03/15/2016 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SCR16 | |
| SB114 | |
| SB128 | |
| SJR1 | |
| SB114 | |
| SB128 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SCR 16 | TELECONFERENCED | |
| += | SB 114 | TELECONFERENCED | |
| += | SB 128 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SJR 1 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
March 15, 2016
9:01 a.m.
MEMBERS PRESENT
Senator Bill Stoltze, Chair
Senator John Coghill, Vice Chair
Senator Charlie Huggins
Senator Lesil McGuire
Senator Bill Wielechowski
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE CONCURRENT RESOLUTION NO. 16
Urging the Governor to designate a location for a special
session of the Twenty-Ninth Alaska State Legislature, if called
after adjournment of the First Regular Session of the Twenty-
Ninth Alaska State Legislature, that is in a community on the
state's road system.
- HEARD & HELD
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 114
"An Act relating to the Alaska Permanent Fund Corporation, the
earnings of the Alaska permanent fund, and the earnings reserve
account; relating to the mental health trust fund; relating to
deposits into the dividend fund; and providing for an effective
date."
- MOVED CSSSSB 114(STA) OUT OF COMMITTEE
SENATE BILL NO. 128
"An Act relating to the Alaska permanent fund; relating to
appropriations to the dividend fund; relating to income of the
Alaska permanent fund; relating to the earnings reserve account;
relating to the Alaska permanent fund dividend; making
conforming amendments; and providing for an effective date."
- MOVED SB 128 OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 1
Proposing amendments to the Constitution of the State of Alaska
relating to the Alaska permanent fund, establishing the earnings
reserve account, relating to the permanent fund dividend, and
requiring the permanent fund dividend be at least equal to the
amount that would be calculated under current law.
- MOVED SJR 1 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SCR 16
SHORT TITLE: SPECIAL SESSION TO BE HELD ON ROAD SYSTEM
SPONSOR(s): SENATOR(s) STOLTZE
04/18/15 (S) READ THE FIRST TIME - REFERRALS
04/18/15 (S) STA
03/15/16 (S) STA AT 9:00 AM BUTROVICH 205
BILL: SB 114
SHORT TITLE: PERM FUND: EARNINGS, DEPOSITS, ACCOUNTS
SPONSOR(s): SENATOR(s) MCGUIRE
04/18/15 (S) READ THE FIRST TIME - REFERRALS
04/18/15 (S) STA, FIN
02/01/16 (S) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
02/01/16 (S) STA, FIN
02/04/16 (S) STA AT 9:00 AM BUTROVICH 205
02/04/16 (S) Scheduled but Not Heard
02/09/16 (S) STA AT 9:00 AM BUTROVICH 205
02/09/16 (S) Heard & Held
02/09/16 (S) MINUTE(STA)
02/16/16 (S) STA AT 9:00 AM BUTROVICH 205
02/16/16 (S) Heard & Held
02/16/16 (S) MINUTE(STA)
02/16/16 (S) STA AT 6:00 PM BUTROVICH 205
02/16/16 (S) Heard & Held
02/16/16 (S) MINUTE(STA)
02/23/16 (S) STA AT 9:00 AM BUTROVICH 205
02/23/16 (S) Heard & Held
02/23/16 (S) MINUTE(STA)
03/10/16 (S) STA AT 8:30 AM BUTROVICH 205
03/10/16 (S) -- MEETING CANCELED --
03/15/16 (S) STA AT 9:00 AM BUTROVICH 205
BILL: SB 128
SHORT TITLE: PERM. FUND: DEPOSITS; DIVIDEND; EARNINGS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/19/16 (S) READ THE FIRST TIME - REFERRALS
01/19/16 (S) STA, FIN
01/26/16 (S) STA AT 9:00 AM BUTROVICH 205
01/26/16 (S) Heard & Held
01/26/16 (S) MINUTE(STA)
01/28/16 (S) STA AT 9:00 AM BUTROVICH 205
01/28/16 (S) Heard & Held
01/28/16 (S) MINUTE(STA)
02/02/16 (S) STA AT 9:00 AM BUTROVICH 205
02/02/16 (S) Heard & Held
02/02/16 (S) MINUTE(STA)
02/04/16 (S) STA AT 9:00 AM BUTROVICH 205
02/04/16 (S) Heard & Held
02/04/16 (S) MINUTE(STA)
02/04/16 (S) STA AT 5:30 PM BUTROVICH 205
02/04/16 (S) Heard & Held
02/04/16 (S) MINUTE(STA)
02/11/16 (S) STA AT 9:00 AM BUTROVICH 205
02/11/16 (S) Heard & Held
02/11/16 (S) MINUTE(STA)
02/23/16 (S) STA AT 9:00 AM BUTROVICH 205
02/23/16 (S) Heard & Held
02/23/16 (S) MINUTE(STA)
03/10/16 (S) STA AT 8:30 AM BUTROVICH 205
03/10/16 (S) -- MEETING CANCELED --
03/15/16 (S) STA AT 9:00 AM BUTROVICH 205
BILL: SJR 1
SHORT TITLE: CONST AM: GUARANTEE PERM FUND DIVIDEND
SPONSOR(s): WIELECHOWSKI
01/21/15 (S) PREFILE RELEASED 1/9/15
01/21/15 (S) READ THE FIRST TIME - REFERRALS
01/21/15 (S) STA, JUD, FIN
02/23/16 (S) STA AT 9:00 AM BUTROVICH 205
02/23/16 (S) Heard & Held
02/23/16 (S) MINUTE(STA)
03/03/16 (S) STA AT 6:30 PM BUTROVICH 205
03/03/16 (S) Heard & Held
03/03/16 (S) MINUTE(STA)
03/15/16 (S) STA AT 9:00 AM FAHRENKAMP 203
WITNESS REGISTER
BRANDON BREFCZYNSKI, Staff
Senator Stoltze
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained the committee substitute (CS) for
SB 114.
JESSE LOGAN, Staff
Senator McGuire
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Addressed the CS for SB 114.
RYNNIEVA MOSS, Staff
Senator Coghill
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained Amendment 2 for SB 114.
RANDY HOFFBECK, Commissioner
Alaska Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Summarized and addressed questions regarding
SB 128.
CRAIG W. RICHARDS, Attorney General
Alaska Department of Law
Juneau, Alaska
POSITION STATEMENT: Summarized and addressed questions regarding
SB 128.
ACTION NARRATIVE
9:01:11 AM
CHAIR BILL STOLTZE called the Senate State Affairs Standing
Committee meeting to order at 9:01 a.m. Present at the call to
order were Senators Coghill, Huggins, McGuire, and Chair
Stoltze.
SCR 16-SPECIAL SESSION TO BE HELD ON ROAD SYSTEM
9:02:57 AM
CHAIR STOLTZE announced the consideration of SCR 16.
SENATOR HUGGINS moved to adopt the committee substitute (CS) for
SCR 16, version W, as the working document.
CHAIR STOLTZE objected for discussion purposes. He noted that he
introduced SCR 16 at the end of last session in anticipation of
a special session. He specified that he introduced the
resolution due to the capitol's scheduled renovation in order to
minimize increased cost to the state. He specified that the
resolution only dealt with the current session for the 29th
Legislature. He detailed that one of the reasons why he
introduced the legislation as a resolution was due the governor
saying that he would veto a capitol move, but he remarked that a
governor could not veto a resolution. He asserted that SCR 16
was a way for the Legislature to express its constituents' point
of view.
9:03:22 AM
SENATOR WIELECHOWSKI joined the committee meeting.
9:04:44 AM
CHAIR STOLTZE removed his objection. He announced that version W
was adopted and SCR 16 would be held in committee.
SB 114-PERM FUND: EARNINGS, DEPOSITS, ACCOUNTS
9:05:08 AM
CHAIR STOLTZE announced the consideration of SB 114.
9:05:14 AM
At ease.
9:06:26 AM
CHAIR STOLTZE called the committee back to order and noted that
there was a proposed committee substitute (CS).
SENATOR MCGUIRE moved that the CS for sponsor substitute (SS) SB
114, version U, be brought before the committee.
CHAIR STOLTZE objected for discussion purposes. He explained
that the CS was developed by Senator McGuire with one revision
from his office, pertaining to revenue limitation.
9:07:28 AM
BRANDON BREFCZYNSKI, Staff, Senator Stoltze, Alaska State
Legislature, Juneau, Alaska, stated that the committee made only
one change aside from the sponsor's changes. He explained the
committee's change as follows:
Page 2, line 28 through page 3, line 2. We are
establishing a revenue limit based on production tax
and royalties that exceed $1 billion. For every dollar
of production tax and royalties that exceeds $1
billion, the annual Percentage of Market Value (POMV)
draw will be reduced on a dollar-for-dollar basis.
SENATOR WIELECHOWSKI asked that an explanation be provided on
the impact if $2 billion in increased production occurred.
MR. BREFCZYNSKI specified as follows:
If the state would have received $2 billion in
production tax and royalties, you reduce your POMV
draw by $1 billion. Anything over $1 billion the
annual POMV draw is reduced on a dollar-for-dollar
basis.
CHAIR STOLTZE added as follows:
Spending limits themselves is really tough to
implement and we've seen from other action you can do
previous year appropriations and there's a lot of ways
to alter the effectiveness of a spending limit. If all
of the prognostications are wrong and oil rebounds, we
don't want to put in a mechanism that would cause the
ability to spend. Government has an intrinsic tendency
to spend available money.
9:10:27 AM
JESSE LOGAN, Staff, Senator McGuire, Alaska State Legislature,
Juneau, Alaska, addressed what the CS for SSSB 114 does as
follows:
1. Establishes a revenue limit: Section 3.
2. Changes the POMV draw from 5 percent to 4.5 percent:
Section 3. The change allows for a larger rate of growth
for the Permanent Fund and greater payouts over time.
Legislative Finance agreed with the approach.
3. Adds an inflation-proofing mechanism: Section 5, page 3,
lines 20-23. Similar approach to the governor's bill in
that if the POMV draw from the previous year is multiplied
by 4, the difference in the Earnings Reserve Account (ERA)
could be returned to the corpus for inflation proofing.
4. Establishes a review period: Section 7, page 4, lines 23-
31. Allows the commissioner for the Department of Revenue
to recommend adjustments in addition to providing a report
in consultation with the Permanent Fund Corporation to the
Legislature for evaluating asset sufficiency within the
ERA.
MR. LOGAN added that several other small changes were made that
entailed housekeeping measures regarding cash flow and timing.
He noted that changes were done in consultation with the
Permanent Fund Corporation.
9:13:17 AM
SENATOR MCGUIRE added that the amendments were the result of
consultation with members of the House and Senate who actively
spoke with their neighbors in addition to public testimony
offered in the State Affairs Committee. She pointed out that
Chair Stoltze's amendment to limit spending addressed a concern
people had where the Permanent Fund Dividend (PFD) would be
restructured, but the Legislature could go on a spending spree
at some later point. She asserted that changing the POMV draw
from 5 to 4.5 percent would provide for more sustainability. She
opined that the POMV model would inflation-proof itself in
addition to retaining the constitutional requirement for 25
percent of the royalties to go into the Permanent Fund itself.
She noted that an additional provision was included for added
inflation proofing to reflect times of growth. She said the
review period was something that lawmakers had asked for in
order to comeback and revisit the provisions in SB 114. She
pointed out that SB 114 guaranteed a $1000 PFD and noted that
the intent was to provide a dividend that was sustainable. She
added that Permanent Fund Corporation and its trustees were
consulted to make sure all of the amendments were fully vetted.
CHAIR STOLTZE announced that Senator Coghill had an amendment to
offer.
9:15:49 AM
SENATOR COGHILL moved Amendment 29-LS0883\U.2 ("U.2"), Gardner,
3/15/16.
AMENDMENT U.2
Page 2, lines 9 - 15:
Delete all material and insert:
"*Sec. 2. AS 37.13 is amended by adding a new section to read:
Sec. 37.13.015. Appropriations to the dividend fund.
(a) Following the calculation under AS 37.13.140(b), the
legislature may appropriate to the dividend fund
established in AS 43.23.045 the following amounts from the
following funds:
(1) from the earnings reserve account established
in AS 37.13.145,
(A) 15 percent of 21 percent of the sum of
the net income of the fund determined under AS
37.13.140(a) for each of the last five fiscal years
including the fiscal year just ended; and
(B) two percent of the market value of the
constitutional budget reserve fund (art. IX, sec. 17,
Constitution of the State of Alaska) calculated on the
last day of the fiscal year just ended; and
(2) from the general fund, 15 percent of the
money deposited in the general fund during the fiscal year
just ended from all mineral lease rentals, royalties,
royalty sale proceeds, net profit shares under AS
38.05.180(f) and (g), federal mineral revenue sharing
payments, and bonuses received by the state from mineral
leases.
(b) Nothing in this section creates a dedicated fund."
Page 2, line 29:
Delete "the portion"
Insert "an amount equal to 85 percent"
9:16:01 AM
CHAIR STOLTZE objected for discussion purposes.
SENATOR COGHILL explained that the intent of the amendment was
to exclude the dividend payment from the $1 billion cap. He said
the concept was essentially a hybrid plan for the PFD to be paid
for by blending earnings from the Permanent Fund and royalties
in addition to a small valuation from the Constitutional Budget
Reserve (CBR). He explained that the current plan calls for the
PFD to be paid primarily from the earnings of royalties, rents,
and leases. He detailed that the concept's formulation would
blend the following:
· 15 percent of the 21 percent sum of the net income
from the ERA.
· 15 percent of the royalties, sales, and proceeds net
shares of the oil and gas leases.
· 2 percent of the market value of the CBR.
SENATOR COGHILL said instead of guaranteeing a particular
number, the PFD would be based on the health of the state. He
detailed that people would feel the ebb and flow of the long
term as well as the state's short term economic health. He
revealed that he had David Teal, [Legislative Fiscal Analyst],
review his concept and a $200 million funding gap was projected,
a number similar to the bill's original concept.
9:19:20 AM
CHAIR STOLTZE stated that he would continue his analysis, but
remained unsure. He noted that the Senate Finance Committee
would consider the bill as well.
SENATOR MCGUIRE offered her name as a co-sponsor to the
amendment. She concurred that the amendment would also address
concerns for creating a PFD that was based on future rents and
royalties.
9:22:54 AM
RYNNIEVA MOSS, Staff, Senator John Coghill, Alaska State
Legislature, Juneau, Alaska, explained that because 15 percent
of royalties were already in the computation, the amendment
removes the 15 percent of the royalties from the $1 billion cap.
MR. LOGAN specified that the amendment restructured the payout
for the PFD as follows:
1. Market's long term health: 15 percent value of the
statutory net income of the earnings reserve ties to the
long term health of the market. The last 34 dividends have
been tied entirely to the value of the market and the
amendment would have the PFD start to share some of the
market value with the state's long and short term fiscal
health.
2. Alaska's short-term fiscal health: 15 percent of royalties
in the calculation would reflect the short-term fiscal
health of the state.
3. Alaska's long-term fiscal health: the 2 percent of the CBR
value would be the long-term fiscal health of the state.
MR. LOGAN summarized that the amendment was a three-dimensional
concept that shared risk and benefit between the state and
Alaska's residents.
9:24:29 AM
SENATOR WIELECHOWSKI asked that Mr. Logan review the payout
numbers from the proposed dividend formula for 2016. He noted
that the state paid out approximately $1.4 billion in total
dividends in 2015.
9:26:24 AM
MR. LOGAN answered that the PFD payout from the proposed formula
would be $700 million, resulting in an $1100 dividend. He noted
that the bill retained the $1000 dividend floor.
SENATOR COGHILL explained that the amendment was put together
prior to the $1000 floor. He noted that the formula's
projections show the dividend dipping under $1000 by 2020. He
detailed that downward pressure would occur when the
Unrestricted General Fund (UGF) was above $5 billion. He added
that the CBR would be extended out at a steadier rate and the
Permanent Fund balance would continue to rise. He stated that he
would defer to Senate Finance for a decision on whether to
retain the $1000 floor.
MR. LOGAN pointed out that the modeling for the bill shows a
rise in the FY17 budget because the dividend would be considered
part of the overall budget.
9:29:06 AM
MS. MOSS addressed Senator Wielechowski's question and detailed
that an $1127 dividend would be paid out in 2016 from the
proposed formula as follows:
· 15 percent earnings = $618.
· 15 percent royalties = $211.
· 2 percent CBR = $298.
· Total = $1127.
SENATOR WIELECHOWSKI asked how much the dividend would be under
the bill as currently written versus the amended version.
MR. LOGAN answered that the bill would transition to a new
formula in 2017 and the 2016 dividend exceeding $2000 would not
change. He explained that transitioning to the new formula in
2016 would result in an $1100 or $1200 dividend.
SENATOR WIELECHOWSKI noted that dividend projections dipped
slightly below $1000 in future years. He asked what dividends
where projected to be into 2025.
MR. LOGAN answered that the dividends would be approximately the
same, which was the reason the $1000 floor was retained.
SENATOR MCGUIRE added that dividends could have gone as high as
$3000 or $4000 under the current bill due to the formula's
higher percentage of royalties; however, Alaskans expressed
concern in the plan's volatility. She conceded that the proposed
amendment would guarantee Alaskans with a more stable share of
wealth.
SENATOR COGHILL reiterated that the modeling for the amendment
did not contemplate a floor.
CHAIR STOLTZE announced that the Amendment U.2 would be set
aside until later today.
9:33:08 AM
CHAIR STOLTZE moved Amendment 29-LS0833\U.1 ("U.1"), Gardner
3/14/16. He specified that the amendment deals with a sunset
provision.
AMENDMENT U.1
Page 2, following line 8:
Insert a new bill section to read:
"* Sec. 2. AS 37.13.010(a), as amended by sec. 1 of this
Act, is amended to read:
(a) Under art. IX, sec. 15, of the state constitution,
there is established as a separate fund the Alaska
permanent fund. The Alaska permanent fund consists of
(1) 25 percent of all mineral lease rentals,
royalties, royalty sale proceeds, net profit shares under
AS 38.05.180(f) and (g), and federal mineral revenue
sharing payments received by the state from mineral leases
issued on or before December 1, 1979, and 25 percent of all
bonuses received by the state from mineral leases issued on
or before February 15, 1980;
(2) 50 percent of all mineral lease rentals,
royalties, royalty sale proceeds, net profit shares under
AS 38.05.180(f) and (g), and federal mineral revenue
sharing payments received by the state from mineral leases
issued after December 1, 1979, and 50 percent of all
bonuses received by the state from mineral leases issued
after February 15, 1980; and
(3) [(2)] any other money appropriated to or
otherwise allocated by law or former law to the Alaska
permanent fund."
Renumber the following bill sections accordingly.
Page 3, following line 5:
Insert a new bill section to read:
"* Sec. 5. AS 37.13.140, as amended by sec. 4 of this Act,
is amended to read:
Sec. 37.13.140. Income. [(a)] Net income of the fund
includes income of the earnings reserve account established
under AS 37.13.145. Net [THE CORPORATION SHALL DETERMINE
THE NET] income of the fund shall be computed annually as
of the last day of the fiscal year in accordance with
generally accepted accounting principles, excluding any
unrealized gains or losses. Income [, EXCLUDING UNREALIZED
GAINS OR LOSSES.
(b) THE CORPORATION SHALL DETERMINE THE AMOUNT AVAILABLE
FOR DISTRIBUTION UNDER THIS SECTION, COMPUTED ANNUALLY FOR
EACH FISCAL YEAR, FOLLOWING THE CONCLUSION OF THE FISCAL
YEAR. THE AMOUNT] available for distribution [MAY NOT BE
LESS THAN ZERO AND] equals 21 [FOUR AND ONE HALF] percent
of the net income [AVERAGE MARKET VALUE] of the fund [,
INCLUDING THE EARNINGS RESERVE ACCOUNT ESTABLISHED IN AS
37.13.145,] for the last five fiscal years, including
[IMMEDIATELY PRECEDING] the fiscal year just ended, but may
not exceed net income of the fund for the fiscal year just
ended plus the balance in the earnings reserve account
described in AS 37.13.145 [REDUCED BY THE PORTION OF
PRODUTION TAXES AND MINERAL LEASE RENTALS, ROYALTIES,
ROYALTY SALE PROCEEDS, NET PROFIT SHARES UNDER AS
38.05.180(f) AND (g), FEDERAL MINERAL REVENUE SHARING
PAYMENTS, AND BONUSES RECEIVED BY THE STATE FROM MINERAL
LEASES AND DEPOSITED INTO THE GENERAL FUND IN THE FISCAL
YEAR JUST ENDED THAT EXCEEDS $1,000,000,000]"
Renumber the following bill sections accordingly.
Page 3, following line 11:
Insert a new bill section to read:
"* Sec. 7. AS 37.13.145(a), as amended by sec. 6 of this
Act, is amended to read:
(a) The earnings reserve account is established as a
separate account in the fund. Income [EXCEPT FOR INCOME
DEPOSITED INTO THE GENERAL FUND UNDER (e) OF THIS SECTION,
INCOME] from the fund shall be deposited by the corporation
into the account as soon as it is received. Money in the
account shall be invested n investments authorized under AS
37.13.120."
Renumber the following bill sections accordingly.
Page 4, following line 2:
Insert a new bill section to read:
"Sec. 9. AS 37.13.145(c), as amended by sec. 8 of this Act,
is amended to read:
(c) after the transfer under (b) of this section, the
[THE] corporation shall [MAY] transfer from the earnings
reserve account to the principal of the fund an amount
sufficient to offset the effect of inflation on principal
of the fund during that fiscal year. However, none of the
amount transferred shall be applied to increase the value
of that portion of the principal attributed to the
settlement of State v. Amerada Hess, et al., 1JU-77-847
Civ. (Superior Court, First Judicial District) on July 1,
2004. The [ON JULY 1, THE] corporation shall calculate the
amount to transfer to the principal under this subsection
by
(1) computing the average of the monthly United States
Consumer Price Index for all urban consumers for each of
the two previous calendar years;
(2) computing the percentage change between the first
and second calendar year average; and
(3) applying that rate to the value of the principal
of the fund on the last day of the fiscal year just ended,
including that portion of the principal attributed to the
settlement of State v. Amerada Hess, et al., 1JU-77-847
Civ. (Superior Court, First Judicial District) [MULTIPLYING
THE AMOUNT AVAILABLE FOR DISTRIBUTION FOR THE PREVIOUS
FISCAL YEAR UNDER AS 37.13.140(b) BY FOUR AND SUBTRACTING
THE PRODUCT OF THAT CALCULATION FROM THE BALANCE OF THE
EARNINGS RESERVE ACCOUNT ON JUNE 30 OF THE PREVIOUS FISCAL
YEAR]."
Page 4, following line 12:
Insert a new bill section to read:
"* Sec. 11. AS 37.13.145(d), as amended by sec. 10 of this
Act, is amended to read:
(d) Notwithstanding (b) [(e)] of this section, income
earned on money awarded in or received as a result of State
v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court,
First Judicial District), including settlement, summary
judgment, or adjustment to a royalty-in-kind contract that
is tied to the outcome of this case, or interest earned on
the money, or on the earnings of the money shall be treated
in the same manner as other income of the Alaska permanent
fund, except that it is not available for distribution to
the dividend fund or for transfers to the principal
[GENERAL FUND] under (c) [(e)] of this section, and shall
be annually deposited into the Alaska capital income fund
(AS 37.05.5650."
Renumber the following bill sections accordingly.
Page 4, following line 31:
Insert a new subsection to read:
"(h) At the end of each fiscal year, the corporation
shall transfer from the earnings reserve account to the
dividend fund established under AS 43.23.045, 50 percent of
the income available for distribution under AS 37.13.140."
Page5, following line 4:
Insert a new bill section to read:
"* Sec. 14. AS 37.13.300(c), as amended by sec. 13 of this
Act, is amended to read:
(c) Net income from the mental health trust fund may
not be included in the computation of net income [THE
AMOUNT] available for distribution under AS 37.13.140 [AS
37.13.140(b)]."
Renumber the following bill sections accordingly.
Page 5, foll0wing line 11:
Insert a new bill section to read:
"* Sec. 16. AS 37.14.031(c), as amended by sec. 15 of this
Act, is amended to read:
(c) The net income of the fund shall be determined
[COMPUTED ANNUALLY] by the Alaska Permanent Fund
Corporation in the same manner the corporation determines
the net income of the Alaska Permanent Fund under AS
37.13.140 [AS OF THE LAST DAY OF THE FISCAL YEAR IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES,
EXCLUDING ANY UNREALIZED GAINS OR LOSSES]."
Renumber the following bill sections accordingly.
Page 6, following line 6:
Insert a new bill section to read:
"* Sec. 18. AS 43.23.025(a), as amended by sec. 17 of this
Act, is amended to read:
(a) By October 1 of each year, the commissioner shall
determine the value of each permanent fund dividend for
that year by
(1) determining the total amount available for
dividend payments, which equals
(A) the amount of income of the Alaska Permanent
Fund transferred [APPROPRIATED] to the dividend fund
under AS 37.13.145(h) [AS 37.13.015] during the
current year;
(B) plus the unexpended and unobligated balances
of prior fiscal year appropriations that lapse into
the dividend fund under AS 43.23.045(d);
(C) less the amount necessary to pay prior year
dividends from the dividend fund in the current year
under AS 43.23.005(h), 43.23.021, and 43.23.055(3) and
(7);
(D) less the amount necessary to pay dividends
from the dividend fund due to eligible applicants who,
as determined by the department, filed for a previous
year's dividend by the filing deadline but who were
not included in a previous year's dividend
computation;
(E) less appropriations from the dividend fund
during the current year, including amounts to pay
costs of administering the dividend program and the
held harmless provisions of AS 43.23.075;
(2) determining the number of individuals eligible to
receive a dividend payment for the current year and the
number of estates and successors eligible to receive a
dividend payment for the current year under AS
43.23.005(h); and
(3) dividing the amount determined under (1) of this
subsection by the amount determined under (2) of this
subsection."
Renumber the following bill sections accordingly.
Page 6, following line 18:
Insert a new bill section to read:
"* Sec. 21. AS 43.23.045(d), as amended by sec. 20 of this
Act, is amended to read:
(d) Unless specified otherwise in an appropriation
act, the unexpended and unobligated balance of an
appropriation to implement this chapter lapses into the
dividend fund on June 30 of the fiscal year for which the
appropriation was made and shall [MAY] be used in
determining the amount of and paying the subsequent year's
dividend as provided in AS 43.23.025(a)(1)(B)."
Renumber the following bill sections accordingly.
Page 6, following line 19:
Insert a new bill section to read:
"* Sec. 23. AS 37.13.015, 37.13.145(e), 37.13.145(f),
37.13.145(g); and AS 43.23.025(c) are repealed July 1,
2018."
Renumber the following bill sections accordingly.
Page 6, line 22:
Delete "sec. 10"
Insert "sec. 17"
Page 6, line 23:
Delete "sec. 11"
Insert "sec. 19"
Page 6, lines 23-24:
Delete "sec. 12"
Insert "sec. 20"
Page 6, line 26:
Delete "sec. 10 - 12"
Insert "secs. 17, 19, and 20"
Page 6, following line 30:
Insert a new bill section to read:
"* Sec. 25. The uncodified law of the State of Alaska is
amended by adding a new section to read:
TRANSITION. (a) Notwithstanding AS 43.23.025(a), as amended
by sec. 18 of this Act, and AS 43.23.045(c), as amended by
sec. 21 of this Act, the commissioner of revenue shall
determine the value of the permanent fund dividend
distributed in 2018 under AS 37.13.015, AS 43.23.025(a),
43.23.025(c), and 43.23.045(d), as those sections read on
the day before the effective date of secs. 18 and 21 of
this Act.
(b) The commissioner of revenue and the Alaska
Permanent Fund Corporation may adopt regulations, policies,
and procedures necessary to implement AS 43.23.025(a), as
amended by sec. 18 of this Act, and AS 43.23.045(d), as
amended by sec. 21 of this Act. The regulations, policies,
or procedures may not take effect before the effective date
of the law implemented by the regulation, policy, or
procedure."
Page 7, lines 2 - 3:
Delete "secs. 1 - 14 of this Act take effect after July 1,
2016, secs. 1014"
Insert "secs. 1, 3, 4, 6, 8, 10, 12(e) - (g), 13, 15, 17,
19, 20, and 24 take effect after July 1, 2016, secs. 8, 10,
12(e) - (g), 13, 15, 17, 19, 20, and 24"
Page 7, following line 3:
Insert a new bill section to read:
"* Sec. 27. Sections 2, 5, 7, 9, 11, 12(h), 14, 16, 18, 21,
and 23 of this Act take effect July 1, 2018."
Renumber the following bill sections accordingly.
Page 7, line 4:
Delete "Sections 14 and 15"
Insert "Sections 24 and 26"
Page 7, line 5:
Delete "sec 16"
Insert "secs. 27 and 28"
9:33:36 AM
SENATOR HUGGINS objected for discussion purposes.
CHAIR STOLTZE explained that Amendment U.1 would add a 2-year
sunset provision to SB 114 and the legislation would be brought
back for discussion. He noted that his preferred route was a
public vote for the provision to be added to the constitution.
9:35:02 AM
CHAIR STOLTZE announced that SB 114 would be set aside and
reconsidered when the committee reconvenes in the afternoon.
[Amendments U.1 and U.2 were pending.]
SB 128-PERMENANT FUND: DEPOSITS; DIVIDEND; EARNINGS
9:35:22 AM
CHAIR STOLTZE announced the consideration of SB 128.
9:35:55 AM
RANDY HOFFBECK, Commissioner, Alaska Department of Revenue,
Juneau, Alaska, thanked the committee and Senator McGuire for
their efforts in putting forward a plan that would create a
stable and durable fiscal plan for the State of Alaska. He
opined that Alaskans were concerned about government's level of
spending during high revenues and the importance of having
spending accountability so that the state is dealing with a
boom-and-bust economy.
9:38:09 AM
He asserted that the Alaska Permanent Fund Protection Act
(APFPA) encapsulates the volatility within the Permanent Fund by
putting the oil and gas tax with the royalty revenues into the
Permanent Fund. He added that a secondary advantage was created
where the lows within the system were taken out as well.
He stated that the current low-oil price environment
necessitated stress testing the plan's revenue models with
extreme scenarios in order to make sure goals were accomplished
even in times that rarely occur. He revealed that the plan's
modeling did survive the highs and lows of a commodity-based
economy. He added that after a series of tests with thousands of
iterations, the plan could sustainably draw $3.3 billion from
combining oil and gas revenues with investment returns on a
sustained basis.
He reported that the private sector had expressed the need for
government to stabilize its portion of the state's economic
base. He conceded that after attempts to diversify the state's
economy over the years, Alaska has two primary economic engines:
resource development, the commodity side; and government
spending, both state and federal. He remarked that there was
very little that could be done on the commodity side of the
equation, but the one thing that could be stabilized was
government spending. He added that the private sector clearly
stated their need for stability in order to make long-term
financial decisions and investments. He said the lows were taken
out to address the private sector's difficulty in making long
term commitments due to uncertainty.
9:40:45 AM
CHAIR STOLTZE asked how Commissioner Hoffbeck has responded to
businesses that either support a smaller government or the
sector dependent on government activity.
COMMISSIONER HOFFBECK answered that both discussions have
occurred. He detailed that discussions have primarily been on
government's size, followed by predictability and stability. He
summarized that people want to pay for the right size of
government, not excessive government.
CHAIR STOLTZE commented that predictability and stability were
the most important parts and both were being impacted for the
largest revenue producers.
9:42:32 AM
COMMISSIONER HOFFBECK answered correct.
He set forth that the APFPA was a good plan that worked by
taking the volatility component out of the system. He asserted
that thinking had to be different, dynamic, and immediate action
was needed. He said the administration can suggest, but the
Legislature had to make the choices. He asserted that big
problems don't get easier by waiting.
He remarked that closing the $3.5 billion to $4 billion deficit
in a year and a half, two legislative sessions, would be
something that nobody really believed could be accomplished. He
opined that even after the deficit was closed, the individual
tax burden for Alaskans would still be one of the lowest in the
nation. He detailed that the dividend would be protected, a
dividend that no other state pays; the state's savings would
continue to grow at least at the rate of inflation, if not
greater; children's and grandchildren's future would be
protected; most of the government's services that Alaskans have
enjoyed over the years would be preserved; and money would be
left to invest in the state's resources.
9:46:31 AM
SENATOR HUGGINS asked that Commissioner Hoffbeck summarize the
five traits that he was looking for.
COMMISSIONER HOFFBECK summarized as follows:
1. Keep the individual tax burden as low as possible.
2. Preserve the dividend.
3. Preserve the Permanent Fund's corpus for future
generations.
4. Retain as many essential government services as possible.
5. Have money available to support resource development.
9:47:52 AM
CRAIG W. RICHARDS, Attorney General, Alaska Department of Law,
Juneau, Alaska, set forth that the governor's plan does three
things as follows:
1. Places the volatile petroleum revenues, production tax and
royalties directly into the Permanent Fund. Revenues from
oil and gas are no longer large enough to sustain
government.
2. Annually draws $3.3 billion out of the Permanent Fund to
the General Fund. All of the cash-flow streams would act as
an annuity. Revenues from oil and gas are no longer large
enough to sustain government.
3. Changes the dividend formulation from one based on a five-
year average of half of the Permanent Fund earnings to a
royalty formulation of half of royalties.
9:50:40 AM
CHAIR STOLTZE noted that Senator McGuire's plan was not to fill
the whole gap with Permanent Fund earnings, but to provide a
substantial gap. He opined that the governor's "annuity"
approach may make the state dependent on just the payout.
ATTORNEY GENERAL RICHARDS replied that neither Senator McGuire's
POMV approach under SB 114 nor the governor's plan could take
enough out of the Permanent Fund to fully fund state
government's $4 billion budget.
CHAIR STOLTZE asked Attorney General Richards to verify that
Attorney General Richards did not want to be misinterpreted that
people could not be taxed enough.
ATTORNEY GENERAL RICHARDS clarified that Chair Stoltze's
question was whether or not the administration was leaving to
the Legislature the flexibility to budget how they want. He
specified that the answer between SB 114 and the governor's plan
was SB 114 annuitizes one type of wealth and the governor's plan
annuitizes two types of wealth.
ATTORNEY GENERAL RICHARDS detailed that SB 114 takes a measure
of the Permanent Fund's value, not its earnings, the actual cash
flow, and takes the measured value and turns it into an annuity
where "x" amount is taken out, but leaves the petroleum
revenues' volatility in the General Fund.
He added that the third component was the gap that was not
covered by the petroleum revenues and the Permanent Fund. He
asserted that no one's plan was going to be able to close the
gap because the petroleum revenues and the Permanent Fund were
not big enough. He asserted that SB 114 annuities the Permanent
Fund's earnings. He pointed out that the administration's plan
does both the Permanent Fund's earnings and the petroleum
revenues to provide more stability than just annuitizing the
Permanent Fund earnings themselves. He reiterated that both
plans only get part of the way there, which leaves the
Legislature to decide whether to cut more or increase revenues.
9:54:09 AM
He revealed that the state's unrestricted budget compared with
unrestricted petroleum revenues have tracked each other very
closely. He explained that the government spends a lot more
money when it has a lot of money from petroleum revenues, and
the government has to find a way to spend less when it has less.
He pointed out that the Legislature has been incredibly
disciplined in terms of saving Permanent Fund earnings. He
specified that the state has had a rules-based system in place
around the Permanent Fund for over 30 years. He detailed that
the rules-based system inflation proofs the Permanent Fund
corpus, pays out a dividend and then customarily, not a
legislative requirement, of not appropriating the Permanent Fund
earnings reserve or otherwise taking money out of the system.
Even though there has not been particularly a large amount of
discipline in saving monies in high oil environments, there has
been an incredible amount of discipline in terms of how the
Legislature approaches the Permanent Fund. He set forth that the
Legislature has shown a willingness, ability and desire to
follow a structured rule-based framework versus the tendency to
spend the money that is available.
He summarized that one of the goals was not only reducing
volatility, but to put around the petroleum revenues some rule-
based frameworks that would increase the likelihood of saving
money and spending it on a plan rather than just year-to-year ad
hoc.
ATTORNEY GENERAL RICHARDS explained that the goal of the APFPA
was to take the state off of the commodities rollercoaster in
terms of governmental spending. He detailed that stable spending
patterns makes state budgeting easier. He pointed out that
Alaska's revenues have historically gone up and down over 50
percent. He noted that revenues where almost $10 billion in 2008
during the oil tax period from Alaska's Clear and Equitable
Share (ACES) to this year's $2 billion. He summarized that going
to a more annuitized system would make governmental budgeting
easier and its consequence would roll through the state's
economy as well.
9:57:51 AM
He revealed that the International Monetary Fund (IMF) reported
that natural-resource based economies tend not to do well
because they do not have broad-based taxation and are subject to
oil revenue's cyclicality. He said the IMF report suggests that
finding a way to create a fiscal structure that was not reliant
on year-to-year volatility would not only make governmental
budgeting easier, but would actually improve an economy as a
whole by avoiding the danger of "pro-cyclical spending" which
was spending a lot when a government was flush with revenue. He
pointed out that an economic double-whammy occurs when
governmental spending was dramatically reduced at the same time
that other economic sectors and petroleum development comes
down. He noted that the IMF report concluded that diversifying
oil based and commodity-based economies could mean as much as a
0.3 percent increase in annual GDP growth.
He summarized that Alaska's economy was not broad enough to tax
at a level that would diversify the state away from the oil and
gas sector. He said the state has to find a way to use its
sovereign wealth to develop a sound fiscal policy.
10:02:00 AM
CHAIR STOLTZE addressed one of the rules Attorney General
Richards talked about and said there's not a strict adherence.
He specified that the constitution required 25 percent royalties
for quite a while. He noted that the Legislature and the
administration supported 50 percent and the percentage was
reduced during the 23rd Legislature. He said some rules are more
flexible than others.
ATTORNEY GENERAL RICHARDS answered correct. He noted that he
refers to what Chair Stoltze addressed as the Savings Rule and
the Spending Rule. He specified that the Savings Rule has had
variability in it, but he thought of past actions as doing a
little extra. He said the Legislature has been incredibly
disciplined regarding the Spending Rule where the rules
framework has not been broken where the Earnings Reserve was
raided for capital projects.
SENATOR HUGGINS asserted that the State of Alaska pays for
everything. He specified that his statement was an
overstatement, but not far from the truth. He opined that the
concept where the state pays for everything has not been
addressed.
ATTORNEY GENERAL RICHARDS reiterated that any solution with the
Permanent Fund was a half-solution where a billion dollar
differential would still exist. He opined that there was going
to be lots of room for policy discussions on revenues and
spending.
10:04:04 AM
He set forth that a rules-based framework would sustain the
Permanent Fund by:
· Preserving the purchasing power or inflation proofing the
value of the Permanent Fund over time to ensure that the
next generation had the same level of wealth as the current
generation.
· Making sure the plan's durability modeling ensured enough
money for annual draws to the General Fund and dividends.
· Making sure the Earnings Reserve did not grow too large
over time to decrease the chance of a raid.
He added that a good policy would be taking what was not needed
in the Earnings Reserve and moving it to the corpus.
CHAIR STOLTZE noted that Attorney General Richards characterized
any appropriation from the Earnings Reserve as a "raid."
ATTORNEY GENERAL RICHARDS replied that he should frame the
characterization as "ad hoc spending," spending from the
Permanent Fund in a manner that was not under a sustainable
plan.
10:06:22 AM
He addressed the difference between the sovereign wealth fund
model and a classical endowment model. He specified that the
sovereign wealth fund model would house the petroleum revenues
in the Permanent Fund itself. Under the classic endowment model,
the petrol revenues would remain in the General Fund.
ATTORNEY GENERAL RICHARDS said the next option was to decide
whether to go with a fixed draw or a POMV draw. He explained
that the governor's bill has several advantages where petroleum
revenue volatility would be housed in the Permanent Fund with a
fixed-draw amount. He specified that a fixed draw would allow
for a smoothed out or averaged spending where a bit more
spending would be possible in lower years and a bit more savings
in higher years of petroleum revenues. He pointed out that the
Permanent Fund and the POMV both use averages as a way to get
reasoned calculations that do not jump all over the place. He
said putting the petroleum revenues into the Permanent Fund was
a similar concept where revenues are assigned a value and a
certain amount would be spent every year. He suggested that
petroleum revenue be thought of as an asset and deciding what
amount of the asset can be spent every year on a sustained
basis. He added that the governor's plan was similar to Scott
Goldsmith's approach.
10:08:36 AM
SENATOR HUGGINS asked Attorney General Richard to confirm that
under the endowment model, the assumption was that the Permanent
Fund maintains its traditional role and it would not be
leveraged for something else.
ATTORNEY GENERAL RICHARDS answered that the Permanent Fund would
be in its traditional role plus some kind of endowment-like
payment to the General Fund plus dividends.
SENATOR HUGGINS asked if the Permanent Fund would be
destabilized or volatility created if the fund was used as a
backstop for a gas pipeline.
ATTORNEY GENERAL RICHARDS answered that he did not know, but
suggested that there were several ways to do it. He remarked
that he has not heard anyone propose using the Permanent Fund in
the manner Senator Huggins suggested; but if used, he opined
that the Permanent Fund would directly invest as opposed to
backstopping bonds.
He noted that the fixed amount and POMV were both reasonable and
produce the same amount of money over time; however, the
percentage of market value approach would have more fluctuation.
He reiterated that the biggest difference between the governor's
approach and SB 114's sovereign wealth was where oil price
volatility would reside. He said the disadvantage of having oil
price volatility reside in the General Fund was that the state
would be stuck with the annual amount that could be collected.
He specified that reasoned assumptions could not be made about
how much could be spent over time, which meant there would
always be volatility in the General Fund.
10:11:46 AM
ATTORNEY GENERAL RICHARDS explained that a hypothetical modeling
exercise was done by the Department of Revenue to show what
would have happened if the POMV concept was enacted in the past.
He pointed out that the modeling showed that the POMV approach
would not have smoothed out the volatility-curve associated with
oil prices and additional layers would have been laid on the
volatility. He said the layering would have made sense in the
low years because the revenues would have been needed to meet
budgeting needs, but in high years an unadjusted POMV would have
compounded pro-cyclical spending because savings would be placed
into a general fund that already had excess revenues.
He remarked that the revenue-limitation amendment that the
committee passed was a good amendment because during high oil
price environments, money from savings would not be put into a
budget that was already highly funded. He explained that the
difference between the revenue limit and what the governor's
bill does was as follows:
1. Does not provide for automatic savings of the petroleum
revenues at very high revenues.
2. Does not allow for spending a constant level of petroleum
revenues over time regardless of what is collected.
3. Volatility in the General Fund would continue to exist
under the revenue-limit cap.
CHAIR STOLTZE clarified that not spending would increase the
likelihood of spending.
ATTORNEY GENERAL RICHARDS answered correct. He specified that
the POMV payout does not provide a limitation on spending or
revenues in terms of excess oil revenues. He remarked that the
revenue limitation would do a very good job of making sure that
financial savings were not spent when it's not needed, but the
amendment would not go to the next step of ensuring financial
savings at real high oil prices.
10:14:29 AM
ATTORNEY GENERAL RICHARDS addressed the different dividend
methodologies and noted that two combinations did not make the
most sense mathematically. He said using a POMV draw with an
earnings-based dividend was a little dangerous because the POMV
was a pretty steady amount, but the earnings-based dividend
would always be very variable and the result would make it
harder to depend on revenues to the General Fund each year. He
said the preferred alternative to a POMV draw and an earnings-
based dividend would be to base the dividend on the market value
of the fund rather than year-to-year earnings, the end result
would not have the variability and swings that exist under the
current system. He remarked that although variability and swings
might be good policy in terms of people's dividends, variability
rather than stability in revenue to the General Fund did not
make sense.
He said the other type of dividend combination that he found
mathematically challenging was SB 114's initial version with a
royalty-based dividend and a PFD floor. He detailed that
dividends would be paid out on the upside of oil prices, but
guaranteed with a floor on the downside of oil prices. He
asserted that the dividend plan under SB 114 would easily become
unsustainable very fast.
10:17:44 AM
SENATOR MCGUIRE thanked Commissioner Hoffbeck and Attorney
General Richards for working with her office. She opined that an
amalgamation of bills would ultimately happen because people
understand where the state was financially. She analogized that
people were at the acceptance level that a "root canal" must be
performed.
10:19:57 AM
SENATOR COGHILL commented that the real question was whether the
state's wealth could be used to stabilize the government as the
Legislature starts slimming down the budget. He said to date,
the Permanent Fund earnings have not been used for general
government purposes. He detailed that using the current
methodology and taking money out of Permanent Fund earnings for
government spending would highly impact the dividend. He stated
that the intent in the governor's plan and SB 114 was to protect
and sustain the value of the state's wealth when used for the
first time in government services and the dividend. He said he
appreciated the approach being taken and noted that that was the
reason for his methodology change in introducing his amendment.
He remarked that if the Legislature does not do anything, the
Permanent Fund earnings could be used, but the impact on the
dividend would be great and the state's volatility would not
change.
[CHAIR STOLTZE set SB 128 aside for further consideration.]
10:22:48 AM
CHAIR STOLTZE recessed the meeting to the call of the chair.
SJR 1-CONST AM: GUARANTEE PERM FUND DIVIDEND
2:32:02 PM
CHAIR STOLTZE called the committee back to order and announced
the consideration of SJR 1.
2:33:19 PM
SENATOR WIELECHOWSKI moved to report SJR 1, [29-LS0008\A], out
of committee with individual recommendations and accompanying
fiscal notes.
2:33:28 PM
CHAIR STOLTZE announced that without objection, SJR 1 moved out
of committee.
SB 114-PERM FUND: EARNINGS, DEPOSITS, ACCOUNTS
2:33:46 PM
CHAIR STOLTZE announced the continued consideration of SB 114.
He restated the motion to adopt Amendment 29-LS0833\U.1 ("U.1").
SENATOR HUGGINS restated his objection.
CHAIR STOLTZE moved to amend Amendment U.1. He explained that in
consultation with the sponsor, Senator McGuire asked that the
provision's sunset be extended one additional year. He explained
that the amendment was conceptual because drafting would have
taken too long due to the sunset provision's complex language.
CHAIR STOLTZE moved a conceptual amendment to Amendment U.1.
CONCEPTUAL AMENDMENT TO AMENDMENT U.1
The provisions inserted through Amendment [U.1] which
sunset the act within two years, shall be altered to
reflect a 3 year sunset extending the repeal-sunset
provisions for one additional year.
2:34:45 PM
CHAIR STOLTZE found no objection to the conceptual amendment to
Amendment U.1 and it was adopted.
SENATOR HUGGINS removed his objection.
2:35:03 PM
CHAIR STOLTZE found no objection to Amendment U.1, as amended,
and it was adopted.
SENATOR COGHILL said Amendment U. 2 has a technical drafting
error and he would like to amend his motion to adopt it to
reflect the proper citation of 29-LS0883\U.3 ("U.3").
SENATOR HUGGINS objected for discussion purposes.
SENATOR COGHILL explained that it is the same amendment but the
citation was typed incorrectly. It should be 29-LS0883\U.3.
SENATOR HUGGINS removed his objection.
2:36:06 PM
CHAIR STOLTZE announced that hearing no objection, Amendment U.3
is adopted.
2:36:11 PM
SENATOR MCGUIRE moved to report the [committee substitute] for
sponsor substitute for SB 114, as amended, from committee with
individual recommendations and attached fiscal notes.
2:36:39 PM
CHAIR STOLTZE announced that without objection, CSSSSB 114(STA)
moved from committee.
SB 128-PERM. FUND: DEPOSITS; DIVIDEND; EARNINGS
2:36:48 PM
CHAIR STOLTZE returned attention to SB 128. Finding no
amendments or additional discussion, he solicited a motion.
2:37:01 PM
SENATOR COGHILL moved to report SB 128 from committee with
individual recommendations and attached fiscal notes.
2:37:07 PM
CHAIR STOLTZE announced that without objection, SB 128 moved
from committee.
2:37:54 PM
There being no further business to come before the committee,
Chair Stoltze adjourned the Senate State Affairs Committee at
2:37 p.m.