Legislature(2017 - 2018)SENATE FINANCE 532
04/23/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB147 | |
| HB176 | |
| HB213 | |
| HB216 | |
| HB267 | |
| HB400 | |
| HB212 | |
| HB216 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 147 | TELECONFERENCED | |
| += | HB 176 | TELECONFERENCED | |
| += | HB 213 | TELECONFERENCED | |
| += | HB 216 | TELECONFERENCED | |
| += | HB 267 | TELECONFERENCED | |
| += | HB 400 | TELECONFERENCED | |
| + | HB 212 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR HOUSE BILL NO. 213(FIN)(efd fld)
"An Act relating to the investment, appropriation, and
administration of the public school trust fund."
9:15:20 AM
Co-Chair MacKinnon discussed a brief history of the bill.
The public hearing had been opened and closed.
Vice-Chair Bishop MOVED to ADOPT proposed committee
substitute for CSHB 213(FIN), Work Draft 30-LS0765\T
(Wallace, 4/18/18).
Co-Chair MacKinnon OBJECTED for discussion.
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, explained that
the CS reflected one change to the bill that could be found
on Page 2, line 23, where the percentage had been update to
5 percent.
ALEXEI PAINTER, LEGISLATIVE FINANCE, stated that the impact
of the bill would be to increase the draw by approximately
$1.4 million in FY 19, which was in the general range of
POMV draws.
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, it was so ordered.
MIKE BARNHILL, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE,
concurred with the change to the bill as described by the
previous testifiers.
Co-Chair MacKinnon asked whether
Mr. Barnhill answered in the affirmative.
9:18:34 AM
Senator Olson queried the lifespan of the corpus of the
Public School Trust Fund.
Mr. Barnhill replied that the trust was intended to be of
indefinite duration. The trust would last forever if it was
managed appropriately, which meant maintaining the
inflation adjusted value of deposits. He assured the
committee that the trust had a substantial financial
cushion at $650 million and a 5 percent draw over the next
10 years should not reduce the cushion below the inflation
adjusted value of the fund.
9:20:20 AM
Senator Olson asked whether the same would be true when
considering the legislature's penchant for spending.
Mr. Barnhill thought that the legislature had multiple sets
of stakeholders to which it was responsible. He believed
that in the end the legislative process resulted in prudent
expenditures, particularly in the case of trust funds. He
relayed that there were fiduciary duties that applied to
the fund and he felt that it would be unlikely that the
legislature would intentionally overspend from a fund for
which fiduciary duties applied.
9:21:10 AM
Senator Stevens asked whether the department would always
have a better turnover on investments than the APFC.
Mr. Barnhill answered in the negative. He spoke highly of
the investment management staff at APFC and at the
Department of Revenue. He stated that you could beat the
market some of the time, but it was unlikely that you could
beat it all the time. He said that the challenge of all
investment professionals was to stay ahead of the game as
much as possible but sometimes the challenges could be
insurmountable.
Co-Chair MacKinnon asked Mr. Barnhill to explain the
revenue stream that went to the Public School Trust Fund.
Mr. Barnhill elaborated that there was a 1 percent revenue
stream that was dedicated to the fund by statute. He
elaborated that the revenue stream had come in annually
since 1978, which had contributed to the sizeable balance.
Co-Chair MacKinnon added that it had been difficult to
calculate income from the fund and to anticipate what could
be used in any given budget. She said that the method in
the bill would provide a clear path for the legislature to
understand the funds available and the "up to" amount.
9:23:30 AM
REPRESENTATIVE JUSTIN PARISH, SPONSOR, stated that the bill
would modernize the Public School Trust Fund by bringing it
up to the current standard to allow a larger sustainable
draw and a high rate of earnings.
Co-Chair MacKinnon asked whether the sponsor wanted to
speak to the changes in the cs.
Representative Parish commented that the change fell within
the industry standard.
9:24:54 AM
Vice-Chair Bishop MOVED to report SCS CSHB 213(FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
SCS CSHB 213(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new zero fiscal note from
the Department of Education and Early Development, one new
fiscal impact note for the Department of Education and
Early Development from the Senate Finance Committee, and
one previously published fiscal impact note from the
Department of Education and Early Development.
9:25:18 AM
AT EASE
9:27:06 AM
RECONVENED