Legislature(2001 - 2002)
05/03/2001 08:37 AM House STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
May 3, 2001
8:37 a.m.
MEMBERS PRESENT
Representative John Coghill, Chair
Representative Jeannette James
Representative Hugh Fate
Representative Gary Stevens
Representative Peggy Wilson
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 193(FIN)
"An Act making a special appropriation to the Alaska Legislative
Council for a study of the economic and social effects of the
permanent fund dividend on the state; and providing for an
effective date."
- MOVED CSSB 193(FIN) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: SB 193
SHORT TITLE:STUDY:EFFECTS OF PERMANENT FUND DIVIDEND
SPONSOR(S): FINANCE
Jrn-Date Jrn-Page Action
04/17/01 1152 (S) READ THE FIRST TIME -
REFERRALS
04/17/01 1153 (S) STA, FIN
04/19/01 (S) STA AT 3:30 PM BELTZ 211
04/19/01 (S) Moved Out of Committee
04/19/01 (S) MINUTE(STA)
04/20/01 1194 (S) STA RPT 3DP 1NR
04/20/01 1194 (S) DP: THERRIAULT, PHILLIPS,
HALFORD;
04/20/01 1194 (S) NR: DAVIS
04/24/01 (S) FIN AT 9:00 AM SENATE FINANCE
532
04/26/01 (S) FIN AT 6:00 PM SENATE FINANCE
532
04/26/01 (S) Moved CS(FIN) Out of
Committee
04/26/01 (S) MINUTE(FIN)
04/26/01 (S) MINUTE(FIN)
04/27/01 1298 (S) FIN RPT CS 8DP 1NR NEW TITLE
04/27/01 1298 (S) DP: DONLEY, KELLY, GREEN,
AUSTERMAN,
04/27/01 1298 (S) OLSON, WILKEN, WARD, LEMAN;
04/27/01 1298 (S) NR: HOFFMAN
04/27/01 1299 (S) FN1: (LAA)
04/28/01 1329 (S) RULES TO CALENDAR 1OR 4/28/01
04/28/01 1331 (S) READ THE SECOND TIME
04/28/01 1332 (S) FIN CS ADOPTED UNAN CONSENT
04/28/01 1332 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/28/01 1332 (S) READ THE THIRD TIME CSSB
193(FIN)
04/28/01 1332 (S) PASSED Y18 N1 A1
04/28/01 1332 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
04/28/01 1332 (S) ELLIS NOTICE OF
RECONSIDERATION
04/28/01 (S) RLS AT 2:00 PM FAHRENKAMP 203
04/28/01 (S) MINUTE(RLS)
04/30/01 1380 (S) RECONSIDERATION NOT TAKEN UP
04/30/01 1381 (S) TRANSMITTED TO (H)
04/30/01 1381 (S) VERSION: CSSB 193(FIN)
05/01/01 1423 (H) READ THE FIRST TIME -
REFERRALS
05/01/01 1423 (H) STA, FIN
05/02/01 (H) STA AT 9:00 AM CAPITOL 102
05/02/01 (H) -- Meeting Postponed to
5/3/01 --
05/03/01 (H) STA AT 8:30 AM CAPITOL 102
WITNESS REGISTER
SENATOR PETE KELLY
Alaska State Legislature
Capitol Building, Room 518
Juneau, Alaska 99801
POSITION STATEMENT: Sponsor of SB 193.
ACTION NARRATIVE
TAPE 01-52, SIDE A
Number 0001
CHAIR JOHN COGHILL called the House State Affairs Standing
Committee meeting to order at 8:37 a.m. Representatives
Coghill, Fate, Stevens, Wilson, Crawford, and Hayes were present
at the call to order. Representative James arrived as the
meeting was in progress.
SB 193 - STUDY:EFFECTS OF PERMANENT FUND DIVIDEND
Number 0080
CHAIR COGHILL announced that the committee would hear CS FOR
SENATE BILL NO. 193(FIN), "An Act making a special appropriation
to the Alaska Legislative Council for a study of the economic
and social effects of the permanent fund dividend on the state;
and providing for an effective date."
Number 0097
SENATOR PETE KELLY, Alaska State Legislature, sponsor explained
that SB 193 proposes to study what is going on with the
permanent fund dividend (PFD), specifically in preparation for a
possible gas [pipeline] boom. If Alaska experiences a boom
similar to what occurred in the '70s during construction of the
oil pipeline, he predicted, there would be impacts on the PFD.
He then mentioned an [Alaska Superior] Court case [Lindley v.
Malone] from 1990, which, he opined, narrowly left open the door
to examine the possibility of instituting a two-year-residency
requirement for the PFD. He reported that the court said that
the state has to prove that the PFD has a negative impact on the
state before a two-year-residency requirement could be imposed.
All that SB 193 does, he concluded, is begin to study the
socioeconomic impacts of the PFD.
SENATOR KELLY used the example of a family of five who is trying
to decide whether to move to Alaska from the Lower 48: under
recent PFD payouts, this is close to $10,000; therefore, he
opined, the decision to come to Alaska could be based on that
$10,000. He suggested that the question before the legislature
is whether it wants the PFD drawing people to Alaska, or
"opportunity" drawing people. The study proposed by SB 193 just
gives the legislature information; it does not create any
statutory changes. After the study, if it is then determined
that the PFD is having a negative effect - he said the court
called it a magnet affect - then the legislature could implement
a two-year-residency requirement.
CHAIR COGHILL noted SB 193 states that the results of the study
are to be presented to the legislature on or before January 15,
2002. He asked whether this study could be completed in such a
short period of time.
SENATOR KELLY said that he has talked with people who do these
kinds of studies and they have indicated to him that it could be
done in that timeframe.
Number 0355
CHAIR COGHILL asked Senator Kelly whether he has "the blessings
of the departments" with regard to the requirements placed on
them by SB 193. "Are we pushing them, or walking with them?"
SENATOR KELLY responded that rather than go for a fiscal note,
SB 193 just appropriates the money [from the receipts of the
Alaska Permanent Fund Corporation]. Although the departments
are going to be involved, they will not be asked for their
active participation other than to provide information that they
should be collecting already. He explained that it would be the
Alaska Legislative Council that would contract with a company
for the study.
REPRESENTATIVE JAMES surmised that a list of PFD applicants
could be obtained from the Permanent Fund Dividend Division and
then compared with lists of people applying for welfare, food
stamps, and unemployment compensation. She asked if this is how
Senator Kelly envisions the study being done. She also noted
that many people who advocate keeping the PFD as it is and even
making it bigger are those who say that there are probably not
very many people who come to Alaska just for the PFD.
SENATOR KELLY said that goal of the study is to provide hard
evidence - as opposed to anecdotal evidence - of how many people
come to Alaska just for the PFD.
REPRESENTATIVE JAMES mentioned that she heard testimony several
years ago from a woman with a disabled child who moved to Alaska
specifically because Alaska provided better programs for her
child. She also mentioned that a study done regarding the
Longevity Bonus Program indicated that when the residency
requirement was lowered to one year, approximately 40 percent of
people who applied for it had only been in Alaska for three
years or less. Thus, she surmised, there is evidence that
people do come to Alaska just for the programs.
REPRESENTATIVE FATE said he is glad to see SB 193. He mentioned
that a study done several years ago documented approximately how
much money was leaving the state each year as what he called
"ghost money," and documented approximately how many families
leave Alaska every five years. He asked whether the study
proposed by SB 193 would also include this sort of information.
SENATOR KELLY said it would not. Demographic changes will only
be studied in relation to the PFD, he added.
REPRESENTATIVE STEVENS, returning to the example of a family of
five choosing to move to Alaska for $10,000 in PFD money, noted
that Alaska would also be paying the educational costs of the
three children. He also noted that since many people come to
Alaska for a combination of reasons, it wouldn't be easy to
determine that it is strictly because of the PFD. He asked
Senator Kelly what he intends to do if the results of the study
are vague.
Number 1029
SENATOR KELLY admitted that even if the study is approved,
extending the residency requirements to two years might still be
prohibited; it is a bit of a gamble. He added that if the study
is authorized, he envisions the Alaska Legislative Council
working to set the study's parameters with whichever company is
chosen so that the results won't be vague. He explained that he
does not have any objection to people who move to Alaska who
have something to offer the community in return; he said his
fear is that people who have nothing to contribute to Alaska
will move up here solely because of the PFD and then start
living off public assistance programs.
REPRESENTATIVE WILSON said she is glad to see that the effects
of seasonal employment will also be investigated. [For the
reader's information, this line of inquiry is not specifically
listed in SB 193, it is merely mentioned in the sponsor
statement.] As a former Tok resident, she recalled people
without any assets to speak of moving in to the community in
order to qualify for the PFD as well as Alaska's welfare system.
REPRESENTATIVE CRAWFORD opined that the study proposed by SB 193
will help determine what is actually going on. He recounted
that he came "up the highway" 25 years ago with all his worldly
belongings in an International Scout, and that he came for the
opportunities that Alaska had to offer. He added that receiving
the PFD over the years has helped him and his family. He said:
I don't know how we gauge what a negative effect
really is; ... what's negative and what's positive
really is kind of vague here. I'm sure that a lot of
us that came up the highway to work on the pipeline 25
years ago are the fathers and mothers of today's
doctors and lawyers and what have you. I don't know
that having people come up the highway ... [who] are
in dire straights, isn't going to have some good
effects as well. I know that in my trade as an
ironworker, we're short of ironworkers. We don't have
enough ironworkers to build a gas [pipeline]; we don't
even have enough ironworkers to build a 20-story
building in Anchorage this year. We're going to need
more people, and it seems to me that we've been losing
a lot of good people over the last few years; a lot of
anecdotal evidence coming in to me is that kids are
going [to school out of state] and they don't come
back. So I don't know where we get tomorrow's
generation from unless it is people coming up the
highway, and if the dividend helps them to get up here
and stay up here and ... [become] new Alaskans, I
don't know that it's all bad. So I'm glad that you're
going to do this study, so we can kind of decide what
is a good effect and what's a bad effect.
SENATOR KELLY said: "I think you've, in some ways, hit the nail
on the head; this is going to be a tough study because what you
are looking at, really, is motivation. If there's an ironworker
out there that wants to come to Alaska, and that dividend helps
them make the decision, then I say, 'Come on up.'" He remarked
that the people who came up the highway in the '70s for the
pipeline came up because they had a job. He said it is going to
be difficult to get clear answers from the study because the
goal will be to document the number of people who are motivated
by the idea of getting a PFD check rather than getting a job.
Number 1611
REPRESENTATIVE FATE moved to report CSSB 193(FIN) out of
committee with individual recommendations and the accompanying
fiscal note. There being no objection, CSSB 193(FIN) was
reported from the House State Affairs Standing Committee.
ADJOURNMENT
Number 1642
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 8:59
a.m.
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