Legislature(2019 - 2020)GRUENBERG 120

04/30/2019 03:00 PM House STATE AFFAIRS

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         HJR 18-CONST AM: PERMANENT FUND; POMV;EARNINGS                                                                     
3:05:29 PM                                                                                                                    
CO-CHAIR FIELDS announced that the  first order of business would                                                               
be HOUSE  JOINT RESOLUTION  NO. 18,  Proposing amendments  to the                                                               
Constitution  of  the State  of  Alaska  relating to  the  Alaska                                                               
permanent fund  and to appropriations  from the  Alaska permanent                                                               
3:05:57 PM                                                                                                                    
CO-CHAIR KREISS-TOMKINS, as prime sponsor  of HJR 18, stated that                                                               
he was available for questions.                                                                                                 
REPRESENTATIVE WOOL  asked whether the Alaska  State Constitution                                                               
could  be amended  under  the proposed  resolution  or whether  a                                                               
constitutional  convention  would  be   required  to  revise  the                                                               
CO-CHAIR KREISS-TOMKINS responded that  there is limited case law                                                               
on  the question  of amendment  versus  revision.   He cited  the                                                               
Alaska Supreme  Court decision Bess  v. Ulmer [1999].   He stated                                                             
that there  are differing perspectives  for "constitutionalizing"                                                               
the permanent  fund dividend  (PFD) itself  and whether  doing so                                                               
would  constitute a  revision as  opposed  to an  amendment.   He                                                               
expressed his belief that the  amendment proposed under HJR 18 is                                                               
clearly just an amendment, because  it would change the structure                                                               
of the  permanent fund, combine  the earnings reserve  fund (ERA)                                                               
into   the  principle,   and  add   a   constitutional  cap   [on                                                               
appropriations   from  the   permanent   fund];   it  would   not                                                               
effectively add new  content into the constitution  that might be                                                               
considered a revision.   He suggested asking for  an opinion from                                                               
Legislative Legal Services.                                                                                                     
3:08:11 PM                                                                                                                    
EMILY  NAUMAN,  Deputy   Director,  Legislative  Legal  Services,                                                               
Legislative  Affairs Agency,  responded that  it was  a difficult                                                               
question to  answer because there is  only one case to  depend on                                                               
to parse out the difference  between an amendment and a revision.                                                               
She said  that of the  four resolutions  to be considered  by the                                                               
committee, HJR  18 is the most  innocuous; it proposes to  make a                                                               
small number of  changes and would not have a  sweeping effect on                                                               
the balance  of power between  the three branches  of government.                                                               
She relayed that the best  test for determining the difference is                                                               
two-pronged:    1) looking  at  the  number  of changes,  and  2)                                                               
looking at the type of  changes.  She offered that Representative                                                               
Kreiss-Tomkins's representation  of the  changes proposed  in HJR
18 is accurate:  the changes  are minor quantitatively and do not                                                               
tip the scale  qualitatively as far as balance of  power or other                                                               
constitutional authority of the government.                                                                                     
REPRESENTATIVE LEDOUX asked for a quick synopsis of HJR 18.                                                                     
CO-CHAIR KREISS-TOMKINS answered  that HJR 18 would  roll the ERA                                                               
into the  principle of the  permanent fund,  effectively creating                                                               
an endowment governed  with a hard cap  - a draw of  5 percent of                                                               
the  average of  its market  value -  for the  first five  of the                                                               
preceding six fiscal years.                                                                                                     
REPRESENTATIVE  LEDOUX asked  whether  that amount  is less  than                                                               
what the state is currently drawing from the fund.                                                                              
CO-CHAIR  KREISS-TOMKINS  responded  that under  Senate  Bill  26                                                               
[passed  during the  Thirtieth  Alaska  State Legislature,  2017-                                                               
2018, and signed into law  6/27/18], 5.25 percent of market value                                                               
(POMV)  will be  drawn from  the permanent  fund for  the current                                                               
fiscal year  [fiscal year 2018 (FY  18)] and the next  two fiscal                                                               
years [FY  19 and FY  20] to  be available for  appropriation, if                                                               
the legislature  follows statute;  thereafter, the POMV  would be                                                               
reduced to  5 percent.   He pointed out  that after the  next two                                                               
fiscal years, HJR 18 would mirror what is already in law.                                                                       
REPRESENTATIVE  LEDOUX asked  if  the  motive for  HJR  18 is  to                                                               
prevent the legislature from "getting its hands on money."                                                                      
CO-CHAIR KREISS-TOMKINS  stated that the  primary goal of  HJR 18                                                               
is to protect  the permanent fund forever; ensure  that it cannot                                                               
be  spent  down  but  will  remain permanent.    He  described  a                                                               
secondary  benefit:     As  the   permanent  fund   is  presently                                                               
structured,  even  if  the  legislature   is  restrained  in  its                                                               
spending, the ERA  could bottom out in an  extreme [stock] market                                                               
downturn.  This  almost occurred in 2009.  He  expressed that the                                                               
ERA  could drop  to  $0, and  money would  not  be available  for                                                               
dividends or  public services.   He maintained that HJR  18 would                                                               
effectively prevent that from happening.                                                                                        
3:13:20 PM                                                                                                                    
REPRESENTATIVE  VANCE  asked  for  confirmation  that  HJR  would                                                               
enshrine the POMV and supersede the statutory PFD formula.                                                                      
CO-CHAIR KREISS-TOMKINS answered, "That's  incorrect."  He stated                                                               
that there  would be  no mathematical  conflict between  having a                                                               
statutory POMV  and a statutory PFD.   He relayed that  under HJR
18, there would  be enough money for the legislature  to draw a 5                                                               
percent POMV and pay out $3,000 dividends.                                                                                      
REPRESENTATIVE   VANCE    expressed   her    understanding   that                                                               
historically  the PFD  was calculated  from  the 5-year  average.                                                               
Under  HJR 18,  a  5 percent  POMV would  be  transferred to  the                                                               
general  fund (GF),  and  from that  draw  the legislature  would                                                               
dispense  PFD  checks  based on  historical  calculations.    She                                                               
referred  to page  1, line  15, of  HJR 18,  which read  in part,                                                               
"Each  fiscal  year, the  legislature  may  appropriate from  the                                                               
permanent fund  to the general  fund an  amount that is  not more                                                               
than  five percent..."  and added  that  the POMV  would then  be                                                               
transferred   from  the   corpus  to   GF.     Subsequently,  the                                                               
legislature could distribute a dividend  based upon the statutory                                                               
3:16:00 PM                                                                                                                    
KEVIN MCGOWAN, Staff,  Representative Jonathan Kreiss-Tomkins, on                                                               
behalf  of Representative  Kreiss-Tomkins, prime  sponsor of  HJR
18, responded  that HJR 18  would not affect how  the legislature                                                               
decides to allocate the 5 percent draw.                                                                                         
CO-CHAIR  KREISS-TOMKINS added  that the  answer to  the question                                                               
is, Yes, that money can be distributed for dividends.                                                                           
REPRESENTATIVE  VANCE expressed  that  the bigger  issue for  the                                                               
public is "where  funding starts."  She said, "We  all agree that                                                               
... the  50-50 statutory formula,  but where do you  implement it                                                               
into  the math  equation and  come out  with a  different amount?                                                               
And this puts it in after  the POMV draw, whereas historically it                                                               
was  directly from  the  average  of the  earnings,  and this,  I                                                               
think, would shift  a lot of the conversation of  what the public                                                               
is  trying to  have  in light  of  the governor's  constitutional                                                               
amendments as  well."  She  continued by stating, "I'm  not there                                                               
yet.  I know that the winds are  ... blowing that way with SB 26,                                                               
but I don't  ... think I'm there yet because  the public wants to                                                               
have a  fuller conversation  on the  possibility of  PFD paybacks                                                               
with the  ERA, of how  the dividend  should be formulated  in the                                                               
future; and I  agree that we need to look  on the overall effects                                                               
of the  future, but  I'm just  not there  with your  amendment at                                                               
this time."                                                                                                                     
REPRESENTATIVE STORY  expressed her  understanding that  [HJR 18]                                                               
follows  best  practices  for big  endowments  in  setting  their                                                               
investment earnings for the year.                                                                                               
CO-CHAIR  KREISS-TOMKINS agreed  that  most  endowments and  most                                                               
sovereign wealth funds are managed  in the manner contemplated by                                                               
HJR 18,  with a POMV taken  out every year and  one combined fund                                                               
for which the principle is protected.                                                                                           
REPRESENTATIVE LEDOUX  expressed her  concern that under  HJR 18,                                                               
the  PFD will  take "second  place"; it  will be  taken from  the                                                               
amount  that  is  remaining.    She  referred  to  Senator  Peter                                                               
Micciche's  comment  in  the Senate  Finance  Standing  Committee                                                               
meeting that  a $3,000  PFD would probably  exceed the  limits of                                                               
Senate Bill  26.  She said  that he pointed out  that legislators                                                               
would need  to decide  which of  the statutes to  violate.    She                                                               
concluded that  in the scenario under  HJR 18, the PFD  would "be                                                               
the stepchild."                                                                                                                 
CO-CHAIR FIELDS  offered that $3 billion  is enough to pay  out a                                                               
statutory  dividend.   It  is  the  decision of  the  legislature                                                               
whether  to  do that,  raise  revenue  to  pay the  dividend  and                                                               
maintain government services,  or pay out a  massive dividend and                                                               
annihilate government  services within  the POMV framework.   All                                                               
of these are options.                                                                                                           
3:20:56 PM                                                                                                                    
CO-CHAIR  FIELDS asked  for confirmation  that since  the current                                                               
statutory formula was put in  place, the permanent fund has grown                                                               
steadily over time considering bull and bear markets.                                                                           
3:21:20 PM                                                                                                                    
PAULYN  SWANSON, Communications  Manager,  Alaska Permanent  Fund                                                               
Corporation (APFC),  Department of Revenue (DOR),  responded that                                                               
the permanent  fund has  certainly grown a  great deal  over time                                                               
since inception  - from  the initial deposit  of $734,000  to the                                                               
$64.5 billion as of March 31 [2019].                                                                                            
CO-CHAIR FIELDS  asked whether nominal  and real value  PFDs have                                                               
generally grown over time.                                                                                                      
MS. SWANSON  offered that  DOR could  better answer  the question                                                               
regarding the PFD.  She stated  that up until the past few years,                                                               
the  PFD was  based on  the statutory  net income  from the  fund                                                               
averaged  over years.   She  relayed that  HJR 18  speaks to  the                                                               
amount of  money that could  be spent off  the fund on  an annual                                                               
basis; it does not speak to the dividend.                                                                                       
CO-CHAIR  FIELDS  asked  for confirmation  that  nothing  in  the                                                               
constitutional amendment  under HJR  18 would limit  the dividend                                                               
or nullify  the current statute  with respect to  disbursement of                                                               
the dividend.                                                                                                                   
MS.   SWANSON  confirmed   that  nothing   within  the   proposed                                                               
resolution speaks to the dividend.                                                                                              
REPRESENTATIVE  WOOL  maintained  that  the  proposed  resolution                                                               
specifies the amount  of revenue that may be taken  from the fund                                                               
and does not address the statutory formula for the PFD at all.                                                                  
MS. SWANSON answered, "That's absolutely correct."                                                                              
REPRESENTATIVE WOOL  expressed his understanding that  the ERA is                                                               
the account  used to pay  the PFD via GF;  in other words,  it is                                                               
the source of expendable cash in the permanent fund.                                                                            
MS. SWANSON  stated that with  the implementation of  Senate Bill                                                               
26,  FY  19  was  the  first year  that  funds  were  distributed                                                               
directly to GF as  a revenue source.  Up until  then, the ERA had                                                               
been used historically to pay  dividends, pay for APFC operations                                                               
and management,  and to support  the Department of Law  (DOL) and                                                               
Department of Natural Resources (DNR)  regarding the work they do                                                               
to bring in royalties.                                                                                                          
REPRESENTATIVE WOOL relayed that the ERA  was used to pay the PFD                                                               
checks.   He asked what  the changes  would be under  Senate Bill                                                               
MS. SWANSON answered that with Senate  Bill 26 in place, there is                                                               
a statutory rule limiting the draw  to 5.25 percent for FY 19, FY                                                               
20, and FY 21; in FY 22, the  draw goes to 5 percent.  She stated                                                               
that it is  the responsibility of the  legislature to appropriate                                                               
the  money from  the  ERA  to GF  following  the statutory  rule;                                                               
further  distribution of  that money  is the  policy call  of the                                                               
REPRESENTATIVE WOOL  stated that prior  to Senate Bill  26, funds                                                               
needed for the PFD checks were taken directly from the ERA.                                                                     
MS. SWANSON said, "Historically ... that is correct."                                                                           
REPRESENTATIVE WOOL offered  that now the 5.25  percent draw goes                                                               
to GF, funds for the PFD checks come from GF.                                                                                   
MS.  SWANSON answered  yes, the  current construct  of the  FY 20                                                               
budget  is that  the  5.25 percent  goes directly  to  GF and  is                                                               
further distributed to the PFD fund from GF.                                                                                    
CO-CHAIR FIELDS  recalled that  $1.9 billion  would be  needed to                                                               
pay a $3,000 PFD in the current year.                                                                                           
MS. SWANSON concurred.                                                                                                          
3:26:33 PM                                                                                                                    
CO-CHAIR FIELDS relayed that under  HJR 18, a [5.25] percent draw                                                               
would be  $3 billion -  vastly more than  enough to pay  a $3,000                                                               
PFD; HJR 18 would not limit the  size of the PFD; the size of the                                                               
PFD is a legislative decision.                                                                                                  
REPRESENTATIVE  WOOL asked  whether APFC  has a  position on  the                                                               
concept behind what HJR 18 attempts to accomplish.                                                                              
MS.  SWANSON responded  that the  APFC board  of trustees  has no                                                               
position  on  this  resolution specifically.    Historically  the                                                               
board  has supported  the POMV  and  classic endowment  concepts.                                                               
Resolution 1804,  passed by the  board, speaks to  the importance                                                               
of having a rules-based structure  regarding withdrawals from the                                                               
fund,  and  HJR 18  reflects  a  rules-based structure  regarding                                                               
withdrawals from the fund for ongoing sustainability.                                                                           
REPRESENTATIVE VANCE  referred to  testimony that ERA  funds were                                                               
used by  DNR to collect royalties.   She asked what  mechanism is                                                               
in place under Senate Bill 26 to support DNR.                                                                                   
MS. SWANSON answered  that the funds for DNR  is an appropriation                                                               
in the  operating budget.   Within the operating budget,  the ERA                                                               
currently funds the APFC operating  budget for the investment and                                                               
management  of  the   permanent  fund.    There   is  a  specific                                                               
appropriation to  DNR regarding  royalty work.   She  stated that                                                               
combined, DOL and  DNR receive about $8 million  to support their                                                               
activities in generating royalties.                                                                                             
3:29:10 PM                                                                                                                    
REPRESENTATIVE SHAW expressed that HJR  18 appears to put all the                                                               
ERA into the  principle of the fund.   He cited page  1, line 10,                                                               
of HJR  18, which read  in part, "Except  as provided in  (b) and                                                               
(c) of this section, all income...."   He said that the rationale                                                               
given for HB  31 was that there  needed to be a  "cushion" in the                                                               
ERA.  He asked if HJR 18 would  provide a cushion or is a cushion                                                               
not needed.                                                                                                                     
CO-CHAIR  KREISS-TOMKINS answered  that  HB 31  works within  the                                                               
current  structure of  the permanent  fund  in the  constitution,                                                               
whereas HJR  18 would change that  very structure.  He  said that                                                               
in the current structure,  as long as there is an  ERA - which is                                                               
subject  to  volatility  with  markets or  the  spending  of  the                                                               
legislature - it  is advisable to have a  "shock-absorber" - some                                                               
liquidity -  in the  ERA; if the  ERA goes to  zero, there  is no                                                               
means to  pay dividends or  for public  services.  Under  HJR 18,                                                               
combining  the ERA  into the  principle and  operating under  the                                                               
POMV structure eliminates the need for  liquidity in the ERA.  He                                                               
added that HJR 18 would solve the problem at its root.                                                                          
REPRESENTATIVE SHAW  commented that part  of the hardship  in the                                                               
committee and in  the public view is that the  issues have become                                                               
so  confusing, and  there  are so  many  bills, resolutions,  and                                                               
amendments  dealing with  the permanent  fund, the  PFD, and  the                                                               
earnings  that it  is difficult  to "get  a bite  on anything  in                                                               
particular."  He  maintained that Representative Kreiss-Tomkins's                                                               
explanation confused him  more.  He said that he  sees a conflict                                                               
between HB 31  and HJR 18, yet  he doesn't know if  there is one.                                                               
He mentioned  the difficulty of  messaging these concepts  to his                                                               
CO-CHAIR  FIELDS gave  an  example  as an  explanation:   HJR  18                                                               
passes.   Alaska loses $5-10 billion  from the fund due  to a bad                                                               
market year.  Because the ERA  and the principle are combined and                                                               
Alaska is using a POMV draw,  there would still be adequate money                                                               
to pay  out PFDs  from that  one integrated  fund, just  as there                                                               
would  be if  the ERA  money was  adequate.   He maintained  that                                                               
under  HJR 18,  the funds  for payouts  are "safer,"  because the                                                               
money would be  taken from a larger fund,  which constitutes less                                                               
risk in  a terrible market;  in a terrible market  the likelihood                                                               
of the ERA being drawn down is greater.                                                                                         
CO-CHAIR KREISS-TOMKINS  added that currently the  permanent fund                                                               
has two accounts:  the principle and  the ERA.  Since the ERA was                                                               
created, it  was necessary to have  liquidity in the ERA.   Under                                                               
HJR 18, the two would be combined.                                                                                              
REPRESENTATIVE  SHAW offered  that  HJR 18  provides no  cushion,                                                               
since the resolution  states that all income  [from the permanent                                                               
fund shall be retained in the GF].                                                                                              
CO-CHAIR  FIELDS  responded  that  HJR 18  provides  the  largest                                                               
cushion  possible  for  paying out  dividends  and  for  services                                                               
within the context of the POMV.                                                                                                 
3:33:46 PM                                                                                                                    
REPRESENTATIVE WOOL  referred to  testimony that  the legislature                                                               
has a mixed  history on following its own rules.   He opined that                                                               
these statements  bother him.   There are  some examples  of that                                                               
being true:   the  legislature not  following the  90-day session                                                               
and the  PFD formula being  ignored during the past  three years.                                                               
He asked,  "Do you really  think that  we're going to  just start                                                               
... digging  through the crates  and pulling cash out  because we                                                               
need it above and beyond the 5.25 percent?  Is that your fear?"                                                                 
CO-CHAIR KREISS-TOMKINS  replied that  it is impossible  to know;                                                               
however,  there  is enough  probability  or  risk that  it  could                                                               
happen and,  therefore, warrants  fully protecting  the permanent                                                               
fund.   He  stated that  in this  first year  of the  rules-based                                                               
framework  for  the  permanent  fund,  one  legislative  body  is                                                               
potentially on  the verge  of passing a  budget that  exceeds the                                                               
5.25 percent draw.                                                                                                              
REPRESENTATIVE  WOOL  asked  what  the  state  would  do  in  the                                                               
following scenario:   the oil revenue goes to  almost nothing for                                                               
any number of reasons; the  stock market and economy are booming;                                                               
the  permanent fund  is  growing; the  expense  of operating  the                                                               
state  is  substantial; however,  Alaska  is  locked into  the  5                                                               
percent draw in the constitution.                                                                                               
CO-CHAIR KREISS-TOMKINS  replied that  the State of  Alaska would                                                               
have to do what  the other 49 states in the  country do, which is                                                               
cut the budget, raise revenues, or execute some balance of both.                                                                
3:37:22 PM                                                                                                                    
REPRESENTATIVE LEDOUX  offered that  the corpus of  the permanent                                                               
fund is already  protected without the proposed  amendment to the                                                               
constitution; the legislature cannot  access the corpus without a                                                               
vote  of the  people.    She suggested  that  HJR  18 relates  to                                                               
protecting the ERA - a subaccount of the permanent fund.                                                                        
CO-CHAIR KREISS-TOMKINS  answered that  her question gets  to the                                                               
"heart of the  matter," which is, "Do we as  the legislature - do                                                               
Alaskans - consider the ERA part  of the permanent fund ... as in                                                               
something  that  should be  protected  forever,  managed for  the                                                               
benefit of future generations, or is  this ... a pot of cash akin                                                               
to  the  statutory  budget  reserve,  the  constitutional  budget                                                               
reserve, that's  available to  be spent down  because we  want to                                                               
pay down unfunded  liability, we want to build a  bridge, we want                                                               
to have an amazing foster  care system, whatever?"  He maintained                                                               
that  the premise  of HJR  18  is that  the  ERA is  part of  the                                                               
permanent fund -  which is supported by history and  by law - and                                                               
should be likewise protected and managed.                                                                                       
CO-CHAIR FIELDS opened public testimony on HJR 18.                                                                              
3:39:15 PM                                                                                                                    
JUSTIN  PARISH  testified that  he  supports  the resolution  and                                                               
believes that  it will provide  protection for the real  value of                                                               
the [permanent] fund.  Currently,  protection for only the corpus                                                               
does not  protect the real value  of the corpus; if  the earnings                                                               
are  spent  down, because  of  inflation  or market  losses,  the                                                               
corpus  would  be   steadily  depleted  year  after   year.    He                                                               
maintained  that only  a constitutional  amendment such  as under                                                               
HJR 18,  which follows best  practices of fund  management, would                                                               
be enough to protect the fund into the future.                                                                                  
3:40:36 PM                                                                                                                    
LYNN  WILLIS  testified  that  he  is  opposed  to  amending  the                                                               
constitution, because it will constrain  the legislature in doing                                                               
its  job   regarding  stewardship   of  fiscal  resources.     He                                                               
maintained that  the legislature needs every  option available to                                                               
solve the  budget crisis and  expressed that he doesn't  want the                                                               
public blamed if  the state cannot pay out a  massive PFD or levy                                                               
taxes.   He stated that  he opposes the  constitutional amendment                                                               
approach   and    supports   addressing   changes    during   the                                                               
constitutional convention.                                                                                                      
3:41:58 PM                                                                                                                    
LAURA BONNER  testified that  the resolution  is confusing.   She                                                               
said  that  she supports  protecting  the  permanent fund.    She                                                               
stated  that she  supports eliminating  the ERA  and putting  the                                                               
POMV draw into the GF.                                                                                                          
3:43:32 PM                                                                                                                    
JAMES   SQUYRES  testified   that   he   supports  the   original                                                               
calculation  of   the  PFD,   and  HJR   18  would   remove  that                                                               
calculation.    He  opined  that  eliminating  the  ERA  and  the                                                               
statutory  income  would  ultimately  reduce  the  PFD  on  which                                                               
Alaskans depend and eliminate the  PFD payback.  He said Alaskans                                                               
have  ceased to  trust  the legislature's  actions regarding  the                                                               
PFD.  He maintained that  HJR 18 would obstruct [Governor Michael                                                               
J. Dunleavy's] agenda and hearten Senate Bill 26.                                                                               
3:44:51 PM                                                                                                                    
BERT  HOUGHTALING testified  that under  HJR 18,  the legislature                                                               
would  continue  to  use  the  permanent fund  and  ERA  to  fund                                                               
government expenses  and continue its  theft [of the  PFD money].                                                               
He maintained that  no resolution is worth passing  if it doesn't                                                               
seek  to  amend  the  constitution  to protect  the  PFD  in  its                                                               
original formula.                                                                                                               
3:46:25 PM                                                                                                                    
INGRID  PETERSON,   Fox  Creek  Canyon   Landowners  Association,                                                               
testified   that  the   association  objects   to  the   lack  of                                                               
information  and short  timeline for  testimony on  HJR 18.   She                                                               
opined  that more  explanation and  public input  is needed  when                                                               
suggesting changes to the Alaska State Constitution.                                                                            
3:49:16 PM                                                                                                                    
PAM  GOODE testified  that she  and many  others did  not support                                                               
Senate Bill  26; she  does not support  the POMV  philosophy; and                                                               
she does  not support  putting the ERA  into the  permanent fund.                                                               
She  stated that  since  the  voters would  have  to approve  the                                                               
constitutional  amendment  under  HJR  18,  they  would  need  to                                                               
understand  not  only the  original  practices  but the  proposed                                                               
practices, which would  be a challenge.  She  maintained that the                                                               
problem is  not the permanent  fund and the ERA  but overspending                                                               
by legislators.  She offered  that only the inflation-proofing of                                                               
the fund needs attention.                                                                                                       
3:52:09 PM                                                                                                                    
TRISHA PEARSON  testified that she  has many questions  about the                                                               
proposed resolution and expressed  her belief that more education                                                               
of the public  is needed before passing a  resolution calling for                                                               
a constitutional amendment.                                                                                                     
3:53:33 PM                                                                                                                    
VIKKI JO  KENNEDY testified that  she opposes the passage  of any                                                               
confusing resolutions for constitutional amendments.                                                                            
3:54:59 PM                                                                                                                    
ADAM HYKES  testified that it  would be an accounting  blunder to                                                               
think that  Alaska can  spend down  the permanent  fund to  fix a                                                               
spending  problem.   He  expressed that  "Alaska  voted loud  and                                                               
clear on  the PFD  issue," and  members lost  their seats  in the                                                               
legislature because  of it.   He stated,  "We want our  PFD back,                                                               
and it was  taken from us, and  there is no trust  between us and                                                               
government until that is paid back and trust is restored."                                                                      
3:56:08 PM                                                                                                                    
LARRY SLONE  testified that he  supports locking up the  ERA into                                                               
the permanent  fund and, thereby,  making it inaccessible  to the                                                               
legislature.   It  would prevent  the legislature  from depleting                                                               
the permanent fund;  a 5 percent POMV draw would  still provide a                                                               
reasonable  dividend.   If the  government needs  more money,  it                                                               
would just  have to go  through the process of  taxing individual                                                               
citizens, and  consequently it  would be  more difficult  for the                                                               
legislature to waste money.                                                                                                     
3:57:25 PM                                                                                                                    
GARY  MCDONALD expressed  that the  legislators should  leave the                                                               
permanent fund alone and "give us what we deserve."                                                                             
3:58:07 PM                                                                                                                    
CO-CHAIR FIELDS closed public testimony  on HJR 18.  He explained                                                               
that  HJR  18  would  not  change the  statute  with  respect  to                                                               
disbursement  of   PFDs;  it  does   not  limit  or   change  the                                                               
legislature's  ability  to raise  revenue;  it  does protect  the                                                               
value of  the permanent fund  and, therefore, the ability  to pay                                                               
out  PFDs   indefinitely  into  the  future   by  preventing  the                                                               
liquidation of a significant part of the permanent fund.                                                                        
REPRESENTATIVE STORY  commented that  each year every  $1 billion                                                               
invested yields Alaska about $100  million; therefore, being able                                                               
to build and preserve the ERA  along with the corpus would keep a                                                               
long-term  permanent fund  and ultimately  the statutory  formula                                                               
CO-CHAIR  FIELDS added  that draining  the  permanent fund  locks                                                               
Alaska into a death spiral in  which the state could only pay out                                                               
smaller and smaller PFDs over time.                                                                                             
[HJR 18 was held over.]                                                                                                         

Document Name Date/Time Subjects
HJR018 Fiscal Note OOG-DOE 4.26.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR 18
HJR005 Supporting Doucment - Letter of Support.pdf HSTA 4/30/2019 3:00:00 PM
HJR005 Transmittal Letter 1.29.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR005 Fiscal Note GOV-DOE 2.20.2019.pdf HSTA 4/30/2019 3:00:00 PM
HJR005 Sectional Analysis ver A 3.21.2019.pdf HSTA 4/30/2019 3:00:00 PM
HJR005 ver A 2.20.2019.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Supporting Document - Letter of Support.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Transmittal Letter 1.29.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Supporting Document - Letter of Support 4.25.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 ver A 2.20.2019.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Fiscal Note GOV-DOE 2.20.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Sectional Analysis ver A 3.21.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Powerpoint 4.29.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Legislative Legal Opinion 4.30.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR005 Legislative Legal Opinion 4.30.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR005 Amendment A.2 4.30.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR005 Amendment A.2 Legal Opinion 5.1.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR018 Opposing Document - Letter of Opposition 4.30.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR 18
HJR005 Opposing Document - Letter of Opposition 4.30.19 (2).pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Opposing Document - Letter of Opposition 4.30.19 (2).pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Opposing Document - Letter of Opposition 4.26.19.pdf HSTA 4/30/2019 3:00:00 PM
HJR007 Opposing Document - Letter of Opposition 4.30.19.pdf HSTA 4/30/2019 3:00:00 PM