Legislature(2023 - 2024)SENATE FINANCE 532
04/17/2023 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Subcommittee of the Whole: University of Alaska Fy24 Budget Closeout | |
| SB98 | |
| SB107 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 98 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 107 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 17, 2023
9:05 a.m.
9:05:26 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:05 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson (via teleconference)
MEMBERS ABSENT
None
ALSO PRESENT
Tim Grussendorf, Staff, Senator Lyman Hoffman; Deven
Mitchell, Executive Director, Alaska Permanent Fund
Corporation; Pete Ecklund, Staff, Senator Bert Stedman; Ken
Alper, Staff, Senator Donny Olson; Alexei Painter,
Director, Legislative Finance Division;
PRESENT VIA TELECONFERENCE
SUMMARY
SB 98 POWER COST EQUALIZATION ENDOWMENT FUND
CSSB 98 was REPORTED out of committee with four
"do pass" recommendations, two "no
recommendation" recommendations, and three new
fiscal notes: FN 1(REV), FN 2(REV), and FN
3(REV).
SB 107 PERMANENT FUND DIVIDEND; POMV SPLIT
SB 107 was HEARD and HELD in committee for
further consideration.
SUBCOMMITTEE OF THE WHOLE: UNIVERSITY OF ALASKA FY24 BUDGET
CLOSEOUT
^SUBCOMMITTEE OF THE WHOLE: UNIVERSITY OF ALASKA FY24
BUDGET CLOSEOUT
9:06:23 AM
TIM GRUSSENDORF, STAFF, SENATOR LYMAN HOFFMAN, explained
the budget for the University of Alaska. He stated that the
subcommittee was recommending a total of $614.672 million
in general funds; $75.510 million in other funds; and
$188.3255 million in federal funds. He stated that the
full-time position count was 3759, and 185 part-time
positions. He remarked that the subcommittee adopted all of
the governors actions, and noted that the majority of the
governors requests were transferring language for the
technical training.
Co-Chair Stedman asked for explanation regarding whether it
was a single appropriation and whether the process was
different than the historic process.
Mr. Grussendorf responded that the Senate had agreed to the
single structure of the University budget. He remarked that
before that agreement, there had been different allocations
for the different locations of the University to ensure
that the money was only allotted to the central university.
He stated that the request came from the president of the
university in order to have a single appropriation to get
the university back in order.
Co-Chair Stedman agreed with the budget process and had
confidence in the president of the University of Alaska.
Co-Chair Stedman MOVED to ADOPT the FY 24 OPERATING BUDGET
for University of Alaska from subcommittee with the
attached Legislative Finance Division (LFD) reports, and
directed LFD to make any technical or conforming changes.
There being NO OBJECTION, it was so ordered.
9:09:24 AM
RECESS
9:10:49 AM
RECESS to THE CALL OF THE CHAIR
9:18:15 AM
RECONVENED
SENATE BILL NO. 98
"An Act relating to the power cost equalization
endowment fund; and relating to the Alaska Permanent
Fund Corporation."
9:19:05 AM
Co-Chair Hoffman MOVED to ADOPT the committee substitute
for SB 98, Work Draft 33-LS0493\D (Marx, 4/11/23).
Co-Chair Olson OBJECTED for discussion.
TIM GRUSSENDORF, STAFF, SENATOR LYMAN HOFFMAN explained the
CS. He stated that the majority of the changes within the
CS were clarification issues, and were all done in
cooperation with the Alaska Permanent Fund Corporation and
Legislative Legal.
Co-Chair Olson wondered how much resistance was in the
Permanent Fund Corporation.
Mr. Grussendorf stated that he had not encountered
resistance from the Permanent Fund Corporation, but
deferred to Mr. Mitchell.
9:22:11 AM
DEVEN MITCHELL, EXECUTIVE DIRECTOR, ALASKA PERMANENT FUND
CORPORATION, stated that there was not concern about the
additional assets in the Permanent Fund.
Co-Chair Olson surmised that there was optimism.
Mr. Mitchell replied that there was a different asset
allocation, and there were pros and cons to that. He noted
that the FY 22 performance showed that there would have
been a different outcome had the money resided in the asset
allocation of the Alaska Permanent Fund.
Co-Chair Olson WITHDREW the OBJECTION. There being NO
OBJECTION, it was so ordered.
Co-Chair Hoffman MOVED to REPORT CSSB 98(FIN) out of
committee with individual recommendations and attached
fiscal notes. There being NO OBJECTION, it was so ordered.
CSSB 98 was REPORTED out of committee with four "do pass"
recommendations, two no recommendation recommendations,
and three new fiscal notes: FN 1(REV), FN 2(REV), and FN
3(REV).
9:24:21 AM
AT EASE
9:27:53 AM
RECONVENED
SENATE BILL NO. 107
"An Act relating to the Alaska permanent fund;
relating to income of the Alaska permanent fund;
relating to the amount available for appropriation and
appropriations from the earnings reserve account;
relating to the permanent fund dividend; and providing
for an effective date."
9:29:47 AM
Co-Chair Olson OPENED and CLOSED public testimony.
9:28:52 AM
AT EASE
9:29:27 AM
RECONVENED
9:29:38 AM
Co-Chair Stedman MOVED to ADOPT the committee substitute
for SB 107, Work Draft 33-LS0349\P (Nauman, 4/12/23).
Co-Chair Hoffman OBJECTED for discussion.
9:30:05 AM
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, explained the
CS. He remarked that there was a trigger mechanism within
the bill for a 50/50 dividend to come into effect which,
prior to the CS, the new revenue to be raised was set at
$900 million. He stated that after examining some modeling,
and considering the governors capital budget was roughly
$303 million, with $250 for federal and other funds. He
stated that the modeling in the $900 million had a capital
budget of $400 million going forward. He stated that the
deferred, education, and capital needs of the state showed
that the modeling was based on $700 million for additional
capital and K-12 needs. He remarked that the trigger was
moved from $900 million to $1.3 billion of new revenue. He
stated that SB 107 was a framework for a fiscal plan, which
required savings to withstand the variability of the oil
revenue. He remarked that the recent forecasts from the
Department of Revenue (DOR) varied revenue by $2 billion,
so there was a trigger proposed of $3.5 billion for the CBR
before a percent of market value (POMV) would take effect.
Co-Chair Hoffman asked about the requirement of the CBR
draw.
Mr. Ecklund replied that the requirement in the CS was $3.5
billion adjusted with inflation after 2026. He stated that
the $3.5 billion was recommended by the director of LFD.
Co-Chair Olson queried the process to determine the
inflation adjustment for the $3.5 billion.
Mr. Ecklund replied that the same inflation calculation was
used as was in statute for the Permanent Fund.
Co-Chair Olson asked for the specific number.
Mr. Ecklund replied that it was a change of consumer price
index from one calendar year to the next calendar year.
Co-Chair Olson wondered how the CS would affect the
Permanent Fund Dividend (PFD).
9:35:40 AM
KEN ALPER, STAFF, SENATOR DONNY OLSON, explained that the
previous version of the bill set a low PFD for the near-
term with the possibility of stepping up to a larger
dividend in the next couple of years depending on certain
fiscal conditions. He stated that the new version would
make the hurdle to the larger dividend. Therefore, the
75/25 split would remain.
Co-Chair Hoffman MAINTAINED his OBJECTION. He explained
that the bill would set the dividend at 50/50. He stressed
that there was not revenue to pay a 50/50 dividend, so the
interim dividend would be set at 75/25 or $1300. He wanted
to discuss the $3.5 billion target. He felt that the $3.5
billion level would potentially cripple the options of the
legislature to fund government. He felt that the provision
would take away the ability to address the dividend split.
He felt that the $3.5 target should be in a separate bill,
and should not be in the version of this bill.
9:42:04 AM
AT EASE
9:43:20 AM
RECONVENED
9:43:41 AM
Co-Chair Stedman spoke in favor of the committee
substitute. He stated that the $1.3 billion was a
reasonable range. He recalled that the original bill had no
protection of the CBR, and would trigger a dividend
regardless of other positions.
Co-Chair Olson stated that he did not support the committee
substitute.
Senator Merrick wondered how many years were not drawn from
the CBR.
9:47:44 AM
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
replied that in the last decade there was a budget surplus
in FY 22, and before that there were deficits from FY 13 to
FY 21. Therefore only one year in the last ten years did
not have a draw from the CBR.
Co-Chair Olson queried the original amount in the CBR and
the current amount.
Mr. Painter replied that the highest amount in the CBR was
approximately $13 billion, and the current amount was
slightly higher than $2.2 billion.
Co-Chair Olson felt that it was concerning that the CBR was
at that low number.
Mr. Painter agreed, but stated that it had been lower by $1
billion previously.
Senator Bishop wondered where the cash was located if the
CBR went to zero, and there was no balance due to oil
revenue.
Mr. Painter replied that revenue anticipation notes could
be used within a year, but could not be used between years.
Senator Bishop wondered if those notes had to be paid back
within the current year.
Mr. Painter replied in the affirmative.
A roll call vote was taken on the motion.
IN FAVOR: Kiehl, Merrick, Bishop, Stedman
OPPOSED: Wilson, Olson, Hoffman
The MOTION PASSED (4/3). The proposed committee substitute
was ADOPTED.
9:50:56 AM
RECONVENED
SB 107 was HEARD and HELD in committee for further
consideration.
Senator Merrick wished Senator Kiehl a HAPPY BIRTHDAY.
ADJOURNMENT
9:52:06 AM
The meeting was adjourned at 9:52 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 98 DOR APFC Ops 032823.pdf |
SFIN 4/17/2023 9:00:00 AM |
SB 98 |
| SB 98 work draft version D.pdf |
SFIN 4/17/2023 9:00:00 AM |
SB 98 |
| SB 107 work draft version P.pdf |
SFIN 4/17/2023 9:00:00 AM |
SB 107 |
| SB 107 POMV split bill Amendment 1 Y.3 back-up.pdf |
SFIN 4/17/2023 9:00:00 AM |
SB 107 |
| HB 39 UOA SFin Subcom BA Sheet - DRAFT.pdf |
SFIN 4/17/2023 9:00:00 AM |
HB 39 |
| HB 39 UOA-AgencyTotals.pdf |
SFIN 4/17/2023 9:00:00 AM |
HB 39 |
| HB 39 UOA-TransactionCompare1.pdf |
SFIN 4/17/2023 9:00:00 AM |
HB 39 |
| SB 98 DOR APFC IMF 031023.pdf |
SFIN 4/17/2023 9:00:00 AM |
SB 98 |
| SB 98 DOR TRS 031023.pdf |
SFIN 4/17/2023 9:00:00 AM |
SB 98 |