Legislature(2023 - 2024)ADAMS 519

04/17/2023 01:30 PM House FINANCE

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                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 17, 2023                                                                                            
                         3:01 p.m.                                                                                              
3:01:24 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster called the House Finance Committee meeting                                                                      
to order at 3:01 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Bryce Edgmon, Co-Chair                                                                                           
Representative Neal Foster, Co-Chair                                                                                            
Representative DeLena Johnson, Co-Chair                                                                                         
Representative Julie Coulombe                                                                                                   
Representative Mike Cronk                                                                                                       
Representative Alyse Galvin                                                                                                     
Representative Sara Hannan                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Will Stapp                                                                                                       
Representative Frank Tomaszewski                                                                                                
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Representative  Kevin  McCabe,  Sponsor; JP  Cortez,  Policy                                                                    
Director,   Sound  Money   Defense;  Representative   George                                                                    
Rauscher, Sponsor; Ryan  McKee, Staff, Representative George                                                                    
HB   3    GOLD AND SILVER SPECIE AS LEGAL TENDER                                                                                
          HB 3 was HEARD and HELD in committee for further                                                                      
HB  83    CITIZEN ADVISORY COMM ON FEDERAL AREAS                                                                                
          HB 83 was HEARD and HELD in committee for further                                                                     
Co-Chair Foster  reviewed the meeting  agenda. He  noted the                                                                    
meeting would be  expedited due to an  upcoming meeting with                                                                    
the governor.                                                                                                                   
HOUSE BILL NO. 3                                                                                                              
     "An  Act relating  to  specie as  legal  tender in  the                                                                    
     state; and relating  to borough and city  sales and use                                                                    
     taxes on specie."                                                                                                          
3:03:44 PM                                                                                                                    
REPRESENTATIVE   KEVIN  MCCABE,   SPONSOR,   gave  a   brief                                                                    
introduction to  HB 3.  He read  from the  sponsor statement                                                                    
(copy on file) as follows:                                                                                                      
     The  purpose   of  HB  3   is  to   recognize  Alaska's                                                                    
     constitutional duty, power and  right under Section 10,                                                                    
     Article I,  of the United States  Constitution, and the                                                                    
     Tenth Amendment  of the  United States  Constitution to                                                                    
     make gold  and silver  legal tender  in the  payment of                                                                    
     HB 3 will  secure the rights of citizens  of this state                                                                    
     under  the Ninth  and Tenth  Amendments  of the  United                                                                    
     States Constitution  to tender  gold and silver  in the                                                                    
     payment of  a debt should  the merchant or  payee agree                                                                    
     to accept it.                                                                                                              
     This bill  will bring Alaska into  full compliance with                                                                    
     the  United  States  Constitution  with  the  policies,                                                                    
     practices, and  procedures of  this State  with respect                                                                    
     to the use of gold,  silver, and specie as legal tender                                                                    
     in the payment of debt.                                                                                                    
Representative  McCabe  added  that   12  other  states  had                                                                    
already  passed  similar  legislation  to  accept  gold  and                                                                    
silver  coins  as legal  tender.  Tennessee  had passed  its                                                                    
legal  tender bill  in  the current  year  and Missouri  and                                                                    
Minnesota   would  be   soon  hearing   a  version   of  the                                                                    
legislation.  As of  2022,  there were  42  states that  had                                                                    
removed some or  all of the taxes from the  purchase of gold                                                                    
and   silver.  He   continued  reading   from  the   sponsor                                                                    
     This  bill  will  preserve, protect,  and  promote  the                                                                    
     state and  its economic  security, safety,  health, and                                                                    
     welfare of the  people of this state;  and protect this                                                                    
     state  and   its  citizens   in  the   acquisition  and                                                                    
     possession of  gold and silver  and their use  as legal                                                                    
     tender in the payment of debt.                                                                                             
Representative McCabe  noted that his office  was working on                                                                    
a modification  to Article  5, Subparagraph  C of  the bill.                                                                    
The  section   tasked  the  House  Finance   Committee  with                                                                    
studying  the possibility  of establishing  additional forms                                                                    
of legal tender  for various expenses, and  the change would                                                                    
move  that  responsibility  to the  Legislative  Budget  and                                                                    
Audit  Committee   (LB&A).  The  change  was   suggested  by                                                                    
Representative Hannan in  the prior year and  he agreed that                                                                    
LB&A would  be better suited  for the job. He  concluded his                                                                    
comments and offered to                                                                                                         
Co-Chair Foster  suggested that the invited  testifier speak                                                                    
on the bill.                                                                                                                    
3:06:43 PM                                                                                                                    
JP  CORTEZ, POLICY  DIRECTOR, SOUND  MONEY DEFENSE,  thanked                                                                    
the committee  for hearing HB  3 and stated his  support for                                                                    
the bill. He  understood that Alaska did not  charge a sales                                                                    
tax on  purchases of goods, but  boroughs and municipalities                                                                    
occasionally chose  to charge a  sales tax. He  thought that                                                                    
sales taxes discouraged Alaskans who  wished to own gold and                                                                    
silver to  protect their  savings at a  time of  record high                                                                    
inflation. The  bill would ensure  that there were  no taxes                                                                    
or  disincentives  to  prevent   Alaskans  from  owning  the                                                                    
precious metals. He reiterated that  the bill would also put                                                                    
Alaska in compliance with the U.S. Constitution.                                                                                
Mr. Cortez continued  that one of the reasons  that the bill                                                                    
was  important was  because investments  were not  typically                                                                    
subject to sales  tax. There were 42 states  that had active                                                                    
legislation to  eliminate sales  taxes from  precious metals                                                                    
and reaffirm  gold and  silver as  legal tender.  He relayed                                                                    
that there was  currently a similar bill  on the Mississippi                                                                    
governor's desk  and once signed, it  would make Mississippi                                                                    
the forty-third state to pass  similar legislation. He added                                                                    
that Missouri and  Arkansas also had bills  to reaffirm gold                                                                    
and silver  as legal tender  and the bills  were anticipated                                                                    
to pass  within the following  week. In 2023, there  were 25                                                                    
states  that had  introduced similar  legislation to  either                                                                    
remove taxes from  the purchase or from the  sale of metals.                                                                    
He indicated that HB 3  would also allow the state treasurer                                                                    
to invest state funds in  physical holdings to establish in-                                                                    
state depositories. He thanked the committee for its time.                                                                      
Co-Chair  Foster reminded  the  committee that  there was  a                                                                    
meeting with  the governor in  21 minutes and he  planned to                                                                    
spend 15 minutes on each of the bills on the agenda.                                                                            
Representative Josephson understood  that Alaska was already                                                                    
in compliance with the US  Constitution; however, the system                                                                    
to use  gold and silver was  simply not in place.  It was an                                                                    
option  for  the  state,  but  the state  was  not  in  non-                                                                    
compliance  by not  engaging  in the  system.  He asked  Mr.                                                                    
Cortez if his understanding was accurate.                                                                                       
Mr.   Cortez  responded   that  Representative   Josephson's                                                                    
understanding  was accurate.  He  indicated  that one  could                                                                    
make the  argument that taxes  or impediments on  using gold                                                                    
and silver as legal tender  were in opposition to the spirit                                                                    
of the U.S. Constitution.                                                                                                       
3:10:22 PM                                                                                                                    
Representative Ortiz asked if any  other states had begun to                                                                    
use gold and  silver in normal transactions.  He wondered if                                                                    
it had created any confusion in the business world.                                                                             
Mr. Cortez responded  that some states had begun  to use the                                                                    
system.  He  emphasized that  there  was  no obligation  and                                                                    
businesses  could  choose  to accept  or  decline  gold  and                                                                    
silver  as a  form  of currency.  There  were businesses  in                                                                    
other states and  countries that had decided  to accept gold                                                                    
backs as currency.                                                                                                              
Representative Ortiz  asked why there  was a recent  push to                                                                    
establish  the system  in  the current  year  as opposed  to                                                                    
beginning the process years ago.                                                                                                
Mr. Cortez responded that the  world was in an unprecedented                                                                    
monetary  period.  Advocates  of  gold  financing  had  been                                                                    
predicting that  a time of  high inflation  would inevitably                                                                    
arrive, and it  had. He opined that paper money  had been an                                                                    
experiment   for   decades   and  that   state   treasurers,                                                                    
investment  groups, and  citizens  were "waking  up" to  the                                                                    
realization that "paper  money is just that" and  it was not                                                                    
as established as gold and silver.                                                                                              
Representative  Stapp  asked  if   capital  gains  would  be                                                                    
applicable if an individual were  to purchase gold or silver                                                                    
and sell it for profit in a year's time.                                                                                        
Mr. Cortez responded that federal  gains would be applicable                                                                    
but there would be no  applicable state taxes because Alaska                                                                    
did not have a state income tax.                                                                                                
3:13:53 PM                                                                                                                    
Representative  Galvin asked  how many  decades paper  money                                                                    
had been an experiment.                                                                                                         
Mr. Cortez responded  it had been five  decades, starting in                                                                    
Representative  Galvin  stated  her understanding  that  Mr.                                                                    
Cortez thought  that the  world needed to  "wake up"  to the                                                                    
gold and  silver standard. She  was also hearing  from young                                                                    
people that  the world needed  to wake  up to the  idea that                                                                    
money was abstract and could  be traded online. There seemed                                                                    
to  be a  wide  spectrum as  to how  money  was viewed.  She                                                                    
wondered what  the advantages would  be to returning  to the                                                                    
gold and silver standard  as opposed to using cryptocurrency                                                                    
and other online monies.                                                                                                        
Mr. Cortez responded  that prior to 1971,  barring the years                                                                    
during which the country was  involved in a world war, there                                                                    
was no  inflation. He thought official  inflation numbers in                                                                    
the  present day  were close  to 7  percent. Individuals  on                                                                    
hourly wages,  individuals with fixed incomes,  and retirees                                                                    
were  most harmed  by inflation.  It was  difficult to  make                                                                    
long-term plans when the  economic environment was unstable.                                                                    
He opined  that it was  easier to make long-term  plans when                                                                    
one could  rely on a  stable unit  of currency that  was not                                                                    
being manipulated.                                                                                                              
Representative  Galvin  asked  for   a  description  of  the                                                                    
difference between the  price of oil changing,  the price of                                                                    
gold changing, and the inflationary  costs of goods. She was                                                                    
trying  to  understand his  argument  that  gold bars  would                                                                    
eradicate inflation.                                                                                                            
Mr. Cortez  responded that  from 1931 to  1971, there  was a                                                                    
floating exchange rate. Prior  to 1931, the traditional gold                                                                    
standard  required that  a  dollar be  attached  to a  fixed                                                                    
amount  of gold.  There was  a  period of  nearly 100  years                                                                    
where  there  was no  inflation  in  the United  States.  He                                                                    
acknowledged that  there was some  movement in the  price of                                                                    
gold as  it was a global  market and one of  the most liquid                                                                    
markets in existence. Silver was  a production metal and was                                                                    
used  in jewelry,  cars, and  other  technologies and  there                                                                    
were  industrial reasons  for  the movement  of silver.  The                                                                    
difference between  gold and  silver was  that gold  was not                                                                    
necessarily traded as an industrial metal.                                                                                      
Mr. Cortez continued that there  were certain countries that                                                                    
were stockpiling  the available  gold supply to  bolster the                                                                    
countries' treasuries.  It was difficult for  individuals to                                                                    
trade  commodities such  as oil,  but gold  and silver  were                                                                    
generally uniform assets regardless  of one's background and                                                                    
nationality. He indicated that gold  was a universal trading                                                                    
instrument  and  had  a  fixed quantity  in  addition  to  a                                                                    
longstanding  history  of  stability.   He  thought  it  was                                                                    
important that gold was mentioned  in the U.S. Constitution.                                                                    
He concluded that for the  reasons mentioned, gold should be                                                                    
placed in a different category than other commodities.                                                                          
3:19:30 PM                                                                                                                    
Co-Chair  Foster  asked if  Mr.  Cortez  would be  available                                                                    
online as  a resource for  future committee meetings  on the                                                                    
Mr. Cortez responded that he would be available.                                                                                
HB  3   was  HEARD  and   HELD  in  committee   for  further                                                                    
HOUSE BILL NO. 83                                                                                                             
     "An   Act   reestablishing   the   Citizens'   Advisory                                                                    
     Commission on Federal Management Areas in Alaska; and                                                                      
     providing for an effective date."                                                                                          
3:20:54 PM                                                                                                                    
REPRESENTATIVE GEORGE RAUSCHER, SPONSOR, thanked the                                                                            
committee for hearing HB 83. He read the sponsor statement                                                                      
(copy on file):                                                                                                                 
     House  Bill  83  reestablishes the  Citizens'  Advisory                                                                    
     Commission  on  Federal   Management  Areas  in  Alaska                                                                    
     (CACFA), which  sunset in 2021,  and sets a  new sunset                                                                    
     date of June 30, 2031. The  Commission is made up of 10                                                                    
     public  members, one  Senator,  and one  Representative                                                                    
     who  represent  "the diversity  of  users  and uses  of                                                                    
     federal land  in the  state" and  are appointed  by the                                                                    
     Governor and Legislature.                                                                                                  
     CACFA  was first  established  in  1981, shortly  after                                                                    
     Congress  passed  the  Alaska National  Interest  Lands                                                                    
     Conservation Act  (ANILCA)    comprehensive legislation                                                                    
     governing all federal public lands  in the state. Under                                                                    
     the  balanced compromise  Congress  crafted in  ANILCA,                                                                    
     104+ million  acres (on top  of the ~100  million acres                                                                    
     already set aside) were  set-aside in permanent federal                                                                    
     ownership  as conservation  system units  (e.g., parks,                                                                    
     preserves,  wildlife refuges,  wilderness areas)  while                                                                    
     at the  same time enabling Alaskan's  to maintain their                                                                    
     traditions, accommodate  the social and  economic needs                                                                    
     of  the state,  provide a  range of  land-use and  land                                                                    
     access rights, safeguard  opportunities for responsible                                                                    
     resource   development,    and   facilitate   continued                                                                    
     improvements    in     transportation    and    utility                                                                    
     infrastructure. The provisions of  ANILCA plus those of                                                                    
     the Alaska  Statehood Act and the  Alaska Native Claims                                                                    
     Settlement  Act (ANCSA)  mean  that  most Alaskans  are                                                                    
     regulated   under  a   unique  and   extremely  complex                                                                    
     regulatory web.                                                                                                            
     For  the  decades  that  CACFA   operated,  it  was  an                                                                    
     independent  and impartial  source  of information  and                                                                    
     center  for advocacy  on Statehood,  ANCSA, and  ANILCA                                                                    
     issues that  impact all Alaskans. CACFA  helps Alaskans                                                                    
     navigate  complex regulations  and  works with  federal                                                                    
     agencies to ensure  Congressional intent is implemented                                                                    
     with respect to Alaska's  interests. Among many things,                                                                    
     the  Commission   holds  hearings  to   collect  public                                                                    
     comment  on decisions  that  affect them;  disseminates                                                                    
     information  about historical  and  new regulations  to                                                                    
     the public, the Executive  branch, and the Legislature;                                                                    
     monitors  the Federal  Register  and regularly  submits                                                                    
     written  comment in  response  to  actions that  affect                                                                    
     Alaska; and helps  Alaskans navigate federal permitting                                                                    
     While  the  State's  ANILCA   program  and  CACFA  both                                                                    
     monitor federal actions, CACFA is  the only entity that                                                                    
     represents  the views  of  Alaskan citizens  concerning                                                                    
     federal land management plans within the state.                                                                            
     The last  state audit conducted in  2020 concluded that                                                                    
     "there   is   a   continuing  public   need   for   the                                                                    
     commission." As  time passes, institutional  memory and                                                                    
     ANILCA expertise is lost at  both the federal and state                                                                    
     level. An active CACFA is  critical to ensure that this                                                                    
     critical knowledge is  preserved, remains accessible to                                                                    
     Alaskans,   and  can   be   used   to  defend   Alaska.                                                                    
     Furthermore,  without  CACFA,  there  is  no  organized                                                                    
     center  through  which  individuals can  channel  their                                                                    
     concerns  to the  higher  levels  of government  making                                                                    
     important land  use decisions  that impact  them. CACFA                                                                    
     is an  essential tool  to ensure  that Alaskans  have a                                                                    
     strong  and  powerful  voice in  what  happens  in  our                                                                    
3:25:46 PM                                                                                                                    
RYAN MCKEE, STAFF, REPRESENTATIVE GEORGE RAUSCHER, read the                                                                     
sectional analysis (copy on file):                                                                                              
     Sec   1.      Amends  AS   44.66.010(a)  creating   new                                                                    
     subsection  (15) reestablishing  the Citizens  Advisory                                                                    
     Commission  on  Federal  Management  Areas  in  Alaska,                                                                    
     setting a new sunset date of June 30, 2031.                                                                                
     Sec  2.    Amends  AS  44.66.010(a), technical  change:                                                                    
     Removes subsection  (10) where CACFA's  previous sunset                                                                    
     date (June 30, 2021) was listed.                                                                                           
     Sec  3.     Incorporates  transition  language  to  the                                                                    
     uncodified law of Alaska  establishing the initial term                                                                    
     lengths   of  new   appointments  to   the  commission.                                                                    
     Thereafter,   the   term   limits   outlined   in   the                                                                    
     Commission's statute will take effect.                                                                                     
     Sec 4.  Sets an effective date of July 1, 2023.                                                                            
Mr. McKee added that [legislative auditor] Ms. Kris Curtis                                                                      
was available online to answer any questions regarding the                                                                      
2020 audit mentioned in the sponsor statement.                                                                                  
Co-Chair Foster thought the bill  might seem complicated and                                                                    
he was aware that there  was a lot of background information                                                                    
involved  in the  legislation. For  example, Serpentine  Hot                                                                    
Springs  in Nome  were difficult  to access  because it  was                                                                    
located within  [Bering Land Bridge] National  Park and all-                                                                    
terrain vehicles  were not  allowed in  the area.  Elders in                                                                    
particular  had been  experiencing difficulty  accessing the                                                                    
springs  and historically,  elders had  visited the  springs                                                                    
frequently. He  relayed that CACFA  would allow  the opening                                                                    
of  trails that  fell under  [federal] Revised  Statute (RS)                                                                    
2477,  which   were  historical   trails  used   by  miners,                                                                    
travelers, and villagers, among  others. One of the concerns                                                                    
he  had  heard  was  that CACFA  might  make  private  lands                                                                    
vulnerable to  unwanted visitors, but his  understanding was                                                                    
that  CACFA  only  aimed  to open  federal  lands,  such  as                                                                    
national parks.                                                                                                                 
Representative Josephson thought the  concerns about RS 2477                                                                    
conflicts were  valid. He had  done research on  the Klutina                                                                    
Lake  dispute in  Wrangel and  there were  profound concerns                                                                    
about the  potential impacts of  opening federal  lands. His                                                                    
main concern  was that CACFA  had a narrow  perspective. The                                                                    
Board of  Game was  entirely appointed  by the  governor and                                                                    
Title  16 required  that  the  governor appointment  members                                                                    
with reference  to the diversity  of users; however,  he did                                                                    
not  think  the  requirement  was being  satisfied.  On  the                                                                    
Department of Fish and Game's  website, there was a video on                                                                    
how  to  extradite a  dog  from  a  trap.  He asked  how  an                                                                    
individual  dog owner  who  would like  to  avoid a  similar                                                                    
situation while walking on federal  lands would have a voice                                                                    
through CACFA.  He thought that  such an  individual's voice                                                                    
would be too  small to be heard amid the  federal outcry. He                                                                    
wondered  how the  quiet  user, such  as  the cross  country                                                                    
skier, dog walker,  or backpacker, would have  a voice under                                                                    
Representative Rauscher responded that  the quiet user would                                                                    
have an opportunity  to be heard under the bill  and that it                                                                    
was  part  of the  purpose  of  CACFA.  He thought  that  an                                                                    
individual could  always bring  their concerns to  CACFA and                                                                    
that  CACFA   would  make  a  determination.   However,  the                                                                    
decision  might  not  always be  made  in  the  individual's                                                                    
3:32:31 PM                                                                                                                    
Co-Chair Foster reviewed the agenda for the following day's                                                                     
HB 83 was HEARD and HELD in committee for further                                                                               
3:33:28 PM                                                                                                                    
The meeting was adjourned at 3:33 p.m.                                                                                          

Document Name Date/Time Subjects
HB3.VerB.SectionalAnalysis.4.11.23.pdf HFIN 4/17/2023 1:30:00 PM
HB 3
HB3.VerB.SponsorStmt.4.11.23.pdf HFIN 4/17/2023 1:30:00 PM
HB 3
HB3.VerB.SupportingDocsLetters.4.11.23.pdf HFIN 4/17/2023 1:30:00 PM
HB 3
HB 83 Sectional Analysis.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Supporting Document AMA 3.13.2023.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Sponsor Statement.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Supporting Document APHA 3.8.2023.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Supporting Document ATA 3.27.2023.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Supporting Document CACFA Audit Report 04.08.2020.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Supporting Document CAP 3.13.2023.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Supporting Document Cunning 3.15.2023.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Supporting Document SCI AK 3.1.2023.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 Supporting Document SCI AK SCI Kenai 3.21.2023.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
HB 83 SB 34 Support Letter Charlie Lean 4.14.23.pdf HFIN 4/17/2023 1:30:00 PM
HB 83
SB 34
HB 83 NEW FN DNR 041423.pdf HFIN 4/17/2023 1:30:00 PM
HB 83