Legislature(2019 - 2020)GRUENBERG 120
04/30/2019 03:00 PM House STATE AFFAIRS
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HJR 5-CONST. AM: STATE TAX; INTIATIVE HJR 6-CONST. AM.:PERMANENT FUND & DIVIDEND HJR 7-CONST AM:APPROP. LIMIT; RESERVE FUND 3:59:52 PM CO-CHAIR FIELDS announced that the next order of business would be HOUSE JOINT RESOLUTION NO. 5, Proposing amendments to the Constitution of the State of Alaska prohibiting the establishment of, or increase to, a state tax without the approval of the voters of the state; and relating to the initiative process and HOUSE JOINT RESOLUTION NO. 6, Proposing amendments to the Constitution of the State of Alaska relating to the Alaska permanent fund and the permanent fund dividend and HOUSE JOINT RESOLUTION NO. 7, Proposing amendments to the Constitution of the State of Alaska relating to an appropriation limit; relating to the budget reserve fund and establishing the savings reserve fund; and relating to the permanent fund. 4:00:03 PM MIKE BARNHILL, Director of Policy, Office of Management & Budget (OMB), Office of the Governor, on behalf of the House Rules Standing Committee, sponsor of HJR 5, HJR 6, and HJR 7, by request of the governor, relayed that the three resolutions comprise Governor Michael J. Dunleavy's proposal to the legislature to amend the Alaska State Constitution in three separate vehicles to provide for long-term fiscal stability and sustainability. He stated that HJR 5 and HJR 6 are both examples of direct democracy. The proposal under HJR 5 stipulates that whenever the legislature enacts a tax or an increase to the rate of a tax, a vote of the people would be required. REPRESENTATIVE LEDOUX referred to Mr. Barnhill's statement that the proposed resolutions are examples of direct democracy. She opined that HJR 5, Section 1(b) is an example of direct democracy; however, Section 1(c) is the converse of direct democracy in that any law enacted by the voters through initiative must be approved by the legislature. She added that she supports Section 1(b) but does not believe Section 1(c) to represent direct democracy. MR. BARNHILL responded that there are two elements to HJR 5: When the legislature enacts a tax or an increase in the rate of an existing tax, it would require a vote of the people. Section 1(c) is the converse of 1(b). When people initiate a tax or an increase in the rate of an existing tax, which is an example of direct democracy, the tax question comes back to the legislature for approval. He maintained that both are uses of direct democracy and already exist in the constitution. He stated that when the legislature enacts any law, under the constitution the people have the right through the referendum process to consider it and reject it. Conversely, under the constitution, if the people were to initiate and enact any law, the legislature can amend it immediately but can't repeal it for two years. The change proposed under HJR 5 involves allowing the legislature to reject a voter-initiated law during the next legislative session, rather than waiting two years. REPRESENTATIVE LEDOUX maintained that what Mr. Barnhill described is not exactly direct democracy. She asked for confirmation that the legislature's amendment to a voter- initiated law cannot constitute a substantial change to the initiative. MR. BARNHILL responded that there are court cases that attempt to define the line between an amendment and a repeal of a voter- initiated law. He added that the court looks at whether substantively the amendment amounts to a repeal. He maintained that Section 1(c) is absolutely an example of direct democracy but would tighten the timelines for the legislature to reject a voter-initiated law. CO-CHAIR FIELDS asked whether a legislature that did not want to approve a voter-initiated tax would need to vote on it or whether the tax would die through legislative inaction. MR. BARNHILL stated that under HJR 5, the legislature would need to act on the law before it is approved; no action would constitute a "pocket veto" of the law. He added that the companion resolution, SJR 4, was changed by the Senate Judiciary Standing Committee to a "pocket passage" approach to address concerns that the other approach could potentially reduce the power of the people to initiate a tax law. 4:05:44 PM MR. BARNHILL reminded the committee that HJR 6 was discussed in the 4/25/19 House State Affairs Standing Committee meeting. He maintained that HJR 6 is also an example of direct democracy; it proposes that any change in the calculation of the permanent fund dividend (PFD) in statute would also be considered by the people. He continued by saying that HJR 7 is an appropriation limit proposal. He offered that together the three resolutions form Governor Dunleavy's core legislative agenda for the current session; the governor feels very strongly about allowing the people the opportunity to consider each of these [proposed] amendments to the constitution separately in order to achieve fiscal stability and fiscal sustainability in the state. MR. BARNHILL stated that HJR 5 is referred to in other states as the taxpayer bill of rights; it is inspired by Colorado's example, in which the people initiated a change to the Colorado State Constitution in 1992 requiring a vote of the people any time there is a change to a tax. He mentioned other states with similar provisions: The State of Missouri enacted an amendment to the Missouri State Constitution requiring a vote of the people any time there was a tax or fee that increased revenues by more than $50 million or the inflation-adjusted value. The State of Washington has a constitutional provision requiring a vote of the people for property taxes at the local level that are in excess of 1 percent of property values. California's constitution also requires a vote of the people at the local level. REPRESENTATIVE LEDOUX suggested that western states, rather than eastern states, have the initiative process. She asked whether any of the states that Mr. Barnhill mentioned allowing taxation through the initiative process have provisions requiring the legislature to approve the taxes - ether implicitly or explicitly. MR. BARNHILL responded that he did not know but could research that. 4:09:06 PM WILLIAM MILKS, Senior Assistant Attorney General, Legislation & Regulations Section, Civil Division (Juneau), Department of Law (DOL), on behalf of the House Rules Standing Committee, sponsor of HJR 5, by request of the governor, paraphrased from the sectional analysis, which read as follows [original punctuation provided]: Section 1: This section would add two new subsections to the tax clause of the Alaska Constitution. Taken together, the two subsections would require that any new state tax or increase to the rate of an existing state tax be approved by both the legislature and the voters. Subsection (b) would require that any law enacted through the legislative process that would establish a new state tax or increase the rate of an existing state tax shall not take effect unless the voters approve the proposed law in the next statewide election. If the voters approve the proposed law, it would take effect 90 days after the election was certified. Subsection (c) would require that any law proposed for enactment through the initiative process and approved by the voters that would establish a new state tax or increase the rate of an existing state tax shall not take effect unless the legislature, by resolution, approved the initiated measure by the end of the next regular session. The legislature would have to approve it by majority vote in a joint session. If the legislature approved of the initiated measure, it would take effect 90 days after the legislature's approval. Section 2: This section would make a conforming change to the initiative process in Section 6 of Article XI, providing an exception to the effective date requirements for initiatives. Section 3: This section would require that this amendment be placed on the ballot in the 2020 general election. CO-CHAIR FIELDS referred to a memorandum from Legislative Legal Services [dated 4/19/19], included in the committee packet, which suggested that HJR 5 is sufficiently sweeping to require a constitutional convention, because it constitutes a revision to the constitution and not an amendment. MR. MILKS explained that the Department of Law (DOL) considers the proposed constitutional amendment to be an appropriate amendment, because the Alaska State Constitution already allows for the people or the legislature to enact laws, and processes exist for veto or override. He reiterated that since the state already has an initiative or referendum process, the amendment would not constitute a sweeping change. He mentioned that in the Alaska Supreme Court Case, Bess v. Ulmer , cited in the memo, two of the three amendments considered were found to be appropriate amendments, and only one was found not to be appropriate; that amendment was a sweeping change to a large number of criminal defense rights. CO-CHAIR FIELDS relayed the opinion from the Legislative Legal Services memorandum, dated 4/19/19, which read in part as follows: Under art. XIII, sec. 1, Constitution of the State of Alaska, an amendment to the constitution may be made with a two-thirds vote of each house of the legislature and a majority vote of the electorate. Under art. XIII, sec. 4, a revision to the constitution may only be made at a constitutional convention.... The amendment prevents the legislature from imposing new tax or increasing a tax without voter approval. The result will be a fundamental shift in the constitutional authority of the legislature to tax. As identified in Bess [v. Ulmer] the changes seem to 'substantially alter the substance and integrity of the state constitution as a document of independent force and effect....' 4:13:39 PM REPRESENTATIVE WOOL mentioned that HJR 5 calls for any change to an existing tax to go to a vote of the people automatically. He stated that the referendum/ballot initiative process is difficult work as is the process of passing a bill. He expressed his belief that the only tax increase during his tenure in the legislature was the Spill Prevention and Response (SPAR) [surcharge of .0095 cent-per-gallon on refined fuel sold]. He asked whether under the proposed constitutional amendment, such a tax increase would need to go to a vote of the people. MR. BARNHILL answered that he doesn't know whether the SPAR [surcharge] is a tax or a fee. He said that if it was a fee then it would not go to a vote of the people; if it was a tax then it would. He maintained that unlike Missouri, which puts taxes and fees to a vote of the people, the administration recognizes that putting every fee increase to the vote of the people could be burdensome; it would overload the ballot, requiring presentations on many issues. He offered that the proposed amendment is intended to divide taxes and fees. MR. MILKS offered that the proposed amendment refers to changes in a tax or a fee. He relayed the definition of tax: a charge laid by government upon persons or property for public purposes. He said that in contrast, a user fee is a charge to someone for permission to do something or to be licensed for an occupation. REPRESENTATIVE WOOL asked whether motor fuel tax is a fee or a tax. MR. BARNHILL responded, "That is a tax." He said that if the legislature enacted into law a 5 percent increase, it would go to a vote of the people. REPRESENTATIVE WOOL expressed his reluctance with the proposed amendment as follows: "If I ask my kid's class if they want ice cream every day for lunch, they're probably going to say 'Yes.' Do they really need ice cream every day for lunch? Probably not." He stated that he is not trying to be disrespectful to the public. He offered that if you ask a room full of people if they want to pay more for gas at the pump, they would say 'No'; however, he contended that the second half of the question - do you want your roads fixed? - is important. Going back to his earlier example, he said, "If I ask my kids, 'Hey, do you all want to have diabetes?' ... they're going to say 'No,' but the ice cream might dominate their mind." He said that it would be the same with the tax. He maintained that some of the taxes are complicated. When raising a tax, it is important to look at the totality of the state economy to understand the implication of the tax increase. MR. BARNHILL responded that he acknowledges Representative Wool's concerns; however, he maintained that direct democracy is a part of Alaska's constitutional framework. He relayed that it is the administration's position that the issue of new taxes, increases in the rate of a tax, and the calculation of the PFD are sufficiently important issues that the people should be consulted. He mentioned that if the legislature enacts a tax, the people - with the tools currently available in the constitution - can put a referendum on the ballot. The proposed constitutional amendment "pre-packages" that process. He maintained that a new tax is important enough to warrant getting the public's view on it. REPRESENTATIVE WOOL asked, "How easy do you want to make it?" He suggested that rejecting a law - that has been enacted through ballot initiative - by legislative inaction may be too easy. He mentioned the legalization of marijuana as an example and offered that perhaps the legislature should have to wait two years to repeal a law; if the law has been in effect for two years it may be impossible to repeal. 4:20:23 PM CO-CHAIR KREISS-TOMKINS said that the terms "taxes," "fees," and "surcharges" are semantics used by politicians to frame an issue. He maintained that if the constitution is amended based on one of these terms at the exclusion of the others, the substantive difference between them is very important. He said that all money raised from taxes, fees, or surcharges end up in the general fund (GF). He requested in writing an interpretation of how the three will be distinguished from one another. REPRESENTATIVE LEDOUX stated that last year the legislature eliminated some oil tax credits. She asked whether eliminating oil tax credits would be considered a change in taxes requiring a vote of the people. MR. MILKS responded that the intent of HJR 6 is that the constitutional amendment would be drafted such that a new tax or change in the rate of a tax would go to a vote of the people; a change in deduction would not go to a vote of the people, In response to Representative Kreiss-Tompkins he stated that in interpreting constitutional amendments, the Alaska Supreme Court will look at the records of the committees and the understanding of the legislators and the people. He reiterated that the constitutional amendment proposal refers to taxes as understood by the Alaska Constitutional Convention - a charge laid by government upon persons or property for public purposes - which refers to property, sales, and income taxes levied by the state. He asserted that this understanding of taxes contrasts with fees - the permission to do something - or licenses - such as an occupational license. REPRESENTATIVE LEDOUX conjectured that among the states that have constitutional caps on taxes, fees, or both, people would not vote to raise their taxes very often. She mentioned that most states don't have a permanent fund like Alaska and asked how the states pay for their core services. MR. BARNHILL answered that the states that he referred to do not have constitutional caps; and they have constitutionally required referendums. He stated that in Colorado since 1992 there have been just over a dozen taxes proposed by the legislature; of those, there was an increase in the cigarette tax rate, an enactment of a marijuana tax, and an increase in the rate of the marijuana tax. All three were approved by a vote of the people. He added that it is not impossible for new taxes to become law in Colorado, but it is clearly more difficult. REPRESENTATIVE LEDOUX expressed her understanding that Colorado's constitutional provision does not apply to fees, and there has been a hefty increase in fees since the constitutional provision went into effect. MR. BARNHILL replied that he did not have information on the increase in fees in Colorado; however, he confirmed that fees are excluded from the Colorado constitutional amendment. He added that there has been litigation and [Colorado] Supreme Court decisions to distinguish fees from taxes. 4:26:01 PM CO-CHAIR FIELDS stated that he does not support the proposed amendments and believes that they represent a backdoor attempt to defund core services; defunding of services is wildly unpopular in the state of Alaska. He maintained that evidence from around the country demonstrates that when such provisions are adopted in other states, it leads to dramatic declines in funding for education, higher education, and other core services. He asserted that if those are the decisions that Alaska wishes to make, it should make them in a straightforward manner and not through a backdoor effort. 4:27:01 PM The committee took an at-ease from 4:27 p.m. to 4:29 p.m. 4:28:41 PM ED KING, Chief Economist, Office of Management & Budget (OMB), Office of the Governor, on behalf of the House Rules Standing Committee, sponsor of HJR 7, by request of the governor, presented HJR 7 with the use of a PowerPoint presentation, entitled "House Joint Resolution 7 Appropriation Limit." He referred to a description of the current constitutional spending limits on slide 2, entitled "Current Constitutional Spending Limit (Article 9, Section 16)," and relayed that the limit was set at $2.5 billion in 1982, allowing for adjustments for inflation. MR. KING pointed out that slide 3, entitled "UGF Spending and Limit History (Inflation Adjusted)," shows a graphic representation of how the current spending and spending limit interact. He stated that in the early 1980s, there was a massive increase in revenue from oil with a corresponding increase in spending; in 1982 a limit was set due to excess spending. He maintained that the limit was not effective when oil revenues spiked again, as shown on the right side of the graph; it did not prevent the growth of government. MR. KING moved on to slide 4, entitled "What if the Proposed Spending Cap Passed before Oil Prices Spiked?" which demonstrates the current spending limit versus the proposed spending limit; it reveals that if the proposed limit had been in place, $29 billion would not have been spent; and that amount invested would have generated an additional $5-6 billion in the POMV rather than the current $3 billion. MR. KING turned to slide 5, entitled "Sources of UGF Spending Growth," to point out the sectors in which the growth [of government] occurred in the years surrounding 2010. 4:30:31 PM CORI MILLS, Senior Assistant Attorney General, Labor and State Affairs Section, Department of Law (DOL), on behalf of the House Rules Standing Committee, sponsor of HJR 7, by request of the governor, continued with slide 6, entitled "Appropriation Limit (SJR 6/HJR 7)," to point out that the current constitutional appropriation limit has not worked to create an actual limit for spending. She stated that the Constitutional Budget Reserve Fund (CBRF) was created to be used during Alaska's "down time"; however, over the past four years, the legislature has not been able to access the CBRF by a majority vote to fill a fiscal gap, because the Alaska Supreme Court determined that the legislature must first take into account the earnings reserve account (ERA), and the ERA has always had enough to cover the budget. MS. MILLS referred to slide 7, entitled "Appropriation Limit: Section 1(a)," and relayed that the current appropriation limit is $2.5 billion plus inflation; the goal under HJR 7 is to make the limit more meaningful and impactful by tying it to spending. She reviewed slide 7, which read as follows: • Appropriation Limit -- "Appropriations made for a fiscal year shall not exceed the average of the appropriations made in the previous three fiscal years by more than fifty percent of the cumulative change in population and inflation since January 1 of the previous calendar year, derived from federal indices as prescribed by law, or two percent, whichever is less o Provides a list of exceptions for spending that falls outside the appropriation limit cap o Examples: permanent fund dividends and money placed in the fund; money for disasters; obligations and proceeds from G.O. bonds and revenue bonds o Most substantial change from existing exceptions-- capital spending is not an exception and falls within the appropriation limit cap MS. MILLS turned to slide 8 for a graphic illustrating expenditures that would fall within the limit and are capped by the limit and the expenditures that would fall outside the limit - the PFD, federal receipts, and other trust monies that must be spent for specific purposes. She explained that the proposed exclusions are currently exceptions within the constitutional appropriation limit except for capital spending, which is currently an exception but would not be under HJR 7. MS. MILLS moved on to slide 9, entitled "Appropriation Limit: Section 1(b) and (c)," to describe the new "savings waterfall" under HJR 7. Slide 9 read as follows: • Excess revenues would automatically be deposited into savings accounts in priority order Total amount in general fund that is "unexpended, unobligated, and unappropriated" (i.e., excess revenues) Priority #1: Pay back the permanent fund principal 50% of the income that was deposited into the ERA that fiscal year Priority #2: [if money remains after priority #1] Get savings reserve fund balance up to appropriation limit (formerly the CBR) Priority #3: [if money remains after priority #2] Put money into permanent fund principal to continue growing the fund MS. MILLS referred to slide 10, entitled "Appropriation Limit: Sections 2,3, and 5," to relay that under HJR 7 the CBRF would get a new name, [savings reserve fund]; the Senate [Judiciary Standing Committee] removed that provision [from the companion resolution, SJR 6, during the 4/1/19 meeting]. She reviewed the left side of slide 10 as follows: The existing CBRF is funded by tax and royalty settlements, which can be spent by a three- quarters vote [of the legislature]. All the money available in GF is to be returned to CBRF - pursuant to Article IX, Section 17(d), of the Alaska State Constitution - which is known as "the sweep." The repayment via the sweep has not occurred, because the legislature has used the three-quarters vote to return the money to GF, a process known as the "reverse sweep." MS. MILLS turned to the right side of slide 10 to relay the proposal under HJR 7 as follows: Tax and royalty settlements would still go into the savings reserve fund (formerly the CBRF). A portion of excess revenues, mentioned on slide 9, would also go into the savings reserve fund. The sweep and the [need for a] three-quarters vote would be eliminated; however, the legislature, by majority vote, would be able to access the savings reserve fund to fill the gap between what is available in the GF for appropriation up to the appropriation limit. She maintained that between the changes to the CBRF and the appropriation limit, the two would work more in harmony together, create a more effective cap on government spending, and create a more sustainable savings model. 4:36:03 PM CO-CHAIR FIELDS opened public testimony on HJR 5, HJR 6, and HJR 7. 4:36:18 PM JUSTIN PARISH testified that although HJR 5 is being "sold" as direct democracy, it is an unprecedented attack on the power of the initiative process, which is direct democracy. He mentioned that Colorado's taxpayer bill of rights does not restrict initiatives at all. He stated that if most of Alaska voters want one thing and have put tremendous sacrifice and work into achieving it through the initiative process, the legislature should listen and not prevent it by way of a pocket veto. He offered that to not include tax decreases in the proposed amendment suggests that the administration does not want to take the risk of the public asking to decrease taxes, for example, on the oil industry. He maintained that the goal of HJR 5 is to prevent the public weighing in on oil taxes. He stated that last year ConocoPhillips Alaska, Inc. paid an effective tax rate of -7.7 percent to Alaska as a production tax, and he asked how the public is supposed to respond to that. He reiterated that the proposed amendment under HJR 5 would "tie the public's hands" and prevent it from trying to get a fair deal. He added that also it would prevent the public from saying, "No, I want to pay for my schools." MR. PARISH continued by testifying that the proposed amendment under HJR 7 would thwart the state's ability to pay for all of the state functions that the public wants, including care for Alaska elders; it would result in an approximately 19 percent cut across the board over the next 20 years. 4:39:35 PM JOE GELDHOF, Board Member, Permanent Fund Defenders, testified that the mission of the Permanent Fund Defenders is to protect and defend the permanent fund and the PFD. He maintained that the PFD is not a welfare program; it is an equal portion of the interest of the citizens' permanent fund paid out as a dividend; and it has been very good at diversifying Alaska's economy and lifting people out of poverty. MR. GELDHOF continued by saying that the group supports requiring a vote of the people to change the current PFD statutory formula; however, it believes that the eligibility requirement of the PFD program and the payment schedule should be left in statute. He concluded by saying that the statutory formula has worked very well to protect the permanent fund over the past four decades. 4:43:19 PM LAURA BONNER testified that the proposed amendment under HJR 5 would preempt the duty of legislators. She maintained that the legislature has access to much more information for analysis than the voters on what the state needs to maintain the roads and fund education and services. She stated that she has friends in Colorado who say that the roads are terrible; Colorado has problems funding core services such as roads and education. MS. BONNER maintained that funding the PFD is important; however, she opined that the proposed amendment under HJR 18 would be more effective in that regard than the one under HJR 6. She continued by saying that she is very disturbed by HJR 7. She maintained that the analysis of the appropriation limit under SB 104 revealed a troubling short-term budget outcome. She expressed that she did not support eliminating the CBRF. She emphasized that there is not enough analysis of all three resolutions for committee or public vote. 4:46:19 PM PAT KEHOE PENDELL expressed her belief that HJR 5 constitutes an unnecessary impediment to providing needed tax revenues. She maintained that an initiative that the people have been able to get passed would be removed from direct democracy if subject to legislative pocket veto. She stated that she is in favor of funding stability, however, believes that the proposal under HJR 5 would make it more difficult for the state to fund core services. She asserted that the public would seek to increase the amount of the PFD rather than realizing the value to themselves and their community of the services that have historically been provided by the State of Alaska. She added that she believes that Alaska needs a state income tax, and HJR 5 would make it more difficult to achieve that goal. 4:47:59 PM ROBERT HALL attested to the fact that the legislature faces a difficult challenge: balancing the budget, paying the PFD, and providing for long-term fiscal stability that would be approved by Alaskan voters. He advocated for putting an advisory resolution on the ballot to give the voters an option of approving a package of proposals that would give the legislature guidance. The proposal would include a two-part revision to the PFD formula: 1) a $6,700 PFD for this year, and 2) a revised future total payment of the PFD to a minimum of 1 percent of the total value of the permanent fund - $1,000. He stated that the governor proposes no revisions to the PFD without a vote of the people; this would be the vote. He urged allowing the people to vote on a proposal package to give the legislature direction, guidance, and approval to pass all the constitutional amendments and revisions to the permanent fund. He maintained that making this year's PFD $6,700 would ensure passage and provide for fiscal stability for the subsequent 20 years. 4:49:56 PM BRIAN LYNCH testified that the intent of the proposed constitutional amendments is to put Governor Dunleavy's fiscal agenda into the constitution and once in place, would be extremely difficult to remove should the necessity arise. He mentioned that the referendum process is extremely difficult and expensive for individual residents of Alaska to accomplish. He stated that he is in favor of leaving the fiscal decisions to the duly elected legislators, and if a person does not like the decisions, he/she has the constitutional right to express his/her displeasure by voting the member out of office. 4:51:35 PM ADAM HYKES testified that he supports Section 1(b) of HJR 5 but not Section 1(c); he stated that he is opposed to allowing the legislature to stonewall the will of the people through action or inaction. He expressed his belief that the PFD needs to be constitutionally protected, as proposed under HJR 6. He stated that he supports the three-year average spending limit under HJR 7. 4:52:50 PM LARRY SLONE expressed his belief that the proposed constitutional amendment under HJR 5 would defund core services - basic infrastructure and public safety. He opined that not allowing the state to tax its citizens amounts to "slitting our own throat." He said that that he concurs with Governor Jay Hammond, who said that the silliest thing he did as a governor was to allow the income tax to be rescinded. He offered that the public has an obligation to pay attention to money spent by the state and the services provided; he maintained that taxing the residents will encourage this as well as force efficiencies. He continued by saying that paying out a full PFD under the current formula as proposed under HJR 6 would result in the legislature raiding the ERA to fund state services, which would ultimately gut the future value of the permanent fund. He opined that under HJR 7, the permanent fund would be built up with excess revenues and would force budget efficiencies by the legislature. 4:54:30 PM GENE WHITE testified that in Alaska's form of representative government, the voters elect legislators to make large and small decisions. The decisions do represent the will of the people, or the legislators would not have been elected; and the people can enact changes through the initiative process. He maintained that the three proposed resolutions express that the administration does not trust the future will of the people through their elected representatives, and what is known today is good for all the future. He asserted that the legislature must have the ability and the flexibility to deal with situations as they arise. 4:56:06 PM CRIS EICHENLAUB testified that he supports the governor's plan to follow the statutory formula for the PFD and the wording in HJR 6, page 1, lines 14-15, which read, "a portion of the income from the permanent fund shall be transferred solely for a program of dividend payments to state residents...." He maintained that it is the intent of the governor to restore integrity to the state through the three resolutions so that entities will want to do business with the state. He maintained that legislators found a way to circumvent the law and as a result, people didn't get PFD money they were due. He stated that the money is in the ERA and could be paid out today. 4:58:53 PM DEBORAH HOLLAND testified that legislators should talk about the fund "properly" instead of referring to the permanent fund as if it was their personal bank account. CO-CHAIR FIELDS closed public testimony on HJR 5, HJR 6, and HJR 7. He stated that HJR 5, HJR 6, and HJR 7 would be held over.