Legislature(2023 - 2024)DAVIS 106
03/11/2023 09:00 AM House WAYS & MEANS
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| Audio | Topic |
|---|---|
| Start | |
| HJR9 | |
| HJR9|| HJR8|| HJR7|| HB90|| HB72 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HJR 2 | TELECONFERENCED | |
| + | HB 38 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 72 | TELECONFERENCED | |
| += | HB 90 | TELECONFERENCED | |
| += | HJR 7 | TELECONFERENCED | |
| += | HJR 8 | TELECONFERENCED | |
| *+ | HJR 9 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS
March 11, 2023
9:02 a.m.
DRAFT
MEMBERS PRESENT
Representative Ben Carpenter, Chair
Representative Jamie Allard
Representative Tom McKay
Representative Kevin McCabe
Representative Cathy Tilton
Representative Cliff Groh
MEMBERS ABSENT
Representative Andrew Gray
OTHER LEGISLATORS PRESENT
Representative Jesse Sumner
Representative Craig Johnson
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 9
Proposing amendments to the Constitution of the State of Alaska
relating to the Alaska permanent fund and to appropriations from
the Alaska permanent fund.
- HEARD & HELD
HOUSE JOINT RESOLUTION NO. 8
Proposing amendments to the Constitution of the State of Alaska
relating to the Alaska permanent fund and appropriations from
the Alaska permanent fund.
- HEARD & HELD
HOUSE JOINT RESOLUTION NO. 7
Proposing amendments to the Constitution of the State of Alaska
requiring payment of a dividend to eligible state residents.
- HEARD & HELD
HOUSE BILL NO. 90
"An Act relating to income of the Alaska permanent fund and the
amount available for appropriation; relating to appropriations
from the earnings reserve account; relating to the amount of the
permanent fund dividend; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 72
"An Act relating to use of income of the Alaska permanent fund;
relating to the amount of the permanent fund dividend; relating
to the duties of the commissioner of revenue; and providing for
an effective date."
- HEARD & HELD
HOUSE BILL NO. 72
"An Act relating to use of income of the Alaska permanent fund;
relating to the amount of the permanent fund dividend; relating
to the duties of the commissioner of revenue; and providing for
an effective date."
- HEARD & HELD
HOUSE JOINT RESOLUTION NO. 2
Proposing amendments to the Constitution of the State of Alaska
relating to an appropriation limit.
- BILL HEARING CANCELED
HOUSE BILL NO. 38
"An Act relating to an appropriation limit; relating to the
budget responsibilities of the governor; and providing for an
effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HJR 9
SHORT TITLE: CONST AM: PERMANENT FUND; POMV;EARNINGS
SPONSOR(s): REPRESENTATIVE(s) GROH
03/06/23 (H) READ THE FIRST TIME - REFERRALS
03/06/23 (H) W&M, JUD
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
BILL: HJR 8
SHORT TITLE: CONST AM: GUARANTEE PERM FUND DIVIDEND
SPONSOR(s): WAYS & MEANS
03/01/23 (H) READ THE FIRST TIME - REFERRALS
03/01/23 (H) W&M, JUD
03/06/23 (H) W&M AT 6:00 PM DAVIS 106
03/06/23 (H) Heard & Held
03/06/23 (H) MINUTE(W&M)
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
BILL: HJR 7
SHORT TITLE: CONST AM: PERMANENT FUND DIVIDEND
SPONSOR(s): WAYS & MEANS
03/01/23 (H) READ THE FIRST TIME - REFERRALS
03/01/23 (H) W&M, JUD
03/06/23 (H) W&M AT 6:00 PM DAVIS 106
03/06/23 (H) Heard & Held
03/06/23 (H) MINUTE(W&M)
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
BILL: HB 90
SHORT TITLE: PERMANENT FUND DIVIDEND; $1000 DIVIDEND
SPONSOR(s): FIELDS
03/01/23 (H) READ THE FIRST TIME - REFERRALS
03/01/23 (H) W&M, FIN
03/06/23 (H) W&M AT 6:00 PM DAVIS 106
03/06/23 (H) Heard & Held
03/06/23 (H) MINUTE(W&M)
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
BILL: HB 72
SHORT TITLE: PERMANENT FUND DIVIDEND; 75/25 POMV SPLIT
SPONSOR(s): ORTIZ
02/15/23 (H) READ THE FIRST TIME - REFERRALS
02/15/23 (H) W&M, FIN
03/01/23 (H) W&M AT 6:00 PM DAVIS 106
03/01/23 (H) Heard & Held
03/01/23 (H) MINUTE(W&M)
03/08/23 (H) W&M AT 6:00 PM DAVIS 106
03/08/23 (H) -- MEETING CANCELED --
03/11/23 (H) W&M AT 9:00 AM DAVIS 106
WITNESS REGISTER
CAMERON EBERSOLD, Staff
Representative Cliff Groh
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave the section analysis for HJR 9 on
behalf of Representative Groh, prime sponsor.
EMILY NAUMAN, Director
Legislative Legal Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Answered questions pertaining to HJR 9.
JOHN MILLER, representing self
Matanuska-Susitna, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
ED MARTIN, representing self
Kenai, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
MISTY COLE, representing self
Nikiski, Alaska
POSITION STATEMENT: Testified in support of HJR 7 and HJR 8,
and in opposition to HJR 9, HB 72, and HB 90.
DONALD MITCHEL, representing self
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of HB 72 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
SARAH CAMPBELL, representing self
Ketchikan, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
MICHAEL GARHART, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
ANTONIA LENARD, representing self
Eagle River, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
BERT HOUGHTALING, representing self
Big Lake, Alaska
POSITION STATEMENT: Testified in support of HJR 8 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
SARANA SCHELL, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
JAMELIA SAIED, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
ROYAL KIEHL, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
RACHEL LORD, representing self
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 72 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
DIANNE HOLMES, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
JAN CONITZ, representing self
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
RANDY GRIFFIN, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
NICOLAS ABRAMCZYK, representing self
Palmer, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
PHILIP TAFS, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
CANDY MILLER, representing self
Matanuska-Susitna, Alaska
POSITION STATEMENT: Testified in support of HJR 7 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
MICHAEL BUCY, representing self
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
GEORGE PIERCE, representing self
Kasilof, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
HAROLD BORBRIDGE, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
WILLY KEPPEL, representing self
Quinhagak, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
TIM WILKINS, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
PAULINE HESSING, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
LEONARD MILLER, representing self
Homer, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
LILA HENDERSON, representing self
Nikiski, Alaska
POSITION STATEMENT: Testified in opposition to HB 72 and HB 90
and in support of HJR 8, parts of HJR 7, and constitutionalizing
the PFD.
JAMES SQUYRES, representing self
Deltana, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
JEAN HOLT, representing self
Palmer, Alaska
POSITION STATEMENT: Testified in opposition to HB 72 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
GARY MCDONALD, representing self
No address provided
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
RYAN BROUSSARD, representing self
Nikiski, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
LAURA HECKERT, representing self
Homer, Alaska
POSITION STATEMENT: Testified in support of HJR 7 and HJR 8
during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
WILLIAM REINER, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HJR 8 and in
opposition to HB 72, HB 90, HJR 7 and HJR 9.
JOEL SIGMAN, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HJR 7 during the
hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90.
SYBIL CURRY, representing self
Nikiski, Alaska
POSITION STATEMENT: Testified during the hearing on HJR 7, HJR
8, HJR 9, HB 72, and HB 90.
ACTION NARRATIVE
9:02:00 AM
REPRESENTATIVE MCCABE called the House Special Committee on Ways
and Means meeting to order at 9:02 AM Representatives McCabe,
McKay, Tilton, Groh, Allard were present at the call to order.
Representative Carpenter arrived as the meeting was in progress.
HJR 9-CONST AM: PERMANENT FUND; POMV;EARNINGS
9:03:10 AM
REPRESENTATIVE MCCABE announced that the first order of business
would be HOUSE JOINT RESOLUTION NO. 9, "Proposing amendments to
the Constitution of the State of Alaska relating to the Alaska
permanent fund and to appropriations from the Alaska permanent
fund."
REPRESENTATIVE MCCABE announced to members that he will be
chairing today's meeting until the arrival of Chair Carpenter.
9:04:08 AM
The committee took an at-ease from 9:04 a.m. to 9:05 a.m.
9:05:27 AM
REPRESENTATIVE GROH, as prime sponsor of HJR 9, gave the sponsor
statement to the committee [included in the committee packet]
which read as follows [original punctuations provided]:
When the Permanent Fund was created, it was structured
as two accounts: the Principal and the Earnings
Reserve Account (ERA). The Alaska Constitution
prohibits the spending of the Principal without a vote
of the people. However, profits generated by the fund
are deposited into the ERA, which is entirely
available for the Legislature to appropriate and
spend. The current value of the ERA is approximately
$16 billion. Overdraw of the ERA depletes the value of
the entire Permanent Fund and leaves Alaska worse off.
In 2018 the Legislature adopted statutes that allow
appropriation up to an amount that maintains the
growth of the fund. This plan is commonly known as the
"Percent of Market Value" ("POMV") draw. Still, those
statutes do not stop the Legislature from passing
budgets that spend Permanent Fund earnings beyond than
those sustainable limits. This resolution would send a
proposed amendment to Alaska voters to enshrine this
policy in the constitution. The proposed
constitutional amendment would combine the Permanent
Fund Principal and the Permanent Fund Earnings Reserve
Account into a single constitutionally protected
account. Under this proposed amendment, the
Legislature would be allowed to appropriate each year
a maximum of five percent (5%) of the market value of
that new constitutionally safeguarded account as
calculated over the first five of the preceding six
fiscal years. Experts have told the Legislature that
these limits make that spending rate sustainable. The
Permanent Fund's Board of Trustees have recommended
this change since 2003, and this constitutional
amendment was also urged by the Fiscal Policy Working
Group, a bipartisan and bicameral group of legislators
that issued a report in 2021. This measure is not and
should not deal with the size of the Permanent Fund
Dividend or what specific percentage of this
appropriation is spent on state services. It neither
encourages nor prevents legislators from pursuing
those plans in the future. This merely prevents the
state from overspending our renewable financial
resource which ensures the permanence of our Permanent
Fund.
9:08:31 AM
CAMERON EBERSOLD, Staff, Representative Cliff Groh, Alaska State
Legislature, explained that Section 1 would amend Article IX,
Section 15(a) of the Alaska State Constitution so that income
earned by the Alaska permanent fund would be retained by the
fund's sole account created by Section 3. He said the only
exceptions are detailed in Section 2. He said Section 2 amends
Article IX, Sect. 15 with two subsections. Subsection (b) would
allow the legislature, in each fiscal year, to appropriate from
the fund only up to 5 percent of the average market value of the
fund over the preceding six fiscal years. Subsection (c) would
allow the permanent fund to be used to pay costs associated with
investments. He explained that Section 3 would amend Article XV
with a new section: Section 30. This section proposes to
deposit the balance of the earnings reserve account (ERA) into
the principal, unifying the permanent fund into a single
account. It also specifies the proposed amendments would apply
to appropriations made during the fiscal year ending June 30,
2026, and after. He said Section 4 would place these amendments
before state voters at the next General Election.
9:10:05 AM
REPRESENTATIVE MCKAY asked how the state would pay dividends out
of the fund, prescribed in HJR 9, if it were to pass.
REPRESENTATIVE GROH explained that the payouts would be done in
the same way as the legislature has been doing currently, in
that the legislature votes, through powers granted in
Wielechowski v. State. He said HJR 9 does not attempt to
address the permanent fund dividend (PFD), which is a separate
issue. He said the measures have been heard, and there may be
others to hear that would address the PFD level. He stated that
while many legislators do not see eye-to-eye on the exact PFD
level, HJR 9 seeks to provide fiscal stability and prevent the
legislature from overspending. He proposed HJR 9 as a way to
protect the permanent fund from overdraws in the future.
9:11:47 AM
REPRESENTATIVE MCKAY suggested that the total value of the
permanent fund corpus is about $76 billion.
REPRESENTATIVE GROH remarked, "It changes month to month, but
sure."
REPRESENTATIVE MCKAY referred to Representatives Groh's
materials and offered his understanding that they stated that
the ERA is at about $16 billion.
REPRESENTATIVE GROH clarified that it is more than $13 billion;
the $16 billion figure was from last year's financial report.
REPRESENTATIVE MCKAY suggested that, if the corpus total was
added to the ERA, is about $90 billion altogether. Further, 5
percent of that figure would be about $4.5 billion.
REPRESENTATIVE GROH stated that he would defer percentage draws
figures to David Mitchell, CEO of the Alaska Permanent Fund
Corporation. He reiterated that the value of the fund changes
from month to month, and even day to day.
9:13:33 AM
REPRESENTATIVE MCCABE asked about language within page 1 line 15
and 16. He said he it is unusual to see language, like the word
"may", in a constitutional amendment. For example, "Each fiscal
year the legislature may appropriate from the permanent fund to
the general fund an amount that is not more than 5 percent". He
said that the language does not really prescribe 5 percent. He
stressed that this is not what the fiscal policy working group
said, and instead had said that the constitutional amendment
would state "shall," as in "the legislature shall appropriate".
He asked if the language is intentional.
9:15:02 AM
EMILY NAUMAN, Director, Legislative Legal Services, Legislative
Affairs Agency, answered that the discussion between "may" or
"shall" is a policy decision. She said that Representative
McCabe is correct that stating that the legislature "may
appropriate not more than 5 percent" would allow the legislature
to appropriate nothing or up to 5 percent. She suggested that
there might be policy reasons behind why a legislature would
want to draw less than 5 percent off of the fund.
9:15:44 AM
REPRESENTATIVE ALLARD asked Ms. Nauman to give the committee the
legal difference, in legal use, between the words "may" and
"shall".
MS. NAUMAN answered that "may" is permissive, in that it allows
the legislature to do something. Moreover, "shall" is a
requirement, in that it would require the legislature to take
certain action.
9:16:24 AM
REPRESENTATIVE GROH urged the committee to support HJR 9, and
said the changes that the joint resolution proposes were
recommendations from the Fiscal Policy Working Group. He said
the intent of the bill was to address, if there are draws at 5
percent, whether the legislature wants to maintain the fund
sustainably in the future.
9:17:24 AM
REPRESENTATIVE ALLARD pointed out that using the word "may"
allows the legislature to "do what they want." She asked the
bill sponsor why he drafted the bill with the word "may".
REPRESENTATIVE GROH replied that the intent was to have the 5
percent be a firm cap, and allows for the legislature to
spending below or up to 5 percent. He deferred to Ms. Nauman to
further address the question.
9:18:24 AM
MS. NAUMAN answered that the definition Representative Groh
provided is correct, in that the language would allow the
legislature to draw up to 5 percent each year if it so wishes.
She said the bill allows for draws under 5 percent.
REPRESENTATIVE ALLARD stated that she wants Representative
Groh's opinion on the language used in HJR 9. She said that,
for her, using the word "may" does not provide confidence to
Alaska, as using the word "shall" would.
REPRESENTATIVE GROH reiterated that the legal interpretation of
the word "may" means the legislature could draw up to or below 5
percent. He said this language carries out the policy of
allowing legislative appropriations from the fund of up to 5
percent.
9:19:57 AM
REPRESENTATIVE MCCABE asked if the intent is to just have a 5
percent cap.
REPRESENTATIVE GROH answered that is correct.
9:20:11 AM
MR. EBERSOLD addressed Representative Allard's question by
explaining that the amount of the PFD is different from the
appropriation from the fund itself. He said that if members
wish to use language - like "shall" - that option is still
present. He said HJR 9 keeps any amount that is withdrawn from
the permanent fund sustainable.
9:20:55 AM
REPRESENTATIVE GROH stated that HJR 9 does not address levels
for PFDs, but rather addresses the amount of the draw from the
permanent fund itself.
9:21:26 AM
The committee took an at-ease from 9:21 a.m. to 9:22 a.m.
HJR 9-CONST AM: PERMANENT FUND; POMV;EARNINGS
HJR 8-CONST AM: GUARANTEE PERM FUND DIVIDEND
HJR 7-CONST AM: PERMANENT FUND DIVIDEND
HB 90-PERMANENT FUND DIVIDEND; $1000 DIVIDEND
HB 72-PERMANENT FUND DIVIDEND; 75/25 POMV SPLIT
9:22:23 AM
REPRESENTATIVE MCCABE announced that the next order of business
would be HOUSE JOINT RESOLUTION NO. 9, "Proposing amendments to
the Constitution of the State of Alaska relating to the Alaska
permanent fund and to appropriations from the Alaska permanent
fund" and HOUSE JOINT RESOLUTION NO. 8, "Proposing amendments to
the Constitution of the State of Alaska relating to the Alaska
permanent fund and appropriations from the Alaska permanent
fund" and HOUSE JOINT RESOLUTION NO. 7, "Proposing amendments to
the Constitution of the State of Alaska requiring payment of a
dividend to eligible state residents" and HOUSE BILL NO. 90, "An
Act relating to income of the Alaska permanent fund and the
amount available for appropriation; relating to appropriations
from the earnings reserve account; relating to the amount of the
permanent fund dividend; and providing for an effective date"
and HOUSE BILL NO. 72, "An Act relating to use of income of the
Alaska permanent fund; relating to the amount of the permanent
fund dividend; relating to the duties of the commissioner of
revenue; and providing for an effective date."
9:22:41 AM
REPRESENTATIVE MCCABE opened public testimony on HJR 9, HJR 8,
HJR 7, HB 90, and HB 72.
9:24:01 AM
JOHN MILLER, representing self, stated that he is in support of
returning back to the original permanent fund dividend (PFD)
formula, which he said has been successful for the last 35
years. He said that in 2016, the process was destroyed, and has
been a major contention ever since. He offered his
understanding that the people feel betrayed and feel that the
legislature no longer has the people's best interests in mind.
He said the permanent fund is used to pay back special interest
groups and unions who funded their elections. He urged members
to follow the law and the original PFD formula. He warned that
until the PFD is returned to the original formula, there will be
contention.
9:25:55 AM
ED MARTIN, representing self, shared that he's been a resident
of the state for over 50 years. He further shared that family
member Ed Martin, Sr. was a lawmaker in 1999 and was part of the
"save the dividend" campaign. He suggested that those in the
committee might remember the advisory vote, in which the
legislature was recommended to never touch the PFD process, as
it was established in 1982, which entails a full statutory PFD.
He stated that some members of the committee voted for budgets
that defy statute, and further stated that the Alaska Supreme
Court's actions did not mandate that the legislature could defy
statute. He referred the sponsor statement for HJR 7 [included
in the committee packet], in which notes that the draws are
sustainable, which he opined is a lie. He stated, "No one in
that room has a crystal ball." He said the proposed $1,000 PFD
within HB 90 is a slap in the face to the people that own the
resources, as well as the investments and the return on the
investments. He stated that he is in support of a PFD
constitutional amendment. He said it is unimaginable that a
constitutional amendment would be required to make the
legislature follow the law.
9:28:27 AM
MISTY COLE, representing self, said she supports HJR 7 and HJR 8
and opposes HB 72, HB 90, and HJR 9.
9:29:41 AM
DONALD MITCHEL, representing self, shared that he has lived in
Alaska for 51 years. He said there are many benefits to his
living in Alaska, one of which he highlighted was having
competent and consistent government services without having to
pay a state tax. However, he stressed that things have changed,
and there is now inadequate or inconsistent funding for state
services. He said the roads in his area are horrible, the
Alaska Marine Highway System (AMHS) is unreliable, and funding
for state employees is difficult. He stated that the way the
PFD is structured hurts the elections process, in that, the
amount of the PFD is being used as a tool to pay for votes. He
said HB 72 would provide reliability and consistency to state
services and the PFD. He urged support for HB 72.
9:30:49 AM
SARAH CAMPBELL, representing self, shared that she is a public
school teacher and has lived in Alaska for 48 years. She said
she is a supporter of increasing the base student allocation,
and would also like to see the state return to a defined benefit
retirement package for state employees, but said that will cost
money. She stated that she is a proponent of fully funding
state services. She commented that HB 72 seems fair, in that
Alaskans will get a PFD and know there will be money for state
services.
9:32:48 AM
MICHAEL GARHART, representing self, commented that, out of the
bills up for testimony today, he only supports HJR 7. He
explained that there has been too much PFD money taken from the
public. He stated, "Since the 1990s, it was tracked: $27.3
billion had been stolen prior to deposit into the accounts." He
said that the legislature was questioned for 10 years, and
answers were never given. He said the state needs to follow the
law.
9:33:48 AM
ANTONIA LENARD, representing self, opined on the "legalese"
language in the materials provided in today's meeting. She said
that the original founder of the PFD was getting a stake in
Alaska's land and resources, and the residents were supposed to
be paid out of the funds that were generated by people
profiting. She spoke on the 75/25 percent of market value
(POMV) split, and said that the split should instead be 25/75.
She suggested that the need for state funding would go away
since residents would have enough money individually to carry
out state services, like building a school. She said that
anytime the legislature seeks to draw from the fund, then the
draw should be put to a vote.
9:36:03 AM
BERT HOUGHTALING, representing self, urged that, out of the
bills that are being taken up at today's meeting, only HJR 8 be
allowed to move forward. He referred to the other bills as
"putting lipstick on a pig," in which the bills seek to put
further legislative control on the PFD. He explained that HJR 8
would put the corpus into legislative control. He said that
combining the corpus and the permanent fund would make it so
legislators now also have control over the corpus. He said he
supports HJR 7 so far that it formalizes what has been in Alaska
statute for the last four decades. He pointed out that
Legislative Legal Service's definition of "shall" and "may"
might be the clinical definition in a dictionary but does not
compare to the definition provided in Wielechowski v. State. He
relayed that the Alaska Supreme Court ruled that "shall" and
"may" have the exact same meaning.
9:39:01 AM
SARANA SCHELL, representing self, stated that she is calling in
support of the sustainability of the permanent fund. She said
that, while large dividends are great, she is willing to put a
cap on the PFD. She said she supports the cap since it would
help with the sustainability of the fund.
9:40:07 AM
JAMELIA SAIED, representing self, shared that she has been a
resident for 61 years. She said that the PFD has served a
valuable purpose, but said she thinks it is time to end it and
reestablish an income tax. Since that does not seem politically
possible, she remarked, she supports whichever bill proposes a
smaller PFD that the state can provide. She said that is
reflected in Representative Groh's bill. She urged that the
state needs to stay conservative, and that if the state
distributes a full PFD, it will not have the money for state
services.
9:42:23 AM
ROYAL KIEHL, representing self, said he and his family have
lived in Alaska since 1974, and at that time the state levied an
income tax. He commented that the state has, without intending
to do so, turned into a welfare state, with every citizen
believing they cannot live without their PFD. He said the state
cannot afford to live up to the state's responsibilities because
of the annual payouts. He said the PFD has become an addiction.
He stated that large PFDs have interfered with paying for
quality education, as well as adequate ferry service, as
examples. He stated that while it may be painful to give up the
annual "moneybombs, the situation has gotten out of hand, with
people believing it is their right to get money they have not
worked for. He suggested that the PFD amount be reduced to
$1000, with annual inflation increases, and fund state services
with the rest of the earnings. He said there should be a year
before HB 90 is implemented to allow residents time to process
the change.
9:44:46 AM
RACHEL LORD, representing self, stated she is testifying to
support an increase in state revenues through higher reliance on
permanent fund earnings in order to fund state services. She
stated her support for HB 72. She echoed comments regarding
raising broad based revenues in the state being the right way
forward, or so too could be the combination of income tax and a
reduced PFD. She said that at the borough level, specifically
in the Kenai Peninsula Borough, citizens pay for the services
they receive via property and sales taxes. This funding goes
toward schools, roads, and state troopers. She spoke on
economic development and said that businesses can only thrive
when there is stability in the public sector. She said she
cannot see how things will get better without actual financial
investment, and pointed out that everyone is benefitting from
state services.
9:46:59 AM
The committee took an at-ease from 9:46 a.m. to 9:49 a.m.
9:49:00 AM
REPRESENTATIVE MCCABE handed the gavel over to Chair Carpenter.
9:49:31 AM
DIANNE HOLMES, representing self, echoed previous testimony
regarding the benefits everyone receives in untaxed services,
but recognized that oil revenues are volatile. She stressed
that state services should always come first. She said the past
few years the state has had to face the COVID-19 pandemic, and
now it must face educational needs. She said that of the PFD
plans before the committee today, those proposing a percentage
of split will always impact services. She stated that Alaska
does not need larger PFDs if that means services are gone as a
result. She urged members to listen to economists, and said
that a 25/75 split will take away from state services.
9:51:26 AM
JAN CONITZ, representing self, said she has been concerned about
the PFD debate the last few years, and the time the legislature
has spent on the discussion. She said the PFD is a symbolic
"good thing" rather than the check being used as a part of
needed household income. She opined on the level of state
services and highlighted AMHS and public schools as examples of
programs in decline and in need of attention and funding. She
said she is concerned about the amount of time the legislature
has taken discussing the PFD, and further said she fears the
state is going to go bankrupt trying to pay out high PFD
payments. She acknowledged that PFDs are a symbolically good
thing, in they it provide a sense of ownership to the resident,
but opined they should only be considered symbolic. She said
the annual PFD debate is "crowding out" discussion on policy,
one of which she suggested is education policy. She further
suggested better support toward transportation, university,
economic development, care for seniors, and people with
disabilities. She stated that she supports an income tax.
9:54:50 AM
RANDY GRIFFIN, representing self, stated that his comments focus
on HJR 7 and HJR 8. He expressed his feeling that the PFD has
no place in the Alaska Constitution, and acknowledged that he
has received thousands from PFD payments, but stopped in 2014 to
begin returning the check to the state. He said he is against
enshrining the PFD into the Alaska Constitution because he is in
favor of a dividend funded by surplus profit. If it is not
funded by surplus profit, then he said he would consider it
public assistance. He stressed that "hand-out" money should not
go into the Alaska constitution, and that while he said he loves
free money, he will only collect a PFD if it is a PFD based on
surplus.
9:57:23 AM
NICOLAS ABRAMCZYK, representing self, commented that Alaska did
a good thing in establishing the permanent fund itself, and he
noted how the fund has grown. He advised members that they need
to look at the economic context of Alaska in the 1980s, the
population it had at the time, which he suggested was about one-
third of what it is today. He pointed out that, just in the
last ten years, there have been economic challenges that were
not present in the 1980s. He spoke on the bills before the
committee, and advised members to first examine the state's
revenue streams.
9:59:01 AM
PHILIP TAFS, representing self, shared that he is a small
business owner in Alaska with 28 employees. He stated that he
believes state services need to be funded first. He said he
loves the PFD, but does not believe that Alaska can have large
PFDs without it impacting state services. He expressed
opposition to adding language in the constitution and making
things permanent, and stressed that the state needs to maintain
flexibility in how programs are funded. He said that as a small
business owner he needs consistency, a way to be able to plan
for something, without having every legislative session bring
him fear since he does not know what might come out of the
session. He expressed frustration from having to wait until the
last minute in August for a special session, and said it creates
a difficult business environment. He said that anyone who needs
the PFD to get by needs state services more, which as a small
business owner, would allow him to grow his business.
10:01:55 AM
CANDY MILLER, representing self, shared that her family switched
to a different health insurer, they saved 70 percent on their
expenses. She said the Alaska budget could go from red to black
if people choose their own health insurance. She said that if
more money is taken out of government and put to individuals,
the individuals would make decisions that would save the
government money. She said she learned that, while she was
changing her healthcare plan, that a teacher in the Matanuska-
Susitna valley was paying $20,000 for their plan, and the plan
she herself was $2,000 a year.
CHAIR CARPENTER interjected to request that Ms. Miller testify
to the bills under public testimony today.
MS. MILLER said she is in favor of HJR 7. She said the money
from the permanent fun should go into the people's hands. She
said there is then no concern on whether to raise taxes because
the people will direct it.
10:05:12 AM
MICHAEL BUCY, representing self, shared that he has been a
resident of Alaska and has been receiving a PFD since 1982. He
said he would support putting language into the constitution
only if it were to cap the PFD payout. He shared that he was
flabbergasted when the governor announced a $4,000 PFD, in
conjunction with no BSA increase, which prompted him to rally at
the capitol. He said he appreciates what the PFD has done for
his family, and that others may rely on the PFD, but what he
would like to see is robust welfare funding instead. He opined
that millionaires don't need the PFD and shouldn't receive it.
He said the function of government is to perform economically
what the individual cannot. He said that right now residents
are depending on the government. He remarked that government is
not the problem, bad government is. He said that people are
leaving Alaska despite high PFDs, and urged that that be turned
around, and that the PFD no longer be an annual debate.
10:08:49 AM
GEORGE PIERCE, representing self, spoke to education funding, in
that the government sent schools funding during the COVID-19
pandemic, which he said was being used to refurbish schools. He
stated that Alaska needs an income tax and to get people who are
not living in the state to pay their fair share. He advocated
raising the tax on oil and mining.
CHAIR CARPENTER stated that the public testimony is specifically
for bills relating to the PFD.
MR. PIERCE advised to mandate the PFD in the Alaska
Constitution. He suggested that if the state needs resources,
get rid of the subsidies. He further suggested taxing
individuals coming up to conduct tourism business. He said
there are other kinds of revenues to generate, but said the
legislature wants to take it from poor Alaskans. He reiterated
his suggestion to raise taxes on the oil and gas companies.
10:11:13 AM
HAROLD BORBRIDGE, representing self, stated that the public
needs to realize that every dollar the state receives is from
the people, whether it be paid with the people's resources or
the permanent fund's returns, because every dollar spent is
either from oil resources or from the permanent fund. He
suggested that a simple handout be made explaining the sources
of state revenue.
10:12:46 AM
WILLY KEPPEL, representing self, prefaced by urging members to
follow state statute and pay a full PFD. He suggested that
baseline spending be set at $4.2 billion so that the state's tax
and futures revenue can actually pay for state services. He
reminded members that Alaskans paid for three extra special
sessions a number of years ago, and opined on the outcome of the
sessions. During committee hearings in a previous session, he
said there was a testimony that stuck out to him: there is no
problem in paying a PFD because the state has had the money, but
the legislature as of late has been opting to take money from
the PFD. He further recounted the statement that prior to
actions made during the Walker Administration, money going
toward PFDs never went through the legislature. Following this
testimony, he further recounted, Senator Lyman Hoffman inquired
as to why the legislature did not follow the law on PFDs, to
which the answer was that the legislature does not have to
follow the law. He reiterated his call to members to pay a full
PFD and cut spending.
10:16:08 AM
TIM WILKINS, representing self, agreed with comments made by Mr.
Keppel. He recounted that in 2015 the Walker administration had
moved to take 50 percent of everyone's PFD and expressed his own
disagreement with that action. He suggested that the PFD be
enshrined in the Alaska Constitution. He said that the state of
Alaska needs to balance its expenses, and urged that money taken
out of one pot and put into another, be replaced. He expressed
his support for the Dunleavy administration.
10:18:18 AM
PAULINE HESSING, representing self, thanked the committee
members for talking about the PFD. She said that she considers
debates on the amount of the PFD wasted time, and would rather
like to see the legislature debate other pressing matters. She
suggested that the PFD be capped at $1,000, and that anything
over that amount would be considered money that the people are
giving to the state to use for services. She pointed out there
is no income tax in Alaska, and suggested that her idea would be
a mechanism that would function like an income tax. She stated
that permanent fund earnings are not for the individual but are
owned by all Alaskans. She said that if the PFD was capped at
$1,000 a year, it would also be less of an enticement for people
who have no money and want to come to Alaska for free money.
10:20:01 AM
The committee took a brief at-ease at 10:20 a.m.
10:20:05 AM
CHAIR CARPENTER made comments regarding the committee's intent
to hear further public testimony.
10:21:47 AM
The committee took an at-ease from 10:21 a.m. to 10:31 a.m.
10:31:45 AM
LEONARD MILLER, representing self, stated that he could support
HJR 7 and HJR 8 but needs more information. He said his concern
with bills that deal with the permanent fund is that, without
research and legal understanding, the ordinary Alaska resident
will find it hard to make an informed decision, but could still
make an informed decision about what candidate to elect. As far
as what is fair for the permanent fund, he said residents share
the fund's wealth, which he said encourages him to do what he is
doing now: advocating to defend the principal of the PFD. Since
a vast majority of residents do not have mineral rights in the
state, he explained, the minerals are part of the residents'
corporate royalties, and former Governor Jay Hammond's vision
was that Alaska residents would share in the earnings so that
residents would stay engaged in limiting the growth of
government. He urged members to not steal the resident's
royalty.
10:34:22 AM
LILA HENDERSON, representing self, disclosed that she is
registered Republican. She stated that she does not support HB
72 and HB 90. She said she backs HJR 8 and parts of HJR 7, and
is overall in favor of constitutionalizing the PFD. She
expressed that the state is taking more and more of the PFD, and
opined that the people are entitled to their royalties. She
echoed Mr. Millers comments on that matter.
10:35:34 AM
JAMES SQUYRES, representing self, stated that he supports a full
statutory PFD. He commented that the public has testified for
many years for a full statutory PFD. He urged members to think
about the people that have testified for the PFD before, and
that, just because the people are not in the committee room
today, does not take away from past testimony. He said he does
not support putting the POMV in the Alaska Constitution unless
the earnings reserve is rolled into the permanent fund. He
asked for the difference between statutory PFDs not previously
paid, and refundable oil and gas tax credits. He pointed out
that rolling the earnings reserve into the permanent fund ends
the PFD payback, which he said is still owned to residents in
the state. He advised members to repeal SB 26 [30th
Legislature], which he said put the POMV into statute. He noted
that last year the administration had the POMV PFD in the
budget, but there was no effort to repeal SB 26 [30th
Legislature]; and commented that, if Alaska wants to go back to
the way it was with the PFD, what's taken place needs to be
unraveled. He suggested that putting the POMV and full PFD into
the Alaska Constitution put the "squeeze" on funding for
government.
10:37:56 AM
JEAN HOLT, representing self, Testified in opposition to HB 72.
She stated government has taken away freedoms, and that the PFD
should be enshrined in the Alaska Constitution. She said there
are people who are opposed to the PFD being taken away. She
further urged members to not mess with the PFD.
10:39:17 AM
The committee took an at-ease at 10:39 a.m.
10:39:54 AM
GARY MCDONALD, representing self, stated that he supports the
regular PFD formula that Alaska had for about 30 years.
10:41:12 AM
RYAN BROUSSARD, representing self, inquired about the number of
active military who are receiving a PFD. He explained that in
boot camp he was told to go to Alaska, do a short tour, and
collect the PFD for the rest of his career. He said this
process is recommended to people, and recounted that, in
Virginia, there were many Alaska license plates. He expressed
concern that a large number of PFDs are going out of state, and
also out of the country. He said that he and his family relied
on the PFD, and that the PFD should be returned to statutory
levels.
10:43:20 AM
The committee took back-to-back at-eases from 10:43 a.m. to
10:47 a.m. to await arrival of the final testifiers of the day.
10:47:57 AM
LAURA HECKERT, representing self, called for the passages of HJR
7 and HJR 8. She said she wants a PFD payout to be done using
the previous distribution formula.
10:49:18 AM
The committee took an at-ease from 10:49 a.m. to 10:52 a.m.
10:52:09 AM
WILLIAM REINER, representing self, stated that he is in favor of
HJR 8, and expressed disagreement with HB 72, HB 90, HJR 7, and
HJR 9. He highlighted that in HJR 9, and stated that there is
no need for the bill as it "muddies the water." He shared that
he's been an Alaska resident since 1976 and was around for the
start of the PFD. He referred to the U.S. Supreme Court case,
Zobel v. Williams, and said he is leaning towards the decision
the court made. Regarding mineral and gas royalties, he
disclosed that he is not an Alaskan Native, and due to a 1948
law, he cannot access any minerals, oil, or gas on property he
owns.
10:55:55 AM
JOEL SIGMAN, representing self, testified in support of HJR 7
and said he wants a full PFD. He opined on proper public notice
of legislation. He said he is tired of the legislature stealing
people's money and budgeting improperly. He stated that all
residents should get a full PFD. He urged members to not take
the money from the people and to give it back to the people.
10:58:15 AM
SYBIL CURRY, representing self, shared she has lived in Alaska
for 20 years and is a legal immigrant from a socialist country.
She further shared she is a U.S. citizen, a law enforcement
veteran, and that her grandparents survived Nazi Germany. She
stated that what is happening in America is horrible, noting
that several banks have crashed. She said the people want an
original statutorily determined PFD, and she recommended that
the PFD be enshrined in the Alaska Constitution.
11:00:00 AM
CHAIR CARPENTER reminded the public that they can submit further
comments electronically.
11:00:27 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Ways and Means meeting was adjourned at 11
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR009A.PDF |
HW&M 3/11/2023 9:00:00 AM |
HJR 9 |
| HJR 9 sponsor statement.pdf |
HW&M 3/11/2023 9:00:00 AM |
HJR 9 |
| HJR 9 sectional analysis.pdf |
HW&M 3/11/2023 9:00:00 AM |
HJR 9 |
| 2003-05-APFC-Resolution-POMV.pdf |
HW&M 3/11/2023 9:00:00 AM HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| 2020-01-APFC-Resolution-POMV-Support.pdf |
HW&M 3/11/2023 9:00:00 AM HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| PF_singleaccount_graphic.pdf |
HW&M 3/11/2023 9:00:00 AM HW&M 3/6/2024 6:00:00 PM |
HJR 9 |
| PF_TwoAccountgraphic.pdf |
HW&M 3/11/2023 9:00:00 AM HW&M 3/6/2024 6:00:00 PM |
HJR 9 |