02/29/2024 03:00 PM House STATE AFFAIRS

           HB 245-DIR DEPOSIT PFD IN INVESTMENT ACCT                                                                        
                                                                                                                                
3:05:13 PM                                                                                                                    
                                                                                                                                
CHAIR SHAW  announced that the  first order of business  would be                                                               
HOUSE  BILL NO.  245, "An  Act relating  to depositing  permanent                                                               
fund  dividends into  investment accounts;  and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
3:05:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAN  SADDLER, Alaska  State Legislature,  as prime                                                               
sponsor,  paraphrased  his  sponsor statement  [included  in  the                                                               
committee packet],  which read  as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     House  Bill  245  would give  Alaskans  the  option  to                                                                    
     simply and  easily direct all  or part of  their annual                                                                    
     Permanent Fund dividends  into investment accounts, and                                                                    
     make  it  easier  for  them  to  build  their  personal                                                                    
     financial security.  Much as the popular  "Pick. Click.                                                                    
     Give."  program  lets Alaskans  check  a  box on  their                                                                    
     dividend  application  to  direct money  to  their  own                                                                    
     favorite  charities,  "Pick.  Click. Save."  would  let                                                                    
     Alaskans   direct  money   to   their  own   investment                                                                    
     accounts,  such   as  Individual   Retirement  Accounts                                                                    
     (IRAs)  or  401(k)  accounts.   Making  it  easier  for                                                                    
     Alaskans  to  put money  aside  today  to grow  through                                                                    
     compound  interest  and  capital appreciation  for  the                                                                    
     future can make them  more financially independent, and                                                                    
     less  dependent  on potentially  unreliable  government                                                                    
     benefits.  Currently,  a  person   filling  out  a  PFD                                                                    
     application has  the option  to direct  all or  part of                                                                    
     their dividend to a  checking account, savings account,                                                                    
     529 education savings  account, education raffle ticket                                                                    
     or,  through  "Pick.  Click.  Give.,"  any  of  several                                                                    
     charities.  HB  245  would   expand  those  options  to                                                                    
     include  direct  deposit  into an  existing  investment                                                                    
     account,  eliminating  the   necessity  of  waiting  to                                                                    
     receive  the   dividend,  then   having  to   take  the                                                                    
     additional  step of  contributing it  to an  investment                                                                    
     account. It's  important to note  that HB 245  does not                                                                    
     seek to  address any high-level policy  questions about                                                                    
     the Permanent  Fund, such as  how dividend  amounts are                                                                    
     calculated,  how  the  Fund is  invested,  whether  its                                                                    
     principal and  reserve accounts should be  combined, or                                                                    
     anything  else.  It simply  would  make  it easier  for                                                                    
     Alaskans to invest  the dividends they do  receive in a                                                                    
     way  that   will  benefit  their   personal,  long-term                                                                    
     financial health.  Pick. Click.  Save. is a  modest but                                                                    
     important way  we can help  Alaskans along  the journey                                                                    
     to economic independence.                                                                                                  
                                                                                                                                
3:08:37 PM                                                                                                                    
                                                                                                                                
MELODIE  WILTERDINK, Staff,  Representative  Dan Saddler,  Alaska                                                               
State  Legislature, on  behalf of  Representative Saddler,  prime                                                               
sponsor, provided  a sectional  analysis of  HB 245  [included in                                                               
the   committee  packet],   which  read   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Section 1, Page 1, Lines 4-14  & Page 2, Line 1 Section                                                                    
     1 of  HB 245 amends AS  43.23 by adding a  new section,                                                                    
     AS 43.23.058, which has three subsections.                                                                                 
     Subsection (a)  states that a recipient  of a permanent                                                                    
     fund dividend  may direct  the Permanent  Fund Division                                                                    
     to  deposit  all  or  part of  that  dividend  into  an                                                                    
     investment account.                                                                                                        
     Subsection  (b) directs  the Department  of Revenue  to                                                                    
     design  the  permanent  fund  dividend  application  to                                                                    
     allow direct  deposits into investment accounts  and to                                                                    
     request  any   information  from   dividend  applicants                                                                    
     needed to make those deposits.                                                                                             
     Subsection  (c)  stipulates   that  the  Department  of                                                                    
     Revenue may  not use  money from  the dividend  fund to                                                                    
     cover  the administrative  costs  of implementing  this                                                                    
     Act.                                                                                                                       
                                                                                                                                
     Section 2, Page 2, Line 2                                                                                                  
     Section 2 provides for an effective date of January 1,                                                                     
     2025.                                                                                                                      
                                                                                                                                
3:10:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY asked about the administrative costs.                                                                      
                                                                                                                                
3:10:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE     SADDLER    explained     that    while     the                                                               
"Pick.Click.Give."     collects     an    administrative     fee,                                                               
"Pick.Click.Save." would  have no  fee.   He referenced  the zero                                                               
fiscal note.                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY  asked for  an explanation  for the  lack of                                                               
fees.                                                                                                                           
                                                                                                                                
REPRESENTATIVE SADDLER  explained that  setting up one  extra box                                                               
on  the online  application  would  create little  administrative                                                               
impact.                                                                                                                         
                                                                                                                                
3:12:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CARRICK asked for  more specificity concerning the                                                               
types of accounts that can be utilized.                                                                                         
                                                                                                                                
REPRESENTATIVE SADDLER answered that  while HB 245 was envisioned                                                               
to encourage  Alaskans to contribute  to retirement  accounts, it                                                               
is not  limited to retirement  accounts and  can be put  into any                                                               
long-term  investing account  including money-marketing  accounts                                                               
or crypto currencies.                                                                                                           
                                                                                                                                
REPRESENTATIVE  CARRICK asked  if the  investment accounts  would                                                               
need  to be  established  by the  permanent  fund dividend  (PFD)                                                               
recipient.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  SADDLER  affirmed  that the  investment  accounts                                                               
would be set up by the  constituent separately.  He noted that in                                                               
an earlier  iteration of the  bill that  there would have  been a                                                               
requirement to  enroll in a  state sponsored  investment account.                                                               
The current version of HB 245  imposes no obligation on the state                                                               
to set up accounts.                                                                                                             
                                                                                                                                
REPRESENTATIVE CARRICK asked if there  is wisdom in narrowing the                                                               
language  to   "retirement  accounts"  to  deter   Alaskans  from                                                               
utilizing predatory accounts.                                                                                                   
                                                                                                                                
REPRESENTATIVE SADDLER explained that  autonomy should be granted                                                               
for citizens  to determine  their own  investment decisions.   He                                                               
made  note   of  his  personal  views   on  long-term  retirement                                                               
accounts.                                                                                                                       
                                                                                                                                
CHAIR SHAW  made a comment about  using the PFD as  an investment                                                               
opportunity.                                                                                                                    
                                                                                                                                
3:16:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CARPENTER asked if the extra box is necessary.                                                                   
                                                                                                                                
REPRESENTATIVE SADDLER  said HB 245 creates  an additional option                                                               
for  direct  deposit  of  the  PFD  into  a  personal  investment                                                               
account.  He  recollected opportunities in the  past for Alaskans                                                               
to buy shares of the permanent fund.                                                                                            
                                                                                                                                
REPRESENTATIVE CARPENTER  asked why it  is necessary for  the PFD                                                               
online application to indicate a separate box for investing.                                                                    
                                                                                                                                
3:18:08 PM                                                                                                                    
                                                                                                                                
MS.  WILTERDINK answered  that the  types of  accounts, including                                                               
checking, savings, and investment  accounts, must be indicated to                                                               
prevent technical errors.                                                                                                       
                                                                                                                                
REPRESENTATIVE CARPENTER asked for  confirmation that the changes                                                               
to  the application  would be  minor  enough to  not incur  extra                                                               
costs.                                                                                                                          
                                                                                                                                
MS. WILTERDINK  reiterated that the  bill received a  zero fiscal                                                               
note.    Small changes  made  to  the  PFD application  would  be                                                               
absorbed.                                                                                                                       
                                                                                                                                
CHAIR  SHAW  commented  about  using the  PFD  for  college  fund                                                               
accounts.                                                                                                                       
                                                                                                                                
3:20:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER commented about the Alaska 529 plan.                                                                     
                                                                                                                                
3:21:26 PM                                                                                                                    
                                                                                                                                
CHAIR SHAW announced that HB 245 was held over.