04/11/2003 07:02 AM House W&M

                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE SPECIAL COMMITTEE ON WAYS & MEANS                                                                           
                         April 11, 2003                                                                                         
                           7:02 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Co-Chair                                                                                            
Representative Jim Whitaker, Co-Chair                                                                                           
Representative Cheryll Heinze                                                                                                   
Representative Vic Kohring                                                                                                      
Representative Norman Rokeberg                                                                                                  
Representative Bruce Weyhrauch                                                                                                  
Representative Peggy Wilson                                                                                                     
Representative Max Gruenberg                                                                                                    
Representative Carl Moses                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative John Harris                                                                                                      
Representative Ralph Samuels                                                                                                    
Representative Paul Seaton                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
DETAIL REVIEW OF STATE REVENUES                                                                                                 
                                                                                                                                
TAPES                                                                                                                         
                                                                                                                                
03-3, SIDES(S) A & B                                                                                                            
03-4, SIDE A                                                                                                                    
                                                                                                                                
CO-CHAIR MIKE  HAWKER convened the  meeting of the  House Special                                                             
Committee on Ways  & Means at 7:02 a.m.   Representatives Hawker,                                                               
Whitaker,   Weyhrauch,   Wilson,   Rokeberg,   Heinze,   Kohring,                                                               
Gruenberg, and Moses were present at  the call to order.  Also in                                                               
attendance were Representatives Harris, Samuels, and Seaton.                                                                    
                                                                                                                                
SUMMARY OF INFORMATION                                                                                                        
                                                                                                                                
TOMAS BOUTIN,  Deputy Commissioner,  Office of  the Commissioner,                                                               
Department  of  Revenue,  discussed  the  recent  sale  of  state                                                               
general obligation bonds.   The bond sale was  received very well                                                               
and  the bid  process was  very aggressive.   To  receive six  or                                                               
seven bids was more than expected.   Alaska has a triple A rating                                                               
on the series  A bonds.  There was only  a .17 percent difference                                                               
in bids.   He  also noted  that the state's  bond rating  was not                                                               
very  stable.   Depending  on the  amount of  the  draw from  the                                                               
Constitutional  Budget  Reserve (CBR),  the  bond  rating may  be                                                               
degraded.   If the CBR draw  is in excess of  $400 million, there                                                               
is  an extremely  high likelihood  that the  State's bond  rating                                                               
will decrease.                                                                                                                  
                                                                                                                                
MR. BOUTIN discussed  the state's revenues and  commented that if                                                               
the governor's proposed budget were  to pass in its entirety, the                                                               
CBR would be eliminated  by FY 06.  The state  is required to pay                                                               
back into the  CBR any and all  monies that are removed.   If the                                                               
state  were to  have a  $1 billion  balance, then  the forecasted                                                               
depletion would be cut in half.                                                                                                 
                                                                                                                                
WILLIAM  CORBUS, Commissioner,  Department of  Revenue, discussed                                                               
how  the CBR  was  established.   The principle  to  the CBR  was                                                               
deposited  from  one-time  oil   settlements.    These  types  of                                                               
lawsuits  will not  happen  again,  and the  state  does not  and                                                               
should  not  expect  any  such  deposits  in  the  future.    The                                                               
commissioner  also  commented  on  the  general  outlook  of  the                                                               
state's revenues and economic expansions.                                                                                       
                                                                                                                                
CHUCK   LOGSDON,  Chief   Petroleum   Economist,  Tax   Division,                                                               
Department of  Revenue, discussed  the world-wide  production and                                                               
increase  in production  along with  the  recent and  anticipated                                                               
change in oil prices.                                                                                                           
                                                                                                                                
DAN  DICKINSON, Director,  Tax Division,  Department of  Revenue,                                                               
answered  questions  about  draws on  the  Constitutional  Budget                                                               
Reserve.                                                                                                                        
                                                                                                                              
ANNOUNCEMENTS                                                                                                                 
                                                                                                                                
There were no announcements.                                                                                                    
                                                                                                                                
COMMITTEE ACTION                                                                                                              
                                                                                                                                
There was no committee action.                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Ways & Means was adjourned at 8:56 a.m.                                                                    
                                                                                                                                
NOTE:   The meeting was  recorded and handwritten log  notes were                                                               
taken.  A  copy of the tape(s)  and log notes may  be obtained by                                                               
contacting the  House Records  Office at  State Capitol,  Room 3,                                                               
Juneau,  Alaska  99801  (mailing address),  (907)  465-2214,  and                                                               
after  adjournment  of the  second  session  of the  Twenty-Third                                                               
Alaska  State Legislature  this  information may  be obtained  by                                                               
contacting the Legislative Reference Library at (907) 465-3808.