04/17/2016 09:30 AM House FINANCE

HOUSE BILL NO. 245                                                                                                            
                                                                                                                                
     "An  Act   relating  to  the  Alaska   permanent  fund;                                                                    
     relating  to  appropriations   to  the  dividend  fund;                                                                    
     relating  to  income  of  the  Alaska  permanent  fund;                                                                    
     relating to  the earnings reserve account;  relating to                                                                    
     the Alaska  permanent fund dividend;  making conforming                                                                    
     amendments; and providing for an effective date."                                                                          
                                                                                                                                
Co-Chair  Neuman  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute    for   HB    245,   Work    Draft   29-GH2859\N                                                                    
(Wallace/Martin, 4/16/16). There being  NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
10:51:46 AM                                                                                                                   
                                                                                                                                
JANE   PIERSON,   STAFF,  REPRESENTATIVE   STEVE   THOMPSON,                                                                    
reviewed the  changes in  the work  draft from  the previous                                                                    
version. She read the prepared sectional analysis:                                                                              
                                                                                                                                
     Sec. 1:                                                                                                                    
     3 year Reevaluation                                                                                                        
                                                                                                                                
     Sec. 2: AS 36.30.015:                                                                                                      
     Alaska Permanent  Fund Corporation  procurement. Alaska                                                                    
     Permanent   Fund   Corporation   can  adopt   its   own                                                                    
     procurement procedures, as long  as they are similar to                                                                    
     State procurement codes                                                                                                    
                                                                                                                                
     Sec. 3: AS 36.30.990(l):                                                                                                   
     Adds Alaska  Permanent Fund Corporation to  the list of                                                                    
     those   exempt  from   State   of  Alaska   procurement                                                                    
     requirements.                                                                                                              
                                                                                                                                
     Sec. 4: AS 37.05.540(d):                                                                                                   
     Tells the  Alaska Permanent Fund Corporation  to manage                                                                    
     and invest assets of the Constitutional Budget Reserve                                                                     
                                                                                                                                
     Sec. 5: AS 37.05.565(a):                                                                                                   
     Amerada  Hess money  no longer  flows into  the Capital                                                                    
     Income Fund                                                                                                                
                                                                                                                                
     Sec. 6: AS 37.10.430(a):                                                                                                   
     Alaska   Permanent   Fund  Corporation   shall   manage                                                                    
     Constitutional  Budget Reserve  funds by  the effective                                                                    
     date 7/1/17                                                                                                                
                                                                                                                                
     Sec. 7: AS 37.10.430(b):                                                                                                   
     Report   by  Alaska   Permanent  Fund   Corporation  to                                                                    
     legislature re: Constitutional Budget Reserve                                                                              
                                                                                                                                
     Sec. 8: AS 37.13.010:                                                                                                      
     Dedicated deposits  of royalties to the  Permanent Fund                                                                    
     are reduced  from the current  25/50 split in  old/ new                                                                    
    leases to the constitutional minimum of 25 percent                                                                          
                                                                                                                                
     Sec. 9: AS 37.13.140(a):                                                                                                   
     Requires  the  Alaska  Permanent  Fund  Corporation  to                                                                    
     determine  the  net  income  of  the  Earnings  Reserve                                                                    
     Account and excludes unrealized gains or losses                                                                            
                                                                                                                                
     Sec. 10: AS 37.13.140:                                                                                                     
     Defines Percent of Market Value  payout at 5.25 percent                                                                    
     of the  average year-end  market value  of the  ERA for                                                                    
     the first  5 of the most  recent 6 years of  the payout                                                                    
     may  not exceed  the year-end  balance of  the Earnings                                                                    
     Reserve Account                                                                                                            
     (c) Volatility provision                                                                                                   
                                                                                                                                
     Sec. 11:                                                                                                                   
     Inflation Proofing                                                                                                         
                                                                                                                                
     Sec. 12: AS 37.13.446:                                                                                                     
     Dividends  are  comprised of  20  percent  of the  5.25                                                                    
     percent Percent  of Market  Value ,  and 20  percent of                                                                    
     the  prior year's  royalties, excludes  those dedicated                                                                    
     to the Permanent Fund or  School Fund (25.5 percent are                                                                    
     dedicated)                                                                                                                 
                                                                                                                                
     Sec. 13: AS 37.13.206(a):                                                                                                  
     Conforming to new procurement                                                                                              
                                                                                                                                
     Sec. 14: AS 37.13.300(c):                                                                                                  
     Mental Health  Trust Fund  may not  be included  in the                                                                    
     computation  of  the  available  income  available  for                                                                    
     distribution under the Percent of Market Value                                                                             
                                                                                                                                
     Sec. 15: AS 37.14.031 (c):                                                                                                 
     Makes computation  of the AK  Mental Health  Trust Fund                                                                    
     income consistent with computation of other PF income                                                                      
                                                                                                                                
     Sec. 16: AS 43.23.025 (a):                                                                                                 
     Transfer  of money  to the  Dividend  Fund requires  an                                                                    
     appropriation                                                                                                              
                                                                                                                                
     Sec. 17: AS 43.23.025 (a):                                                                                                 
     The amount  of each Permanent Fund  Dividend for fiscal                                                                    
     years 2017, 2018, and 2019 shall be $1,000                                                                                 
                                                                                                                                
     Sec. 18: AS 43.23.045 (a):                                                                                                 
     Conforms to Sec. 12 which  moves dollars to dividend by                                                                    
     appropriation.                                                                                                             
                                                                                                                                
     Sec. 19:                                                                                                                   
     Once the money is in  the Dividend Fund, the Department                                                                    
     of  Revenue   shall  annually  pay   dividends  without                                                                    
     further appropriation.                                                                                                     
                                                                                                                                
     Sec. 20:                                                                                                                   
     Repealers:                                                                                                                 
     AS 37.10.430 (c) Subaccount of CBR,                                                                                        
     AS  37.13.145  (b)  Dividend  based  on  statutory  net                                                                    
     income,                                                                                                                    
     AS 37.13.145 (c) Inflation proofing,                                                                                       
     AS 37.13.145 (d) Amerada Hess                                                                                              
                                                                                                                                
     Sec. 21:                                                                                                                   
     Repeals corresponding Session Law                                                                                          
                                                                                                                                
     Sec. 22:                                                                                                                   
     Repeals $1000 dividend; Dividend goes to formula                                                                           
                                                                                                                                
     Sec. 23:                                                                                                                   
     Transition language RE: Regulations and policies                                                                           
     adopted by Commissioner of the Dept. of Revenue and                                                                        
     Permanent Fund Corporation                                                                                                 
                                                                                                                                
     Sec. 24:                                                                                                                   
     Retroactivity clause                                                                                                       
                                                                                                                                
     Sec. 25:                                                                                                                   
     Immediate effective date                                                                                                   
                                                                                                                                
     Sec. 26:                                                                                                                   
     Effective date July 1, 2017                                                                                                
                                                                                                                                
     Sec. 27:                                                                                                                   
     Effective date of July 1 2016                                                                                              
                                                                                                                                
HB 245 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Thompson recessed the meeting to a call of the                                                                         
chair [Note: the meeting never reconvened].