ALASKA STATE LEGISLATURE  HOUSE RULES STANDING COMMITTEE  May 9, 2004 4:28 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chair Representative John Coghill Representative Lesil McGuire Representative Carl Morgan Representative Ethan Berkowitz Representative Beth Kerttula MEMBERS ABSENT  Representative Pete Kott COMMITTEE CALENDAR CS FOR SENATE BILL NO. 326(STA) "An Act relating to investments of Alaska permanent fund assets; and providing for an effective date." - MOVED CSSB 326(STA) OUT OF COMMITTEE PREVIOUS COMMITTEE ACTION BILL: SB 326 SHORT TITLE: PERMANENT FUND INVESTMENTS SPONSOR(S): RULES BY REQUEST OF LEG BUDGET & AUDIT 02/13/04 (S) READ THE FIRST TIME - REFERRALS 02/13/04 (S) STA, FIN 02/24/04 (S) STA AT 3:30 PM BELTZ 211 02/24/04 (S) Heard & Held 02/24/04 (S) MINUTE(STA) 03/04/04 (S) STA AT 3:30 PM BELTZ 211 03/04/04 (S) Moved CSSB 326(STA) Out of Committee 03/04/04 (S) MINUTE(STA) 03/05/04 (S) STA RPT CS 1DP 2NR SAME TITLE 03/05/04 (S) NR: STEVENS G, STEDMAN; DP: COWDERY 03/29/04 (S) FIN RPT CS(STA) 2DP 5NR 03/29/04 (S) DP: GREEN, WILKEN; NR: DYSON, HOFFMAN, 03/29/04 (S) STEVENS B, BUNDE, OLSON 03/29/04 (H) FIN AT 9:00 AM HOUSE FINANCE 519 03/29/04 (S) Moved CSSB 326(STA) Out of Committee 03/29/04 (S) MINUTE(FIN) 05/07/04 (S) TRANSMITTED TO (H) 05/07/04 (S) VERSION: CSSB 326(STA) 05/08/04 (H) READ THE FIRST TIME - REFERRALS 05/08/04 (H) RLS 05/08/04 (H) HB 466 SIMILAR BILL 05/08/04 (H) RLS AT 12:00 AM CAPITOL 124 05/08/04 (H) 05/09/04 (H) RLS AT 3:45 PM CAPITOL 102 WITNESS REGISTER ROBERT STORER, Executive Director Alaska Permanent Fund Corporation (APFC) Department of Revenue Juneau, Alaska POSITION STATEMENT: Explained SB 326. ACTION NARRATIVE TAPE 04-8, SIDE A  Number 0001 CHAIR NORMAN ROKEBERG called the House Rules Standing Committee meeting to order at 4:28 p.m. Representatives Rokeberg, Coghill, McGuire, Morgan, Berkowitz, and Kerttula were present at the call to order. SB 326-PERMANENT FUND INVESTMENTS CHAIR ROKEBERG announced that the only order of business would be CS FOR SENATE BILL NO. 326(STA), "An Act relating to investments of Alaska permanent fund assets; and providing for an effective date." Number 0059 ROBERT STORER, Executive Director, Alaska Permanent Fund Corporation (APFC), Department of Revenue, explained that the APFC must follow the prudent investor rule as well as the statutory list specifying investments APFC is allowed to make. Approximately four years ago, the legislature assisted the APFC in allowing it to invest 5 percent of its total assets outside of the statutory list while following the prudent investor rule. Mr. Storer referred to it as the basket clause. MR. STORER further explained that on page 1, line 14, the legislation cleans up some of the original intent language. On page 2, line 3, the Senate increased the original percentage to 10 percent, which will provide greater investment flexibility. However, it doesn't mean that the permanent fund would take a lot more risk. He explained that it means that when APFC's investments appreciate, APFC won't be forced to sell or liquidate those investments because of statutory constraints. Number 0163 REPRESENTATIVE BERKOWITZ inquired as to how CSSB 326(STA) differs from the House State Affairs Standing Committee's version. MR. STORER specified that the Senate asked if APFC would amend its original request of 15 percent down to 10 percent, to which he agreed. He related his belief that the 10 percent would provide the minimum that could be utilized over the next couple of years. However, he noted that APFC would be back before the legislature [on this matter] in a couple of years. In further response to Representative Berkowitz, Mr. Storer confirmed that CSSB 326(STA) is what is necessary to move the legislation through the process is these last days of the session. Number 0224 REPRESENTATIVE BERKOWITZ moved to report CSSB 326(STA) out of committee [with individual recommendations and the accompanying fiscal notes]. There being no objection, CSSB 326(STA) was reported from the House Rules Standing Committee. ADJOURNMENT  There being no further business before the committee, the House Rules Standing Committee meeting was adjourned at 4:33 p.m.