Legislature(2017 - 2018)BUTROVICH 205

03/07/2017 03:30 PM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SJR 1 CONST AM: GUARANTEE PERM FUND DIVIDEND TELECONFERENCED
Moved SJR 1 Out of Committee
-- Public Testimony --
*+ SCR 1 UNIFORM RULES: ABSTAIN FROM VOTING TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
          SJR 1-CONST AM: GUARANTEE PERM FUND DIVIDEND                                                                      
                                                                                                                                
3:32:53 PM                                                                                                                    
CHAIR DUNLEAVY announced the consideration of SJR 1.                                                                            
                                                                                                                                
3:33:16 PM                                                                                                                    
SENATOR  BILL  WIELECHOWSKI,  Alaska State  Legislature,  Juneau,                                                               
Alaska, sponsor  of SJR 1,  said the resolution would  put before                                                               
the Alaska voters  an amendment to Article IX, Section  15 of the                                                               
Alaska Constitution to do the following:                                                                                        
                                                                                                                                
   1. Place the current formula for calculating the Permanent                                                                   
     Fund Dividend (PFD) into the constitution.                                                                                 
   2. Require that there be inflation proofing.                                                                                 
                                                                                                                                
SENATOR  COGHILL addressed  inflation  proofing  and pointed  out                                                               
that  Senator Wielechowski  would leave  it  up to  a "matter  of                                                               
law." He referenced Section 2(c),  "The Legislature shall provide                                                               
by law  for a transfer from  the earnings reserve account  of the                                                               
fund  sufficient  to  offset  the  effect  of  inflation  on  the                                                               
principal of the fund during  that fiscal year." He asked Senator                                                               
Wielechowski  if he  considered tying  inflation proofing  to the                                                               
Consumer Price Index (CPI).                                                                                                     
                                                                                                                                
SENATOR WIELECHOWSKI replied that his  original intent was to put                                                               
the statute's exact language into  the constitution. He disclosed                                                               
that Legislative  Legal said using  the exact language was  a lot                                                               
to add  to the  constitution and  recommended that  the statute's                                                               
exact language  not be  used. He opined  that if  the legislation                                                               
passes and  voters approve  it, then  the existing  statute would                                                               
still  control, and  the  Legislature could  change  that at  any                                                               
time, just like what the Legislature can do now.                                                                                
                                                                                                                                
SENATOR   COGHILL  commented   that  putting   SJR  1   into  the                                                               
constitution and using the earnings  reserve for government would                                                               
have an impact on the  dividend. He asked Senator Wielechowski to                                                               
address  the   resolution's  impact  on  the   dividend  and  its                                                               
"constitutional right balance."                                                                                                 
                                                                                                                                
3:35:54 PM                                                                                                                    
SENATOR WIELECHOWSKI replied that all  the resolution does is put                                                               
the dividend formula  into the constitution. He  pointed out that                                                               
the PFD is  currently considered a right in  statute. He admitted                                                               
that stating a right statutorily  does not confer the same degree                                                               
of right as a constitutional  situation would. He reiterated that                                                               
the  resolution  is not  declaring  a  right,  but rather  it  is                                                               
declaring  the  formula  is  set  in  the  constitution  and  the                                                               
inflation proofing  is set  in the  constitution. He  opined that                                                               
the resolution  does not  change the legal  status, but  makes it                                                               
more of  a right  to substantive  procedural due  process; that's                                                               
what  typically   occurs  in  a  constitutional   right  that  is                                                               
established is more  of an ability to claim a  legal due process,                                                               
a procedural  due process.  He specified that  what is  gained is                                                               
just  putting  the dividend  formula  into  the constitution.  He                                                               
emphasized that his intent is  not to confer anyone an additional                                                               
right.                                                                                                                          
                                                                                                                                
He pointed out  that the statute currently says there  is a legal                                                               
obligation for  the Permanent Fund Corporation  to transfer funds                                                               
from the  earnings reserve to  the dividend fund,  something that                                                               
he  believes  is illegal  and  is  currently being  contested  in                                                               
judiciary.  He remarked  that the  statutory dedication  that the                                                               
Legislature set  up would confer  a similar right  that currently                                                               
exists.  He summarized  that his  intent was  to put  the current                                                               
statutes into  the constitution and  not change  anyone's rights,                                                               
but to simply  codify it in the constitution so  that people know                                                               
that they are going to get  their PFD every year without it being                                                               
vetoed.                                                                                                                         
                                                                                                                                
He  opined  that  if  the Legislature  passes  a  permanent  fund                                                               
restructuring with a guarantee for  a PFD, the dividend cannot be                                                               
guaranteed unless  it is put  into the constitution.  He asserted                                                               
that putting  the guarantee into  the constitution  will engender                                                               
trust  by  the   people  of  Alaska  and  a   fair  tradeoff  for                                                               
restructuring the permanent fund.                                                                                               
                                                                                                                                
SENATOR  COGHILL  replied  that many  of  Senator  Wielechowski's                                                               
points  were  legitimate, but  sees  the  resolution as  creating                                                               
other structural problems.                                                                                                      
                                                                                                                                
3:39:45 PM                                                                                                                    
CHAIR DUNLEAVY opened public testimony on SJR 1.                                                                                
                                                                                                                                
3:40:09 PM                                                                                                                    
CLEM TILLION, representing self,  Halibut Cove, Alaska, testified                                                               
in support  of SJR 1.  He asked  that the Legislature  not change                                                               
anything and obey  the law as it is written.  He pointed out that                                                               
the Alaska Permanent Fund Corporation  is statutorily required to                                                               
take out  inflation proofing before  approving 50 percent  of the                                                               
earnings to be sent to the  Department of Revenue. He opined that                                                               
changing  the law  makes the  permanent fund  more vulnerable  to                                                               
destruction.                                                                                                                    
                                                                                                                                
3:42:33 PM                                                                                                                    
SENATOR GIESSEL  asked Mr. Tillion to  clarify if he is  in favor                                                               
of SJR 1.                                                                                                                       
                                                                                                                                
MR.  TILLION emphasized  that he  is  in favor  of SJR  1 if  the                                                               
resolution does  not change  the law as  it currently  stands and                                                               
puts it into the constitution where it belongs.                                                                                 
                                                                                                                                
3:44:34 PM                                                                                                                    
JANEL DOCKENDORF,  representing self, Wasilla,  Alaska, testified                                                               
in support of SJR  1. She said the PFD should be  left the way it                                                               
is.                                                                                                                             
                                                                                                                                
3:45:41 PM                                                                                                                    
JAMES SQUYRES,  representing self, Deltana, Alaska,  testified in                                                               
support of SJR 1. He said  he supports the current calculation of                                                               
the PFD. He  suggested that the resolution  be passed immediately                                                               
for  comparison  to  the permanent  fund  bills  currently  under                                                               
consideration.                                                                                                                  
                                                                                                                                
3:47:11 PM                                                                                                                    
JULIET  STOESSEL, representing  self, Tok,  Alaska, testified  in                                                               
support of SJR  1. She set forth  that the PFD needs  to be saved                                                               
because the permanent fund is Alaskan's money.                                                                                  
                                                                                                                                
3:48:25 PM                                                                                                                    
NORMAN  EGOLF,  representing  self,  Tok,  Alaska,  testified  in                                                               
support of  SJR 1. He  asked that  the current statute  be placed                                                               
into the constitution.                                                                                                          
                                                                                                                                
3:49:23 PM                                                                                                                    
PEGGY  CLEVENGER, representing  self, Tok,  Alaska, testified  in                                                               
support of  SJR 1.  She asked  that the statute  be added  to the                                                               
constitution.                                                                                                                   
                                                                                                                                
3:50:46 PM                                                                                                                    
JACK  CLEVENGER, representing  self,  Tok,  Alaska, testified  in                                                               
support of SJR 1.                                                                                                               
                                                                                                                                
3:52:03 PM                                                                                                                    
DAVID RICHARD  LUNTZ, representing self, Delta  Junction, Alaska,                                                               
testified  in support  of  SJR 1.  He asked  that  the people  of                                                               
Alaska be allowed to vote on the measure.                                                                                       
                                                                                                                                
3:53:28 PM                                                                                                                    
JON  FAULKNER, representing  self,  Homer,  Alaska, testified  in                                                               
support of SJR  1. He believes that the current  PFD program is a                                                               
right of the  citizens and that Alaskans have a  right to vote on                                                               
the measure.                                                                                                                    
                                                                                                                                
3:55:55 PM                                                                                                                    
DAVID OTNESS,  representing self,  Cordova, Alaska,  testified in                                                               
support  of SJR  1. He  said  the state  is in  a very  important                                                               
juncture and  he considered SJR 1  to be the most  important item                                                               
to have come along in a long time.                                                                                              
                                                                                                                                
3:58:52 PM                                                                                                                    
BETH  FREAD,  representing  self, Palmer,  Alaska,  testified  in                                                               
support of  SJR 1. She  set forth that SJR  1 is critical  to the                                                               
ongoing fiscal health of Alaska's future.                                                                                       
                                                                                                                                
4:02:15 PM                                                                                                                    
PAM  GOODE,  representing  self, Deltana,  Alaska,  testified  in                                                               
support  of SJR  1. She  stated  that she  supported keeping  the                                                               
PFD's  current calculation.  She asserted  that the  constitution                                                               
was written  for the people  to hold the  government accountable.                                                               
She said she  does not look at the PFD  as an entitlement because                                                               
the PFD belongs to the people.                                                                                                  
                                                                                                                                
4:04:19 PM                                                                                                                    
KAREN  TERRY, representing  self, Chugiak,  Alaska, testified  in                                                               
support  of  SJR  1.  She  said  she  did  not  support  using  a                                                               
percentage-of-market-value  formula  to  determine the  PFD.  She                                                               
opined  that  Alaskans  want  the  current  PFD  formula  in  the                                                               
constitution  due to  excessive spending  by the  Legislature and                                                               
possible vetoes. She said a  constitutional amendment is the only                                                               
way  to assure  that the  PFD is  protected, and  Alaska's unique                                                               
legacy is preserved for future generations.                                                                                     
                                                                                                                                
4:07:59 PM                                                                                                                    
STEVE ST.  CLAIR, representing  self, Wasilla,  Alaska, testified                                                               
in opposition  of SJR 1. He  remarked that enshrining the  PFD in                                                               
the constitution is a good thing,  but added that there are parts                                                               
in  resolution that  he did  not like.  He opined  that inflation                                                               
proofing  is unnecessary  because  investments  in the  permanent                                                               
fund are already inflation proofed  and previously proposed 50-50                                                               
plans  for using  the  permanent fund  do  not include  inflation                                                               
proofing.                                                                                                                       
                                                                                                                                
4:09:34 PM                                                                                                                    
KENNETH MCLEOD, representing self,  North Pole, Alaska, testified                                                               
in support of  SJR 1. He asserted that the  permanent fund should                                                               
not be changed. He said any  changes to the permanent fund should                                                               
go before the people of Alaska.                                                                                                 
                                                                                                                                
4:11:00 PM                                                                                                                    
KURT   SCHMIDT,  representing   self,  Delta   Junction,  Alaska,                                                               
testified in  support of SJR  1. He asserted that  the resolution                                                               
maintains  and  clarifies  procedures  that govern  the  PFD  and                                                               
prevents  abuse of  the fund.  He set  forth that  the people  of                                                               
Alaska should  decide their  fate and  vote on  SJR 1.  He stated                                                               
that he disagreed  with one Senate member who  recently said that                                                               
the  people really  don't  know the  issues  and the  Legislature                                                               
should not let them vote in such matters as the PFD.                                                                            
                                                                                                                                
4:13:06 PM                                                                                                                    
CHAIR DUNLEAVY closed public testimony on SJR 1.                                                                                
                                                                                                                                
4:13:22 PM                                                                                                                    
SENATOR GIESSEL moved to report  SJR 1, version 30-LS0104\D, from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note(s).                                                                                                                        
                                                                                                                                
CHAIR DUNLEAVY asked if there was an objection.                                                                                 
                                                                                                                                
SENATOR COGHILL objected  and explained that he is not  a big fan                                                               
of putting  SJR 1 in the  constitution. He stated that  there are                                                               
constitutional principles in  SJR 1 that he  does not understand.                                                               
He noted  that there is  public support, but said  the resolution                                                               
would create a tension between  using any of the earnings reserve                                                               
and the dividend.                                                                                                               
                                                                                                                                
SENATOR COGHILL removed his objection.                                                                                          
                                                                                                                                
4:14:25 PM                                                                                                                    
CHAIR  DUNLEAVY announced  that  without objection,  SJR 1  moved                                                               
from the Senate State Affairs Standing Committee.                                                                               

Document Name Date/Time Subjects
SCR 1 - Version A.PDF SSTA 3/7/2017 3:30:00 PM
SCR 1
SCR 1-Sponsor Statement.pdf SSTA 3/7/2017 3:30:00 PM
SCR 1
SCR 1 - Supporting Document - Voting Recusal Provisions in 50 states.pdf SSTA 3/7/2017 3:30:00 PM
SCR 1
SCR 1- Fiscal Note LEG.pdf SSTA 3/7/2017 3:30:00 PM
SCR 1
SJR 1 - Fiscal Note Division of Elections.pdf SSTA 3/7/2017 3:30:00 PM
SJR 1
SJR 1 - Written Testimony.pdf SSTA 3/7/2017 3:30:00 PM
SJR 1