Legislature(2021 - 2022)BUTROVICH 205
04/09/2021 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SJR1 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 1 | TELECONFERENCED | |
| + | TELECONFERENCED |
SJR 1-CONST AM: GUARANTEE PERM FUND DIVIDEND
1:34:34 PM
CHAIR REINBOLD announced the consideration of SJR 1, SENATE
JOINT RESOLUTION NO. 1, Proposing amendments to the Constitution
of the State of Alaska relating to the Alaska permanent fund and
appropriations from the Alaska permanent fund.
CHAIR REINBOLD asked if Section 1 would remove the Earnings
Reserve Account on June 30, 2023.
1:34:52 PM
SONJA KAWASAKI, Staff, Senator Bill Wielechowski, Alaska State
Legislature, Juneau, Alaska, agreed that Section 1 would
eliminate the Earnings Reserve Account by collapsing it into the
corpus of the Permanent Fund.
1:35:36 PM
CHAIR REINBOLD referred to Section 2, which would
constitutionalize five percent of market value (POMV).
MS. KAWASAKI agreed that is correct.
CHAIR REINBOLD related her understanding that the payments of
dividends could be calculated in two ways.
1:35:51 PM
MS. KAWASAKI explained that SJR 1 establishes that payments of
dividends to Alaskans will be either by the calculation set by
the historic statutory formula, as constitutionalized, or fifty
percent of the POMV, whichever would produce a dividend of
greater value. In that sense, the people would get the first
call. The remaining amount could be used to fund government
services.
CHAIR REINBOLD explained that SJR 1 would require 50 percent to
go to the people and 50 percent of the POMV would be spent on
government.
MS. KAWASAKI reiterated the calculation was a comparison between
the historic statutory formula and 50 percent of POMV.
1:37:21 PM
SENATOR SHOWER offered his view that under the current formula,
in 2021, about $2 billion would fund PFDs and the remaining $1.5
billion would be left for government and inflation proofing. It
would not quite be a 50:50 split.
CHAIR REINBOLD stated that SJR 1 would constitutionalize the
five percent POMV. She offered her view that this will give a
large portion of the permanent fund earnings to government. She
asked if it would require a two-thirds vote by the legislature.
MS. KAWASAKI answered yes. The legislature would need to approve
SJR 1 by a two-thirds vote.
CHAIR REINBOLD related her understanding that the question would
be on the November 8, 2022, general election ballot. If
approved, the earnings reserve account would be transferred to
the principal of the fund on June 30, 2023. She referred to page
2, lines 15 through 18. She read:
(a) On June 30, 2023, the unencumbered balance of the
earnings reserve account established by law shall be
deposited in the Alaska permanent fund and become part
of the principal of the fund.
1:40:22 PM
CHAIR REINBOLD opened public testimony on SJR 1.
1:41:05 PM
KATHERINE UEI, representing self, Soldotna, Alaska, spoke in
support of SJR 1. She stated her support for the legislature to
cut the budget. She expressed an interest in constitutionally
protecting the PFD.
1:42:19 PM
WILLY KEPPEL, representing self, Quinhagak, Alaska, stated his
support for SJR 1 since it will provide a means for the public
to have a voice. He encouraged the Senate to pass it and put it
before the voters. The budget and deficit need to be resolved,
he said.
MIKE COONS, representing self, Palmer, Alaska, spoke in support
of SJR 1. He said he liked the provisions in SJR 1. He offered
his view that large numbers of Alaskans will support the
resolution. If a fiscal note is required, it should be added.
SJR 1 and the spending cap in SJR 5 at 2.5 percent would create
a barrier that the legislature could not breach. This will
protect the permanent fund dividend (PFD) and keep spending
under realistic control. SJR 1 would establish a five percent of
market value (POMV) but prefers four percent.
1:45:47 PM
KRISTA BURTON, representing self, Anchorage, Alaska, spoke in
support of SJR 1. She asked members to please pass SJR 1.
1:46:26 PM
BERT HOUGHTALING, representing self, Big Lake, Alaska, spoke in
support of SJR 1. He said that SJR 1 was the only measure before
the legislature to protect the PFD by constitutionalizing the
statutory formula. He expressed concern about combining the
corpus and the ERA. He stated that the POMV draw seemed
reasonable, but it could be lower. He suggested the POMV draw
should be set at four percent to guarantee the fund's
sustainability. He urged the committee to add a provision to
inflation-proof the fund. He offered his view that the Permanent
Fund rightfully belongs to Alaskans and giving a share to state
departments does not meet the original purpose of the Permanent
Fund.
1:47:56 PM
SENATOR HUGHES joined the meeting.
1:49:03 PM
KATHLEEN SHOOP, representing self, Palmer, Alaska, spoke in
support of SJR 1.
1:50:28 PM
KEVIN HALL, representing self, Sterling, Alaska, spoke in
support of SJR 1. He said he has been watching this issue since
Governor Walker decided not to issue a PFD. The Permanent Fund
belongs to the people and that is how it should remain, he said.
1:51:37 PM
At ease
1:52:09 PM
CHAIR REINBOLD reconvened the meeting. She said she would accept
public testimony via email at Senate.Judiciary@akleg.gov.
CHAIR REINBOLD closed public testimony on SJR 1.
1:52:57 PM
SENATOR SHOWER offered his view that many legislators would
prefer not to combine the earnings reserve account (ERA) with
the corpus of the Permanent Fund. One issue is that the
legislature has spent $16.5 billion from the CBR. As revenues
decline, the legislature could decide to deplete it, he said. He
cautioned members that leaving funds in the earnings reserve
account means that the legislature can access the funds by a
simple majority vote.
1:53:59 PM
CHAIR REINBOLD said she struggles with SJR 1 because she does
not like the POMV provisions, but she would like SJR 1 to go
before the people for a vote. She maintained her concern that a
large portion of the draw would be deposited in the general fund
for government spending. She stated her previous support for a
full statutory PFD.
1:56:58 PM
MELISSA GUDOBBA, representing self, Wasilla, Alaska, spoke in
support of SJR 1 as a means to protect the Alaska Permanent
Fund.
[SJR 1 was held in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR1 Combined Public Testimony 4.3-9.pdf |
SJUD 4/9/2021 1:30:00 PM |
SJR 1 |
| SJR1 ALL Public Testimony Combined April 9 2021.pdf |
SJUD 4/9/2021 1:30:00 PM |
SJR 1 |