HB 132-PERM. FUND:DEPOSITS;DIVIDEND;EARNINGS    5:21:35 PM CO-CHAIR KREISS-TOMKINS announced that the final order of business would be HOUSE BILL NO. 132, "An Act relating to the Alaska permanent fund; relating to the earnings reserve account; relating to the permanent fund dividend; relating to deposits into the permanent fund; relating to appropriations to the dividend fund and general fund; and providing for an effective date." 5:21:53 PM CO-CHAIR FIELDS moved to adopt Amendment 1, [labeled 31- LS0799\U.1, Nauman, 5/13/19], which read: Page 5, line 21: Delete "33" Insert "40" CO-CHAIR KREISS-TOMKINS objected for the purpose of discussion. CO-CHAIR FIELDS explained that Amendment 1 would change the percentage used to calculate the permanent fund dividend (PFD) from 33 percent to 40 percent. This would ensure that the PFD provided under HB 132 would be about $1,400; he maintained that this amount would be "imminently reasonable and defensible" and comparatively substantial. 5:22:36 PM REPRESENTATIVE WOOL commented that he supports the amendment. He stated that based on 2018 revenues, 33 percent would yield a $1,142 PFD; 40 percent would yield a $1,384 PFD. He added that based on 2019 revenues, [40 percent] would yield a $1,435 PFD. CO-CHAIR KREISS-TOMKINS removed his objection. There being no further objection, it was so ordered. REPRESENTATIVE WOOL maintained that a PFD formula is needed, which was his motivation for introducing HB 132. He gave an analogy: A group of investors own a restaurant. At the end of the year, they each get a percentage of the profit based on the performance of the restaurant. If the restaurant has a good year, the investors get more money. If the restaurant loses money, the investors get less or no money. He maintained that no one would suggest that the investors get a percentage of profit based on the value of the building. Real estate values may be escalating every year, but the percentage of profit that the investors get as stakeholders in the restaurant would be based on the performance of the restaurant. Some day the investors may sell the building; but in this analogy, the building is the permanent fund, and Alaska would not sell it. He reiterated that the dividend should be based on the performance of oil and other mineral resources. CO-CHAIR KREISS-TOMKINS expressed that he has some reservations, but the conversation about the PFD formula is important. REPRESENTATIVE HOPKINS stated that many constituents mention "running the state like a business" and finding efficiencies; when a business does well, it pays dividends based on its profitability. He recalled in 2008, Governor Sarah Palin approved an energy rebate in addition to that year's PFD. Even though the state's economy was healthy, Alaskans felt the negative impacts of higher heating fuel costs. He maintained that HB 132 would alleviate the adverse consequences of this inverse relationship. He encouraged further dialogue about the percentage to be appropriated for the dividend, but maintained that linking that percentage to oil revenues more accurately gives Alaskans their share of the resource wealth and does mote to helps assist with the cost of living than does linking the PFD amount to the performance of "Wall Street." He reminded the committee that in the late 2000s, when the price of oil was increasing, the stock market was crashing, and the PFDs were smaller; under HB 132, the dividends would reflect the oil revenues. 5:29:41 PM CO-CHAIR FIELDS moved to report HB 132, as amended, out of committee with individual recommendations and the accompanying fiscal note. There being no objection, CSHB 132(STA) was reported from the House State Affairs Standing Committee.