03/02/2021 03:30 PM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB83 | |
| SB84 | |
| SJR1 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 83 | TELECONFERENCED | |
| *+ | SB 84 | TELECONFERENCED | |
| += | SJR 1 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
March 2, 2021
3:33 p.m.
MEMBERS PRESENT
Senator Mike Shower, Chair
Senator Lora Reinbold, Vice Chair
Senator Roger Holland
Senator Scott Kawasaki
MEMBERS ABSENT
Senator Mia Costello
COMMITTEE CALENDAR
SENATE BILL NO. 83
"An Act relating to elections; and providing for an effective
date."
- HEARD & HELD
SENATE BILL NO. 84
"An Act relating to the veterans' land purchase discount;
establishing state land vouchers; relating to the permanent fund
dividend; relating to the duties of the Department of Revenue;
authorizing the Department of Natural Resources to accept state
land vouchers; relating to eligibility for public assistance;
and providing for an effective date."
- HEARD & HELD
SENATE JOINT RESOLUTION NO. 1
Proposing amendments to the Constitution of the State of Alaska
relating to the Alaska permanent fund and appropriations from
the Alaska permanent fund.
- MOVED SJR 1 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 83
SHORT TITLE: ELECTIONS; VOTING; BALLOT REQS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/12/21 (S) READ THE FIRST TIME - REFERRALS
02/12/21 (S) STA, FIN
03/02/21 (S) STA AT 3:30 PM BUTROVICH 205
BILL: SB 84
SHORT TITLE: LAND VOUCHERS; PFDS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/12/21 (S) READ THE FIRST TIME - REFERRALS
02/12/21 (S) STA, RES, FIN
03/02/21 (S) STA AT 3:30 PM BUTROVICH 205
BILL: SJR 1
SHORT TITLE: CONST AM: GUARANTEE PERM FUND DIVIDEND
SPONSOR(s): WIELECHOWSKI
01/22/21 (S) PREFILE RELEASED 1/8/21
01/22/21 (S) READ THE FIRST TIME - REFERRALS
01/22/21 (S) STA, JUD, FIN
02/09/21 (S) STA AT 3:30 PM BUTROVICH 205
02/09/21 (S) Heard & Held
02/09/21 (S) MINUTE(STA)
02/11/21 (S) STA AT 3:30 PM BUTROVICH 205
02/11/21 (S) Scheduled but Not Heard
03/02/21 (S) STA AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
JOSH APPLEBEE, Chief of Staff
Lieutenant Governor Kevin Meyer
Juneau, Alaska
POSITION STATEMENT: Presented SB 83 on behalf of the
administration.
CORI MILLS, Deputy Attorney General
Civil Division
Department of Law
Juneau, Alaska
POSITION STATEMENT: Answered questions and provided information
related to SB 83.
GAIL FENUMIAI, Director
Division of Elections
Office of the Lieutenant Governor
Juneau, Alaska
POSITION STATEMENT: Answered questions related to SB 83.
MIKE BARNHILL, Deputy Commissioner
Department of Revenue (DOR)
Juneau, Alaska
POSITION STATEMENT: Presented a PowerPoint to introduce SB 84 on
behalf of the administration.
MARTY PARSONS, Director
Division of Mining, Land, and Water
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Provided information related to SB 84.
SENATOR BILL WIELECHOWSKI
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SJR 1.
JOE GELDHOF, Board Member
Alaska Permanent Fund Defenders (APFD)
Juneau, Alaska
POSITION STATEMENT: Invited testimony in support of SJR 1.
RICK HALFORD, representing self
Chugiak, Alaska
POSITION STATEMENT: Invited testimony in support of SJR 1.
CRIS EICHENLAUB, representing self
Wasilla, Alaska
POSITION STATEMENT: Stated that he supported SJR 1 generally but
he did not support the POMV or the elimination of the ERA.
SHERRY EICHENLAUB, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of SJR 1.
EDWARD MARTIN, representing self
Cooper Landing, Alaska
POSITION STATEMENT: Testified that SJR 1 is an important aspect
of the future of Alaska and its children.
BERT HOUGHTALING, representing self
Big Lake, Alaska
POSITION STATEMENT: Testified on SJR 1 to state full support for
enshrining the PFD in the constitution, but not the POMV draw or
combining the ERA in the corpus.
ACTION NARRATIVE
3:33:00 PM
CHAIR MIKE SHOWER called the Senate State Affairs Standing
Committee meeting to order at 3:33 p.m. Present at the call to
order were Senators Holland, Kawasaki, Reinbold, and Chair
Shower.
SB 83-ELECTIONS; VOTING; BALLOT REQS
3:33:59 PM
CHAIR SHOWER announced the consideration of SENATE BILL NO. 83
"An Act relating to elections; and providing for an effective
date."
He listed the individuals available to answer questions.
3:34:35 PM
JOSH APPLEBEE, Chief of Staff, Lieutenant Governor Kevin Meyer,
Juneau, Alaska, stated that SB 83 stems from the experience of
the 2020 election cycle, which, due to COVID-19, was unlike any
other. It offers four ideas for the committee to consider to
help "bolster, tighten, and tweak" the election system.
First, SB 83 provides the director of the Division of Elections
flexibility to conduct additional hand counts if the
circumstances of the election warrant it. The statute currently
only permits a hand-count verification on one randomly drawn
precinct within each district. Further hand counts are allowed
only if the hand count comes back with significant deviation. He
said the division believes that the ability to audit more
precincts to ensure confidence in the results would improve
election integrity.
Second, SB 83 clarifies that two voter identifiers are required
in order to apply for an absentee ballot, and that both a voter
signature and identifier are required on an absentee ballot
envelop. He said this is how the division interpreted and
applied the law during the 2020 elections so this is codifying
current practice.
MR. APPLEBY emphasized that SB 83 does nothing to change the
requirement for a witness signature. He highlighted that the
Lieutenant Governor and the Department of Law argued to keep
that requirement in the 2020 election but were unsuccessful in
court. He further highlighted that that the court decision only
applied to the 2020 elections and not any subsequent elections.
Third, SB 83 allows the director to establish in regulation the
amount of deposit required for a recount. He noted that the
amounts in the existing statute are outdated and do not cover
the actual costs.
Fourth, SB 83 allows, but does not require, communities with a
population of less than 750 to conduct elections by mail instead
of in person. In the last election, some communities shut down
their polling stations for legitimate health and safety reasons,
but even in non-pandemic times it can be difficult to find staff
and a polling location in small communities. This bill offers
flexibility for the division to work with small communities to
find the best way to ensure that every voter can exercise their
right to vote.
3:38:54 PM
CHAIR SHOWER advised that he requested a meeting with the
Lieutenant Governor's Office to try to prevent overlapping
efforts between SB 83 and SB 39, which he sponsored.
3:39:45 PM
MR. APPLEBEE presented the sectional analysis for SB 83.
Section 1. Provides the Division of Elections the
flexibility to count more than one random precinct in
the ballot review process should the Director have
concerns about the elections process.
Section 2. Clarifies a space for the voter identifier
be made on the voter certificate that accompanies an
absentee ballot.
Section 3. Clarifies that one of the voter
identifiers must be a voter's date of birth.
Section 4. Clarifies that the voter certificate must
include the information required in AS 15.20.030.
Section 5. States that the absentee ballot counting
board shall examine the voter certificate and
determine that it has been properly executed including
a voter's signature and voter identifier.
Section 6. Clarifies that an absentee ballot may not
be counted if the voter certificate does not contain a
voter's signature or voter identifier.
Section 7. Removes the deposit amount for a recount
from statute and requires the Director to adopt
regulations establishing the amount and manner of
payment for a recount.
Section 8. Gives the Division the flexibility to
conduct voting by mail for communities with a
population under 750 if necessary.
Section 9. Adds the definition of voter identifier
into statute.
Section 10. Directs the Division to adopt regulations
necessary to implement this bill.
Section 11. Makes Section 10 effective immediately.
3:40:46 PM
CHAIR SHOWER highlighted that while the court decision only
applied to the 2020 elections, it did set precedent so nothing
prevents a court from changing an election in a future
emergency. He emphasized that, "The legislature is the
constitutional authority for setting that law, not the courts."
SENATOR REINBOLD echoed the previous concern and voiced support
for sidebars.
3:42:00 PM
SENATOR KAWASAKI asked Cori Mills with the Department of Law if
the court case placed conditions other than the pandemic.
[Ms. Mills dropped off line and Senator Kawasaki posed a second
question.]
3:43:01 PM
SENATOR KAWASAKI noted the perjury implications for a voter who
falsifies information when providing an identifier on an
election ballot application and asked if perjury also applies
for anybody who signs as a witness.
3:43:38 PM
CORI MILLS, Deputy Attorney General, Civil Division, Department
of Law, Alaska, Alaska, cautioned that she might need to correct
her answers after consultation with the criminal division. She
said the applicable criminal laws are perjury and falsification
and she believes that it would be a crime of falsifying a signed
statement to falsely witness a ballot.
CHAIR SHOWER asked for the penalty for that crime.
MS. MILLS cited AS 15.56.040. Voter misconduct in the first
degree. She offered her understanding that falsely witnessing
would fall under that statute and it is a class C felony.
SENATOR KAWASAKI referred to the ballot he applied for but did
not use. He noted that the only requirement under the witness
affidavit is to be over age 18. He asked if she could explain
why it was written that way.
MS. MILLS said she would guess that the language has been that
way for some time, but she would defer to Ms. Fenumiai to
explain the reason.
3:47:56 PM
GAIL FENUMIAI, Director, Division of Elections, Office of the
Lieutenant Governor, Juneau, Alaska, confirmed that that
language has been on the by mail return envelopes for at least
the last two decades.
CHAIR SHOWER pointed out the very small print warning outside
the box for the witness signature says, "False statements made
by the voter or by the attesting witness on the certificate are
punishable by law."
SENATOR KAWASAKI asked Ms. Mills for the basis for the unanimous
decision in the 2020 elections court case.
MS. MILLS advised that it was a preliminary injunction motion in
the superior court. The court looked at the pandemic and the
health and safety risks of interacting with another person. The
Department of Law (DOL) appealed the decision to the Alaska
Supreme Court and that court found that the superior court judge
did not abuse her discretion in granting the preliminary
injunction. She clarified that the Supreme Court did not go into
the merits of the case, just whether the decision was within the
judge's discretion.
SENATOR KAWASAKI asked if she believes that DOL would be able to
win the case in the Alaska Supreme Court if it weren't a
pandemic and the argument was more broad-based.
MS. MILLS replied it was DOL's legal position that the law is
constitutional both under the pandemic and if there weren't a
pandemic.
3:51:50 PM
CHAIR SHOWER reported that in March 2020, the legislature took
up the issue of the witness signature and the decision was to
keep that requirement intact.
SENATOR HOLLAND referred to Section 8 on page 6 and asked about
the benefit of providing a definition for the term "community."
CHAIR SHOWER noted that this was an area of overlap between SB
83 and SB 39. The Alaska Municipal League suggested the
population of 750 and SB 39 provides a more nuanced definition.
He asked Mr. Applebee to comment.
MR. APPLEBEE explained that the term "community" refers to any
size town or village that has a population of less than 750 and
that number is the break between small and larger.
SENATOR REINBOLD asked about defining the type of pandemic
because she feels the situation of the COVID-19 pandemic has
been exploited.
3:55:45 PM
MS. MILLS responded by adding precision to her response to
Senator Kawasaki. She said the concerns were specific to COVID-
19 and the evidence before the court was specific to
transmissibility, death rates, and health information related to
COVID-19. That is the information the plaintiff's council
presented and the court weighed. The Department of Law put
forward their own information, specifically related to COVID-19,
about the safety options to get a witness signature.
SENATOR REINBOLD asked about providing a clear definition of
"pandemic" in this or another bill that would be applicable in
the future.
MS. MILLS said it is an interesting concept and the department
would be willing to look at any proposal brought forward.
CHAIR SHOWER asked Mr. Appleby what led to the decision to make
750 the population cutoff for conducting an election by mail.
MR. APPLEBEE answered that the basis was conversations with
community leaders and time spent recruiting election workers in
rural areas. The determination was that 750 is the size where
recruiting becomes difficult for an in-person election.
3:59:26 PM
CHAIR SHOWER asked Ms. Mills if DOL raised the issue of the
courts' ability to change election law at either the state or
federal level.
MS. MILLS answered no; this was a state-centered issue.
CHAIR SHOWER asked what protocols were in place to ensure the
accuracy of the voter rolls.
MS. FENUMIAI advised that she provided a document to the
committee that outlines the list maintenance processes that the
division undertakes to keep the voter rolls in accordance with
state and federal law. She asked if members had the document.
CHAIR SHOWER answered yes and asked for a 30,000-foot view.
4:01:55 PM
MS. FENUMIAI explained that the division follows the provisions
in AS 15.07.130, which meets the guidelines under the National
Voter Registration Act. The division participates in a 30-state
cross matching program, sends notices to people who appear to be
registered to vote in other states, and receives notices about
voter deaths from a variety of sources. This includes
information from the non-profit organization ERIC, secretaries
of state offices, state health and analytics, voters' families,
obituaries, and voters who request cancellation.
4:03:36 PM
SENATOR KAWASAKI asked if the division receives updated
information when a person applies online for a permanent fund
dividend (PFD) and they list an address that is different than
is in the voter roll.
MS. FENUMIAI replied the division receives the information from
the PFD and their process is to notify the person and ask if
they want the information on the PFD application to update their
voter registration record. These voters have a 30-day window to
opt out of changing their voter registration record. If they do
not opt out, the division uses the information they provided on
their PFD application to update their voter registration.
SENATOR KAWASAKI asked if the system is automated or if there is
discretion. He mentioned the PFD fraud unit that uses data to
determine the truthfulness of residency claims.
4:05:05 PM
MS. FENUMIAI answered that the division takes the information at
face value just as they do for those who register to vote,
certified under penalty of perjury, directly with the division.
SENATOR KAWASAKI asked how the voter roll is affected when
someone applies for a PFD and claims to be in the state but
their IP address identifies them as applying from out-of-state.
MS. FENUMIAI asked for further clarification of the question
because a voter does not need to be in the state to remain
registered to vote.
4:06:13 PM
SENATOR KAWASAKI asked if the division has a way to prevent a
person who lives out of state from becoming registered to vote
if they apply for a PFD online claiming that they live at a
former Alaska address.
MS. FENUMIAI answered no. A voter who registers through the PFD
application and does not respond to the opt-out notice is
registered to vote based on the information provided from the
permanent fund.
CHAIR SHOWER added that his office recently learned that the
data from the PFD application passes directly through to the
Division of Elections.
SENATOR REINBOLD recalled a bill that allowed members of the
military who had left Alaska to apply for a PFD if they intended
to return at some time. She asked Ms. Fenumiai if she was aware
of that legislation.
MS. FENUMIAI said she does not know the PFD rules, but Title 15
provides that an individual who has an intent to return does not
lose their residency for voting purposes.
CHAIR SHOWER related his personal experience that when he was
stationed outside Alaska he was always able to vote absentee but
he did not receive the dividend.
SENATOR REINBOLD opined that "intent to return" ought to be
defined.
4:10:30 PM
CHAIR SHOWER found no further questions and stated he would hold
SB 83 in committee.
4:10:38 PM
At ease
SB 84-LAND VOUCHERS; PFDS
4:11:07 PM
CHAIR SHOWER reconvened the meeting and announced the
consideration of SENATE BILL NO. 84 "An Act relating to the
veterans' land purchase discount; establishing state land
vouchers; relating to the permanent fund dividend; relating to
the duties of the Department of Revenue; authorizing the
Department of Natural Resources to accept state land vouchers;
relating to eligibility for public assistance; and providing for
an effective date."
He listed the individuals available to answer questions.
4:11:38 PM
MIKE BARNHILL, Deputy Commissioner, Department of Revenue (DOR),
Juneau, Alaska, stated that SB 84 creates a program through the
Permanent Fund Dividend (PFD) that allows applicants to elect a
PFD land voucher in lieu of a cash dividend. The face value
would be two times the statutory formula of the dividend. He
said this is an opportunity for Alaskans to use their vouchers
to purchase state land from the Department of Natural Resources
(DNR). He described the precedent of land vouchers in this
country that started after the American Revolutionary War to
compensate veterans. He said the governor's objective is to get
state land into the hands of Alaskans.
4:13:50 PM
MR. BARNHILL summarized the following sectional analysis for SB
84:
Section 1: Amends AS 38.05.940(c) to allow a veteran
to apply one or more dividend land vouchers issued
under AS 43.23.018 to the one-time purchase of
discounted state land under AS 38.05.940(c) ("Land
purchase price discount for veterans.")
Section 2: Amends AS 38.05.940(d) to limit a person
using a dividend land voucher to purchase land under
AS 43.23.018 to purchasing surface rights only, and to
prohibit a person from applying a dividend land
voucher to costs ineligible for a discount under the
section.
Section 3: Amends AS 38.95 by adding three new
sections.
Proposed AS 38.95.350 directs the Department of
Natural Resources (DNR), on or after Jan. 1, 2022, to
accept one or more dividend land vouchers at their
face value for purchase of state land under land
contracts. It prohibits DNR from accepting vouchers
for payment of rents or fees or land purchases. A
voucher will be exhausted after one use whether it
covered the full land sale price or not, and
applicants are entitled to no refund or other credit
for any portion of the voucher's value remaining after
such a sale.
Mental health trust land is excluded from state land
that can be purchased with a voucher.
Proposed AS 38.95.360, requires DNR to report to the
governor before September 1 of each year the number
and total value of dividend land vouchers it accepted
for payment in the previous fiscal year. The report
shall include a recommendation for any additional
appropriation for the Land Disposal Income Fund to
account for decreases to the fund caused by acceptance
of vouchers to pay for state land. Loss of these
funds, if not replaced by another revenue source, will
result in significant challenges to maintaining DNR's
land sale programs.
Proposed AS 38.95.400 defines "department" to be DNR.
Section 4: Adds a new section, AS 43.23.018.
Subsection (a) directs DOR to allow a person using the
electronic application for a Permanent Fund dividend
and not a person or public agency applying on behalf
of another individual, or an assignee of the right to
receive a dividendto make an irrevocable election to
receive a single dividend land voucher instead of a
monetary dividend. It directs DOR, if unable during a
dividend year to determine whether an applicant is
eligible to receive a dividend, to void that
applicant's election to receive a dividend land
voucher; if later determined to be eligible, the
applicant will be eligible to receive a monetary
dividend, but not to elect to receive a dividend land
voucher.
Subsection (b) sets the value of a dividend land
voucher at twice the value of a monetary dividend as
calculated under AS 43.23.025 if 50 percent of income
available distribution was deposited into the Fund's
dividend fund under AS 37.13.145(b).
Subsection (c) limits the use of vouchers only to
purchase of land under AS 38.95.350.
Subsection (d) provides that vouchers issued under
this section do not expire.
Subsection (e) makes vouchers transferable to any
person. The Department of Revenue is required to keep
records of voucher transfers. An action against the
state related to transfer of a state land voucher is
prohibited.
Subsection (f) provides that issuing a land dividend
voucher creates no obligation on DNR to make any state
land available for sale or to enter any land sale
contract, nor does it confer eligibility to purchase
state land.
Subsection (g) provides that the value of a voucher
subject to garnishment is set under AS 43.23.140(e).
The Department of Revenue shall issue land vouchers
for the value remaining after such collection.
Section 5: Amends AS 43.23.045 by adding a new
subsection (f), directing that the cash from foregone
PFDs resulting from individual elections to receive
state land will, after garnishment under AS 43.23.140,
lapse to the General Fund.
Section 6: Amends AS 43.23.055 to conform the Revenue
commissioner's duties to include issuing state land
vouchers under AS 43.23.180; directs Revenue to
develop regulations to establish procedures and time
limits for voucher issuance and use, as well as for
replacing a lost, stolen or destroyed land voucher;
and directs Revenue to report annually to DNR both the
number of individuals electing to receive land
vouchers instead of monetary dividends, and the number
and value of such vouchers issued.
Sections 7-8: Amends AS 43.23.140 by adding a new
subsection (e) to specify that the value of a land
voucher may only be garnished up to the amount
available for garnishment from a monetary dividend.
Section 9: Adds a new subsection AS 43.23.240(d),
directing the Department of Health and Social Services
to consider a land voucher as income or resources of
an applicant, in calculating that applicant's
eligibility for public assistance programs it
administers, and to notify all public assistance
recipients of the effects of receiving a dividend land
voucher.
Section 10: Adds a new subsection AS 43.23.250(b), to
require financial needs-based programs administered by
the state or by a state instrumentality or a
municipality to consider the value of a dividend land
voucher held by an applicant as income or resources in
determining whether the person is eligible for the
program.
Section 11: Adds a new subsection to AS 43.23.270.
New subsection (f) applies the same penalties for
violations of state law relating to Permanent Fund
dividend eligibility and application, to dividend land
vouchers eligibility and application.
Section 12: Establishes as the bill's effective date
as January 1, 2022.
MR. BARNHILL deferred to Mr. Parsons to offer the Department of
Natural Resources' (DNR) perspective of the bill.
4:17:56 PM
MARTY PARSONS, Director, Division of Mining, Land, and Water,
Department of Natural Resources (DNR) Anchorage, Alaska,
described SB 84 as a means to fulfill the constitutional mandate
to help develop the land and resources of Alaska in the public
interest. He said he views the voucher as a win for both
individuals and the state treasury. It is an opportunity to get
more land into the hands of Alaskans.
CHAIR SHOWER asked how many acres of state land are eligible
under the state land sale program and where it is located.
4:20:59 PM
MR. PARSONS stated that just over 2 million acres are classified
as "settlement" and could be included in the land sale program.
Much of it is remote, but there is some near Tok, Glenallen,
Wasilla, and Fairbanks. He noted the lack of infrastructure in
the state and said the department has tried to ensure that the
land it offers has buildable sites.
CHAIR SHOWER asked him to talk about the size of the properties
relative to the size of the PFD.
MR. PARSONS said five-acre parcels are about the average size
and the cost is about $3,000 per acre or $15,000 for a five-acre
parcel. He also noted the state's generous financing program for
state land sales.
CHAIR SHOWER asked if unrelated individuals could pool resources
to purchase a piece of land.
MR. PARSONS said he doesn't believe there are limitations but he
would defer to Mr. Barnhill.
4:26:40 PM
MR. BARNHILL clarified that the legislation does not prevent
individuals from pooling their land vouchers.
CHAIR SHOWER asked how the land is titled.
MR. BARNHILL said he assumes the title would be the same as
would be granted in any other state land sale, but he would
defer to Mr. Parsons.
MR. PARSONS confirmed that the title would be similar to any
other land purchased from the state.
SENATOR HOLLAND asked how often the previous PFD voucher program
was used.
MR. BARNHILL replied that legislation was never enacted into
law.
SENATOR HOLLAND asked if the money stays in the Earnings Reserve
Account (ERA) or transferred "to some portion of the state for
the property."
4:28:24 PM
MR. BARNHILL referred to the hypothetical cash flow on page 4 of
the PowerPoint to answer the question. He noted that he prepared
the hypothetical at the committee's request last year when it
considered similar legislation. He clarified that the
hypothetical was not a projection; it showed how the money
moves.
The example shows a statutory PFD of $2,300 per person, actual
appropriation of $1,000 per person, and the land voucher under
this bill of $4,600 per person. Of the 640,000 PFD applicants,
600,000 elect the cash PFD and 40,000 elect the PFD land
voucher.
The total amount appropriated from the ERA to the general fund
(GF) to the PFD fund is 640,000 times $1,000 or $640 million. Of
this, cash PFDs total $600 million, $40 million lapses to the GF
because of land voucher elections (40,000 times $1,000 or $40
million), and the face value of the land vouchers is $4,600 per
person times 40,000 participants or $184 million.
The hypothetical assumes $300 million in land sales to which
$184 million in land sales is applied, leaving $116 million that
the purchasers would need to supply from personal resources to
complete the $300 million purchase.
The result of this hypothetical shows $116 million in cash from
the purchases plus $40 million in unelected cash PFDs or $156
million going to the general fund.
MR. BARNHILL displayed a mock-up of the land voucher to conclude
the presentation.
CHAIR SHOWER found no questions and asked if he had any closing
comments.
MR. BARNHILL reiterated that the purpose of SB 83 is to get
state land into the hands of Alaskans and move residents to a
higher degree of self-sufficiency.
CHAIR SHOWER stated support for the concept then highlighted the
cost barrier to access the land.
4:33:10 PM
CHAIR SHOWER held SB 84 in committee.
SJR 1-CONST AM: GUARANTEE PERM FUND DIVIDEND
4:33:26 PM
CHAIR SHOWER announced the consideration of SENATE JOINT
RESOLUTION NO. 1 Proposing amendments to the Constitution of the
State of Alaska relating to the Alaska permanent fund and
appropriations from the Alaska permanent fund.
He noted that the committee previously heard the bill and today
would hear a summary followed by invited and public testimony.
4:33:51 PM
SENATOR BILL WIELECHOWSKI, Alaska State Legislature, Juneau,
Alaska, sponsor of SJR 1, reminded the committee that that SJR 1
enshrines the original permanent fund dividend (PFD) in the
Alaska Constitution and limits the draw from the fund corpus to
five percent of a five-year averaged market value (POMV). The
bill prioritizes the POMV draw to first pay a dividend to the
people and government may use the remainder to pay government
expenses. He explained that this is similar to an endowment
program used by institutions worldwide.
SENATOR WIELECHOWSKI highlighted that SJR 1 eliminates the
Earnings Reserve Account (ERA) because legislatures have access
to that account. If earnings from the permanent fund continue to
flow into the ERA, he said legislatures could repeatedly
withdraw funds to the point that there would not be enough to
pay a dividend.
He referenced the chair's earlier question about historic
funding of PFDs through automatic transfers and directed
attention to the brief in the bill packets. It recounts numerous
occasions of fund transfers from the permanent fund to the
dividend fund without appropriation. He explained that the basis
of the argument in his lawsuit [Wielechowski v. Alaska] was that
there does not need to be an appropriation for a dividend;
therefore, the governor cannot veto the dividend.
4:36:25 PM
SENATOR HOLLAND asked if this legislation affected the
Constitutional Budget Reserve (CBR).
SENATOR WIELECHOWSKI answered no.
4:37:10 PM
JOE GELDHOF, Board Member, Alaska Permanent Fund Defenders
("Defenders"), Juneau, Alaska, stated that Clem Tillion, chair
of Defenders asked him to make a couple of macro points about
the permanent fund and the PFD, the first of which is that the
permanent fund was never intended to be a rainy day account for
government spending. The second point is that the permanent fund
is arguably the best idea that Alaska has had since statehood;
it saves a portion of nonrenewable resources for future
generations. Third, the PFD is not an entitlement; it is a form
of ownership designed to meet the constitutional requirement
that the resources of the state, which are held in common, are
developed for the maximum use and benefit of Alaskans.
He related that Defenders believe that there is a critical need
to quickly address the permanent fund and the PFD because too
much has already been spent and too little has been saved. The
state's savings accounts are dwindling and the options to
address the state's fiscal problems are quickly disappearing. He
said Defenders strongly believe that the legislature needs to
enact legislation this session so the measure can be on the
ballot in 2022. He recounted the basic principles that Defenders
adopted for looking at any proposal such as SJR 1. The corpus of
the fund must be protected from inflation; the permanent fund
needs to continue to grow; spending funds that go into the ERA
needs to stop; the annual brawl over the PFD must stop; and the
legislation needs straightforward language that pays an equal
PFD to all Alaskans and is easy for the public to understand.
4:41:30 PM
MR. GELDHOF said Chair Tillion likes what SJR 1 does in terms of
allocation of the fund. The problem is that 5 percent arguably
will jeopardize the corpus of the account. He reported that
economists that Defenders worked with, the Permanent Fund
Corporation and the people who run stress tests all agree that 5
percent may fail. He pointed out that the Rockefeller Foundation
used 4 percent when it moved to a POMV structure. He emphasized
that when shifting from a trust fund structure to an annuity
structure, it is very important to set the percentage low enough
for the fund to continue to grow and provide sufficient returns
to provide for the PFD and general fund spending into
perpetuity.
4:45:52 PM
RICK HALFORD, representing self, Chugiak, Alaska, stated that he
was involved in the initial management structure of the PFD and
it received broad support and was viewed as clearly
constitutional. He agreed with the previous testimony and added
that what was lost most in the court case was the connection
between the performance of the fund and the management structure
that created such a successful fund. He said the dividend grew
as a defense of the fund and the element of that defense was the
realized gain averaged over five years.
MR. HALFORD pointed out that the POMV structure bases the draw
on the gross value of the fund, not the performance of the fund
and does not affect trustee decisions and the investment system.
Transitioning to the POMV offers security and constitutional
protection but the connection between the fund performance and
the dividend is lost. He said that loss may be worthwhile if the
number is low enough that the fund increases in value.
MR. HALFORD described a 4 percent POMV with language that
retains the old calculation versus 50 percent of the new
calculation as a big step in the right direction.
CHAIR SHOWER commented on the value of his historical
perspective.
SENATOR REINBOLD asked if he would broaden the permanent fund to
include taxes on all resources to promote development and better
management of state resources.
MR. HALFORD replied he has many friends who believe severance
tax should have been included initially, but the permanent fund
is not based on taxes; it is based on ownership. The hope is
that the renewable resources ownership will maintain value into
the future. The concern is that this generation is spending in
one generation the nonrenewable resources ownership that is the
property of all generations of Alaskans. "We have not saved
enough. We are spending the endowment as a trust land state of
all future Alaskans in one generation," he said.
4:54:01 PM
CHAIR SHOWER asked him to comment on the prevalent attitude
among some current and former legislators that the dividend is
free money and they do not want an income tax to pay for it,
which is very much at odds with the view that it belongs to the
people.
MR. HALFORD related that Wally Hickel was famous for saying
Alaska is an owner state and Jay Hammond individualized that by
giving the people a stake in all of it. He said it is
interesting that people who were close to being in diapers are
telling people what we meant when we created the permanent fund.
He highlighted that Elmer Rasmusson and members of the permanent
fund working group spent two years trying to get an answer to
what the reason for the permanent fund was and they never
reached a conclusion. The only agreement was that it was a
savings account and the money should not be wasted.
4:57:34 PM
CHAIR SHOWER found no further questions and opened public
testimony on SJR 1.
4:58:15 PM
CRIS EICHENLAUB, representing self, Wasilla, Alaska, stated that
he supported SJR 1 generally but he did not support the POMV or
the elimination of the ERA. He suggested that if the legislature
repealed the POMV legislation [Senate Bill 26] the ERA could be
left intact. Do it the way it's been done for the last 40 years,
he said.
5:00:06 PM
SHERRY EICHENLAUB, representing self, Wasilla, Alaska, stated
support for SJR 1 and enshrining the PFD in the constitution.
She suggested that people who do not want their dividend can
donate it through Pick Click Give of not apply. She wants the
dividend to continue so her children and grandchildren can have
a future in Alaska as college graduates and good citizens.
5:01:07 PM
EDWARD MARTIN, representing self, Cooper Landing, Alaska, stated
that SJR 1 is an important aspect of the future of Alaska and
its children. He reported that he has supported the dividend his
entire life and his dad gathered signatures on the peninsula to
get the advisory vote. Nothing has changed and there is no need
for another advisory vote. He said the decision about what is
done with the dividend should be an individual decision. The
future of Alaska is the people as owners benefiting from the
resources of the state.
5:03:30 PM
BERT HOUGHTALING, representing self, Big Lake, Alaska, began his
testimony on SJR 1 by Governor Jay Hammond:
Alaska's dividend program is, of course, anything but
socialistic. Socialism is taking from the wealthy to
provide what government thinks is best for all.
Permanent Fund Dividends do just the opposite. They
take the money, which by constitutional mandate,
belongs to all and allows all individuals to determine
how to spend some of his or her share. What could be
more capitalistic?
MR. HOUGHTALING stated full support for enshrining the PFD in
the constitution but not having Senate Bill 26 involvement with
the POMV or the elimination of the ERA and combining it with the
corpus. They need to be separate so the corpus cannot be spent,
he said. He advocated for continued meaningful cuts to state
government.
CHAIR SHOWER advised that written comments could be sent to
[email protected].
5:06:01 PM
CHAIR SHOWER closed public testimony on SJR 1.
5:06:15 PM
At ease
5:06:47 PM
CHAIR SHOWER reconvened the meeting and solicited a motion.
5:06:58 PM
SENATOR REINBOLD moved to report SJR 1, work order 32-LS0015\A,
from committee [with individual recommendations and attached
fiscal note(s)].
CHAIR SHOWER found no objection and SJR 1 was reported from the
Senate State Affairs Standing Committee.
5:07:23 PM
At ease
5:08:39 PM
CHAIR SHOWER reconvened the meeting and reviewed the agenda for
upcoming meetings.
5:08:59 PM
There being no further business to come before the committee,
Chair Shower adjourned the Senate State Affairs Standing
Committee meeting at 5:08 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 84 Dept of Revenue PPT.pdf |
SSTA 3/2/2021 3:30:00 PM |
SB 84 |
| SB 84 Sectional Analysis.pdf |
SSTA 3/2/2021 3:30:00 PM |
SB 84 |
| SB 84 Bill.PDF |
SSTA 3/2/2021 3:30:00 PM |
SB 84 |
| SB 83 Sectional Analysis version A.pdf |
SSTA 3/2/2021 3:30:00 PM |
SB 83 |
| SB 83 Sponsor Statement version A.pdf |
SSTA 3/2/2021 3:30:00 PM |
SB 83 |
| SB 83 A.PDF |
SSTA 3/2/2021 3:30:00 PM |
SB 83 |
| SB 83-1-2-021221-GOV-N.PDF |
SSTA 3/2/2021 3:30:00 PM |
SB 83 |