04/30/2003 08:15 AM House W&M
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ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS
April 30, 2003
8:15 a.m.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Jim Whitaker, Co-Chair
Representative Cheryll Heinze
Representative Norman Rokeberg
Representative Max Gruenberg
Representative Carl Moses
MEMBERS ABSENT
Representative Vic Kohring
Representative Bruce Weyhrauch
Representative Peggy Wilson
OTHER LEGISLATORS PRESENT
Representative Paul Seaton
Representative Dan Ogg
Representative Ralph Samuels
Representative John Harris
COMMITTEE CALENDAR
PUBLIC EMPLOYEE RETIREMENT SYSTEM: ACTUARIAL VALUATION - GUY
BELL
- HEARD [See 7:10 a.m. minutes for this date]
HOUSE JOINT RESOLUTION NO. 9
Proposing amendments to the Constitution of the State of Alaska
relating to an appropriation limit and a spending limit.
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 26
Proposing amendments to the Constitution of the State of Alaska
relating to and limiting appropriations from and inflation-
proofing the Alaska permanent fund by establishing a percent of
market value spending limit.
- HEARD AND HELD
PREVIOUS ACTION
BILL: HJR 9
SHORT TITLE:CONST AM: APPROPRIATION/SPENDING LIMIT
SPONSOR(S): REPRESENTATIVE(S)STOLTZE
Jrn-Date Jrn-Page Action
01/31/03 0102 (H) READ THE FIRST TIME -
REFERRALS
01/31/03 0102 (H) STA, JUD, FIN
02/11/03 (H) STA AT 8:00 AM CAPITOL 102
02/11/03 (H) Heard & Held
MINUTE(STA)
03/28/03 0687 (H) COSPONSOR(S): ROKEBERG
04/04/03 0797 (H) W&M REFERRAL ADDED BEFORE STA
04/09/03 (H) W&M AT 7:00 AM HOUSE FINANCE
519
04/09/03 (H) Heard & Held
04/09/03 (H) MINUTE(W&M)
04/17/03 (H) W&M AT 7:00 AM HOUSE FINANCE
519
04/17/03 (H) Heard & Held
04/17/03 (H) MINUTE(W&M)
04/24/03 (H) W&M AT 7:00 AM HOUSE FINANCE
519
04/24/03 (H) Heard & Held
04/24/03 (H) MINUTE(W&M)
04/29/03 (H) W&M AT 7:00 AM HOUSE FINANCE
519
04/29/03 (H) Heard & Held -- Location
Change --
04/29/03 (H) MINUTE(W&M)
04/30/03 (H) W&M AT 8:00 AM HOUSE FINANCE
519
BILL: HJR 26
SHORT TITLE:CONST. AM: PF APPROPS/INFLATION-PROOFING
SPONSOR(S): RLS BY REQUEST OF LEG BUDGET & AUDIT BY
Jrn-Date Jrn-Page Action
04/17/03 1025 (H) READ THE FIRST TIME -
REFERRALS
04/17/03 1025 (H) W&M, JUD, FIN
04/22/03 (H) W&M AT 7:00 AM HOUSE FINANCE
519
04/22/03 (H) Heard & Held
MINUTE(W&M)
04/24/03 (H) W&M AT 7:00 AM HOUSE FINANCE
519
04/24/03 (H) Heard & Held
MINUTE(W&M)
04/25/03 (H) W&M AT 7:00 AM HOUSE FINANCE
519
04/25/03 (H) Heard & Held
MINUTE(W&M)
04/29/03 (H) W&M AT 7:00 AM HOUSE FINANCE
519
04/29/03 (H) Heard & Held -- Location
Change --
MINUTE(W&M)
04/30/03 (H) W&M AT 8:00 AM HOUSE FINANCE
519
WITNESS REGISTER
ROBERT BARTHOLOMEW, Chief Operating Officer
Alaska Permanent Fund Corporation
Juneau, Alaska
POSITION STATEMENT: Testified in support of HJR 26 and answered
questions.
RON LORENSEN, Attorney at Law
Simpson, Tillinghast, Sorensen, and Longenbaugh
Juneau, Alaska
POSITION STATEMENT: As outside counsel to the Alaska Permanent
Fund Corporation, he testified in support of HJR 26 and answered
questions.
JAY HOGAN, Deputy Director
Office of Management and Budget
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Testified on HJR 26 and answered questions.
ACTION NARRATIVE
[For the overview on the Public Employee Retirement System:
Actuarial Valuation by Guy Bell, see the 7:10 a.m. minutes for
this date.]
TAPE 03-19, SIDE A
Number 0001
CO-CHAIR JIM WHITAKER called the House Special Committee on Ways
and Means meeting to order at 8:15 a.m. Representatives Hawker,
Whitaker, Heinze, Rokeberg, Gruenberg, and Moses were present at
the call to order. Also present were Representatives Seaton,
Ogg, Samuels, and Harris.
HJR 9-CONST AM: APPROPRIATION/SPENDING LIMIT
CO-CHAIR WHITAKER 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 an
appropriation limit and a spending limit.
Number 0037
REPRESENTATIVE CO-CHAIR HAWKER moved to adopt committee
substitute (CS) for HJR 9, Version 23-LS0435\H, Cook, 4/29/03,
as the working document. There being no objection, Version H
was before the committee.
[At this point there is a motion to adopt CSHJR 26, Version 23-
LS1006\I, Cook, 4/29/03, as the working document. The
discussion related to HJR 26 happens later, which is where the
motion is noted.]
CO-CHAIR WHITAKER said HJR 9 is a constitutional appropriation
limit, which is one of the components of a long-term budget
solution. He told the members his intent is to move HJR 9 [out
of committee] tomorrow.
Number 0346
REPRESENTATIVE ROKEBERG suggested an amendment to the [10]
exemptions under subsection (a), Appropriation Limit, that would
include appropriations for capital projects. He explained that
there will be times when the legislature decides that
investments in state infrastructure may be important. For
example, the legislature may need to match abnormally high
federal appropriations or use public works monies to help
[recover from] an economic disaster. Having some flexibility
with capital projects may be warranted, he said.
CO-CHAIR WHITAKER announced that the committee will take action
on amendments tomorrow.
Number 0609
REPRESENTATIVE SAMUELS asked about the changes in Version H of
HJR 9.
CO-CHAIR WHITAKER said he would prefer to answer those questions
tomorrow, giving committee members time to review the CS.
CO-CHAIR HAWKER offered to summarize the differences between
Version H of the committee substitute and the original bill.
Number 0649
REPRESENTATIVE GRUENBERG asked if the committee will be
discussing the differences between the 4/16/03, Version D, and
the 4/29/03, Version H, committee substitutes.
CO-CHAIR HAWKER recalled that the Version D draft was not
adopted, although it was discussed. The substantive difference
between the two versions is that in Version H on page 1, line 7,
the option of a 2 percent increase in the base level of
appropriations can be passed each year by a simple majority.
Subsection (b) on page 2, starting on line 11, adds a second 2
percent [increase] that can be achieved with a two-thirds vote
of each house; and the last 2 percent increment is subject to a
three-quarters vote of each house of the legislature.
REPRESENTATIVE ROKEBERG pointed out that the budget could grow a
maximum of 6 percent in one year.
CO-CHAIR WHITAKER suggested considering that increase in light
of the presentation earlier today by Guy Bell, Director of
Retirement and Benefits, Department of Administration. Given
the rising costs of the Public Employees' Retirement System
(PERS), the first 2 percent increase would have to absorb the
increasing costs of the retirement fund.
CO-CHAIR HAWKER noted that the hurdles to achieve 4 and 6
percent increments are substantial with a two-thirds and then a
three-quarters vote of the members of each house of the
legislature.
Number 0847
REPRESENTATIVE GRUENBERG said on page 2, line 28, there appears
to be a sunset in [FY] 2013. He added that there is a
difference in language between the two proposed committee
substitutes: on page 2, line 29 of Version H and on page 2,
starting on line 28 in Version D.
CO-CHAIR WHITAKER suggested delaying these questions until the
next meeting.
REPRESENTATIVE ROKEBERG said it might be helpful to compare the
differences in the two committee substitutes with a chart or
table.
Number 1051
REPRESENTATIVE GRUENBERG echoed Representative Rokeberg's
concern that the legislature retain some flexibility in the
capital budget. However, he said he is not sure how to do it in
the constitution.
Number 1200
REPRESENTATIVE ROKEBERG asked if the legislature will be
repealing the existing constitutional spending limit.
CO-CHAIR WHITAKER replied yes, the intention is to repeal it;
however, he is not certain that it is in this draft of the
resolution.
[HJR 9 was held over.]
HJR 26-CONST. AM: PF APPROPS/INFLATION-PROOFING
Number 1233
CO-CHAIR WHITAKER announced that the last order of business
would be HOUSE JOINT RESOLUTION NO. 26, Proposing amendments to
the Constitution of the State of Alaska relating to and limiting
appropriations from and inflation-proofing the Alaska permanent
fund by establishing a percent of market value spending limit.
[The following motion occurred at the beginning of the meeting,
immediately after the motion regarding the adoption of the CS
for HJR 9. The motion is as follows: REPRESENTATIVE CO-CHAIR
HAWKER moved to adopt committee substitute (CS) for HJR 26,
Version 23-LS1006\I, Cook, 4/29/03, as the working document.
There being no objection, Version I was before the committee.]
Number 1346
RON LORENSEN, Attorney at Law, Simpson, Tillinghast, Sorensen,
and Longenbaugh; testifying as outside counsel to the Alaska
Permanent Fund Corporation, testified in support of HJR 26 and
answered questions. He told the members that a working group
convened yesterday afternoon at the direction of Co-Chair
Whitaker to review a couple of alternate formulations of
language. The main focus was subsection (b) on the top of page
2 of the committee substitute draft. He explained that as a
result of that discussion there was unanimous agreement as to
what the appropriate substitution for the language in subsection
(b) should be. He told the members that is what is before the
committee now in the new work draft, Version I. Mr. Lorensen
said that in order to make the title consistent with that change
the title has been adjusted slightly. The last two words "over
time" that were in Version H have been removed. Otherwise, he
commented, the title remains the same. He noted that there is a
minor change in Section 1 of the bill. The new language that
has been provided changed the language in Version H from "Except
as provided in (b) of this section", to the language in Version
I which says, "Except as appropriated under this section". He
said he believes this an appropriate change.
Number 1612
REPRESENTATIVE ROKEBERG commented that he does appreciate the
efforts of Mr. Lorensen, Mr. Bartholomew, and Mr. Hogan, and the
members who worked on the committee substitute. However, he
maintained his discomfort with the objective. He said he
understands the corporation's desire to give some assurance to
the public that there will be some constraint on the part of the
legislature in terms of determining what the appropriation
should not exceed. Representative Rokeberg told the members he
understands the political implications in offering the public
some comfort; however, he is still not convinced that litigation
might not rise out of this legislation if there were some
disagreement in the amount appropriated by the legislature. It
appears that while this language certainly preserves a policy
objective of offsetting inflationary impacts and maintaining the
real value of the fund, he said he is not sure that is the
proper economic policy that the legislature should pursue.
Representative Rokeberg emphasized that he does not disagree
with the policy objectives put forth in the bill, but he is
concerned about possible litigation.
REPRESENTATIVE ROKEBERG said he would prefer to have the bill's
language default to that presented in Version D and would offer
amendments that would eliminate the first sentence in subsection
(b). He recommended that the committee and the corporation
focus on the statutory framework which needs to go with the
amendment to be put forth before the people [of the state].
Number 1957
REPRESENTATIVE ROKEBERG told the members that he believes that
in order for the people to understand this legislation, there
will need to be more than a stand-alone constitutional
amendment. He said that the policy issues the corporation puts
forth, that he agrees with, can be addressed through the
statutes, rather than the constitution.
REPRESENTATIVE GRUENBERG opined that there needs to be more
discussion about this issue.
CO-CHAIR HAWKER commented that Representative Rokeberg's
position is consistent with the conceptual vision of a long-
range fiscal plan that was discussed in committee a couple of
days ago. In those discussions the members envisioned an
accompanying statute to explain what the legislative intent is
regarding this constitutional amendment, as well as, what to do
with the appropriations that would be made subsequent to this
amendment. He summarized his comments by saying that he agrees
with the position put forth by Representative Rokeberg.
Number 2235
ROBERT BARTHOLOMEW, Chief Operating Officer, Alaska Permanent
Fund Corporation, testified in support of HJR 26 and answered
questions. He told the members that Representative Rokeberg's
statement does bring to focus one question that needs to be
addressed, which is the purpose of the proposed language. Both
the original version and Version I, try to blend the two
sentences together so that there is one standard from which to
weigh what should be appropriated from the permanent fund,
instead of two [standards], he said. Mr. Bartholomew told the
members that the board supports having one concept. The policy
statement that this sentence makes is that it is important to
maintain the real value of the permanent fund and protect it
against inflation. He pointed out a question that needs to be
answered by the committee and legislature. If the language is
taken out and only the 5 percent spending limit remains, could
there be policies stated in statutes that would be different
than the policy statement here, of protecting the real value of
the permanent fund, he asked. That is why the board believes it
is important to have the language [in the constitution], and it
is up to the legislature to decide if it is the policy it wants
also. He urged the members to focus on that issue and not move
the policy statement to statute.
CO-CHAIR WHITAKER asked if the option provides that a mandatory
5 percent of the value [of the fund] will be allocated or up to
5 percent [will be allocated].
Number 2424
MR. BARTHOLOMEW replied that the when saying 5 percent will be
allocated, he reads that as saying a mandatory 5 percent. There
are other options. He commented that [the language should be]
up to 5 percent may be allocated.
REPRESENTATIVE ROKEBERG replied that he completely agrees with
Mr. Bartholomew that the amount should not exceed 5 percent. A
policy call by each legislature would be required; however,
there would be a cap on how much can be appropriated. He
commented that there may be a tendency to default to the 5
percent. Representative Rokeberg told members he does not
disagree with this policy, but the question is where to put it.
If it is placed in the constitution, then it may give rise to
litigation if someone thinks the legislature missed the target.
He pointed out that the policy the legislature has used over the
last 20 years has included inflation-proofing and protecting the
fund which is in statute. Representative Rokeberg asked where
the problem is. Perhaps it is with the public, he said. He
emphasized that the corporation has done a wonderful job of
creating and growing the fund; and the legislature has done a
good job of keeping its hands off of the fund.
Number 2706
CO-CHAIR WHITAKER noted that Representative Rokeberg's concern
is with the definition of real value and subsequent potential
litigation. He asked if Representative Rokeberg is satisfied
with the language that the appropriation may not exceed 5
percent.
REPRESENTATIVE ROKEBERG agreed. In response to Co-Chair
Whitaker's request, Representative Rokeberg said he would
provide an amendment to that effect.
Number 2744
JAY HOGAN, Deputy Director, Office of Management and Budget,
Office of the Governor, testified on HJR 26 and answered
questions. He directed the members' attention to Section 1
where two key words: "principal" and "income" are being deleted
from the constitution. This language has been in place since
the [Alaska permanent fund] was adopted in 1976. According to
the constitution the income was to be deposited in the general
fund, but as Representative Rokeberg pointed out the legislature
has not done that. Mr. Hogan said it was [the administration's]
feeling that with the principal gone and with income gone, it
would be appropriate to put the term "real income" in the
constitution. This would become the standard for the percent of
market value (POMV), as opposed to the standard of the previous
concept which differentiated between and relied upon the
concepts of principal and interest. He explained that the
removal of these two terms are the strongest reason for
inserting the words "real value".
REPRESENTATIVE ROKEBERG commented that Mr. Hogan's argument has
merit.
CO-CHAIR WHITAKER stated for the record that Representative
Harris had joined the meeting.
Number 3000
MR. LORENSEN stated that both he and Tamara Cook, Director,
Legislative Legal and Research Services, agree that this
language creates a single standard which is 5 percent [payout].
The introductory language is really an explanation of why the 5
percent is there. While it was an important issue for the
board, it no longer provides that second, independent standard,
he said. Mr. Lorensen said he believes that the only standard
that is enforceable with respect to the actions of the
legislature is the 5 percent POMV rule.
Number 3110
REPRESENTATIVE ROKEBERG said he believes that the courts would
find that there are two standards in place one of which is [the
5 POMV] and the other is that real value is maintained.
MR. HOGAN, as a person who was there when this decision was
debated originally, said it has always been a disappointment to
him that the original concept of money flowing into the general
fund really never happened. One of the main assumptions was
that the permanent fund would be available at such a time as a
legislature and governor felt it was necessary to draw upon it.
By statute, the legislature has made use of the otherwise
provided by law, rather than money flowing into the general
fund. He said he believes that the term "real income" is one
that is generally understood within the financial world. He
said a financial expert could appear in court and make a
convincing argument that it does mean something. It could be
shown to have a direct relation to what the legislature is
trying to do, which is to protect the fund against inflation;
thereby, only using the average real income of that fund which
turns out to be 5 percent.
Number 3331
REPRESENTATIVE ROKEBERG asked Mr. Bartholomew about a
hypothetical market situation in which there is a period of very
high, double-digit inflation. He asked if the market typically
acts negatively to inflationary trends and in turn drives the
value down.
MR. BARTHOLOMEW responded that the executive director of the
Alaska Permanent Fund Corporation has previously testified that
what Representative Rokeberg described is a worst-case scenario.
He said that has happened in the past when there is high
inflation and dropping asset values.
Number 3433
REPRESENTATIVE ROKEBERG remarked that in a situation in which
the corpus and principal of the fund was being eroded by a
hyper-inflationary situation, which would also drive value down,
this kind of language would mean the legislature would not be
able to draw out any funds.
MR. BARTHOLOMEW replied that if the board was making a
recommendation in a one- or two-year period such as the one
Representative Rokeberg described, he said he believes the
board's recommendation would be to take the long-term view and
continue to recommend that the legislature would still be
protecting the fund by allowing an up to 5 percent distribution.
However, as Representative Wilson previously discussed, if this
kind of situation lasted for five, eight, or ten years, then it
would be prudent to review that. He emphasized that it is
important to maintain a long-term view because there will be
good and bad years in the future. The board looks at this in
five-, ten-, and fifteen-year periods, and he believes the board
would continue to recommend [the 5 percent payout].
Number 3626
REPRESENTATIVE ROKEBERG asked why the "over time" language was
removed from the bill.
MR. LORENSEN responded that the "over time" language was removed
as a result of the comments made by Ms. Cook yesterday. It was
her view that "over time" is an ambiguous term and did not add
anything to the bill.
CO-CHAIR WHITAKER commented that it is important to have the
leeway to make judgments about language that would [minimize]
potential litigation.
Number 3800
REPRESENTATIVE ROKEBERG pointed out that the easy way to avoid
litigation is to payout 100 percent to dividends.
CO-CHAIR HAWKER commented that he is in agreement with
Representative Rokeberg on the importance of the long-term view.
He said that he is concerned that without the over time or long-
term concept in this clause, there does not seem to be any
indication that real value is to be measured over time; assuring
that real value is being preserved could mean that there can
never be a decline in value however temporary. This is a grave
concern to him, he said.
Number 3911
MR. LORENSEN responded that he understands the concern Co-Chair
Hawker raised. He commented that perhaps there is another way
to describe that longer period of time without using the "over
time" language.
MR. HOGAN told the committee that current state law describes
what "income" from the permanent fund means. He said he thinks
the statute in Alaska is the appropriate place to fill in the
details and explanations of terms such as real income. He
pointed out that the current statute describes income for the
permanent fund. Mr. Hogan said he also believes that if it is
the legislature's intention to have these two terms travel as a
pair, then that presents a different legal argument at some
point in time because the details of what the legislature is
thinking is all included, if not in the constitutional
amendment, in the statutes that accompanies it.
Number 4049
REPRESENTATIVE HEINZE commented that this is a delicate piece of
legislation, and she expressed the need to make the language
very clear so there is no question [as to its meaning].
REPRESENTATIVE HARRIS asked why the first line in Section 2(b)
is included, as he believes it only serves to confuse the
public. He said all that really needs to be said is that no
more than 5 percent of the value of the fund averaged over five
years is to be used as a stream of revenue. He reiterated his
belief that the first line does not need to be in the bill at
all.
Number 4241
MR. BARTHOLOMEW responded that the 5 percent was not included to
take money off the table from the legislature. That first
sentence addresses why 5 percent is used and that has to do with
asset allocation and the investment philosophy of the permanent
fund [corporation] which shows that there will be 5 percent in
real income available for distribution over the long term. He
commented that this [sentence] is explanatory language which
could be related via the "record" rather than the constitution.
REPRESENTATIVE HARRIS opined that the words "ensure the real
value" in that first sentence could be interpreted differently
by lawyers. For instance, in a year in which the rate of return
is less than 5 percent, the funds would actually be taken from
the principal of the fund. He questioned whether the
aforementioned would be interpreted as ensuring the real value
of the fund. He told the members he believes [including this
language in the bill] would be a bad thing.
Number 4519
REPRESENTATIVE GRUENBERG said in his experience courts construe
constitutional provisions differently than statutes.
Constitutional provisions are usually very short and very broad
while statutes are normally more detailed. He used the analogy
of a body in which the constitution forms the backbone, the
statutes provide the skeleton, and the regulations provide the
flesh while the agencies and the legal interpretations provide
the meat, bone, and skin. Although this kind of language
[Section 2(b)] generally would not be in a constitution,
occasionally, it is. For example, in the [Alaska] Constitution
the right to keep and bear arms [includes explanatory language]
as follows:
A well regulated militia being necessary to the
security of a free state, the right of the people to
keep and bear arms shall not be infringed.
TAPE 03-19, SIDE B
REPRESENTATIVE GRUENBERG pointed out that the first phrase is
the purpose section. He added that the constitution was amended
to ensure that there was an individual right to keep and bear
arms because the people of the state believed the proposed
section might be unduly restrictive. He said it is important to
be careful what is put into the constitution because it could
later be used against [the purpose of the amendment]. He
summarized his comments by saying there is precedent for placing
[explanatory language in the constitution].
Number 4624
CO-CHAIR HAWKER noted that the Second Amendment has been one of
the most heavily litigated, and may be a good argument in
opposing the inclusion of this [explanatory clause].
REPRESENTATIVE GRUENBERG said he would like to examine the
perceived problem that this language is intended to cure. He
said he thinks the problem boils down to the question of how the
legislature politically prevents the people from going into the
corpus [of the permanent fund]. If the concept of the fund is
changed to an endowment, there will be less concern if there is
no dividend because it guarantees a payout. If this were not
the case, there could be a need to go to the [corpus of the
fund]. He asked Mr. Bartholomew if that is the primary purpose
of the amendment.
MR. BARTHOLOMEW responded that is the secondary reason for the
amendment. The primary reason, he said, is to assure that
inflation-proofing of the fund moves from an optional annual
appropriation to [mandatory] inflation-proofing. This would be
done by moving [inflation-proofing] into the constitution and
ensuring the fund's protection against inflation is the top
priority. However, inflation-proofing could be done without
achieving the second objective, which is to assure an annual
distribution. He said it is the board's recommendation to
achieve both objectives. This effect on the economy can go from
zero to a billion dollars and is very dramatic.
Number 4314
REPRESENTATIVE GRUENBERG commented that he prefers options that
allow the people who govern to use [whatever tools are
available] to govern well, although that, too, is a risk because
those that govern can do so badly. He stated that he is not a
fan of dedicated funds and he does not support amending the
constitution very often. The permanent fund is the exception to
the rule, he said. If this amendment passes, this would more
stringently dedicate funds by imposing more requirements.
Although the dividend is not in the constitution, it might as
well be because it is so politically protected. He pointed out
that the legislature still has the legal option to do whatever
is necessary to govern. He asked if there is a way to achieve
these goals without amending the constitution, thereby giving
the legislature the ability to do what it must at some future
time when faced with unforeseeable circumstances.
MR. BARTHOLOMEW responded that the board believes that the
proposed changes, which passed through the Alaska House of
Representatives last year in a statutory version, proves two
points. The statutory option to inflation-proof or not, truly
does not improve the protection of the permanent fund, he said.
The second objective, which would take out that word "principal"
which would allow the legislature in a short-term down period to
have an annual distribution, definitely cannot be achieved
without amending the constitution. In summary, he said, the
board believes these two objectives cannot be achieved without a
constitutional amendment.
Number 3934
REPRESENTATIVE ROKEBERG asked if leaving the word "principal" in
the first section while deleting all references to real value
and inflation-proofing would send a message to the public that
the principal would be maintained.
MR. BARTHOLOMEW responded that there is an attorney general's
opinion that is currently being worked on to determine whether
the permanent fund's historical interpretation of principal and
income are accurate. Currently, there is no legal opinion
saying that the legal interpretations are incorrect, he said,
but by leaving the word principal in and removing the
introductory phrase [out], this brings the members back to the
proposal that was submitted to the legislature two years ago.
Number 3738
REPRESENTATIVE ROKEBERG pointed out that if the 6 percent
override in HJR 1 was deleted, the committee would have the
exact language he believes is needed now.
[HJR 26 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Ways and Means meeting was adjourned at
9:20 a.m.
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