HOUSE BILL NO. 18 An Act making a special appropriation from the earnings reserves account to the principal of the permanent fund; and providing for an effective date. Co-Chair Mulder MOVED to RESCIND previous action taken on passing HB 18 out of Committee. Representative J. Davies OBJECTED. Representative Bunde asked for further discussion on the motion. He noted that he was anxious with "locking away" access to money when faced with other challenges. Co-Chair Mulder stated that the discussion could not occur without rescinding the motion. A roll call vote was taken on the motion. IN FAVOR: Phillips, Austerman, Bunde, G. Davis, Foster, Therriault, Mulder OPPOSED: J. Davies, Grussendorf Representative Moses and Representative Williams were not present for the vote. The MOTION PASSED (7-2). Co-Chair Mulder explained that there is sufficient resources remaining in the permanent fund reserve to not threaten the fund in the future. Without an adequate balance in the earnings reserve account, if there was a prolonged or extended bare stock market, there would be a risk of not having available funds to actually pay a permanent fund dividend. He stated that the $250 million dollar number would not threaten the dividend. Co-Chair Therriault asked the balance in the earnings reserve. Co-Chair Mulder replied that $4.1 billion dollars remained in the earnings reserve. Representative J. Davies asked if that was actual cash. Co-Chair Mulder understood that was unrealized gains. CLARKE GRUENING, CHAIR, ALASKA PERMANENT FUND, JUNEAU, stated that there are two accountings kept at the fund. One is the realized and the other is the unrealized earnings reserve. The realized portion is invested like the rest of the fund. It is part of the earnings reserve and mirrors the asset allocation of the entire fund. Representative J. Davies asked if that amount included the amount to be paid out in this year's dividend. Mr. Gruening replied that is managed by the fund in coordination with Department of Revenue. Representative J. Davies asked if there were sufficient funds to pay the current dividend. Additionally, he questioned if something similar were adopted, would there be sufficient funds. He noted that last year, testimony was heard that the account needed a $6 billion dollars reserve to act as a shock absorber. Representative Grussendorf voiced concern with the "one up manship". Co-Chair Therriault noted that there had been an amendment adopted to address Representative Grussendorf's concern during a previous meeting. Representative Phillips stated that she would oppose the legislation until there has been an opportunity to look at a long-range plan for the State. She emphasized that passing such legislation would be bad policy. Co-Chair Mulder MOVED to report CS HB 18 (FIN) out of Committee with individual recommendations. Representative J. Davies OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Phillips, Austerman, Bunde, Foster, Mulder, Therriault OPPOSED: J. Davies, G. Davis, Grussendorf Representative Williams and Representative Moses were not present for the vote. The MOTION PASSED (6-3). CS HB 18 (FIN) was reported out of Committee with a "do not pass" recommendation.