Legislature(2023 - 2024)DAVIS 106
03/11/2023 09:00 AM House WAYS & MEANS
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| Audio | Topic |
|---|---|
| Start | |
| HJR9 | |
| HJR9|| HJR8|| HJR7|| HB90|| HB72 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HJR 2 | TELECONFERENCED | |
| + | HB 38 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 72 | TELECONFERENCED | |
| += | HB 90 | TELECONFERENCED | |
| += | HJR 7 | TELECONFERENCED | |
| += | HJR 8 | TELECONFERENCED | |
| *+ | HJR 9 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS
March 11, 2023
9:02 a.m.
MEMBERS PRESENT
Representative Ben Carpenter, Chair
Representative Kevin McCabe, Vice Chair
Representative Jamie Allard
Representative Tom McKay
Representative Cathy Tilton
Representative Cliff Groh
MEMBERS ABSENT
Representative Andrew Gray
OTHER LEGISLATORS PRESENT
Representative Jesse Sumner
Representative Craig Johnson
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 9
Proposing amendments to the Constitution of the State of Alaska
relating to the Alaska permanent fund and to appropriations from
the Alaska permanent fund.
- HEARD & HELD
HOUSE JOINT RESOLUTION NO. 8
Proposing amendments to the Constitution of the State of Alaska
relating to the Alaska permanent fund and appropriations from
the Alaska permanent fund.
- HEARD & HELD
HOUSE JOINT RESOLUTION NO. 7
Proposing amendments to the Constitution of the State of Alaska
requiring payment of a dividend to eligible state residents.
- HEARD & HELD
HOUSE BILL NO. 90
"An Act relating to income of the Alaska permanent fund and the
amount available for appropriation; relating to appropriations
from the earnings reserve account; relating to the amount of the
permanent fund dividend; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 72
"An Act relating to use of income of the Alaska permanent fund;
relating to the amount of the permanent fund dividend; relating
to the duties of the commissioner of revenue; and providing for
an effective date."
- HEARD & HELD
HOUSE JOINT RESOLUTION NO. 2
Proposing amendments to the Constitution of the State of Alaska
relating to an appropriation limit.
- BILL HEARING CANCELED
HOUSE BILL NO. 38
"An Act relating to an appropriation limit; relating to the
budget responsibilities of the governor; and providing for an
effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HJR 9
SHORT TITLE: CONST AM: PERMANENT FUND; POMV;EARNINGS
SPONSOR(s): REPRESENTATIVE(s) GROH
03/06/23 (H) READ THE FIRST TIME - REFERRALS
03/06/23 (H) W&M, JUD
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
BILL: HJR 8
SHORT TITLE: CONST AM: GUARANTEE PERM FUND DIVIDEND
SPONSOR(s): WAYS & MEANS
03/01/23 (H) READ THE FIRST TIME - REFERRALS
03/01/23 (H) W&M, JUD
03/06/23 (H) W&M AT 6:00 PM DAVIS 106
03/06/23 (H) Heard & Held
03/06/23 (H) MINUTE(W&M)
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
BILL: HJR 7
SHORT TITLE: CONST AM: PERMANENT FUND DIVIDEND
SPONSOR(s): WAYS & MEANS
03/01/23 (H) READ THE FIRST TIME - REFERRALS
03/01/23 (H) W&M, JUD
03/06/23 (H) W&M AT 6:00 PM DAVIS 106
03/06/23 (H) Heard & Held
03/06/23 (H) MINUTE(W&M)
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
BILL: HB 90
SHORT TITLE: PERMANENT FUND DIVIDEND; $1000 DIVIDEND
SPONSOR(s): FIELDS
03/01/23 (H) READ THE FIRST TIME - REFERRALS
03/01/23 (H) W&M, FIN
03/06/23 (H) W&M AT 6:00 PM DAVIS 106
03/06/23 (H) Heard & Held
03/06/23 (H) MINUTE(W&M)
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
BILL: HB 72
SHORT TITLE: PERMANENT FUND DIVIDEND; 75/25 POMV SPLIT
SPONSOR(s): ORTIZ
02/15/23 (H) READ THE FIRST TIME - REFERRALS
02/15/23 (H) W&M, FIN
03/01/23 (H) W&M AT 6:00 PM DAVIS 106
03/01/23 (H) Heard & Held
03/01/23 (H) MINUTE(W&M)
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
WITNESS REGISTER
CAMERON EBERSOLD, Staff
Representative Cliff Groh
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave the section analysis for HJR 9, on
behalf of Representative Groh, prime sponsor.
EMILY NAUMAN, Director
Legislative Legal Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Answered questions pertaining to HJR 9.
JOHN MILLER, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
ED MARTIN, representing self
Kenai, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
MISTY COLE, representing self
Nikiski, Alaska
POSITION STATEMENT: Testified in support of HJR 7 and HJR 8,
and in opposition to HJR 9, HB 72, and HB 90.
DONALD MITCHEL, representing self
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of HB 72 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
SARAH CAMPBELL, representing self
Ketchikan, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
MICHAEL GARHART, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
ANTONIA LENARD, representing self
Eagle River, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
BERT HOUGHTALING, representing self
Big Lake, Alaska
POSITION STATEMENT: Testified in support of HJR 8 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
SARANA SCHELL, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
JAMELIA SAIED, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
ROYAL KIEHL, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
RACHEL LORD, representing self
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 72 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
DIANNE HOLMES, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
JAN CONITZ, representing self
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
RANDY GRIFFIN, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
NICOLAS ABRAMCZYK, representing self
Palmer, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
PHILLIP TAFS, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
CANDY MILLER, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HJR 7 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
MICHAEL BUCY, representing self
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
GEORGE PIERCE, representing self
Kasilof, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
HAROLD BORBRIDGE, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
WILLY KEPPEL, representing self
Quinhagak, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
TIM WILKINS, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
PAULINE HESSING, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
LEONARD MILLER, representing self
Homer, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
LILA HENDERSON, representing self
Nikiski, Alaska
POSITION STATEMENT: Testified in opposition to HB 72 and HB 90
and in support of HJR 8, parts of HJR 7, and constitutionalizing
the PFD.
JAMES SQUYRES, representing self
Deltana, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
JEAN HOLT, representing self
Palmer, Alaska
POSITION STATEMENT: Testified in opposition to HB 72 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
GARY MCDONALD, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
RYAN BROUSSARD, representing self
Nikiski, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
LAURA HECKERT, representing self
Homer, Alaska
POSITION STATEMENT: Testified in support of HJR 7 and HJR 8
during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
WILLIAM REINER, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HJR 8 and in
opposition to HB 72, HB 90, HJR 7, and HJR 9.
JOEL SIGMAN, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HJR 7 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
SYBIL CURRY, representing self
Nikiski, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
ACTION NARRATIVE
9:02:00 AM
VICE CHAIR KEVIN MCCABE called the House Special Committee on
Ways and Means meeting to order at 9:02 AM. Representatives
McCabe, McKay, Tilton, Groh, Allard were present at the call to
order. Representative Carpenter arrived as the meeting was in
progress.
HJR 9-CONST AM: PERMANENT FUND; POMV;EARNINGS
9:03:10 AM
VICE CHAIR MCCABE announced that the first order of business
would be HOUSE JOINT RESOLUTION NO. 9, Proposing amendments to
the Constitution of the State of Alaska relating to the Alaska
permanent fund and to appropriations from the Alaska permanent
fund.
9:04:08 AM
The committee took an at-ease from 9:04 a.m. to 9:05 a.m.
9:05:27 AM
REPRESENTATIVE GROH, as prime sponsor of HJR 9, presented the
sponsor statement [included in the committee packet] which read
as follows [original punctuation provided]:
When the Permanent Fund was created, it was structured
as two accounts: the Principal and the Earnings
Reserve Account (ERA). The Alaska Constitution
prohibits the spending of the Principal without a vote
of the people. However, profits generated by the fund
are deposited into the ERA, which is entirely
available for the Legislature to appropriate and
spend. The current value of the ERA is approximately
$16 billion. Overdraw of the ERA depletes the value of
the entire Permanent Fund and leaves Alaska worse off.
In 2018 the Legislature adopted statutes that allow
appropriation up to an amount that maintains the
growth of the fund. This plan is commonly known as the
"Percent of Market Value" ("POMV") draw. Still, those
statutes do not stop the Legislature from passing
budgets that spend Permanent Fund earnings beyond than
those sustainable limits. This resolution would send a
proposed amendment to Alaska voters to enshrine this
policy in the constitution. The proposed
constitutional amendment would combine the Permanent
Fund Principal and the Permanent Fund Earnings Reserve
Account into a single constitutionally protected
account. Under this proposed amendment, the
Legislature would be allowed to appropriate each year
a maximum of five percent (5%) of the market value of
that new constitutionally safeguarded account as
calculated over the first five of the preceding six
fiscal years. Experts have told the Legislature that
these limits make that spending rate sustainable. The
Permanent Fund's Board of Trustees have recommended
this change since 2003, and this constitutional
amendment was also urged by the Fiscal Policy Working
Group, a bipartisan and bicameral group of legislators
that issued a report in 2021. This measure is not and
should not deal with the size of the Permanent Fund
Dividend or what specific percentage of this
appropriation is spent on state services. It neither
encourages nor prevents legislators from pursuing
those plans in the future. This merely prevents the
state from overspending our renewable financial
resource which ensures the permanence of our Permanent
Fund.
9:08:31 AM
CAMERON EBERSOLD, Staff, Representative Cliff Groh, Alaska State
Legislature, gave the sectional analysis for HJR 9, on behalf of
Representative Groh, prime sponsor. He explained that Section 1
would amend Article IX, Section 15(a) of the Constitution of the
State of Alaska. This would allow the income earned by the
Alaska Permanent Fund to be retained by the fund's sole account
created by Section 3. He said the only exceptions are detailed
in Section 2. He said Section 2 amends Article IX, Section 15
with two subsections. Subsection (b) would allow the
legislature, in each fiscal year, to appropriate from the fund
only up to 5 percent of the average market value of the fund
over the preceding six fiscal years. Subsection (c) would allow
the Permanent Fund to be used to pay costs associated with
investments. He explained that Section 3 would amend Article XV
with a new section, Section 30. This section proposes to
deposit the balance of the earnings reserve account (ERA) into
the principal, unifying the Permanent Fund into a single
account. It also specifies the proposed amendments would apply
to appropriations made during the fiscal year ending June 30,
2026, and after. He said Section 4 would place these amendments
before state voters at the next general election.
9:10:05 AM
REPRESENTATIVE MCKAY questioned the PFD payments, per the
proposed HJR 9.
REPRESENTATIVE GROH explained that the payouts would be done in
the same way as the legislature has been currently doing this,
in that the legislature votes, through powers granted in
Wielechowski v. State, 403 P.3d 1141 (2017). He said HJR 9 does
not address the permanent fund dividend (PFD), as this is a
separate issue the other measures address. He stated that while
many legislators do not see "eye-to-eye" on the exact PFD level,
HJR 9 would provide fiscal stability by preventing the
legislature from overspending. He stated that the proposed
resolution is a way to protect the Permanent Fund from being
overdrawn in the future.
9:11:47 AM
REPRESENTATIVE MCKAY suggested that the total value of the
Permanent Fund corpus is about $76 billion.
REPRESENTATIVE GROH expressed agreement, adding that it is
variable month to month. In response to a follow-up question,
he stated that ERA is more than $13 billion, as the $16 billion
figure is from last year's financial report.
REPRESENTATIVE MCKAY suggested that, if the corpus total is
added to ERA, there would be about $90 billion altogether.
Furthermore, a 5 percent [draw] of this would be about $4.5
billion.
REPRESENTATIVE GROH, concerning percentage draws, deferred the
CEO of the Alaska Permanent Fund Corporation. He reiterated
that the value of the fund changes from month to month, and even
day to day.
9:13:33 AM
VICE CHAIR MCCABE questioned the language on page 1, line 15 and
line 16 of the proposed resolution. He expressed the opinion
that language like the word "may" is unusual in a constitutional
amendment. He quoted from the line and opined that the language
would not really prescribe 5 percent. He posed that this is not
what the Fiscal Policy Working Group had said. He expressed the
understanding that the group had used the language "shall". He
questioned whether the use of "may" was intentional.
9:15:02 AM
EMILY NAUMAN, Director, Legislative Legal Services, Legislative
Affairs Agency, answered that the discussion between "may" or
"shall" is a policy decision. She said that Vice Chair McCabe
is correct in stating that the legislature "may appropriate not
more than 5 percent" would allow the legislature to appropriate
nothing or up to 5 percent. She suggested that there might be
policy reasons why less than 5 percent would be drawn off the
fund.
9:15:44 AM
REPRESENTATIVE ALLARD questioned the legal difference between
the words "may" and "shall".
MS. NAUMAN answered that "may" is permissive, as it allows the
legislature to do something; moreover, "shall" is a requirement,
as it would require the legislature to take certain action.
9:16:24 AM
REPRESENTATIVE GROH urged the committee to support HJR 9, as
these proposed changes are recommendations from the Fiscal
Policy Working Group. He said the intent of the resolution
would be to address the sustainability of the fund in the
future.
9:17:24 AM
REPRESENTATIVE ALLARD pointed out that using the word "may"
allows the legislature to "do what they want." She questioned
why the proposed legislation had been drafted with "may".
REPRESENTATIVE GROH replied that the intent was to have the 5
percent be a firm cap, and this allows for the legislature to
spend below or up to 5 percent. He deferred to Ms. Nauman to
further address the question.
9:18:24 AM
MS. NAUMAN concurred with Representative Groh, as the language
will allow the legislature to draw up to 5 percent each year, if
it so wishes. She reiterated that the resolution would allow
for draws under 5 percent.
REPRESENTATIVE ALLARD requested Representative Groh's opinion on
the language used in HJR 9. She expressed the opinion that
using the word "may" does not provide the same confidence as the
word "shall".
REPRESENTATIVE GROH reiterated that the legal interpretation of
the word "may" means the legislature "could" draw below and then
up to 5 percent. He reiterated that this language carries out
the policy of allowing legislative appropriations from the fund
of up to 5 percent.
9:19:57 AM
VICE CHAIR MCCABE asked if the intent is to have a 5 percent
cap.
REPRESENTATIVE GROH responded in the affirmative.
9:20:11 AM
MR. EBERSOLD addressed Representative Allard's question by
explaining that the amount of the PFD is different from the
appropriation from the Permanent Fund itself. He said that if
members wish to use language like "shall", this option is still
present. He expressed the opinion that, whatever the amount
withdrawn, HJR 9 would keep the Permanent Fund sustainable.
9:20:55 AM
REPRESENTATIVE GROH added that HJR 9 does not address levels for
PFDs, but rather addresses the amount of the draw from the
Permanent Fund itself.
[HJR 9 was treated as tabled and, following the at-ease, was
brought before the committee again with various other
legislation for the purpose of public testimony.]
9:21:26 AM
The committee took an at-ease from 9:21 a.m. to 9:22 a.m.
HJR 9-CONST AM: PERMANENT FUND; POMV;EARNINGS
HJR 8-CONST AM: GUARANTEE PERM FUND DIVIDEND
HJR 7-CONST AM: PERMANENT FUND DIVIDEND
HB 90-PERMANENT FUND DIVIDEND; $1000 DIVIDEND
HB 72-PERMANENT FUND DIVIDEND; 75/25 POMV SPLIT
9:22:23 AM
VICE CHAIR MCCABE announced that the next order of business
would be HOUSE JOINT RESOLUTION NO. 9, Proposing amendments to
the Constitution of the State of Alaska relating to the Alaska
permanent fund and to appropriations from the Alaska permanent
fund and HOUSE JOINT RESOLUTION NO. 8, Proposing amendments to
the Constitution of the State of Alaska relating to the Alaska
permanent fund and appropriations from the Alaska permanent fund
and HOUSE JOINT RESOLUTION NO. 7, Proposing amendments to the
Constitution of the State of Alaska requiring payment of a
dividend to eligible state residents and HOUSE BILL NO. 90, "An
Act relating to income of the Alaska permanent fund and the
amount available for appropriation; relating to appropriations
from the earnings reserve account; relating to the amount of the
permanent fund dividend; and providing for an effective date"
and HOUSE BILL NO. 72, "An Act relating to use of income of the
Alaska permanent fund; relating to the amount of the permanent
fund dividend; relating to the duties of the commissioner of
revenue; and providing for an effective date."
9:22:41 AM
VICE CHAIR MCCABE opened public testimony on HJR 9, HJR 8, HJR
7, HB 90, and HB 72.
9:24:01 AM
JOHN MILLER, representing self, expressed the support of
returning to the original PFD formula, and he expressed the
opinion that it has been successful for the last 35 years. He
said the process had been destroyed in 2016, and there has been
a major contention since. He offered his understanding that the
people feel betrayed because the legislature no longer has the
people's best interests in mind, as the Permanent Fund has been
used to pay back special interest groups and unions who fund
elections. He urged members to follow the law and the original
PFD formula. He warned that until the Permanent Fund is
returned to the original formula, there will be contention.
9:25:55 AM
ED MARTIN, representing self, shared that he has been a resident
of the state for over 50 years. He shared that a family member,
Ed Martin, Sr., was a lawmaker in 1999 and part of the "save the
dividend" campaign. He reminded the committee of the advisory
vote, in which the legislature was recommended to never touch
the PFD process established in 1982, which entails a full
statutory PFD. He suggested that some members of the committee
have voted for budgets which defy statute; furthermore, the
Alaska Supreme Court's actions have not mandated the legislature
can defy statute. He referred to the sponsor statement for HJR
7 [included in the committee packet], which states that draws
are sustainable. He opined that this statement was a lie. He
said, "No one in that room has a crystal ball." He expressed
the opinion that the $1,000 PFD proposed in HB 90 would be a
"slap in the face" to the people who own the resources, as well
as the investments and the return on the investments. He
expressed support for a Permanent Fund constitutional amendment.
9:28:27 AM
MISTY COLE, representing self, expressed support for HJR 7 and
HJR 8; however, she testified in opposition to HB 72, HB 90, and
HJR 9.
9:29:41 AM
DONALD MITCHEL, representing self, shared that he has lived in
Alaska for 51 years. He expressed the opinion there are many
benefits to living in Alaska, of which is having competent and
consistent government services without having to pay a state
tax; however, he expressed the opinion that things have changed,
as now funding for state services is inadequate or inconsistent.
He pointed out that the roads in his area are "horrible," the
Alaska Marine Highway System (AMHS) is unreliable, and funding
for state employees is difficult. He expressed the belief that
the structure of the PFD hurts the elections process because the
amount of the PFD is being used as a tool to pay for votes. He
argued that HB 72 would provide reliability and consistency to
state services and the PFD. He urged support for HB 72.
9:30:49 AM
SARAH CAMPBELL, representing self, shared that she is a public-
school teacher and has lived in Alaska for 48 years. She
expressed support of increasing the base student allocation
(BSA) and would like to see the state return to a defined
benefit retirement package for state employees; however, she
expressed the understanding that this would cost money. She
expressed support for fully funding state services and expressed
the opinion that HB 72 "seems fair," because Alaskans would get
a PFD, and there would be money for state services.
9:32:48 AM
MICHAEL GARHART, representing self, commented that, out of the
bills up for testimony, he only supports HJR 7. He expressed
the understanding that too much PFD money has been taken from
the public. He stated, since the 1990s, it was tracked that
$27.3 billion had been "stolen." He said that the legislature
has been questioned for 10 years, but answers were never given.
He argued that the state needs to follow the law.
9:33:48 AM
ANTONIA LENARD, representing self, pointed out the legalese in
the materials provided in the meeting. She suggested that the
Permanent Fund was originally intended to give the residents a
stake in Alaska's resources, and residents were supposed to be
paid out of the fund, and not have people profiting from the
fund. She suggested that the 75/25 percent of market value
(POMV) split should instead be 25/75. She expressed the idea
that state funding should go away because residents would have
enough money individually to carry out state services, like
building a school. She opined that anytime the legislature
seeks to draw from the fund, the draw should be put to a vote.
9:36:03 AM
BERT HOUGHTALING, representing self, stated that out of the
bills put forward at the meeting, only HJR 8 should be allowed
to move forward. He referred to the other bills and resolutions
as "putting lipstick on a pig" and giving the legislature more
control on the Permanent Fund. He explained that HJR 8 would
put the corpus into legislative control; however, combining the
corpus and the Permanent Fund would allow the legislators to
also have the corpus. He expressed support for HJR 7 because it
would formalize what has been in Alaska statute for the last
four decades. He pointed out that the Legislative Legal
Service's definition of "shall" and "may" might be the clinical
definition in a dictionary; however, it does not compare to the
definition provided in Wielechowski v. State. He expressed the
idea that the Alaska Supreme Court ruled that "shall" and "may"
have the exact same meaning.
9:39:01 AM
SARANA SCHELL, representing self, expressed support for the
sustainability of the Permanent Fund. She said that, while
large dividends are great, she supports a cap on the PFD because
this would help with the sustainability of the fund.
9:40:07 AM
JAMELIA SAIED, representing self, shared that she has been a
resident for 61 years. She said that the PFD has served a
valuable purpose; however, she expressed the opinion that it is
time for it to end and an income tax be reestablished. She
remarked that this does not seem to be politically possible, so
she offered her support to whichever bill proposes a smaller
PFD, such as [HJR 9]. She expressed the opinion that the state
should stay conservative, otherwise a full PFD would mean no
state services.
9:42:23 AM
ROYAL KIEHL, representing self, said he and his family have
lived in Alaska since 1974, when the state had levied an income
tax. He expressed the opinion that, without the intention to,
the state has turned into a welfare state, with every citizen
believing they cannot live without a PFD. He argued that the
state cannot afford to live up to the responsibility because of
the annual payouts, and he compared the PFD to an addiction.
For example, he stated that large PFDs have interfered with
quality education and adequate ferry service. He stated that
while it may be painful to give up the annual "money bombs," the
situation has gotten out of hand because people believe it is
their right to have unearned money. He suggested that the PFD
amount be reduced to $1000, with annual inflation increases. He
continued that the rest of the earnings should fund state
services. He suggested that, if HB 90 passes, so residents can
process the change, they should be given a year before it is
implemented.
9:44:46 AM
RACHEL LORD, representing self, testified in support of an
increased reliance on the Permanent Fund earnings to fund state
services, and she expressed support for HB 72. Regarding
raising broad-based revenues in the state, she echoed comments
that this would be the right way forward. She suggested that a
combination of income tax with a reduced PFD would also achieve
the effect. She said that in the Kenai Peninsula Borough,
citizens pay for the services via property and sales taxes, and
this funding goes toward schools, roads, and state troopers.
She spoke on economic development and said that businesses can
only thrive when there is stability in the public sector. She
expressed the opinion that things will not get better without
financial investment. She concluded by pointing out that
everyone benefits from state services.
9:46:59 AM
The committee took an at-ease from 9:46 a.m. to 9:49 a.m.
9:49:00 AM
VICE CHAIR MCCABE passed the gavel to Chair Carpenter.
9:49:31 AM
DIANNE HOLMES, representing self, echoed previous testimony
regarding the benefits everyone receives in untaxed services,
but she recognized that oil revenues are volatile. She
expressed the opinion that state services should always come
first. She pointed out that during the past few years the state
has had to face the COVID-19 pandemic, and now it must face
educational needs. She offered that, of the PFD plans before
the committee, a percentage split would impact services. She
stated that Alaska does not need larger PFDs if losing services
would be a result. She urged members to listen to the
economists and their advice that a 25/75 split would take away
from state services.
9:51:26 AM
JAN CONITZ, representing self, expressed concern about the
recent PFD debate, and the amount of time the legislature has
spent on the discussion. She said the PFD is symbolically a
"good thing;" however, she pointed out the decline of state
services, such as AMHS and public schools. She reiterated the
concern about the amount of time the legislature has taken
discussing the PFD; furthermore, she expressed the fear that the
state would go bankrupt trying to pay out high PFD payments.
She acknowledged that the Permanent Fund is symbolically good,
as it allows a sense of ownership to the residents, but it
should only be symbolic. She said the annual PFD debate crowds
out the discussion on other policies, such as education. She
further suggested better support for transportation, the
university system, economic development, care for seniors, and
care for people with disabilities. She expressed support for an
income tax.
9:54:50 AM
RANDY GRIFFIN, representing self, referenced HJR 7 and HJR 8, in
that the Permanent Fund has no place in the Constitution of the
State of Alaska. He acknowledged the thousands of dollars in
PFD payments that he has received; however, in 2014 he began
returning the check back to the state. He said he is against
enshrining the PFD into the state constitution, rather he
supports a dividend funded by surplus profits. He argued that,
if it is not funded by surplus profits, it is public assistance.
He reiterated that "hand-out" money should not be written into
the constitution. He expressed appreciation for the "free
money;" however, he stated that he will only collect a PFD if it
is based on a surplus.
9:57:23 AM
NICOLAS ABRAMCZYK, representing self, expressed the opinion that
the state had done a good thing when it initially established
the Permanent Fund; however, he advised members to look at the
economic context of Alaska in the 1980s, as the population was
about one-third of the population that it is today. He pointed
out that, in the last ten years, there have been economic
challenges which were not present in the 1980s. He continued
that, before enacting the proposed legislation, the members
should first examine the state's revenue streams.
9:59:01 AM
PHILLIP TAFS, representing self, shared that he is a small
business owner in Alaska with 28 employees. He expressed the
opinion that state services need to be funded first. While he
appreciates the PFD, he continued that large PFDs impact state
services. He expressed opposition to adding language to the
constitution which would make these proposals permanent. He
said that the state should maintain its flexibility in funding
programs. He said that as a small business owner he needs
consistency and the ability to plan without having every
legislative session bring fear. He expressed frustration from
having to wait until the last minute in August for a special
session and said this creates a difficult business environment.
He suggested that anyone who needs the PFD should rely on state
services more, which as a small business owner, would allow him
to grow his business.
10:01:55 AM
CANDY MILLER expressed support for HJR 7. She expressed the
opinion that money from the Permanent Fund should go to the
residents, and then there would be no concern on raising taxes
because the people will direct it.
10:05:12 AM
MICHAEL BUCY, representing self, shared that he has been a
resident of Alaska and has received a PFD since 1982. He said
he would support putting language into the constitution only if
it were to cap the PFD payout. He shared that he was
flabbergasted when the governor announced a $4,000 PFD, in
conjunction with no BSA increase. He stated that this prompted
him to rally at the capitol. He expressed appreciation for what
the PFD has done for his family, and he acknowledged that others
rely on the PFD; however, he suggested that the state needs
robust welfare funding instead. He opined that millionaires do
not need the PFD and should not receive it. He described the
function of government as doing economically what individuals
cannot do alone. He said that residents now are depending on
the government; however, the problem is not simply government,
it is bad government. He said that people are leaving Alaska
despite high PFDs. He suggested that this needs to be
addressed, and the PFD should no longer be the center of an
[annual] debate.
10:08:49 AM
GEORGE PIERCE expressed the opinion that the PFD should be
mandated in the Constitution of the State of Alaska, and, if the
state needs resources, the oil and gas companies should not
receive subsidies. He further suggested taxing individuals
coming to Alaska to conduct tourism. He advised that there are
other kinds of revenues to generate instead of allowing the
legislature to take it from "poor" Alaskans. He reiterated the
suggestion to raise taxes on the oil and gas companies.
10:11:13 AM
HAROLD BORBRIDGE, representing self, expressed the idea that the
public needs to realize every dollar the state receives is from
the people, whether it is paid with the people's resources or
the Permanent Fund's returns. He continued that every dollar
[the state] spends is either from oil resources or from the
Permanent Fund. He suggested that a simple handout be made to
the residents, along with an explanation of the sources of state
revenue.
10:12:46 AM
WILLY KEPPEL, representing self, urged members to follow state
statute and pay a full PFD. He suggested that baseline spending
be set at $4.2 billion so the state's tax and future revenues
could pay for state services. He reminded members that for many
years Alaskans have paid for special sessions. He recalled a
previous session where there was a testimony which related that
paying PFDs is not a problem because the state has the money.
He further recounted that prior to the Walker Administration,
money going toward PFDs had never gone through the legislature.
Continuing, he referenced the conversation in a past session
where Senator Lyman Hoffman had inquired why the legislature was
not following the law on PFDs, and the response had been that
the legislature does not have to follow the law. He reiterated
to members to pay a full PFD and cut spending.
10:16:08 AM
TIM WILKINS, representing self, agreed with the comments made by
Mr. Keppel. He recounted that in 2015 the Walker Administration
had moved to take 50 percent of everyone's PFD, and he expressed
his own disagreement with this action. He suggested that the
PFD be enshrined in the Constitution of the State of Alaska. He
said that the state of Alaska needs to balance its expenses and
urged that the money should be replaced in the Permanent Fund.
He expressed his support for the Dunleavy Administration.
10:18:18 AM
PAULINE HESSING, representing self, thanked the committee
members for the discussion; however, she expressed the opinion
that debates on the Permanent Fund is wasted time, as the
legislature should be debating more pressing matters. She
suggested that the PFD be capped at $1,000, and anything over
this should be given to the state to use for state services.
She pointed out there is no income tax in Alaska and suggested
that her idea would be like an income tax. She stated that
Permanent Fund earnings are not for the individual but are owned
by all Alaskans. She suggested that if the PFD was capped, it
would also be less of an enticement for people who have no money
to come to Alaska for "free money."
10:20:01 AM
The committee took a brief at-ease.
10:20:05 AM
CHAIR CARPENTER made comments regarding the committee's intent
to hear further public testimony.
10:21:47 AM
The committee took an at-ease from 10:21 a.m. to 10:31 a.m.
10:31:45 AM
LEONARD MILLER, representing self, stated that he could support
HJR 7 and HJR 8 but would need more information. He expressed
concern that, without research and legal understanding,
legislation which deals with the Permanent Fund is difficult to
understand, so it is hard for ordinary Alaskans to make an
informed decision. As far as what is fair, he said that
residents share the Permanent Fund's wealth, and this encourages
him to defend the principal of the Permanent Fund. Since a vast
majority of the residents do not have mineral rights in the
state, he expressed the opinion that the minerals should be part
of the residents' corporate royalties, as former Governor Jay
Hammond's vision was that Alaska residents would share in the
earnings so residents would stay engaged in limiting the growth
of government. He urged the members not to steal the residents'
royalties.
10:34:22 AM
LILA HENDERSON, representing self, disclosed that she is a
registered member of the Republican Party. She expressed
disagreement with HB 72 and HB 90 and expressed support for HJR
8 and parts of HJR 7. She continued that she is overall in
favor of constitutionalizing the PFD. She expressed the idea
that the state is taking more of the Permanent Fund each year
and opined that the people are entitled to their royalties. She
echoed Mr. Millers comments on this matter.
10:35:34 AM
JAMES SQUYRES, representing self, stated that he supports a full
statutory PFD. He pointed out that the public has testified for
many years for a full statutory PFD. He urged members to
remember the people who have testified in favor of the PFD in
the past. He argued that just because these people are not in
the room today, this should not take away from past testimony.
He said he does not support putting POMV in the Constitution of
the State of Alaska unless the earnings reserve account (ERA) is
rolled into the Permanent Fund. He questioned the difference
between statutory PFDs not previously paid, and refundable oil
and gas tax credits. He pointed out that rolling ERA into the
Permanent Fund would end PFD paybacks, of which he insisted are
still owed to residents in the state. He advised members to
repeal Senate Bill 26 [passed during the thirtieth Alaska State
Legislature], which he said put POMV into statute. He noted
that last year the administration had POMV in the budget, but
there was no effort to repeal Senate Bill 26. He argued that,
if Alaska wants to go back to the way it was with the PFD, this
bill will need to be repealed. He suggested that enacting POMV
is what put the "squeeze" on the funding for government
services.
10:37:56 AM
JEAN HOLT, representing self, testified in opposition to HB 72.
She stated the government has taken away freedoms, and the PFD
should be enshrined in the Constitution of the State of Alaska.
She further urged members not to "mess" with the PFD.
10:39:17 AM
The committee took a brief at-ease.
10:39:54 AM
GARY MCDONALD, representing self, stated that he supports the
regular PFD formula which Alaska had used for about 30 years.
10:41:12 AM
RYAN BROUSSARD, representing self, inquired about the number of
active military members who receive a PFD. He explained that in
boot camp he was told to go to Alaska, do a short tour, and
collect the PFD for the rest of his career. He said this
process is recommended to people, and he recounted that in
Virginia there were many Alaska license plates. He expressed
concern that many PFDs are going out of state, and out of the
country. He said that he and his family rely on the PFD, and
the statutory levels should be returned.
10:43:20 AM
The committee took an at-ease from 10:43 a.m. to 10:47 a.m.
10:47:57 AM
LAURA HECKERT, representing self, called for the passages of HJR
7 and HJR 8. She expressed support for going back to the
previous PFD distribution formula.
10:49:18 AM
The committee took an at-ease from 10:49 a.m. to 10:52 a.m.
10:52:09 AM
WILLIAM REINER, representing self, expressed support for HJR 8
and expressed disagreement with HB 72, HB 90, HJR 7, and HJR 9.
He highlighted that in HJR 9 "muddies the water." He shared
that he's been an Alaska resident since 1976 and was around for
the start of the PFD. He referred to the U.S. Supreme Court
case, Zobel v. Williams, 457 U.S. 55 (1982), and expressed
support for the court decision in this case. Regarding mineral
and gas royalties, he disclosed that he is not an Alaskan
Native, and because of the 1948 law, he is unable to access any
minerals, oil, or gas on his own property.
10:55:55 AM
JOEL SIGMAN, representing self, testified in support of HJR 7,
as he wants a full PFD. He expressed the opinion that the
legislature is stealing people's money and budgeting improperly
and all residents should get a full PFD. He urged members to
not take the money from the state's residents.
10:58:15 AM
SYBIL CURRY, representing self, shared that she has lived in
Alaska for 20 years and is a legal immigrant from a socialist
country. She further shared that she is a U.S. citizen, a law
enforcement veteran, and her grandparents are survivors of Nazi
Germany. She expressed the opinion that what is happening in
America is horrible, noting that several banks have crashed.
She said the people want an original statutorily determined PFD,
and she recommended that the PFD be enshrined in the
Constitution of the State of Alaska.
[HB 90, HB 72, HJR 9, HJR 8, and HJR 7 were held over.]
11:00:27 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Ways and Means meeting was adjourned at
11:00 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR009A.PDF |
HW&M 3/11/2023 9:00:00 AM |
HJR 9 |
| HJR 9 sponsor statement.pdf |
HW&M 3/11/2023 9:00:00 AM |
HJR 9 |
| HJR 9 sectional analysis.pdf |
HW&M 3/11/2023 9:00:00 AM |
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 |
| 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_singleaccount_graphic.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 |