March 12, 2009
Senator Hoffman and Senator Stedman
Senate Finance Committee
Alaska State Legislature, State Capitol
Juneau, AK 99801
RE: SJR9-POMV Amendment to the Alaska Constitution
Dear Senator Hoffman and Senator Stedman:
On behalf of the Resource Development Council for Alaska, Inc., (RDC), I am writing in support of SJR9, amending the constitution of the State of Alaska to establish a percent of market value (POMV) approach as a means of distribution from the Permanent Fund in order to protect it for future generations of Alaskans.
RDC is a statewide, non-profit, membership-funded organization founded in 1975. The RDC membership is comprised of individuals and companies from Alaska’s oil and gas, mining, timber, tourism, and fisheries industries, as well as Alaska Native corporations, local communities, organized labor, and industry support firms. RDC’s purpose is to link these diverse interests together to encourage a strong, diversified private sector in Alaska and expand the state’s economic base through the responsible development of our natural resources.
RDC’s Board of Directors has supported the POMV approach for some time. Indeed, the Board of the Permanent Fund has also endorsed this concept since 2000 having passed several resolutions supporting similar amendments like SJR9 over the years. The POMV approach is currently used by many large endowments and public trusts and if enacted for the Permanent Fund, it will balance the goal of maximizing the availability of income from the fund with the long-term goal of protecting its value through inflation proofing.
Ultimately, POMV will simplify how the Permanent Fund is distributed, making it a lot more understandable to Alaskans. It will eliminate the confusing distinction between principal and earnings and provide for the option of an annual distribution through dividends. All the while, it will provide a means of conserving a portion of the state’s revenues from mineral resources in order to benefit future generations of Alaskans.
Though RDC has historically supported using some of the distribution of the Permanent Fund to help fund state government, we support this current approach of not tying the Constitutional amendment and the POMV concept to how the money is used, be it for dividends, funding public services, or otherwise.
We encourage the committee to vote in favor of this amendment to the Constitution of the State of Alaska so that we can protect the Permanent Fund for future generations of Alaskans. Thank you for your consideration.
Sincerely,
Resource Development Council for Alaska, Inc.
