Legislature(1999 - 2000)
05/23/1999 11:15 PM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| * | HB1001 | ||
HOUSE FINANCE COMMITTEE
SPECIAL SESSION
May 23, 1999
11:15 P.M.
TAPE HFC SS 99 - 5, Side 1.
CALL TO ORDER
Co-Chair Mulder called the House Finance Committee meeting
to order at 11:15 P.M.
PRESENT
Co-Chair Mulder Representative Foster
Co-Chair Therriault Representative Grussendorf
Representative Austerman Representative Kohring
Representative Bunde Representative G. Davis
Representative J. Davies Representative Williams
Representative Moses was not present for the meeting.
ALSO PRESENT
Representative Jim Whitaker; Representative Andrew Halcro;
Representative Ethan Berkowitz; Senator John Torgerson;
Representative Sharon Cissna; Representative Bill Hudson.
SUMMARY
HB 1001 An Act authorizing an advisory vote on a long-term
financial plan for the state; and providing for an
effective date.
CS HB 1001 (FIN) was reported out of Committee
with a "do pass" recommendation.
HOUSE BILL NO. 1001
An Act authorizing an advisory vote on a long-term
financial plan for the state; and providing for an
effective date.
Co-Chair Mulder spoke to the changes made to the work draft
currently before the members. He advised that a change had
been made to Page 3, Section 7, which would mandate that the
permanent fund dividends issued in 2000 would be the same as
those issued in 1999.
Representative Williams questioned the reason for that
change. Co-Chair Mulder explained that would allow the
public to know the amount that their dividends would be for
the next two years. Representative Williams pointed out
that the public would not know the dividend amount should
the status quo calculation be in place.
Representative Grussendorf explained by providing the public
information regarding the amount, would increase their
comfort enough to be able to focus on the plan and the
State's financial problem.
Representative Grussendorf asked the time frame from which
the 1999 dividend would be calculated. Co-Chair Mulder
replied it would be determined from a 5-year rolling average
and based on the July 1st through June 30th fiscal year.
Co-Chair Mulder advised that Section 8 provided transitional
language; Section 9 changes the sunset date and the
repealing date. He added that this legislation will require
additional action by the Legislature for it to stay in
place. Representative J. Davies suggested that the
legislation would provide security to the voters.
Representative Williams asked how distribution of a $1700
dollar dividend would affect budget numbers calculated in
plans previously discussed. Co-Chair Mulder explained that
level of dividend would create a "medium level" volatility.
The plan works with all the same assumptions.
Co-Chair Mulder pointed out that the current work draft
contains no language regarding new revenues. The proposed
plan is only a "model", which will serve the purpose of
showing assumptions of how a plan could work. Those
assumptions would vary from legislature to legislature
depending on new revenues and/or additional budget
reductions.
Representative Williams emphasized that it would be "risky"
for the welfare of the State's budget to guarantee a $1700
dollar dividend for the next two years. Co-Chair Mulder
agreed that the $1000 dollar dividend would be the more
responsible way for the State to proceed, however, he
believed that the $1700 approach would be less risky than
the status quo. He acknowledged that the intent was to
appease voters enough to hopefully vote "yes" on the issue.
Representative Williams asked if the proposed plan would
need "adjusting" in the next few years. Co-Chair Mulder
reiterated that the proposed legislation could work.
Representative Williams acknowledged that he was "bothered"
by this proposal and reminded members that when various
plans were being considered, the $1700 dollar dividend plan
was known to be "very" risky. He believed that the
Legislature would have to come back into session to "fix"
this plan. Representative Williams pointed out that this is
the first time that the Legislature has come before the
people to request usage of the Permanent Fund. He
emphasized that he would like to see it done correctly the
first time.
Representative Grussendorf spoke to the "risk" of presenting
any plan to the public. He stressed that the Legislature
can not afford to "fail". The public must be educated,
however, he acknowledged that what is on their minds is only
the amount of the dividend check. The $1700 dollar dividend
will provide the voting public a little "comfort" and
hopefully, the proposed plan should provide a better
political and economic environment to sell the plan.
Representative G. Davis agreed that the $1000 dividend would
provide complete safety from an economic standpoint, the
$1500 dividend would provide a degree of comfort, and that
the $1700 dividend does guarantee more risk. However, he
acknowledged that the need for a plan is so important, it is
essential to convince the public while at the same time,
they don't sacrifice too deeply.
Co-Chair Therriault MOVED to RESCIND action taken on
adopting the previous CS HB 1001 (FIN) from Committee.
There being NO OBJECTION, it was so ordered.
Co-Chair Therriault MOVED to adopt work draft #1-LS1022\I,
Cook, 5/23/99, as the legislation before the Committee.
There being NO OBJECTION, it was adopted.
Representative Austerman asked clarification on how the
legislation would work. Co-Chair Mulder explained that this
year, the dividend would be calculated in the traditional
manner; next year, the dividend would be the same amount as
in 1999. He continued, the following year, the dividend
would be calculated at 50% of the 5.88 payout.
Representative Austerman pointed out that by putting off the
endowment for two years, could jeopardize the intended
concept.
Representative Foster referenced Page 5, Lines 7 and 10. He
questioned if that language should be included. He posed a
hypothetical situation in which, if the plan does not
generate enough funds, then the State would need to find
future revenue sources. He believed that the language could
"tie the hands" of future legislatures when trying to create
revenue sources.
Co-Chair Mulder agreed, however, noted the intent was to
convey to the public, that there is confusion related to the
approach as provided by the Governor. This language is
"not" the Governor's approach. He noted that it would not
preclude other new revenues or a statewide tax from being
discussed as possible options in the future.
Representative J. Davies agreed that the language referenced
by Representative Foster would not preclude an income tax in
the future.
Co-Chair Therriault MOVED to report CS HB 1001 (FIN) out of
Committee with individual recommendations, There being NO
OBJECTION, it was so ordered.
CS HB 1001 (FIN) was reported out of Committee with a "do
pass" recommendation.
ADJOURNMENT
The meeting adjourned at 11:40 P.M.
H.F.C. Special Session 4 5/23/99 p.n.
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