HOUSE BILL NO. 213 "An Act relating to the investment, appropriation, and administration of the public school trust fund." 10:25:37 AM Co-Chair Foster noted the committee had heard a brief introduction on the bill on January 25. Co-Chair Seaton MOVED to ADOPT the proposed committee substitute for HB 213, Work Draft 30-LS0765\R (Glover, 1/26/18). Co-Chair Foster OBJECTED for discussion. He asked the sponsor to address the changes in the work draft. REPRESENTATIVE JUSTIN PARISH, SPONSOR, provided a brief introduction of the bill. The bill changed the way the state managed the Public School Trust Fund and would allow it to realize capital gains as income where appropriate, always preserving the principal of the fund and allowing for growth into the future. Moving to a more modern management system would mean continued growth in the fund, realize higher dividends, and a higher rate of earning. The CS had several changes - one practical and a couple of substantive changes. He deferred to his staff to address the details. LISA WORL, STAFF, REPRESENTATIVE JUSTIN PARISH, addressed the summary of changes: Page 2, line 10: Delete "previous 10 fiscal years" and add "five fiscal years preceding he previous fiscal year." Page 2, line 31: Add "Section 6. This Act Takes effect immediately under AS 01.10.070(c). Ms. Worl addressed the bill in its entirety by providing a sectional analysis: Section 1 (page 1, line 4): Amends AS 37.14.110 (c) to state the commissioner of revenue shall determine the net income of the fund in accordance with accounting principles and that the principal shall be perpetually retained in the fund for investment purposes. The distinction between principal and income and defining and maintaining the difference between the funds is deleted. Section 2. (page 2, line 9): AS 37.14.160 adds section (5) to the duties to direct the commissioner to determine the average monthly balance for the public school trust fund based on the monthly average market value of the fund for the previous 10 fiscal years. Ms. Worl elaborated that Section 2 added a lag-year with the word preceding. She continued to review the sectional analysis: Section 3. (page 2, line 11 16): Adds new section, AS 37.14.165 relates to the use of the public trust fund allowing the legislature to appropriate 4.75 percent of the amount determined by the commissioner. Section 4. (page 2, line 19 and line 23): AS 37.14.170 further defines investment of the trust fund management. Section 5. (page 2, line 30): AS 37.14.140 is repealed. This section had stated that the net income of the fund could not be appropriated or expended. This section was repealed as it did not allow for fund to be managed with the POMV method. Section 6. (page 2, line 31): Adds section 6 for Act to take effect immediately. Ms. Worl communicated she was available for questions and listed others available in the room and online. 10:31:01 AM Representative Guttenberg relayed that he had previously asked for the history of the fund. He requested to hear from the Legislative Finance Division (LFD). ALEXEI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION, asked if Representative Guttenberg would like information on the history of the fund. Representative Guttenberg answered in the affirmative. Mr. Painter obliged. He relayed that the fund had been established in 1913 as a land trust from a congressional grant to the territory of Alaska for public schools. In the 1970s the land trust had been converted into a cash trust, creating the fund as it is at present. At that point, all the public school trust lands were merged into general state lands. A cash trust had been created that was invested and 0.5 percent of royalties from minerals were to be deposited into the trust in an attempt to make the trust whole. Since then, the fund had initially been used for capital projects, but was now mainly used in the formula. Given investment strategies in the 1970s at the time the statute was written, there was deleted language in Section 1, such that the only spendable amount coming from the fund was dividends and other income. He stated that capital gains could not be spent. Mr. Painter explained that dividends and capital gains (gains from selling stocks) went into the Permanent Fund Earnings Reserve Account (ERA). The Public School Trust Fund did not allow capital gains to be spent. As a result, less was spendable every year and the Department of Revenue (DOR) managed the fund in a way that perhaps did not maximize the total return of the fund since stocks tended to be where much of the value resided at present. Changing the management of the fund to a percent of market value (POMV) would likely increase the expected returns of the fund because the management could be shifted away from some of the dividend earning investments that may not be as strong. Additionally, the change would allow more to be spent every year because the state could not spend the dividends but could spend a more stable market value of the fund. He noted there were also several lawsuits. 10:34:13 AM Representative Neuman referenced Mr. Painter's testimony that the fund had changed from a land trust to a cash fund. He asked about the process. Mr. Painter answered that at the time in the 1970s the lands were managed as school trust lands and when the sales happened the revenue was spent by schools. At that point the new sales from land were deposited into a new fund. The land trust had been liquidated and the lands had been added to general state land. There was no distinction between school and other state lands, except for some post-1980 that were transferred. The royalty deposit was intended to take the place of trust lands that no longer belong to the trust. He explained it had been the subject of part of the Kasayulie law suit. At the time as part of the court's ruling (which had been preempted by a consent decree later on), the judge had determined that it was not possible to determine whether the trust had been made whole by putting the royalties instead of the lands unless the value of the lands was known. The value of the lands was not known - it was impractical to survey hundreds of thousands of acres in small parcels across the state. The trust would remain in perpetuity as long as the value of the lands was not known, but if the state could spend in a sustainable way on the correct things, it seemed to be fulfilling the trust's purpose. He remarked that the Department of Law (DOL) could provide further detail on the legal aspects. Representative Neuman referenced the first paragraph in section changes that read: "language that was removed in a manner that preserves the distinction between principal and income and excludes capital gains." He believed it was a major change in the way management had been done. He requested to hear from DOL. He stated the change allowed the principal to be used for management purposes. He asked for more detail. 10:37:02 AM Representative Parish deferred to DOL. BRIAN BJORKQUIST, SENIOR ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW (via teleconference), responded there were several mischaracterizations of the Public School Trust, which he intended to clarify. He addressed Co-Chair Neuman's question about what happened with eliminating the capital gains in Section 1 of the bill. He explained that the section still had the DOR commissioner determine the net income and still preserved the principal of the fund, which was perpetually retained for investment purposes. The section changed that the capital gains or losses were retained as part of the principal of the fund - the capital gains would add to what could be spend or losses could detract from what could be spent. Representative Neuman stated that the change would allow access to the principal for management of the fund. He reasoned if there was a downturn for several consecutive years of -4.75, it could be taken out of the fund principal. He believed it went against the original intent of the language. Mr. Bjorkquist disagreed. He explained that the bill specified that the principal of the fund shall be retained for investment purposes. The principal of the fund could not be spent for any purpose including administrative costs of the fund. Representative Neuman suggested that the state would have to use part of the fund principal to fund the change in the bill if the fund had negative investment years. He questioned whether it was a change the legislature wanted to make. 10:39:47 AM Representative Pruitt was trying to understand how the fund was currently managed and how the change would be made. He referenced a handout in members' packets provided by DOR dated January 23, 2018 (copy on file). The handout showed a table of projected payouts from FY 19 to FY 25. He looked at a column labeled "status quo" and observed that the amount in [FY 25] would be $825 million. Alternatively, the 5-year endowment proposed in the CS, the fund amount would be $776 million [in FY 25]. He noted there was a change of about $10 million per year in the amount available for spending. He asked how the money was currently managed. He wanted to understand how DOR was currently limited in its ability to manage the fund and how the bill would allow the fund to make more money. Representative Parish deferred to DOR. MIKE BARNHILL, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE, provided a background on the evolving law and theory on the management of trust funds and endowments. He believed it was fair to say that the approach to managing trust funds and endowments had changed substantially over the past 50 years. The state's statutes governing the Permanent Fund and the Public School Trust Fund reflected a theory and common law of managing trust funds that had been in place quite some time ago. Since that time numerous things had taken place. First, was the recognition that the overall objective of managing a trust fund or endowment was to preserve the inflation adjusted value of the fund indefinitely. Previously, the idea had been to preserve the notional value of principal indefinitely. The approach had been modernized to make sure the principal adjusts with the value of inflation. Preserving the value of principal alone did not accomplish the objective. Mr. Barnhill elaborated that over time the investment theory regarding investment of trusts and endowments had evolved from the notion that there should be relatively risk-free securities, meaning the investment portfolio would be heavily dominated with fixed income instruments, had given way to a more aggressively invested portfolio more weighted towards equities and growth in value. The idea of what could be appropriated or spent from a trust had evolved from the concept of income (cash in the case at hand) delivered through dividends from equity instruments and coupons from fixed income instruments, had given way to the idea of delivering some distribution percentage from the fund (in some cases 5 percent, or 4.75 percent in HB 213). The idea was to produce an inflation adjusted income stream for the trust's beneficiaries. Over time there was a stream of income that was relatively consistent and did not erode the inflation adjusted value of the trust. Mr. Barnhill expounded that much of the conversation about the Permanent Fund had been focused on how to evolve the management and the law governing the fund to a more modern theory of endowments, which was equally applicable in the case of HB 213. The statute regarding the exclusion of capital gains in the public trust fund was also similar to the Permanent Fund context. In 1981 or 1982, instead of retaining net capital gains in the principal, the gains were allowed to flow to the income fund. At that time, the Permanent Fund had adopted inflation proofing. He spoke to Representative Neuman's point about eroding the inflation adjusted value of the trust. The way endowments avoid eroding the inflation adjusted value of the trusts was to set a distribution percentage in a way that ensured the payment to beneficiaries was sufficient without eroding the inflation adjusted value of the trust. Mr. Barnhill addressed how the fund was managed currently. In general, the asset allocation was heavily weighted to fixed income compared to other trust funds administered by DOR (55 percent equity/45 percent fixed income). Over the past couple of years the allocation had been adjusted to add in a real estate investment trust (REIT). He explained that a REIT is a cash generating instrument that looked like equities but delivered cash like fixed income. The department had also added in a bit of high yield. He detailed that if the bill passed, the department would shift the asset allocation to be more heavily equity weighted in order to generate a higher return profile over time. The numbers on the DOR table mentioned by Representative Pruitt reflected the idea that DOR would shift closer to a 70/30 asset allocation (70 percent equity/30 percent fixed income) with some adjustments to have continued exposure to REITs and high yield. 10:47:30 AM Representative Pruitt spoke to the bill's intent to maintain the trust principal at an inflationary amount and to allow for the amount to be spent to also increase at the inflationary amount. The CS made a change from a 10-year POMV to a 5-year POMV. He asked Mr. Barnhill for his opinion on the change. Mr. Barnhill answered that one of the challenges in the midterm investment environment (the next ten years) was the current long running bull market in equities. The department's advisors, Callan Associates, and many other advisors were concerned the market may be entering some period of correction. He noted it was not possible to know the timing - it could be any day or in three years. It seemed plausible that at some point over the next 10 years, the frothy returns the equity market had enjoyed over the past several years would come to an end at least temporarily. The department was being cautioned against being optimistic about continuing to see the double-digit equity return over the next 10 years. Mr. Barnhill explained that the 10-year averaging made it easier for the department to hit the objective of preserving the inflation adjusted value of the trust over that period. The 5-year averaging made it more challenging if there was a period of market correction in the next 10 years. He added that Callan Associates and others present their capital market assumptions on a 10-year basis (they were more optimistic on a 30-year basis). While there was some pessimism over the next 10 years about whether they could hit their numbers with a 5-year averaging, over a longer period it should be doable assuming basic elements and performance of the equity markets persist over time. Mr. Barnhill clarified that as drafted, the bill did not go all the way to the legal structure of what was considered to be the modern way to manage endowments and trusts. The reason was because it continued to preserve the distinction between principal and income. The objective of an endowment is to preserve the inflation adjusted value of the trust over time. The technical application of principal and income may not succeed in that objective, which was the reason laws had been updated to eliminate the distinction between principal and income so the manager understood it was not their job to preserve principal, but to preserve the inflation adjusted value of the trust. He cited a 2010 law passed by the legislature as an example. The law was called the Uniform Prudent Management of Institutional Funds Act under AS 13.65. He detailed it was a model law drafted by a professor with expertise in the legal rules governing the administration of endowments and trusts. He stated that AS 13.65 made the transition completely. He read from statute: If a trust is created with the distinction of principal and income for purposes of this law, its interpreted to mean a trust fund of indefinite duration. Mr. Barnhill explained that the distinction was eliminated in the modern law of trusts. 10:52:20 AM Representative Pruitt stated asked where to put weight in terms of a long-term goal if the objective was to receive more money at present or preserve the value of the fund. Mr. Barnhill answered that the policy embedded in laws like the Uniform Prudent Management of Institutional Funds Act was the concept of balancing the interests of beneficiaries today with the interest of beneficiaries in the future (preserving intergenerational equities). He explained that it preserved the inflation adjusted value of the trust while maximizing a stream of income to current beneficiaries. He explained that the numbers [on the DOR table] reflected the view that by investing more aggressively the fund would grow faster, the inflation adjusted value of the trust would be preserved, and the stream of revenue to beneficiaries would be maximized. Vice-Chair Gara referenced the DOR handout. He observed that it did not look like an either/or scenario where either principal or rate of return were protected. He referred to the 10-year endowment model and noted the value of the fund went from $697 million in FY 19 to $808 million [in FY 25]. He asked if his understanding was accurate. Mr. Barnhill answered in the affirmative. Vice-Chair Gara stated that the other goal of the sponsor was to increase the amount of funding that went to public education. While the fund value increased, by FY 24 the annual payout under the 10-year endowment portion of the bill would mean $31.5 million compared to the status quo payout of $23.9 million per year. He asked for verification that it would mean approximately $7.5 million per year in additional funds for education. Mr. Barnhill answered in the affirmative. Vice-Chair Gara stated that a $100 increase in the Base Student Allocation (BSA) was about $30 million and an extra $7.5 million was an increase to the BSA of about $25. He stated that in endowments if a certain amount was taken out annually, there may be some years where money had to be taken from the principal, but over the long-term the principal and payout grew. He asked why there would be a limitation that prevented dipping into the principal in a bad year. 10:56:54 AM Mr. Barnhill referenced the table provided by DOR and replied that 10-year endowment was the department's way of reflecting the averaging or lookback. The bill had initially included a 10-year lookback, which had been changed to a 5-year lookback in the CS. He explained that the 3-year was the lookback for multiple trust funds administered by the department. Modern endowment theory did not ask whether the value of the principal was being invaded, but whether the inflation adjusted value of the trust was being preserved. He pointed to the 10-year endowment column with a starting balance of $697 million. He spoke to the inflation adjusted value preserved indefinitely through time. He detailed that Callan Associates had a 10-year inflation projection of 2.25 percent, which had recently been increased to 2.26 percent. He explained that the 10-year endowment approach preserved the $697 million on an inflation adjusted basis for the 5- year timeline and indefinitely. Mr. Barnhill reported that it was plausible there would be a down market in the future. He noted there would be points in time when the inflation adjusted value was not preserved. The overall objective of endowment law was to preserve the inflation adjusted value indefinitely. He stated there were multiple ways to correct for a period of time where there was a drawdown or a correction in the markets and the inflation adjusted value of the trust decreases. Options included staying the course with the understanding that the market may come back, which it often did, or the distribution percentage could be adjusted temporarily from 4.75 percent downward for a couple of years to see if the inflation adjusted value corrected. It was not fatal. There were other ways of correcting for the issue. The fact there was a period where the current value was less than the inflation adjusted value. He explained the situation was not fatal. 11:00:16 AM Vice-Chair Gara shared that he was in favor of the bill. He asked Mr. Barnhill to provide a written document specifying the impact of doing a traditional endowment model seeking long-term gains and where there was not significant concern over one or two years of a decline in principal. Mr. Barnhill answered that if it was a legal question he preferred to defer to DOL. He stated if it was a trust question... Vice-Chair Gara interjected that it was a trust administration question. Mr. Barnhill responded the easiest thing was to refer members to AS 13.65, which set out the factors to consider in distributing from an endowment. The model statute said that evaluating the prudency of how the factors were evaluated and applied in a given year depended on what was known to the manager at the time. Vice-Chair Gara asked whether it would cause DOR concern if he were to propose an amendment that removed the provision specifying that the principal could never be dipped into, meaning the fund would just be run as an endowment. Mr. Barnhill answered that the committee could delete Section 1, which would mean converting from a principal and income fund to an endowment fund, which he believed would be appropriate. Representative Parish pointed to the language on page 2, lines 12 and 13: "Each year, the legislature may appropriate 4.75 percent..." He stated that if there were ever a concern that the growth of the fund was hindered, it would be the legislature's prerogative to allocate funds from other sources. Given the high rate of returns enabled by the legislation and the conservative 4.75 percent proposed POMV draw over a 5-year lookback, he did not anticipate any erosion of value except in exceptional market circumstances. He reiterated that in those circumstances the legislature had the option of drawing less. 11:03:23 AM Representative Neuman stated he was having difficulty because land was a real property asset with a value that increased and decreased. He recalled losing money on a property in the 1980s because the value had gone down considerably. He had no idea when looking at the forecasts what the prior performance had been. He asked how the fund had performed in the past 10 years - he did not know how to make the comparison without the numbers. He wondered whether the change would put more money in the fund or not. He spoke to the value of the land and understood the concept of going to cash, but the committee had heard from LFD that the state did not know the value of the property when it had been changed from a land trust to a cash fund. He wondered if it could be a potential lawsuit. He asked how the funds currently went into the system. He questioned whether the funds came in as unrestricted general funds (UGF). He reasoned that it would be difficult to see what the funds were if they came in as UGF and were converted to designated general funds (DGF). Representative Parish relayed that the Public School Trust Fund was a dedicated fund; it was a pre-statehood fund that was a federal program. He deferred to Mr. Painter to answer any concerns about the transition from a land trust to a cash trust. He asked Mr. Barnhill to respond to the question about long-term earnings. 11:06:13 AM Mr. Barnhill answered that as indicated by Mr. Painter, the fund had started out in 1913 as a land trust. In 1978 the land trust element was extinguished by the legislature and it was converted entirely to a cash asset portfolio. Currently there was no land in the trust fund - the fund was roughly allocated between 55 percent equity and 45 percent fixed income. The fund was also invested in REIT securities (which was not land) and high yield. He discussed unaudited returns as of December 31, 2017. The 1- year return was 13.79 percent, the 3-year return was 6.74 percent, the 5-year return was 7.36 percent, and the 10- year return was 6.23 percent. He offered to compare the returns to the Power Cost Equalization (PCE) Fund, which DOR administered more on an endowment approach. As of December 31, 2017, the 1-year PCE return was 16.02 percent, the 3-year return was 7.7 percent, the 5-year return was 10.3 percent, and the 10-year return was 7.04 percent. He offered to provide a copy to the Co-Chair Foster for distribution. Representative Neuman requested the past performance in writing. He remarked on the difference between investing the $1 billion PCE Fund compared to the $22 million Public School Trust Fund. Mr. Barnhill clarified that the Public School Trust Fund was a $670 million fund. He recognized the fund was smaller than the PCE Fund, but not that much smaller. 11:08:46 AM Mr. Painter responded to Representative Neuman's question about how funding appeared in the budget. He explained that the 0.5 percent of royalties dedicated to the fund were appropriated but did not appear in the budget just as the royalties going to the Permanent Fund did not show up. The spending from the fund as a dedicated fund showed up as "other," which would not change in the bill. Both the Mount Edgecumbe and K-12 formula components showed up as other funds. There was no UGF because of the pre-statehood dedication. Co-Chair Neuman asked if the [indecipherable] used UGF of DGF. Mr. Painter answered "other." Co-Chair Seaton referenced Mr. Barnhill's testimony that the 10-year endowment model preserved the inflation adjusted value over a 10-year period. He asked if the 5- year lookback that was used by the Permanent Fund also preserve the inflation adjusted value over the same amount of time. Mr. Barnhill answered that for the 10-year lookback the inflation adjusted value at current Callan Associates capital market assumptions was preserved for all periods of time. For the 5-year approach and 10-year window using current Callan capital market assumptions, the inflation adjusted value of the trust fund narrowly missed. Inflation adjusted value was restored in Callan's 30-year projection for capital markets was closer to 8 percent as opposed to 6.5 percent. The pessimism embedded into Callan's 10-year projections created the issue for the 5-year approach. He added that the issue was also true for the 3-year approach. 11:11:19 AM Representative Guttenberg considered the interest earned in a year over the payout plus inflation proofing. He noted that Mr. Barnhill had discussed that in some of the years it was considerably higher. He asked if the interest that went back into the fund was considered principal. Mr. Barnhill replied there were two paradigms he was trying to distinguish. He referred to the principal income paradigm as the legacy paradigm. In the Permanent Fund context there was familiarity and comfort with the concept of inflation proofing because the legislature had decided to explicitly inflation proof through an appropriation back from the ERA to principal. In the Public School Trust Fund the legacy approach did not do that explicitly because the statutory definition of principal included capital gains. He speculated that the drafters of the approach believed the retention of capital gains was some form of inflation proofing. In other words, in the legacy approach for the Public School Trust Fund, there was not any explicit inflation proofing because capital gains and principal were retained, which was different than the Permanent Fund. Mr. Barnhill addressed the modern paradigm the bill tried to move towards and explained that the inflation adjustment was implied through the distribution percentage of 4.75 percent. The notion was to balance the payouts in a way that preserved the inflation adjusted value of the trust over periods of time. Representative Guttenberg asked what Callan Associates and two of their competitors would recommend on the 5-year or 10-year endowment concepts. Mr. Barnhill did not want to put words in Callan's mouth. He speculated that Callan would observe that that the principal and income structure to trust funds was long outdated and the majority (if not all) endowment funds operate on an endowment methodology or POMV approach. He referenced the 10-year, 5-year, and 3-year lookback periods and ventured that Callan would observe that with their current capital market assumptions for the next 10 years that the 10-year averaging approach worked, and the 5-year approach narrowly missed, but over longer periods of time would restore inflation adjusted value and the same was true for the 3-year approach. Representative Guttenberg surmised that Callan would say it was up to the client. 11:15:07 AM Co-Chair Foster WITHDREW his OBJECTION to the adoption of the work draft. Representative Neuman asked why the approach had been changed from 10 to 5 years. Representative Parish answered that he had originally proposed the 10-year lookback. On advice by Mr. Painter he had included a lag-year to provide greater predictability to know what level of funding was coming. He recognized going to a 5-year lookback was a more aggressive option, but it was familiar to the bulk of the Alaskan population through the Permanent Fund program and it was more in line with what the other body [Senate] may be supportive of. He stated that for the past 20 years the Public School Trust Fund had tripled in nominal value. He believed it was fantastic and that robust growth in the state's funds was valuable; however, he thought that it fundamentally departed from the purpose of a trust, which was to preserve the inflation adjusted value, while maximizing dividends to beneficiaries. He believed either the 5-year or the 10-year lookback achieved the objective. There was a strong argument to be made that the 5-year lookback did a superior job, if at the expense at limiting the rate that inflation adjusted value was beat. 11:18:00 AM Representative Neuman requested to see the numbers behind the reasoning the change had been made to 5 years. He mentioned perhaps a 7-year or 8-year approach should be considered. He noted there was a reason the sponsor had changed to the 5-year approach and he assumed it was because the numbers looked better. Representative Parish was sensitive to the concern, which was the reason he had originally proposed a 10-year lookback. He would provide the requested information in writing. Co-Chair Foster wanted to make sure there was time for public testimony. He noted that no one was signed up online. Vice-Chair Gara referenced discussion about going back to the Callan model with POMV and no ban on going into the principal in one year or another. He asked if it would mean deleting Section 1 of the bill. Mr. Barnhill replied that if the legislature wanted to convert the trust from a principal and income fund to a modern endowment fund, it would mean deleting Section 1 of the bill. Vice-Chair Gara requested the information asked for by Representative Neuman. He was interested in the numbers for a 7-year and 8-year approach. Representative Parish replied that he would provide the information. 11:20:21 AM Representative Pruitt remarked that the CS also made the changes effective immediately. He asked if it would enable DOR to shift the asset allocation immediately. Mr. Barnhill believed the intention was two-fold. First, DOR would shift the asset allocation as soon as prudently possible from a 55 percent [equities]/45 percent [fixed income] to a 70 percent [equities]/30 percent [fixed income] allocation. There could be difficulties in making the shift immediately depending on the market conditions; the shift should not be done at the wrong time. He believed the other intention was to appropriate for purposes of FY 19 pursuant to the distribution percentage as opposed to the current method. Representative Parish added that the primary objective was realizing a high rate of return from its assets. The state's asset managers had communicated that higher returns could be achieved on the $670 million fund if they were provided more management discretion. He believed it was better done sooner rather than later. The difference in earnings would be in the thousands of dollars per day if the market behaved as was expected. The difference between an immediate effective date versus 90 days after passage would be measured in the hundreds of thousands of dollars, which he believed merited consideration by the legislature. He thanked the committee. 11:22:53 AM Co-Chair Foster WITHDREW his OBJECTION to the adoption of the work draft. There being NO further OBJECTION, Work Draft 30-LS0765\R (Glover, 1/26/18) was ADOPTED. Co-Chair Foster OPENED and CLOSED public testimony. He relayed that amendments were due on Friday. HB 213 was HEARD and HELD in committee for further consideration. Co-Chair Foster addressed the schedule for the following meeting.