Legislature(2019 - 2020)SENATE FINANCE 532
04/29/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB10 | |
| SB103 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 39 | TELECONFERENCED | |
| += | HB 40 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 10 | TELECONFERENCED | |
| += | SB 103 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 29, 2019
9:18 a.m.
9:18:02 AM
CALL TO ORDER
Co-Chair Steadman called the Senate Finance Committee
meeting to order at 9:18 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Lyman Hoffman
Senator Donny Olson
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Peter Micciche
Senator Mike Shower
ALSO PRESENT
Vikki Jo Kennedy, Self, Juneau; Senator Cathy Giessel;
Senator Mia Costello.
PRESENT VIA TELECONFERENCE
Adam Hykes, Self, Homer; Lynette Clark, Self, Fox; Cris
Eichenlaub, Self, Eagle River; Herman Morgan, Self, Aniak;
Rose Hubbard, Self, Anchorage; Catherine Felt, Self, Kenai.
SUMMARY
SB 10 EXTEND SUICIDE PREVENTION COUNCIL
SB 10 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note from the Department
of Health and Social Services: FN 1(DHS).
SB 103 PFD APPROPRIATIONS
SB 103 was HEARD and HELD in committee for
further consideration.
Co-Chair Stedman discussed housekeeping.
SENATE BILL NO. 10
"An Act extending the termination date of the
Statewide Suicide Prevention Council; and providing
for an effective date."
9:19:35 AM
Co-Chair Stedman explained that the committee had heard the
bill on April 24, 2019. There had been no proposed
amendments or issues brought to the attention; public
testimony was closed.
9:20:33 AM
Senator Wilson MOVED to report SB 10 out of Committee with
individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
SB 10 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note from the Department of Health and Social
Services: FN 1(DHS).
SENATE BILL NO. 103
"An Act relating to deposits into the dividend fund
and appropriations from the earnings reserve account;
and providing for an effective date."
9:21:18 AM
Co-Chair Stedman shared that the bill proposed modifying
the formula used to pay the dividend. He explained that the
dividend was first put forth in statutes in order to pay a
public portion of the royalty wealth accumulated by the
state in the sale of the collectively owned oil wealth. He
thought it would have been difficult at that time to have
imagined a dividend formula on the corpus of $65 billion,
which was the current corpus total. He relayed that as oil
production had declined the state did not have the
reoccurring revenue it had enjoyed in the past and now was
faced with the task of modifying the formula. The bill
would split the amount that would be paid from the funds
portfolio, on a 5-year average, in order to have the amount
calculated well in advance of the governor putting forth
the operating budget in December. He explained that the
numerics of the amount coming to the state would be known
in September of each year. A five-year lookback also
provided smoothing and stabilized the revenue stream and
would not require the corporation to alter their management
style.
9:25:39 AM
Co-Chair Stedman discussed the 5 percent split, which in
the current year would be 5.25 percent before it dropped to
5. He asserted that the funds needed to be split for the
state to meet the core obligations of education, public
safety, and other basic government services. The bill had a
split of one-half to dividends and one-half to the state.
9:27:41 AM
Co-Chair Stedman OPENED public testimony.
ADAM HYKES, SELF, HOMER (via teleconference), spoke in
opposition to the bill. He thought that Co-Chair Stedman
had over-estimated the role of government in meeting the
needs of the people. He thought people should take care of
themselves. He addressed Section 3 of the bill. He thought
the added words "legislature may appropriate were highly
troubling, as he did not think it was appropriate for the
legislature to appropriate funds to the Permanent Fund. He
wanted to be clear that the legislature did not have the
authority take, tax, or modify the formula.
9:29:30 AM
LYNETTE CLARK, SELF, FOX (via teleconference), testified in
opposition to the bill. She thought the co-chairs were in
violation of their offices. She discussed the bill and bill
materials and back up documents. She strongly opposed the
bill. She did not think the members were acting in the best
interest of constituents. She thought the bill was not
legitimate. She thought the bill supported big government.
She wanted her full dividend, paid under the existing
formula.
9:32:50 AM
AT EASE
9:32:53 AM
RECONVENED
CRIS EICHENLAUB, SELF, EAGLE RIVER (via teleconference),
was opposed to SB 103. He was in full support of the
governor's proposed budget. He thought changing the
dividend formula constituted a tax on the people. He
discussed the changing of the state's oil and gas tax
regime. He noticed former Senator Pete Kelly was no longer
on the committee. He supported the governor.
9:34:53 AM
HERMAN MORGAN, SELF, ANIAK (via teleconference), testified
in opposition to the bill. He was concerned that the
legislature was not following the governor's proposed
budget. He lamented that funds were being spent on
education and the University rather than on full dividends.
He questioned the motivations of the legislature. He did
not support big government or increased government
spending. He mentioned a message he sent to Senator Wilson.
He did not support increased funding to the University. He
expressed great sadness with current state affairs.
9:38:48 AM
ROSE HUBBARD, SELF, ANCHORAGE (via teleconference), spoke
in opposition to the bill. She thought there was a right
and wrong way to approach changes to the PFD. She thought
it felt as though the legislature was stealing the people's
money. She felt strongly that the public should have a
chance to learn about any changes to the PFD. She believed
that Alaskans should have a chance to testify on the issue.
She relayed her understanding of the history and function
of the PFD. She felt that more information of the process
should be made available to the public so that they
understood what was going on with their PFD.
9:40:59 AM
CATHERINE FELT, SELF, KENAI (via teleconference), testified
in opposition to SB 103 since it was not a constitutional
amendment. She thought a 50-50 split was a good compromise,
but thought the public needed to vote on the matter.
9:41:51 AM
AT EASE
9:46:42 AM
RECONVENED
VIKKI JO KENNEDY, SELF, JUNEAU, was glad that the committee
was taking public testimony. She asserted that the
Permanent Fund belonged to the people. She hoped the
legislature protected the fund. She thought people were
lining up to move to the state because of free money and
free Medicare. The thanked the committee for their work.
Co-Chair Stedman CLOSED public testimony
9:49:43 AM
Co-Chair Stedman informed that the committee would consider
the bill's fiscal note at a later meeting.
9:49:55 AM
Co-Chair von Imhof appreciated the committee considering a
statute change for the calculation of the PFD. The thought
that the dividend should reflect the move from annual
earnings to a percent of total market value. She pointed
out that the 50-50 split yielded about $700 million in
surplus with a modest capital budget. In order to pay out a
full dividend of $2,300 would require an $861 million draw.
She referenced the Earnings Reserve Account (ERA) and noted
that the unstructured draw, outside the POMV, would mean
that future POMV draws would be less. She referenced the
Constitutional Budget Reserve (CBR) and reminded that the
fund had several recent draws for earthquake damage. She
worried about the probability of forest fires and the
subsequent cost. She referenced the Power Cost Equalization
Fund and noted the consequence of drawing from that fund
would result in less money for rural energy assistance. She
highlighted the importance of considering all the financial
consequences of a 50/50 split.
9:52:41 AM
Co-Chair Stedman discussed housekeeping.
SB 103 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
9:53:26 AM
The meeting was adjourned at 9:53 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 103 Opposition Letter - Goode.pdf |
SFIN 4/29/2019 9:00:00 AM |
SB 103 |