Legislature(2003 - 2004)
04/14/2004 01:55 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 553
An Act relating to investments of the Alaska permanent
fund and to the income of and appropriations from the
Alaska permanent fund and making conforming amendments;
relating to the determination of net income of the
mental health trust fund; and providing for an
effective date.
PETE ECKLUND, STAFF TO REPRESENTATIVE WILLIAMS, observed
that the legislation is similar to HB 298, which was
previously moved from Committee. He discussed differences
between HB 298 and HB 553. He observed that Section 3 of HB
553 directs the Alaska Permanent Fund Corporation to use the
prudent-investor rule while investing that value of the Fund
in excess of principal.
BOB BARTHOLOMEW, CHIEF OPERATING OFFICER, ALASKA PERMANENT
FUND CORPORATION, DEPARTMENT OF REVENUE, further explained
that statutory directions regarding how money in excess of
principal is invested would be repealed. The statutory list
of allowed investments would apply. The authority of how to
invest the balance in excess of principal is currently in AS
37.13.145, which is being repealed. A portion of AS
37.13.145 would be brought into HB 553: (a) This section
applies to investment of fund principal and all other
amounts in the fund
Mr. Ecklund noted that the Committee might want to change
"general fund" to "public education" on line 20, page 3. He
further explained that the cost of operating the Corporation
would before the split occurred. Then not more than 50
percent could be to the General Fund [subsequently amended
by the Committee to read: "public education"] and not more
than 50 percent could be appropriated for dividends.
Section 5 is the same as HB 298.
Mr. Ecklund discussed page 4, lines 1 and 2. He noted that
the section is basically the same as language contained in
HB 298, with the exception of the: The revenue generated by
the fund's investments must be identified as the source of
the operating budget of the corporation and shall be
included in the state's operating budget under AS 37.07.
The only other difference from HB 298 was on page 5:
disclose the amount of each dividend attributable to [INCOME
EARNED BY THE PERMANENT FUND FROM] appropriations to the
permanent fund.
Representative Hawker MOVED to delete "general fund" and
insert "public education" on line 20, page 3, in order to
conform to HB 298. There being NO OBJECTION, it was so
ordered.
Mr. Ecklund noted that the effective date might need to be
changed to June 30, 2005. Co-Chair Williams noted that it
could be changed on the House Floor if necessary.
Co-Chair Harris MOVED to report HB 553 out of Committee with
the accompanying fiscal note. There being NO OBJECTION, it
was so ordered.
CSHB 553(FIN) was REPORTED out of Committee with individual
recommendations and no fiscal impact notes.
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