SJR 4-CONST AM: BUDGET RESERVE FUND                                                                           
                                                                                                                                
CHAIR SEEKINS announced SJR 4 to be up for consideration.                                                                       
                                                                                                                                
SENATOR DYSON,  sponsor of  SJR 4, explained  that it  amends the                                                               
Constitutional Budget Reserve (CBR) Fund,  which has been used to                                                               
date as  a buffer in  lean times, but there  is a poor  record of                                                               
funds being  restored in  fat years. SJR  4 requires  that excess                                                               
revenues in one  year go into repaying  the CBR up to  a limit of                                                               
$5 billion. Consultants have said that  is a good buffer fund for                                                               
a  state with  a  revenue  picture like  Alaska's.  After the  $5                                                               
billion is exceeded,  excess revenues can be divided  in a couple                                                               
of ways:  50% goes to  the Permanent Fund,  25% goes to  a second                                                               
dividend back  to the people  and the  other 25% goes  to working                                                               
off  the  deferred  maintenance  list.  This  is  a  way  to  get                                                               
financial  stability.  He  is  impressed  with  Senator  Wilken's                                                               
arguments about compounding interest.                                                                                           
                                                                                                                                
9:46:02 AM                                                                                                                    
                                                                                                                                
SENATOR FRENCH asked how much is left in the CBR.                                                                               
                                                                                                                                
MR. SHULTZ replied about $2.2 billion.                                                                                          
                                                                                                                                
SENATOR FRENCH asked if any money has ever been repaid.                                                                         
                                                                                                                                
MR.  BRUCE  HANSEN,  Legislative Finance,  indicated  that  small                                                               
surpluses have  been swept back into  the CBR, but then  they are                                                               
usually reversed back out.                                                                                                      
                                                                                                                                
9:47:07 AM                                                                                                                    
                                                                                                                                
CHAIR  SEEKINS said  the  debt  to the  CBR  is approximately  $4                                                               
billion.                                                                                                                        
                                                                                                                                
SENATOR FRENCH  wondered what would  make the legislature  pay it                                                               
back in the future if it hadn't paid it back up to now.                                                                         
                                                                                                                                
9:47:32 AM                                                                                                                    
                                                                                                                                
SENATOR THERRIAULT said, "We're going to build a gas pipeline."                                                                 
                                                                                                                                
CHAIR SEEKINS  remarked that  last week  he saw a  32 TCF  of gas                                                               
hydrate possibility for the state.                                                                                              
                                                                                                                                
9:47:53 AM                                                                                                                    
                                                                                                                                
SENATOR  DYSON said  he believes  that Alaska  is on  the leading                                                               
edge  of  unprecedented  prosperity  and  this  is  the  time  to                                                               
institute  discipline.  The  world   needs  what  Alaska  has  in                                                               
abundance.                                                                                                                      
                                                                                                                                
CHAIR SEEKINS said he would hold SJR 4 for a future hearing.                                                                    
                                                                                                                                
SENATOR DYSON asked  members to provide questions  and issues for                                                               
discussion  so that  they  could be  researched  for an  improved                                                               
product.