SB 1-APPROP: 2016 PFD SUPPLEMENTAL PAYMENT  SB 2-2016 PFD SUPPLEMENTAL PAYMENT  4:56:20 PM CHAIR DUNLEAVY called the committee back to order. He announced the consideration of SB 1 and SB 2. He explained that SB 1 is a bill that he introduced in the fall of 2016. He detailed that SB 2 is the enabling portion to SB 1. He noted that the 2016 Legislature passed an appropriation bill that was to fully fund the entire PFD. He detailed that half of the PFD was vetoed by the governor, approximately $700 million. He specified that the governor said his veto was an effort to help with the state's fiscal situation. He revealed that the approximate $700 million from the veto resides in the earnings reserve and not in the general fund. CHAIR DUNLEAVY contended that the dividend is a very unique issue that is not seen in other states or countries. He opined that Alaskans believe the PFD is a way of receiving a royalty from the state of Alaska due to the Statehood Act and a subsequent constitution that has the state owning the resources in a socialized manner. He explained that the method of paying a dividend from the permanent fund allows all Alaskans to partake in the state's mineral rights. He specified that the bill simply restores the second half of the PFD that was vetoed by the governor. He asserted that the belief is the PFD is a decades- old tradition or right. He stated that he believes restoring the second half of the PFD is the right thing to do due to the current economy's condition as well as comments from his constituents who noted that their dividend was planned to be used for fuel oil, college, medical bills, vehicles, etc. He opined that there are different ways to deal with the ongoing fiscal issue and the bill addresses a need to fix the 2016 PFD and allow the Legislature to move on to bigger and more important issues in terms of fixing the fiscal issues. 4:59:13 PM GINA RITACCO, Staff, Senator Dunleavy, Alaska State Legislature, Juneau, Alaska, provided an overview of SB 1 and SB 2 as follows: There are two bills because one is an appropriation bill, which is SB 1, SB 2 is the directive bill and both are required in order to issue check immediately before the next payout in October. SB 1 gives the appropriation amount and then SB 2 directs the Department of Revenue to actually go ahead and make those checks available. 5:00:02 PM At ease. 5:00:12 PM CHAIR DUNLEAVY called the committee back to order. He announced that there is a committee substitute (CS) for SB 1. 5:00:21 PM SENATOR GIESSEL moved that the committee adopt the CS for SB 1, version: 30-LS0042\D. 5:00:36 PM CHAIR DUNLEAVY objected for discussion purposes. MS. RITACO provided an overview of the CS as follows: The sectional change with Section 1 changes the amount appropriated from $660,350,000, which was just an estimate at the time that we had the bill drafted, to reflect the statutory calculated amount vetoed by the governor which is $683,234,813. CHAIR DUNLEAVY asked to verify that there were no other changes. MS. RITACCO replied that there were no other changes. 5:01:19 PM At ease. 5:01:31 PM CHAIR DUNLEAVY called the committee back to order. He announced that he removed his objection to the CS for SB 1. He declared that the CS for SB 1 is adopted. He asked that Ms. Ritaco provide a sectional analysis. 5:01:48 PM MS. RITACO provided a sectional analysis as follows: SB 1, Section 1: restores approximately $1,032 to every Alaskan. SB 1, Section 2: makes SB 1 contingent on SB 2; the reason for this is that if you don't make that contingent on each other, you could have the appropriation pass and it will just sit there until the next payout goes, which would be in 2017, therefore it actually would be in addition to 2017's payment rather than a supplemental to the 2016 payment. SB 2 is the directive, Section 1: the commissioner of the Department of Revenue is directed to make the payment immediately. SB 2, Section 2: contingent on SB 1 passing, so if SB 1 does not pass, SB 2 does not go into effect. We put an effective date of May 1, 2017 to give time for the Department of Revenue to actually make the checks and send them out with FY2017's funds rather than FY2018. MS. RITACO summarized that SB 1 and SB 2 are interconnected and are contingent on one another. 5:03:11 PM CHAIR DUNLEAVY announced that [SB 1 and SB 2] are held in committee. He reminded the committee that public testimony will be held at an upcoming committee meeting and the intent is to move the two bills the following week.