SB 23-APPROP:SUPP. PAYMENTS OF PRIOR YEARS' PFD  3:33:46 PM CHAIR SHOWER announced the consideration of SENATE BILL NO. 23 "An Act making special appropriations from the earnings reserve account for the payment of permanent fund dividends; and providing for an effective date." He asked the presenters to introduce themselves and noted that Commissioner Designee Tangeman would provide opening comments. He advised that public testimony would be taken at a future hearing. 3:35:18 PM BRUCE TANGEMAN, Commissioner Designee, Department of Revenue, stated that SB 23 and the next bill on the agenda, SB 24, are critical in the cornerstone of what Governor Dunleavy campaigned on and is dear to his heart. They are more about restoring trust in government than paying back the permanent fund dividends (PFD). The governor wanted to correct the previous administration's decision to take a different route than the long-standing statutory calculation for the PFD. He highlighted that the size of government was not significantly reduced over the last three years while the dividend was reduced, and Governor Dunleavy believes these go hand in hand. The dividend can be restored but the size of government in Alaska must be brought into check. He advised that considering the dividend issue is just one part of the larger discussion that will begin on February 13 when the budget is released. 3:38:05 PM ED KING, Chief Economist, Department of Revenue, explained that SB 23 is an appropriation bill that transfers money from the earnings reserve account into the dividend fund. He delivered a sectional analysis speaking to the following prepared document: Section 1(a). This section makes an appropriation from the permanent fund earnings reserve account (AS 37.13.145) to the dividend fund (AS 43.23.045(a)) of the amount of money necessary for a payment of $1061 to eligible individuals who received a 2016 dividend and who are eligible to receive a 2019 dividend for fiscal year 2020. Section 1(b). This section makes an appropriation from the permanent fund earnings reserve account to the dividend fund of the amount of money necessary for a payment of $1289 to eligible individuals who received a 2017 dividend and who are eligible to receive a 2020 dividend for fiscal year 2021. Section 1(c). This section makes an appropriation from the permanent fund earnings reserve account to the dividend fund of the amount of money necessary for a payment of $1328 to eligible individuals who received a 2018 dividend and who are eligible to receive a 2021 dividend for fiscal year 2022. [He noted that there may have been an error in this calculation, and it is under review.] Section 1(d). This section makes an appropriation from the permanent fund earnings reserve account to the dividend fund of the amount authorized for transfer by the Alaska Permanent Fund Corporation pursuant to AS 37.13.145(b) for the payment of permanent fund dividends for fiscal year 2020. Section 1(e). This section makes an appropriation from the permanent fund earnings reserve account to the dividend fund of the amount authorized for transfer by the Alaska Permanent Fund Corporation pursuant to AS 37.13.145(b) for the payment of permanent fund dividends for fiscal year 2021. Section 1(f). This section makes an appropriation from the permanent fund earnings reserve account to the dividend fund of the amount authorized for transfer by the Alaska Permanent Fund Corporation pursuant to AS 37.13.145(b) for the payment of permanent fund dividends for fiscal year 2022. Section 1(g). This section makes an appropriation from the permanent fund earnings reserve account to the dividend fund of the amount authorized for transfer by the Alaska Permanent Fund Corporation pursuant to AS 37.13.145(b) for the payment of permanent fund dividends for fiscal year 2023. Section 2. This section is a contingency provision that makes the appropriations in section 1(a)-(c) contingent on the legislature's passage and enactment into law of a bill directing the commissioner of revenue to include certain payments for the 2016, 2017, and 2018 dividends to eligible individuals with the dividend payments for 2019, 2020, and 2021. Section 3. This section makes the appropriations in section 1(b) and (e) which relate to dividend payments in 2020 effective July 1, 2020. Section 4. This section makes the appropriations in section 1(c) and (f) which relate to dividend payments in 2021 effective July 1, 2021. Section 5. This section makes the appropriation in section 1(g) which relates to dividend payments in 2022 effective July 1, 2022. Section 6. This section provides that except for sections 3-5, the Act takes effect immediately under AS 01.10.070(c). 3:41:42 PM ED KING, Chief Economist, Department of Revenue, characterized SB 23 and SB 24 as "basically married" and said he would move on to the sectional analysis for SB 24 unless there were questions. SENATOR MICCICHE asked if the bill received legal vetting to look at constitutionality and the potential for challenges by those who received a dividend during the three previous years but are no longer a resident and thus ineligible. MR. KING deferred to the commissioner to speak to policy and advised that a legal team would be available to answer questions at a subsequent hearing. 3:43:07 PM COMMISSIONER DESIGNEE TANGEMAN related that the Department of Law (DOL) vetted the bill thoroughly and the administration believes it will stand up in a court. [SB 23 was held in committee.]