Legislature(2023 - 2024)DAVIS 106
03/06/2024 06:00 PM House WAYS & MEANS
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| Audio | Topic |
|---|---|
| Start | |
| HB110 | |
| HB266 | |
| HJR9 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 110 | TELECONFERENCED | |
| *+ | HB 266 | TELECONFERENCED | |
| += | HJR 9 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 110-PERM FUND; XFER DIVIDEND PROG TO APFC
6:03:02 PM
CHAIR CARPENTER announced that the first order of business would
be HOUSE BILL NO. 110, "An Act relating to the Alaska permanent
fund; relating to permanent fund dividends and the dividend
fund; transferring the dividend program from the Department of
Revenue to the Alaska Permanent Fund Corporation; relating to
the duties of the Department of Revenue; relating to the duties
of the Alaska Permanent Fund Corporation; and providing for an
effective date." [Before the committee was the proposed
committee substitute for HB 110, Version 33-LS0371\R, Nauman,
4/24/23, adopted as a working document.]
6:03:39 PM
REPRESENTATIVE MCCABE moved to adopt the proposed committee
substitute (CS), Version 33-LS0731\H, Nauman, 3/6/24, as a
working document.
CHAIR CARPENTER objected for the purpose of discussion.
6:04:01 PM
The committee took a brief at-ease at 6:04 p.m.
6:04:29 PM
KENDRA BROUSSARD, Staff, Representative Ben Carpenter, Alaska
State Legislature, on behalf of the bill sponsor, the House
Special Committee on Ways and Means, on which Representative
Carpenter serves as chair, explained the changes that would be
made by the proposed committee substitute. She spoke from the
document in the committee packet titled "CS For House Bill 110
(W&M) Summary of Changes Version R to Version H," which read as
follows [original punctuation provided]:
Title Change
Delete: relating to the duties of the Department of
Revenue; relating to the duties of the Alaska
Permanent Fund Corporation.
Add: relating to income of the Alaska permanent fund;
relating to the earnings reserve account.
Eliminates Sections
Eliminates sections 2, 3, 7, 8, 10 14, 17 24 from
Version R.
Section 1
Legislative Intent Language: It is the legislature's
intent to pass a constitutional amendment that
requires payment of permanent fund dividends to
eligible state residents, and, in statute, establish
the annual amount of the PFD and maximum draw from the
earnings reserve account.
Section 2
Amends Department of Administration accounting statute
to conform to moving the earnings reserve account from
the general fund to the permanent fund corporation.
Section 3
Changes Sec. 4 in Version R which amends 37.13.140
(permanent fund income) to conform to moving the
earnings reserve account to the permanent fund
corporation. This new CS keeps the calculation of
income for distribution from the fund at five percent
of the average market value of the fund for the first
five of the preceding six years and eliminates the 21
percent of net income calculation.
Section 4
Amends the disposition of income from the permanent
fund statute to move the earnings reserve account from
the general fund to the permanent fund.
Section 5
Changes Sec.5 of Version R that requires the earnings
of the fund to be transferred each year to the general
fund. As in Version R, the draw from the earnings
reserve account may not exceed the balance in the
account.
Section 6
Changes Sec. 6 from Version R which has conforming
language for the Amerada Hess exclusion for the
computation of income available for disposition.
Section 7
Changes Sec. 9 from Version R which has conforming
language for the Mental Health Trust exclusion for the
computation of income available for disposition.
Section 8
Adds conforming language for the power cost
equalization fund income exclusion for the computation
of income available for disposition.
Section 9
Changes Sec. 15, individual dividend calculation
language from Version R, to conform to the calculation
and transfer of the dividend payment in this
amendment.
Section 10
Changes Sec. 16 of Version R, public notice of the
value of the individual dividend amount, to conform to
transfer language.
Section 11
Requires the department of revenue to transfer 50% of
the amount of permanent fund earnings available for
distribution each year to the dividend fund for the
payment of dividends.
Section 12
Adds conforming language to the dividend fund section
of statute.
Section 13
Repeals AS 37.13.145(c) (inflation proofing), AS
37.13.145(e) (appropriations from the earning reserve
account), and AS 37.13.145(f) (total available for
appropriation).
Section 14
Adds to uncodified law a conditional effect. This act
only takes effect if a constitutional amendment to
art. IX, sec. 15, Constitution of the State of Alaska,
requiring an annual permanent fund dividend be paid to
eligible residents of the state, is passed by the
legislature, and approved by the voters at the 2024
general election.
Section 15
Provides for an effective date of July 1, 2025.
6:08:58 PM
CHAIR CARPENTER provided a correction regarding Section 14 that
it is a "conditional" effect, not a "constitutional" effect. He
said the intent of the language is to put a conditional effect
so that this legislation is contingent upon other legislation.
6:09:16 PM
REPRESENTATIVE GRAY inquired about why not make the proposed
conditional effect a statutory change in the way same way as the
[permanent fund] dividend.
CHAIR CARPENTER answered that the conditional effect language
communicates that this is part of a comprehensive plan, not a
stand-alone provision, and other pieces of legislation must also
be considered with this piece of legislation.
REPRESENTATIVE GRAY asked whether the dividend would come out to
be a 50-50 split.
CHAIR CARPENTER replied that he thinks that's what the language
is, as drafted.
REPRESENTATIVE GRAY asked what the harm would be in making it a
statutory change to go to a 50-50 split if HJR 7 isn't passed.
CHAIR CARPENTER responded that it would still be subject to the
appropriations process because the size of the dividend laid out
in statute is already there. The statute could be changed but
the appropriations process would decide whether to follow that
statute. So, HJR 7 would be the forcing function that points to
the statute and says the legislature has dedicated the fund and
therefore that must be followed.
6:11:17 PM
REPRESENTATIVE GROH thanked the chair for bringing this forward.
He pointed out that there is the rate and there is the base.
One base is the percent of market value (POMV) draw and the
other is the current statute of income available for
distribution which can be a larger amount. Income available for
distribution is a term that was created in the 1980s, while POMV
draw is from 2018 when the legislature adopted the POMV
statutes. When talking about the rate of 50 percent, the base
is important, and it is important to distinguish which base.
The current statutes refer to the income available for
distribution whereas this proposal would move it to 50 percent
of the POMV draw.
CHAIR CARPENTER confirmed there are two formulas. The formula
that has been around for a long time is 21 percent of the net
earnings of five of the last six [fiscal] years, which
identifies a sum of money. A recently passed bill, Senate Bill
26, established a different way of calculating a sum of money,
which is 5 percent of market value. This provision recognizes
that the legislature wants to use 5 percent of market value as
the way to calculate the sum of money that is available from the
permanent fund.
6:13:24 PM
REPRESENTATIVE GRAY recalled that while considering Version R of
the bill, there was talk about moving everything to the
Permanent Fund Corporation. He requested elaboration on what
would be moved to the Permanent Fund Corporation, how it is
different from today, and going from the "big bill" to this
smaller bill.
CHAIR CARPENTER answered that the original bill's intent was to
move responsibility for the entire program into the Permanent
Fund Corporation as opposed to the Department of Revenue (DOR).
The intent of Version H is to make the bill simpler by not
transferring the entire responsibility away from DOR.
REPRESENTATIVE GRAY inquired whether there would be any
difference to the way the permanent fund is currently paid if
this bill were in effect.
CHAIR CARPENTER replied that under this bill there would be no
difference with how it is currently being done, other than it
would move the earnings reserve account from the general fund to
the Permanent Fund Corporation to keep it in line with the
language in HJR 7.
6:15:21 PM
DONNA ARDUIN, Staff, Representative Ben Carpenter, Alaska State
Legislature, on behalf of the sponsor of HB 110, the House
Special Committee on Ways and Means, on which Representative
Carpenter serves as chair, explained that Version H conforms
with language in HJR 7, which is one step and then another. The
calculation is in statute, and in HB 110 it would be 5 percent
POMV to the general fund. Because HJR 7 takes the earnings
reserve account out of the general fund and puts it into the
permanent fund, HJR 7 says the only money that can come out of
the earnings reserve account constitutionally is whatever that
calculation is in statute. The first step of that change, then,
is to transfer the entire 5 percent POMV to the general fund and
then half of that to the dividend fund for the payment of
dividends. Technically it's just a different process.
REPRESENTATIVE GRAY asked whether DOR or the Permanent Fund
Corporation has a position on the proposed changes in Version H.
6:16:49 PM
PAULYN SWANSON, Communications Director, Alaska Permanent Fund
Corporation, responded that the corporation doesn't currently
have a position on the bill, but has reviewed the work draft.
She related that currently the Alaska Permanent Fund Corporation
does manage the earnings reserve account, which is a statutory
account as currently established. She offered her understanding
that [Version H] would transfer the earnings reserve account to
the permanent fund, as established in the constitution. Other
than that transfer, the corporation hasn't seen any other effect
per se on how it would then manage the fund at this time.
6:18:09 PM
CHAIR CARPENTER asked if Ms. Swanson believes the legislature
would be able to appropriate out of the earnings reserve account
any additional money than what the statute authorizes, should
the earnings reserve account be transferred from its current
location of the general fund and into the constitutional portion
of the permanent fund under the purview of the Alaska Permanent
Fund Corporation.
MS. SWANSON replied she would need to assess that, so doesn't
have a direct answer. She said she doesn't know that it would
change anything about the power of appropriation that the
legislature currently has over the earnings reserve account.
CHAIR CARPENTER said his intent is to be able to transfer that
earnings reserve account into the corpus portion that is not
appropriable from -
MS. ARDUIN interjected that she believes the question being
asked pertains to HJR 7. Given HJR 7 would constitutionally
move the earnings reserve account into the fund, she said she
believes HJR 7 walls it off, not HB 110.
CHAIR CARPENTER stated that that is an important distinction.
He said he would also like to run this by Legislative Legal and
Research Services.
6:20:02 PM
CHAIR CARPENTER removed his objection to the motion to adopt the
proposed CS to HB 110, Version H. There being no further
objection, Version H was before the committee.
6:20:18 PM
CHAIR CARPENTER announced that HB 110 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB110CS(WAM)-DOR-PFD-3-1-24.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 110 |
| HB110CS(WAM)-DOR-APFC-01-10-24.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 110 |
| HB 266.Version B.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 266 |
| HB 266.SponsorStatement.Version B.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 266 |
| HB 266.SectionalAnalysis.VersionB.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 266 |
| HB 266 Backup.LFD Fiscal Modeling 2024.03.02..pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 266 |
| HB 266 House Ways and Means Presentation.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 266 |
| HB 266-DOR-PFD-3-1-24 Fiscal Note.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 266 |
| HB 266-DOR-APFC-3-1-24 Fiscal Note.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 266 |
| HJR009A.PDF |
HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| HJR 9 sponsor statement.pdf |
HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| HJR 9 sectional analysis.pdf |
HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| 2020-01-APFC-Resolution-POMV-Support.pdf |
HW&M 3/11/2023 9:00:00 AM HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| PF_TwoAccountgraphic.pdf |
HW&M 3/11/2023 9:00:00 AM HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| PF_singleaccount_graphic.pdf |
HW&M 3/11/2023 9:00:00 AM HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| 2003-05-APFC-Resolution-POMV.pdf |
HW&M 3/11/2023 9:00:00 AM HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| HJR009-OOG-DOE-3-1-24 Fiscal Note.pdf |
HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| CSHB 110 v.H.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 110 |
| HB 110 - New CS v. H vs. v. R Summary of changes.pdf |
HW&M 3/6/2024 6:00:00 PM |
HB 110 |