ALASKA STATE LEGISLATURE  HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS  March 11, 2023 9:02 a.m. DRAFT MEMBERS PRESENT Representative Ben Carpenter, Chair Representative Jamie Allard Representative Tom McKay Representative Kevin McCabe Representative Cathy Tilton Representative Cliff Groh MEMBERS ABSENT  Representative Andrew Gray OTHER LEGISLATORS PRESENT  Representative Jesse Sumner Representative Craig Johnson COMMITTEE CALENDAR  HOUSE JOINT RESOLUTION NO. 9 Proposing amendments to the Constitution of the State of Alaska relating to the Alaska permanent fund and to appropriations from the Alaska permanent fund. - HEARD & HELD HOUSE JOINT RESOLUTION NO. 8 Proposing amendments to the Constitution of the State of Alaska relating to the Alaska permanent fund and appropriations from the Alaska permanent fund. - HEARD & HELD HOUSE JOINT RESOLUTION NO. 7 Proposing amendments to the Constitution of the State of Alaska requiring payment of a dividend to eligible state residents. - HEARD & HELD HOUSE BILL NO. 90 "An Act relating to income of the Alaska permanent fund and the amount available for appropriation; relating to appropriations from the earnings reserve account; relating to the amount of the permanent fund dividend; and providing for an effective date." - HEARD & HELD HOUSE BILL NO. 72 "An Act relating to use of income of the Alaska permanent fund; relating to the amount of the permanent fund dividend; relating to the duties of the commissioner of revenue; and providing for an effective date." - HEARD & HELD HOUSE BILL NO. 72 "An Act relating to use of income of the Alaska permanent fund; relating to the amount of the permanent fund dividend; relating to the duties of the commissioner of revenue; and providing for an effective date." - HEARD & HELD HOUSE JOINT RESOLUTION NO. 2 Proposing amendments to the Constitution of the State of Alaska relating to an appropriation limit. - BILL HEARING CANCELED HOUSE BILL NO. 38 "An Act relating to an appropriation limit; relating to the budget responsibilities of the governor; and providing for an effective date." - BILL HEARING CANCELED PREVIOUS COMMITTEE ACTION  BILL: HJR 9 SHORT TITLE: CONST AM: PERMANENT FUND; POMV;EARNINGS SPONSOR(s): REPRESENTATIVE(s) GROH 03/06/23 (H) READ THE FIRST TIME - REFERRALS 03/06/23 (H) W&M, JUD 03/08/23 (H) W&M AT 6:00 PM DAVIS 106 03/08/23 (H) -- MEETING CANCELED -- 03/11/23 (H) W&M AT 9:00 AM DAVIS 106 BILL: HJR 8 SHORT TITLE: CONST AM: GUARANTEE PERM FUND DIVIDEND SPONSOR(s): WAYS & MEANS 03/01/23 (H) READ THE FIRST TIME - REFERRALS 03/01/23 (H) W&M, JUD 03/06/23 (H) W&M AT 6:00 PM DAVIS 106 03/06/23 (H) Heard & Held 03/06/23 (H) MINUTE(W&M) 03/08/23 (H) W&M AT 6:00 PM DAVIS 106 03/08/23 (H) -- MEETING CANCELED -- 03/11/23 (H) W&M AT 9:00 AM DAVIS 106 BILL: HJR 7 SHORT TITLE: CONST AM: PERMANENT FUND DIVIDEND SPONSOR(s): WAYS & MEANS 03/01/23 (H) READ THE FIRST TIME - REFERRALS 03/01/23 (H) W&M, JUD 03/06/23 (H) W&M AT 6:00 PM DAVIS 106 03/06/23 (H) Heard & Held 03/06/23 (H) MINUTE(W&M) 03/08/23 (H) W&M AT 6:00 PM DAVIS 106 03/08/23 (H) -- MEETING CANCELED -- 03/11/23 (H) W&M AT 9:00 AM DAVIS 106 BILL: HB 90 SHORT TITLE: PERMANENT FUND DIVIDEND; $1000 DIVIDEND SPONSOR(s): FIELDS 03/01/23 (H) READ THE FIRST TIME - REFERRALS 03/01/23 (H) W&M, FIN 03/06/23 (H) W&M AT 6:00 PM DAVIS 106 03/06/23 (H) Heard & Held 03/06/23 (H) MINUTE(W&M) 03/08/23 (H) W&M AT 6:00 PM DAVIS 106 03/08/23 (H) -- MEETING CANCELED -- 03/11/23 (H) W&M AT 9:00 AM DAVIS 106 BILL: HB 72 SHORT TITLE: PERMANENT FUND DIVIDEND; 75/25 POMV SPLIT SPONSOR(s): ORTIZ 02/15/23 (H) READ THE FIRST TIME - REFERRALS 02/15/23 (H) W&M, FIN 03/01/23 (H) W&M AT 6:00 PM DAVIS 106 03/01/23 (H) Heard & Held 03/01/23 (H) MINUTE(W&M) 03/08/23 (H) W&M AT 6:00 PM DAVIS 106 03/08/23 (H) -- MEETING CANCELED -- 03/11/23 (H) W&M AT 9:00 AM DAVIS 106 WITNESS REGISTER CAMERON EBERSOLD, Staff Representative Cliff Groh Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Gave the section analysis for HJR 9 on behalf of Representative Groh, prime sponsor. EMILY NAUMAN, Director Legislative Legal Services Legislative Affairs Agency Juneau, Alaska POSITION STATEMENT: Answered questions pertaining to HJR 9. JOHN MILLER, representing self Matanuska-Susitna, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. ED MARTIN, representing self Kenai, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. MISTY COLE, representing self Nikiski, Alaska POSITION STATEMENT: Testified in support of HJR 7 and HJR 8, and in opposition to HJR 9, HB 72, and HB 90. DONALD MITCHEL, representing self Ketchikan, Alaska POSITION STATEMENT: Testified in support of HB 72 during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. SARAH CAMPBELL, representing self Ketchikan, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. MICHAEL GARHART, representing self Wasilla, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. ANTONIA LENARD, representing self Eagle River, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. BERT HOUGHTALING, representing self Big Lake, Alaska POSITION STATEMENT: Testified in support of HJR 8 during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. SARANA SCHELL, representing self Anchorage, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. JAMELIA SAIED, representing self Anchorage, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. ROYAL KIEHL, representing self Anchorage, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. RACHEL LORD, representing self Homer, Alaska POSITION STATEMENT: Testified in support of HB 72 during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. DIANNE HOLMES, representing self Anchorage, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. JAN CONITZ, representing self Juneau, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. RANDY GRIFFIN, representing self Fairbanks, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. NICOLAS ABRAMCZYK, representing self Palmer, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. PHILIP TAFS, representing self Anchorage, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. CANDY MILLER, representing self Matanuska-Susitna, Alaska POSITION STATEMENT: Testified in support of HJR 7 during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. MICHAEL BUCY, representing self Juneau, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. GEORGE PIERCE, representing self Kasilof, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. HAROLD BORBRIDGE, representing self Anchorage, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. WILLY KEPPEL, representing self Quinhagak, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. TIM WILKINS, representing self Soldotna, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. PAULINE HESSING, representing self Anchorage, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. LEONARD MILLER, representing self Homer, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. LILA HENDERSON, representing self Nikiski, Alaska POSITION STATEMENT: Testified in opposition to HB 72 and HB 90 and in support of HJR 8, parts of HJR 7, and constitutionalizing the PFD. JAMES SQUYRES, representing self Deltana, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. JEAN HOLT, representing self Palmer, Alaska POSITION STATEMENT: Testified in opposition to HB 72 during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. GARY MCDONALD, representing self No address provided POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. RYAN BROUSSARD, representing self Nikiski, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. LAURA HECKERT, representing self Homer, Alaska POSITION STATEMENT: Testified in support of HJR 7 and HJR 8 during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. WILLIAM REINER, representing self Anchorage, Alaska POSITION STATEMENT: Testified in support of HJR 8 and in opposition to HB 72, HB 90, HJR 7 and HJR 9. JOEL SIGMAN, representing self Wasilla, Alaska POSITION STATEMENT: Testified in support of HJR 7 during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. SYBIL CURRY, representing self Nikiski, Alaska POSITION STATEMENT: Testified during the hearing on HJR 7, HJR 8, HJR 9, HB 72, and HB 90. ACTION NARRATIVE 9:02:00 AM REPRESENTATIVE MCCABE called the House Special Committee on Ways and Means meeting to order at 9:02 AM Representatives McCabe, McKay, Tilton, Groh, Allard were present at the call to order. Representative Carpenter arrived as the meeting was in progress. HJR 9-CONST AM: PERMANENT FUND; POMV;EARNINGS  9:03:10 AM REPRESENTATIVE MCCABE announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 9, "Proposing amendments to the Constitution of the State of Alaska relating to the Alaska permanent fund and to appropriations from the Alaska permanent fund." REPRESENTATIVE MCCABE announced to members that he will be chairing today's meeting until the arrival of Chair Carpenter. 9:04:08 AM The committee took an at-ease from 9:04 a.m. to 9:05 a.m. 9:05:27 AM REPRESENTATIVE GROH, as prime sponsor of HJR 9, gave the sponsor statement to the committee [included in the committee packet] which read as follows [original punctuations provided]: When the Permanent Fund was created, it was structured as two accounts: the Principal and the Earnings Reserve Account (ERA). The Alaska Constitution prohibits the spending of the Principal without a vote of the people. However, profits generated by the fund are deposited into the ERA, which is entirely available for the Legislature to appropriate and spend. The current value of the ERA is approximately $16 billion. Overdraw of the ERA depletes the value of the entire Permanent Fund and leaves Alaska worse off. In 2018 the Legislature adopted statutes that allow appropriation up to an amount that maintains the growth of the fund. This plan is commonly known as the "Percent of Market Value" ("POMV") draw. Still, those statutes do not stop the Legislature from passing budgets that spend Permanent Fund earnings beyond than those sustainable limits. This resolution would send a proposed amendment to Alaska voters to enshrine this policy in the constitution. The proposed constitutional amendment would combine the Permanent Fund Principal and the Permanent Fund Earnings Reserve Account into a single constitutionally protected account. Under this proposed amendment, the Legislature would be allowed to appropriate each year a maximum of five percent (5%) of the market value of that new constitutionally safeguarded account as calculated over the first five of the preceding six fiscal years. Experts have told the Legislature that these limits make that spending rate sustainable. The Permanent Fund's Board of Trustees have recommended this change since 2003, and this constitutional amendment was also urged by the Fiscal Policy Working Group, a bipartisan and bicameral group of legislators that issued a report in 2021. This measure is not and should not deal with the size of the Permanent Fund Dividend or what specific percentage of this appropriation is spent on state services. It neither encourages nor prevents legislators from pursuing those plans in the future. This merely prevents the state from overspending our renewable financial resource which ensures the permanence of our Permanent Fund. 9:08:31 AM CAMERON EBERSOLD, Staff, Representative Cliff Groh, Alaska State Legislature, explained that Section 1 would amend Article IX, Section 15(a) of the Alaska State Constitution so that income earned by the Alaska permanent fund would be retained by the fund's sole account created by Section 3. He said the only exceptions are detailed in Section 2. He said Section 2 amends Article IX, Sect. 15 with two subsections. Subsection (b) would allow the legislature, in each fiscal year, to appropriate from the fund only up to 5 percent of the average market value of the fund over the preceding six fiscal years. Subsection (c) would allow the permanent fund to be used to pay costs associated with investments. He explained that Section 3 would amend Article XV with a new section: Section 30. This section proposes to deposit the balance of the earnings reserve account (ERA) into the principal, unifying the permanent fund into a single account. It also specifies the proposed amendments would apply to appropriations made during the fiscal year ending June 30, 2026, and after. He said Section 4 would place these amendments before state voters at the next General Election. 9:10:05 AM REPRESENTATIVE MCKAY asked how the state would pay dividends out of the fund, prescribed in HJR 9, if it were to pass. REPRESENTATIVE GROH explained that the payouts would be done in the same way as the legislature has been doing currently, in that the legislature votes, through powers granted in Wielechowski v. State. He said HJR 9 does not attempt to address the permanent fund dividend (PFD), which is a separate issue. He said the measures have been heard, and there may be others to hear that would address the PFD level. He stated that while many legislators do not see eye-to-eye on the exact PFD level, HJR 9 seeks to provide fiscal stability and prevent the legislature from overspending. He proposed HJR 9 as a way to protect the permanent fund from overdraws in the future. 9:11:47 AM REPRESENTATIVE MCKAY suggested that the total value of the permanent fund corpus is about $76 billion. REPRESENTATIVE GROH remarked, "It changes month to month, but sure." REPRESENTATIVE MCKAY referred to Representatives Groh's materials and offered his understanding that they stated that the ERA is at about $16 billion. REPRESENTATIVE GROH clarified that it is more than $13 billion; the $16 billion figure was from last year's financial report. REPRESENTATIVE MCKAY suggested that, if the corpus total was added to the ERA, is about $90 billion altogether. Further, 5 percent of that figure would be about $4.5 billion. REPRESENTATIVE GROH stated that he would defer percentage draws figures to David Mitchell, CEO of the Alaska Permanent Fund Corporation. He reiterated that the value of the fund changes from month to month, and even day to day. 9:13:33 AM REPRESENTATIVE MCCABE asked about language within page 1 line 15 and 16. He said he it is unusual to see language, like the word "may", in a constitutional amendment. For example, "Each fiscal year the legislature may appropriate from the permanent fund to the general fund an amount that is not more than 5 percent". He said that the language does not really prescribe 5 percent. He stressed that this is not what the fiscal policy working group said, and instead had said that the constitutional amendment would state "shall," as in "the legislature shall appropriate". He asked if the language is intentional. 9:15:02 AM EMILY NAUMAN, Director, Legislative Legal Services, Legislative Affairs Agency, answered that the discussion between "may" or "shall" is a policy decision. She said that Representative McCabe is correct that stating that the legislature "may appropriate not more than 5 percent" would allow the legislature to appropriate nothing or up to 5 percent. She suggested that there might be policy reasons behind why a legislature would want to draw less than 5 percent off of the fund. 9:15:44 AM REPRESENTATIVE ALLARD asked Ms. Nauman to give the committee the legal difference, in legal use, between the words "may" and "shall". MS. NAUMAN answered that "may" is permissive, in that it allows the legislature to do something. Moreover, "shall" is a requirement, in that it would require the legislature to take certain action. 9:16:24 AM REPRESENTATIVE GROH urged the committee to support HJR 9, and said the changes that the joint resolution proposes were recommendations from the Fiscal Policy Working Group. He said the intent of the bill was to address, if there are draws at 5 percent, whether the legislature wants to maintain the fund sustainably in the future. 9:17:24 AM REPRESENTATIVE ALLARD pointed out that using the word "may" allows the legislature to "do what they want." She asked the bill sponsor why he drafted the bill with the word "may". REPRESENTATIVE GROH replied that the intent was to have the 5 percent be a firm cap, and allows for the legislature to spending below or up to 5 percent. He deferred to Ms. Nauman to further address the question. 9:18:24 AM MS. NAUMAN answered that the definition Representative Groh provided is correct, in that the language would allow the legislature to draw up to 5 percent each year if it so wishes. She said the bill allows for draws under 5 percent. REPRESENTATIVE ALLARD stated that she wants Representative Groh's opinion on the language used in HJR 9. She said that, for her, using the word "may" does not provide confidence to Alaska, as using the word "shall" would. REPRESENTATIVE GROH reiterated that the legal interpretation of the word "may" means the legislature could draw up to or below 5 percent. He said this language carries out the policy of allowing legislative appropriations from the fund of up to 5 percent. 9:19:57 AM REPRESENTATIVE MCCABE asked if the intent is to just have a 5 percent cap. REPRESENTATIVE GROH answered that is correct. 9:20:11 AM MR. EBERSOLD addressed Representative Allard's question by explaining that the amount of the PFD is different from the appropriation from the fund itself. He said that if members wish to use language - like "shall" - that option is still present. He said HJR 9 keeps any amount that is withdrawn from the permanent fund sustainable. 9:20:55 AM REPRESENTATIVE GROH stated that HJR 9 does not address levels for PFDs, but rather addresses the amount of the draw from the permanent fund itself. 9:21:26 AM The committee took an at-ease from 9:21 a.m. to 9:22 a.m. HJR 9-CONST AM: PERMANENT FUND; POMV;EARNINGS  HJR 8-CONST AM: GUARANTEE PERM FUND DIVIDEND  HJR 7-CONST AM: PERMANENT FUND DIVIDEND  HB 90-PERMANENT FUND DIVIDEND; $1000 DIVIDEND  HB 72-PERMANENT FUND DIVIDEND; 75/25 POMV SPLIT 9:22:23 AM REPRESENTATIVE MCCABE announced that the next order of business would be HOUSE JOINT RESOLUTION NO. 9, "Proposing amendments to the Constitution of the State of Alaska relating to the Alaska permanent fund and to appropriations from the Alaska permanent fund" and HOUSE JOINT RESOLUTION NO. 8, "Proposing amendments to the Constitution of the State of Alaska relating to the Alaska permanent fund and appropriations from the Alaska permanent fund" and HOUSE JOINT RESOLUTION NO. 7, "Proposing amendments to the Constitution of the State of Alaska requiring payment of a dividend to eligible state residents" and HOUSE BILL NO. 90, "An Act relating to income of the Alaska permanent fund and the amount available for appropriation; relating to appropriations from the earnings reserve account; relating to the amount of the permanent fund dividend; and providing for an effective date" and HOUSE BILL NO. 72, "An Act relating to use of income of the Alaska permanent fund; relating to the amount of the permanent fund dividend; relating to the duties of the commissioner of revenue; and providing for an effective date." 9:22:41 AM REPRESENTATIVE MCCABE opened public testimony on HJR 9, HJR 8, HJR 7, HB 90, and HB 72. 9:24:01 AM JOHN MILLER, representing self, stated that he is in support of returning back to the original permanent fund dividend (PFD) formula, which he said has been successful for the last 35 years. He said that in 2016, the process was destroyed, and has been a major contention ever since. He offered his understanding that the people feel betrayed and feel that the legislature no longer has the people's best interests in mind. He said the permanent fund is used to pay back special interest groups and unions who funded their elections. He urged members to follow the law and the original PFD formula. He warned that until the PFD is returned to the original formula, there will be contention. 9:25:55 AM ED MARTIN, representing self, shared that he's been a resident of the state for over 50 years. He further shared that family member Ed Martin, Sr. was a lawmaker in 1999 and was part of the "save the dividend" campaign. He suggested that those in the committee might remember the advisory vote, in which the legislature was recommended to never touch the PFD process, as it was established in 1982, which entails a full statutory PFD. He stated that some members of the committee voted for budgets that defy statute, and further stated that the Alaska Supreme Court's actions did not mandate that the legislature could defy statute. He referred the sponsor statement for HJR 7 [included in the committee packet], in which notes that the draws are sustainable, which he opined is a lie. He stated, "No one in that room has a crystal ball." He said the proposed $1,000 PFD within HB 90 is a slap in the face to the people that own the resources, as well as the investments and the return on the investments. He stated that he is in support of a PFD constitutional amendment. He said it is unimaginable that a constitutional amendment would be required to make the legislature follow the law. 9:28:27 AM MISTY COLE, representing self, said she supports HJR 7 and HJR 8 and opposes HB 72, HB 90, and HJR 9. 9:29:41 AM DONALD MITCHEL, representing self, shared that he has lived in Alaska for 51 years. He said there are many benefits to his living in Alaska, one of which he highlighted was having competent and consistent government services without having to pay a state tax. However, he stressed that things have changed, and there is now inadequate or inconsistent funding for state services. He said the roads in his area are horrible, the Alaska Marine Highway System (AMHS) is unreliable, and funding for state employees is difficult. He stated that the way the PFD is structured hurts the elections process, in that, the amount of the PFD is being used as a tool to pay for votes. He said HB 72 would provide reliability and consistency to state services and the PFD. He urged support for HB 72. 9:30:49 AM SARAH CAMPBELL, representing self, shared that she is a public school teacher and has lived in Alaska for 48 years. She said she is a supporter of increasing the base student allocation, and would also like to see the state return to a defined benefit retirement package for state employees, but said that will cost money. She stated that she is a proponent of fully funding state services. She commented that HB 72 seems fair, in that Alaskans will get a PFD and know there will be money for state services. 9:32:48 AM MICHAEL GARHART, representing self, commented that, out of the bills up for testimony today, he only supports HJR 7. He explained that there has been too much PFD money taken from the public. He stated, "Since the 1990s, it was tracked: $27.3 billion had been stolen prior to deposit into the accounts." He said that the legislature was questioned for 10 years, and answers were never given. He said the state needs to follow the law. 9:33:48 AM ANTONIA LENARD, representing self, opined on the "legalese" language in the materials provided in today's meeting. She said that the original founder of the PFD was getting a stake in Alaska's land and resources, and the residents were supposed to be paid out of the funds that were generated by people profiting. She spoke on the 75/25 percent of market value (POMV) split, and said that the split should instead be 25/75. She suggested that the need for state funding would go away since residents would have enough money individually to carry out state services, like building a school. She said that anytime the legislature seeks to draw from the fund, then the draw should be put to a vote. 9:36:03 AM BERT HOUGHTALING, representing self, urged that, out of the bills that are being taken up at today's meeting, only HJR 8 be allowed to move forward. He referred to the other bills as "putting lipstick on a pig," in which the bills seek to put further legislative control on the PFD. He explained that HJR 8 would put the corpus into legislative control. He said that combining the corpus and the permanent fund would make it so legislators now also have control over the corpus. He said he supports HJR 7 so far that it formalizes what has been in Alaska statute for the last four decades. He pointed out that Legislative Legal Service's definition of "shall" and "may" might be the clinical definition in a dictionary but does not compare to the definition provided in Wielechowski v. State. He relayed that the Alaska Supreme Court ruled that "shall" and "may" have the exact same meaning. 9:39:01 AM SARANA SCHELL, representing self, stated that she is calling in support of the sustainability of the permanent fund. She said that, while large dividends are great, she is willing to put a cap on the PFD. She said she supports the cap since it would help with the sustainability of the fund. 9:40:07 AM JAMELIA SAIED, representing self, shared that she has been a resident for 61 years. She said that the PFD has served a valuable purpose, but said she thinks it is time to end it and reestablish an income tax. Since that does not seem politically possible, she remarked, she supports whichever bill proposes a smaller PFD that the state can provide. She said that is reflected in Representative Groh's bill. She urged that the state needs to stay conservative, and that if the state distributes a full PFD, it will not have the money for state services. 9:42:23 AM ROYAL KIEHL, representing self, said he and his family have lived in Alaska since 1974, and at that time the state levied an income tax. He commented that the state has, without intending to do so, turned into a welfare state, with every citizen believing they cannot live without their PFD. He said the state cannot afford to live up to the state's responsibilities because of the annual payouts. He said the PFD has become an addiction. He stated that large PFDs have interfered with paying for quality education, as well as adequate ferry service, as examples. He stated that while it may be painful to give up the annual "moneybombs, the situation has gotten out of hand, with people believing it is their right to get money they have not worked for. He suggested that the PFD amount be reduced to $1000, with annual inflation increases, and fund state services with the rest of the earnings. He said there should be a year before HB 90 is implemented to allow residents time to process the change. 9:44:46 AM RACHEL LORD, representing self, stated she is testifying to support an increase in state revenues through higher reliance on permanent fund earnings in order to fund state services. She stated her support for HB 72. She echoed comments regarding raising broad based revenues in the state being the right way forward, or so too could be the combination of income tax and a reduced PFD. She said that at the borough level, specifically in the Kenai Peninsula Borough, citizens pay for the services they receive via property and sales taxes. This funding goes toward schools, roads, and state troopers. She spoke on economic development and said that businesses can only thrive when there is stability in the public sector. She said she cannot see how things will get better without actual financial investment, and pointed out that everyone is benefitting from state services. 9:46:59 AM The committee took an at-ease from 9:46 a.m. to 9:49 a.m. 9:49:00 AM REPRESENTATIVE MCCABE handed the gavel over to Chair Carpenter. 9:49:31 AM DIANNE HOLMES, representing self, echoed previous testimony regarding the benefits everyone receives in untaxed services, but recognized that oil revenues are volatile. She stressed that state services should always come first. She said the past few years the state has had to face the COVID-19 pandemic, and now it must face educational needs. She said that of the PFD plans before the committee today, those proposing a percentage of split will always impact services. She stated that Alaska does not need larger PFDs if that means services are gone as a result. She urged members to listen to economists, and said that a 25/75 split will take away from state services. 9:51:26 AM JAN CONITZ, representing self, said she has been concerned about the PFD debate the last few years, and the time the legislature has spent on the discussion. She said the PFD is a symbolic "good thing" rather than the check being used as a part of needed household income. She opined on the level of state services and highlighted AMHS and public schools as examples of programs in decline and in need of attention and funding. She said she is concerned about the amount of time the legislature has taken discussing the PFD, and further said she fears the state is going to go bankrupt trying to pay out high PFD payments. She acknowledged that PFDs are a symbolically good thing, in they it provide a sense of ownership to the resident, but opined they should only be considered symbolic. She said the annual PFD debate is "crowding out" discussion on policy, one of which she suggested is education policy. She further suggested better support toward transportation, university, economic development, care for seniors, and people with disabilities. She stated that she supports an income tax. 9:54:50 AM RANDY GRIFFIN, representing self, stated that his comments focus on HJR 7 and HJR 8. He expressed his feeling that the PFD has no place in the Alaska Constitution, and acknowledged that he has received thousands from PFD payments, but stopped in 2014 to begin returning the check to the state. He said he is against enshrining the PFD into the Alaska Constitution because he is in favor of a dividend funded by surplus profit. If it is not funded by surplus profit, then he said he would consider it public assistance. He stressed that "hand-out" money should not go into the Alaska constitution, and that while he said he loves free money, he will only collect a PFD if it is a PFD based on surplus. 9:57:23 AM NICOLAS ABRAMCZYK, representing self, commented that Alaska did a good thing in establishing the permanent fund itself, and he noted how the fund has grown. He advised members that they need to look at the economic context of Alaska in the 1980s, the population it had at the time, which he suggested was about one- third of what it is today. He pointed out that, just in the last ten years, there have been economic challenges that were not present in the 1980s. He spoke on the bills before the committee, and advised members to first examine the state's revenue streams. 9:59:01 AM PHILIP TAFS, representing self, shared that he is a small business owner in Alaska with 28 employees. He stated that he believes state services need to be funded first. He said he loves the PFD, but does not believe that Alaska can have large PFDs without it impacting state services. He expressed opposition to adding language in the constitution and making things permanent, and stressed that the state needs to maintain flexibility in how programs are funded. He said that as a small business owner he needs consistency, a way to be able to plan for something, without having every legislative session bring him fear since he does not know what might come out of the session. He expressed frustration from having to wait until the last minute in August for a special session, and said it creates a difficult business environment. He said that anyone who needs the PFD to get by needs state services more, which as a small business owner, would allow him to grow his business. 10:01:55 AM CANDY MILLER, representing self, shared that her family switched to a different health insurer, they saved 70 percent on their expenses. She said the Alaska budget could go from red to black if people choose their own health insurance. She said that if more money is taken out of government and put to individuals, the individuals would make decisions that would save the government money. She said she learned that, while she was changing her healthcare plan, that a teacher in the Matanuska- Susitna valley was paying $20,000 for their plan, and the plan she herself was $2,000 a year. CHAIR CARPENTER interjected to request that Ms. Miller testify to the bills under public testimony today. MS. MILLER said she is in favor of HJR 7. She said the money from the permanent fun should go into the people's hands. She said there is then no concern on whether to raise taxes because the people will direct it. 10:05:12 AM MICHAEL BUCY, representing self, shared that he has been a resident of Alaska and has been receiving a PFD since 1982. He said he would support putting language into the constitution only if it were to cap the PFD payout. He shared that he was flabbergasted when the governor announced a $4,000 PFD, in conjunction with no BSA increase, which prompted him to rally at the capitol. He said he appreciates what the PFD has done for his family, and that others may rely on the PFD, but what he would like to see is robust welfare funding instead. He opined that millionaires don't need the PFD and shouldn't receive it. He said the function of government is to perform economically what the individual cannot. He said that right now residents are depending on the government. He remarked that government is not the problem, bad government is. He said that people are leaving Alaska despite high PFDs, and urged that that be turned around, and that the PFD no longer be an annual debate. 10:08:49 AM GEORGE PIERCE, representing self, spoke to education funding, in that the government sent schools funding during the COVID-19 pandemic, which he said was being used to refurbish schools. He stated that Alaska needs an income tax and to get people who are not living in the state to pay their fair share. He advocated raising the tax on oil and mining. CHAIR CARPENTER stated that the public testimony is specifically for bills relating to the PFD. MR. PIERCE advised to mandate the PFD in the Alaska Constitution. He suggested that if the state needs resources, get rid of the subsidies. He further suggested taxing individuals coming up to conduct tourism business. He said there are other kinds of revenues to generate, but said the legislature wants to take it from poor Alaskans. He reiterated his suggestion to raise taxes on the oil and gas companies. 10:11:13 AM HAROLD BORBRIDGE, representing self, stated that the public needs to realize that every dollar the state receives is from the people, whether it be paid with the people's resources or the permanent fund's returns, because every dollar spent is either from oil resources or from the permanent fund. He suggested that a simple handout be made explaining the sources of state revenue. 10:12:46 AM WILLY KEPPEL, representing self, prefaced by urging members to follow state statute and pay a full PFD. He suggested that baseline spending be set at $4.2 billion so that the state's tax and futures revenue can actually pay for state services. He reminded members that Alaskans paid for three extra special sessions a number of years ago, and opined on the outcome of the sessions. During committee hearings in a previous session, he said there was a testimony that stuck out to him: there is no problem in paying a PFD because the state has had the money, but the legislature as of late has been opting to take money from the PFD. He further recounted the statement that prior to actions made during the Walker Administration, money going toward PFDs never went through the legislature. Following this testimony, he further recounted, Senator Lyman Hoffman inquired as to why the legislature did not follow the law on PFDs, to which the answer was that the legislature does not have to follow the law. He reiterated his call to members to pay a full PFD and cut spending. 10:16:08 AM TIM WILKINS, representing self, agreed with comments made by Mr. Keppel. He recounted that in 2015 the Walker administration had moved to take 50 percent of everyone's PFD and expressed his own disagreement with that action. He suggested that the PFD be enshrined in the Alaska Constitution. He said that the state of Alaska needs to balance its expenses, and urged that money taken out of one pot and put into another, be replaced. He expressed his support for the Dunleavy administration. 10:18:18 AM PAULINE HESSING, representing self, thanked the committee members for talking about the PFD. She said that she considers debates on the amount of the PFD wasted time, and would rather like to see the legislature debate other pressing matters. She suggested that the PFD be capped at $1,000, and that anything over that amount would be considered money that the people are giving to the state to use for services. She pointed out there is no income tax in Alaska, and suggested that her idea would be a mechanism that would function like an income tax. She stated that permanent fund earnings are not for the individual but are owned by all Alaskans. She said that if the PFD was capped at $1,000 a year, it would also be less of an enticement for people who have no money and want to come to Alaska for free money. 10:20:01 AM The committee took a brief at-ease at 10:20 a.m. 10:20:05 AM CHAIR CARPENTER made comments regarding the committee's intent to hear further public testimony. 10:21:47 AM The committee took an at-ease from 10:21 a.m. to 10:31 a.m. 10:31:45 AM LEONARD MILLER, representing self, stated that he could support HJR 7 and HJR 8 but needs more information. He said his concern with bills that deal with the permanent fund is that, without research and legal understanding, the ordinary Alaska resident will find it hard to make an informed decision, but could still make an informed decision about what candidate to elect. As far as what is fair for the permanent fund, he said residents share the fund's wealth, which he said encourages him to do what he is doing now: advocating to defend the principal of the PFD. Since a vast majority of residents do not have mineral rights in the state, he explained, the minerals are part of the residents' corporate royalties, and former Governor Jay Hammond's vision was that Alaska residents would share in the earnings so that residents would stay engaged in limiting the growth of government. He urged members to not steal the resident's royalty. 10:34:22 AM LILA HENDERSON, representing self, disclosed that she is registered Republican. She stated that she does not support HB 72 and HB 90. She said she backs HJR 8 and parts of HJR 7, and is overall in favor of constitutionalizing the PFD. She expressed that the state is taking more and more of the PFD, and opined that the people are entitled to their royalties. She echoed Mr. Millers comments on that matter. 10:35:34 AM JAMES SQUYRES, representing self, stated that he supports a full statutory PFD. He commented that the public has testified for many years for a full statutory PFD. He urged members to think about the people that have testified for the PFD before, and that, just because the people are not in the committee room today, does not take away from past testimony. He said he does not support putting the POMV in the Alaska Constitution unless the earnings reserve is rolled into the permanent fund. He asked for the difference between statutory PFDs not previously paid, and refundable oil and gas tax credits. He pointed out that rolling the earnings reserve into the permanent fund ends the PFD payback, which he said is still owned to residents in the state. He advised members to repeal SB 26 [30th Legislature], which he said put the POMV into statute. He noted that last year the administration had the POMV PFD in the budget, but there was no effort to repeal SB 26 [30th Legislature]; and commented that, if Alaska wants to go back to the way it was with the PFD, what's taken place needs to be unraveled. He suggested that putting the POMV and full PFD into the Alaska Constitution put the "squeeze" on funding for government. 10:37:56 AM JEAN HOLT, representing self, Testified in opposition to HB 72. She stated government has taken away freedoms, and that the PFD should be enshrined in the Alaska Constitution. She said there are people who are opposed to the PFD being taken away. She further urged members to not mess with the PFD. 10:39:17 AM The committee took an at-ease at 10:39 a.m. 10:39:54 AM GARY MCDONALD, representing self, stated that he supports the regular PFD formula that Alaska had for about 30 years. 10:41:12 AM RYAN BROUSSARD, representing self, inquired about the number of active military who are receiving a PFD. He explained that in boot camp he was told to go to Alaska, do a short tour, and collect the PFD for the rest of his career. He said this process is recommended to people, and recounted that, in Virginia, there were many Alaska license plates. He expressed concern that a large number of PFDs are going out of state, and also out of the country. He said that he and his family relied on the PFD, and that the PFD should be returned to statutory levels. 10:43:20 AM The committee took back-to-back at-eases from 10:43 a.m. to 10:47 a.m. to await arrival of the final testifiers of the day. 10:47:57 AM LAURA HECKERT, representing self, called for the passages of HJR 7 and HJR 8. She said she wants a PFD payout to be done using the previous distribution formula. 10:49:18 AM The committee took an at-ease from 10:49 a.m. to 10:52 a.m. 10:52:09 AM WILLIAM REINER, representing self, stated that he is in favor of HJR 8, and expressed disagreement with HB 72, HB 90, HJR 7, and HJR 9. He highlighted that in HJR 9, and stated that there is no need for the bill as it "muddies the water." He shared that he's been an Alaska resident since 1976 and was around for the start of the PFD. He referred to the U.S. Supreme Court case, Zobel v. Williams, and said he is leaning towards the decision the court made. Regarding mineral and gas royalties, he disclosed that he is not an Alaskan Native, and due to a 1948 law, he cannot access any minerals, oil, or gas on property he owns. 10:55:55 AM JOEL SIGMAN, representing self, testified in support of HJR 7 and said he wants a full PFD. He opined on proper public notice of legislation. He said he is tired of the legislature stealing people's money and budgeting improperly. He stated that all residents should get a full PFD. He urged members to not take the money from the people and to give it back to the people. 10:58:15 AM SYBIL CURRY, representing self, shared she has lived in Alaska for 20 years and is a legal immigrant from a socialist country. She further shared she is a U.S. citizen, a law enforcement veteran, and that her grandparents survived Nazi Germany. She stated that what is happening in America is horrible, noting that several banks have crashed. She said the people want an original statutorily determined PFD, and she recommended that the PFD be enshrined in the Alaska Constitution. 11:00:00 AM CHAIR CARPENTER reminded the public that they can submit further comments electronically. 11:00:27 AM ADJOURNMENT  There being no further business before the committee, the House Special Committee on Ways and Means meeting was adjourned at 11 a.m.