04/19/2023 01:30 PM Senate FINANCE

SENATE BILL NO. 107                                                                                                           
                                                                                                                                
     "An  Act   relating  to  the  Alaska   permanent  fund;                                                                    
     relating  to  income  of  the  Alaska  permanent  fund;                                                                    
     relating to the amount  available for appropriation and                                                                    
     appropriations  from  the   earnings  reserve  account;                                                                    
     relating to the permanent  fund dividend; and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
2:20:36 PM                                                                                                                    
                                                                                                                                
Co-Chair  Olson  noted  that  SB 107  had  been  before  the                                                                    
committee  several times.  He noted  that the  committee had                                                                    
adopted a Committee Substitute (CS).                                                                                            
                                                                                                                                
KEN  ALPER, STAFF,  SENATOR DONNY  OLSON, reminded  that the                                                                    
committee had adopted a CS  (version P) the previous Monday.                                                                    
He explained that the bill was  intended to set the split of                                                                    
the  annual percent  of market  value (POMV)  draw from  the                                                                    
Permanent Fund including the size  and portion that would go                                                                    
towards paying  PFDs in the  future. He noted that  the bill                                                                    
would  not affect  the current  year's PFD  that was  in the                                                                    
budget  cycle.  The  effective  date of  the  bill  was  the                                                                    
following year. The core sections  of the bill would set the                                                                    
PFD at the  75/25 level, which signified that  75 percent of                                                                    
the  POMV draw  would  be available  for general  government                                                                    
spending, and  25 percent of  the bill (about  $880 million)                                                                    
would pay  the annual PFD.  The PFD would be  roughly $1,300                                                                    
given the average number of annual applicants.                                                                                  
                                                                                                                                
Mr. Alper  continued and described  a "trigger" in  the bill                                                                    
that would  change the formula  to revert to a  50/50 ratio.                                                                    
The  CS  had  changed   the  trigger,  which  was  currently                                                                    
comprised  of two  factors. The  action  required a  certain                                                                    
amount  of  new revenue,  equal  to  $1.3 billion  per  year                                                                    
passed through  new legislation  passed after  January 2023.                                                                    
The second condition  was a savings minimum  of $3.5 billion                                                                    
in the  CBR, which  had an  inflation provision  starting in                                                                    
2025.  If both  conditions  were  met by  2031  and met  the                                                                    
required written  agreement of the DOR  commissioner and LFD                                                                    
director, the PFD would go to the 50/50 amount.                                                                                 
                                                                                                                                
Co-Chair  Hoffman  MOVED  to report  CSSB  107(FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
CSSB 107(FIN) was  REPORTED out of committee  with three "no                                                                    
recommendation"  recommendations  and  with  two  "do  pass"                                                                    
recommendations  and with  one  "amend" recommendation,  and                                                                    
one new fiscal impact note from the Department of Revenue.                                                                      
                                                                                                                                
2:24:31 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:30:44 PM                                                                                                                    
RECONVENED