permanent fund [dividend] is cut, over 9,000 private
sector jobs will be lost and low income seniors such as herself
may be forced to leave Alaska. She said she prays every day that
legislators will have the wisdom and knowledge to fix this
problem.
SENATOR KAWASAKI asked for the source of the report or study she
mentioned at the beginning of her testimony.
MS. MILLS said she didn't recall but she would email the
information to the committee.
CHAIR SHOWER asked her to send the information to
senate.state.affairs@akleg.gov.
7:41:34 PM
SIRELEI KAORI, representing self, Anchorage, stated support for
SJR 5.
7:41:44 PM
JAMES SQUIRES, representing self, Gulkana, stated support for
SJR 5.
7:41:56 PM
At ease
7:46:54 PM
CHAIR SHOWER reconvened the meeting.
7:46:58 PM
MARK GLATT, representing self, Palmer, stated support for SJR 5.
He opined that the dividend should be constitutionally
protected.
7:47:40 PM
At ease
7:51:26 PM
CHAIR SHOWER reconvened the meeting.
7:51:30 PM
DONNA WILMOT, representing self and her family, Kasilof, stated
support for SJR 5 to enshrine the PFD in the constitution.
7:52:01 PM
BRETT WILMOT, representing self, Kasilof, stated support for SJR
5 to enshrine the PFD in the constitution.
7:52:26 PM
At ease
7:56:08 PM
CHAIR SHOWER reconvened the meeting.
7:56:11 PM
LARRY PANNELL, representing self and family, Soldotna, stated
support for SJR 5. He believes the PFD needs to be enshrined in
the constitution to protect it now and for future generations.
7:56:51 PM
At ease
7:58:45 PM
CHAIR SHOWER reconvened the meeting.
7:58:50 PM
STACEY WRIGHT, representing self, Kenai, stated support for SJR
5 to enshrine the PFD in the constitution.
7:59:12 PM
CHAIR SHOWER closed public testimony on SJR 5 and advised that
written testimony could be submitted to
senate.state.affairs@akleg.gov.
[SJR 5 was held in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SSTA OFFICIAL AGENDA MEMO.pdf |
SSTA 3/28/2019 3:30:00 PM |
agenda |
| SJR 4 Transmittal Letter.pdf |
SJUD 4/15/2019 1:30:00 PM SJUD 4/22/2019 6:00:00 PM SSTA 3/26/2019 1:30:00 PM SSTA 3/27/2019 6:00:00 PM SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| SJR 4 version A.pdf |
SJUD 4/22/2019 6:00:00 PM SSTA 3/26/2019 1:30:00 PM SSTA 3/27/2019 6:00:00 PM SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| SJR 4 Sectional Analysis.pdf |
SJUD 4/22/2019 6:00:00 PM SSTA 3/26/2019 1:30:00 PM SSTA 3/27/2019 6:00:00 PM SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| SJR 4 Fiscal Note GOV-DOE.pdf |
SJUD 4/15/2019 1:30:00 PM SSTA 3/27/2019 6:00:00 PM SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| SJR 4 - Amednment #1.pdf |
SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| SJR 4 - Amendment #2.pdf |
SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| SJR 5 Transmittal Letter.pdf |
SJUD 4/8/2019 1:30:00 PM SSTA 3/28/2019 3:30:00 PM |
SJR 5 |
| SJR 5 version A.pdf |
SSTA 3/28/2019 3:30:00 PM |
SJR 5 |
| SJR 5 Sectional Analysis.pdf |
SSTA 3/28/2019 3:30:00 PM |
SJR 5 |
| SJR 5 Fiscal Note GOV-DOE.pdf |
SSTA 3/28/2019 3:30:00 PM |
SJR 5 |
| Senate State Affairs - SJR 4 Written Testimony uploaded (04-08-19).pdf |
SSTA 3/28/2019 3:30:00 PM |
SJR 4 |