Legislature(2003 - 2004)
05/02/2003 07:13 AM House W&M
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HJR 26-CONST. AM: PF APPROPS/INFLATION-PROOFING Number 3153 CO-CHAIR WHITAKER announced that the final order of business would be HOUSE JOINT RESOLUTION NO. 26, Proposing amendments to the Constitution of the State of Alaska relating to and limiting appropriations from and inflation-proofing the Alaska permanent fund by establishing a percent of market value spending limit. He noted that CS for HJR 26, 23-LS1006\I, Cook, 4/29/03, is before committee. The committee took an at-ease from 8:15 to 8:17 a.m. [Due to technical difficulties the log numbers from this point through the end of the minutes are ascending, rather than descending.] Number 3151 CO-CHAIR HAWKER moved Amendment 1 to CS for HJR 26, Version I, which reads as follows: On page 1, line 3 delete the word "ensure" insert the word "assure" On page 1, line 4 delete "is preserved" insert "will be preserved over the long term" On page 2, line 3 after the words "will be preserved" insert "over the long term" CO-CHAIR WHITAKER objected for purposes of discussion. CO-CHAIR HAWKER said that there have been lengthy discussions in earlier meetings on prefacing language. He commented that the original version of the resolution had predicate language and it now has a prefacing clause. As a result of those discussions, this amendment was drafted in coordination with the Alaska Permanent Fund Board and Legislative Legal and Research Services. Number 3319 CO-CHAIR HAWKER explained that the changes from "ensure" to "assure" revolve around a legal subtlety that is better explained by an attorney. He told the members that the amendment restores one important clause in the prefacing language clarifying that this amendment is intended to refer to "over time" as over the "long term". He explained that the words "long term" seemed to be more definitive language than "over time". Co-Chair Hawker said that the third change is just additional conforming language [on the same issue]. He recommended the committee adopt this amendment since it is most closely akin to that which was introduced by the Permanent Fund Corporation. He noted that HJR 26 will go to the House Judiciary Standing Committee where it may be more appropriately reviewed from a legal prospective. He commented that the House Special Committee on Ways and Means focus is a bit more financial than judicial. He noted his confidence that the House Judiciary Standing Committee will give the resolution a more appropriate hearing. He summarized his statement by saying that he believes the committee is in agreement as to the financial appropriateness, correctness, and quality of this resolution with the inclusion of Amendment . Number 3507 REPRESENTATIVE GRUENBERG stated that he strongly supports Amendment . Number 3535 There being no objection, Amendment 1 was adopted. Number 3537 REPRESENTATIVE HEINZE moved to report CSHJR 26, as amended, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE KOHRING objected. He told the members that he has concerns about this legislation and will be voting against it. He said he can see the writing on the wall as far as the support for this resolution and he said he respects the members of the committee. He said that he also respects the efforts to address the fiscal situation [of the state]. However, he views this legislation as a creative way for more money to be spent on government appropriations from the permanent fund. Representative Kohring said he is concerned because he believes the proposal before the legislature is based on the value of the fund, as opposed to the performance of the fund. He said he thinks it could be a potential bonanza if the value of the fund were to go up as far as what could be made available for expenditures. He said he does not see a problem that warrants this kind of filter since the legislature has exercised good fiscal discipline with years of effort in cutting spending. He believes the legislature should go a lot further [in cutting spending] particularly in the areas of making government more efficient through mergers, consolidations, and other measures. He also expressed concern that these monies could take away the incentive to engage in serious spending reductions in the future. The one saving grace, he commented, is that if it passes the legislature it will go before the voters and maybe the voters will see the wisdom of turning this [constitutional amendment] down. Representative Kohring stated that he will campaign against the passage of this constitutional amendment. REPRESENTATIVE KOHRING removed his objection, but restated he does not support the legislation. Number 3745 REPRESENTATIVE HEINZE stated for record that she would like to clarify the main difference between this resolution and the initiative, which was defeated in 1999. She explained that she sees this resolution as a way to protect the dividend, and that is far from [the purpose of the resolution] that was before the voters in 1999. Number 3814 REPRESENTATIVE GRUENBERG stated for the record that the resolution that will be passing out of the committee deletes on page 1, line 10, the word "in". He said that he missed some of the discussion on the bill and asked for clarification on this. He also asked for clarification on the language on page 2, line 5, where it says "the first five of", and asked why is the last year of the preceding six years being eliminated. Why will a five-year reference be used, instead of a six-year average, once removed. Number 3923 BOB BARTHOLOMEW, Chief Operating Officer, Alaska Permanent Fund Corporation, explained that the line to which Representative Gruenberg is referring defines which five-year-average will be used. The objective of going back and not using the most recent fiscal year is to allow the legislature and the governor to know at the time the budget is being prepared exactly what is available. REPRESENTATIVE GRUENBERG responded that answers his question. He stated he has no objection to moving the resolution. CO-CHAIR WHITAKER objected for the purposes of continuing the discussion of the resolution. Number 4013 CO-CHAIR HAWKER acknowledged Representative Kohring's personal position against the bill, his statesmanship, and true courage. He said he appreciates his willingness to move a bill forward that he does not support, knowing that it will ultimately be placed before the people of Alaska for a concurrence vote. Co- Chair Hawker said that he hopes all the members of the body will take a lead from Representative Kohring in his demonstration of true statesmanship in this matter. Co-Chair Hawker removed his objection. Number 4103 REPRESENTATIVE WILSON commented for the record that this is a step to protect the permanent fund dividend and will help to assure continuity and stability in the dividend that will not be there otherwise. REPRESENTATIVE HOLM pointed out that percent of market value is not a very well understood term. He said he believes it is very important that it is made clear what it does and does not do, and how volatile it is. With no further objections, CSHJR 26, as amended, was reported out of the House Special Committee on Ways and Means.