Legislature(2025 - 2026)SENATE FINANCE 532
04/24/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SJR14 | |
| HB53 || HB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 14 | TELECONFERENCED | |
| *+ | HB 53 | TELECONFERENCED | |
| *+ | HB 55 | TELECONFERENCED | |
SENATE JOINT RESOLUTION NO. 14
Proposing amendments to the Constitution of the State
of Alaska relating to the Alaska permanent fund and to
appropriations from the Alaska permanent fund.
9:13:43 AM
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION
(LFD) introduced himself.
CONOR BELL, ANALYST, LEGISLATIVE FINANCE DIVISION,
introduced himself.
Mr. Painter discussed, "SJR 14 Amendment Modeling" (copy on
file). He pointed to slide 2, "Probabilistic Modeling":
• LFD has two versions of the fiscal model: a linear
model which assumes that revenue matches DOR's
forecast, and a probabilistic model that shows the
impact of revenue volatility
• These probabilistic model allows for variation in
two variables:
Oil prices (using a range centered around DOR's
forecast), which impacts Permanent Fund royalty
deposits
Permanent Fund investment returns (using the
ranges developed by Callan for APFC)
• Median cases using probabilistic models are
typically lower than the linear model
• These scenarios assume no ERA Overdraws
9:15:17 AM
Mr. Bell addressed slide 3, "Modeled Scenarios":
Scenarios with POMV Draw formula change beginning
FY28
Retain 5-year average of total Permanent Fund
value, but vary draw percentage between 4.5
percent and 5.5 percent
Retain 5.0 percent draw percentage, but vary from
3 to 7-year average of total Permanent Fund value
Scenarios with POMV Draw formula change beginning
FY26
Step Down: 5 percent draw in FY26-27, 4.875
percent FY28-29, 4.75 percent FY30-FY31, 4.625
percent FY32-33, 4.5 percent FY34-35
5.5 percent draw in FY26-FY28 and FY31-33, 5
percent draw in FY29-30 and FY34-35
5 percent draw in FY26-FY28 and FY31-33, 4.5
percent draw in FY29-30 and FY34-35
5 percent draw, except 5.5 percent draw if 5
percent nominal draw amount would be lower than
prior year
4.5 percent draw, except 5 percent draw if 4.5
percent nominal draw amount would be lower than
prior year
Mr. Bell discussed slide 4, "Status Quo POMV Formula with
No Overdraws
9:20:57 AM
Senator Kiehl asked whether the numbers were nominal
dollars or whether they had been adjusted for inflation.
Mr. Bell stated that they were nominal dollars, and none of
the numbers in the presentation had been adjusted for
inflation.
Mr. Bell pointed to slide 5, "Delta from Status Quo to 6
Year Average Beginning FY28
Mr. Bell looked at slide 6, "How Uncertain is the POMV
Amount from Year to Year?
9:24:56 AM
Mr. Bell addressed slide 7, "POMV Draw as Percentage of
Prior FY-End Total Perm Fund Balance
9:27:24 AM
Mr. Bell displayed slide 8, "Median POMV Draw Amount
Mr. Bell pointed to slide 9, "How Does the Median POMV Draw
Differ from the Status Quo Formula?
Mr. Bell addressed slide 10, "How Uncertain is the POMV
Amount from Year to Year?
9:31:13 AM
Mr. Bell discussed slide 11, "Longer-Term Impact of
Different Draw Rates on Perm Fund Balance
Mr. Bell looked at slide 12, "Longer-Term Impact of
Different Draw Rates on POMV Draw
Mr. Painter shared that there the draw rate and averages
were the focus of the presentation.
9:36:21 AM
Co-Chair Stedman recalled that the consultants had varied
the percentages of the rate throughout the years.
Mr. Painter remarked that drawing more or less would adjust
the portfolio of risk tolerance.
Senator Kaufman wondered whether the modeling was randomly
distributed.
Mr. Painter replied that the model was distributed
randomly.
Mr. Bell furthered that there was an assumption of the
returns year after year was uncorrelated on the return in
the following year.
SJR 14 was HEARD and HELD in committee for further
consideration.
9:40:42 AM
AT EASE
9:43:00 AM
RECONVENED