HJR 28 - CONST. AM: PRODUCTION TAX REVENUE FUND 1:10:27 PM CHAIR RAMRAS announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 28, Proposing an amendment to the Constitution of the State of Alaska relating to the production tax revenue fund, dedicating a portion of the petroleum production tax to the fund, and limiting appropriations from the fund. [Left pending from the meeting on 2/4/08 was the motion to adopt the proposed committee substitute (CS) for HJR 28, Version 25-LS1217\E, Cook, 1/29/08, as the work draft; included in members' packets was a new proposed committee substitute (CS) for HJR 28, Version 25-LS1217\M, Cook, 2/5/08.] 1:10:32 PM REPRESENTATIVE DAHLSTROM moved to adopt the proposed committee substitute (CS) for HJR 28, Version 25-LS1217\M, Cook, 2/5/08, as the work draft. REPRESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE SAMUELS, speaking as the sponsor, relayed that Version M contains all the provisions the committee had expressed favor with during the resolution's last hearing. In Version M, the production tax revenue fund is separate from the existing Constitutional Budget Reserve Fund (CBRF); there is no longer a statutory reference to the "progressivity" monies, and those monies are instead just described via language; appropriations to the proposed fund will no longer be mandatory as of January 1, 2015; the annual payout from the fund is limited to 5 percent of a five-year average and won't begin until 2013; and transitional language is included to allow payouts based on a shorter average for the years 2013 and 2014. He mentioned that he'd received some information from the Department of Revenue (DOR) regarding the estimated payouts, and some acronyms for the proposed fund. REPRESENTATIVE DOOGAN indicated that he, too, has some acronyms for the proposed fund. REPRESENTATIVE DAHLSTROM sought assurance that Version M won't release the legislature from its responsibility to pay back the monies owed to the CBRF. REPRESENTATIVE SAMUELS relayed that it won't because it doesn't affect the existing provisions of the Alaska State Constitution regarding the CBRF. REPRESENTATIVE COGHILL expressed disfavor with placing start and stop dates into the Alaska State Constitution. REPRESENTATIVE SAMUELS offered that as production continues to decline, the production tax revenue might instead be needed to balance the budget, hence the proposed stop date. Meanwhile, establishment of the proposed fund will allow the legislature to save a little bit of that revenue. REPRESENTATIVE COGHILL noted that historically the legislature has been very good at managing its savings, the permanent fund being a good example of that. REPRESENTATIVE HOLMES referred to page 2, lines 6-8, and noted that the payout would be based on the first five of the preceding six years. REPRESENTATIVE SAMUELS said that language ensures that the payout average will be based on firm numbers and not include an estimate of a current fiscal year. He offered his understanding that that language came out of [other legislation]. CHAIR RAMRAS characterized Version M as a clean piece of legislation. REPRESENTATIVE HOLMES removed her objection to the adoption of Version M as the work draft. There being no further objection, Version M was before the committee. 1:20:08 PM REPRESENTATIVE DAHLSTROM moved to report the proposed CS for HJR 28, Version 25-LS1217\M, Cook, 2/5/08, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHJR 28(JUD) was reported from the House Judiciary Standing Committee.