Legislature(2021 - 2022)ADAMS 519
03/02/2022 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB166 | |
| HB177 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 166 | TELECONFERENCED | |
| + | HB 177 | TELECONFERENCED | |
| += | HB 281 | TELECONFERENCED | |
| += | HB 282 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 177
"An Act relating to an increase of an appropriation
due to additional federal or other program receipts;
and providing for an effective date."
9:35:06 AM
REPRESENTATIVE CHRIS TUCK, BILL SPONSOR, introduced the
bill pertaining to revised program appropriations. He
stated that the bill attempted to assert the constitutional
powers of the legislature by better defining and limiting
the revised program legislative (RPL) process. He noted
that the term was actually an accounting code and should
really be referred to as revised program receipts. He
explained that the process involved authorizing the
Legislative Budget and Audit (LB&A) Committee to have
receipt authority through an RPL process that the governor
presented to the committee for additional approval. He
clarified that once the legislature set up a program and
passed a budget or appropriations to fund the program, the
legislature, as the appropriating body, gave LB&A the
authority to receive any additional funding coming in on
behalf of the full legislature. The bill sought to
establish sidebars to ensure the process was better
understood and to avoid legal problems when money was
received.
9:37:39 AM
Representative LeBon recalled a situation two years back
where LB&A had accepted federal money and the full
legislature had to convene in Juneau to approve action
taken. He asked for a summary of what had taken place and
how it likely influenced hearing the bill currently.
Representative Tuck replied that historically, the most
money the LB&A had received was approximately $120 million
until Medicaid expansion, which had increased the largest
amount received to $500 million. Over the past few years,
$5 billion had come from LB&A. He reported there had been
three problems associated with American Recovery and
Reinvestment Act (ARRA) funding received. First, the
legislature had not set up a program. For example, the
small business relief program had not been established by
the legislature; the governor had established the program
through the executive branch. He explained there had been
no appropriations money from the legislature for the
program; the governor had appropriated the money. Second,
for the community relief program, community assistance had
been vetoed by the governor from the budget. Subsequently,
the governor had put the money in through the RPL process.
Third, there had been items in the capital budget that had
not yet passed the legislature that the governor ran
through the RPL process. He highlighted a fourth problem
where funds that went out through the community relief
program were contrary to federal guidance. For example,
funds could not be used for revenue replacement. He
explained that because of the situation, the state was
currently in a federal audit and the state may need to pay
the monies back.
Representative LeBon asked how the bill rectified the
issues highlighted by Representative Tuck.
Representative Tuck answered that the legislature had a
constitutional obligation when delegating authority and
powers to a committee and it was necessary for the
legislature to be careful with the responsibility.
Additionally, there were constitutional powers between the
executive and legislative branches. The bill attempted to
eliminate ambiguity on the legislature's authority, what
was granted to LB&A, and what was allowed for the governor.
He read from the sectional analysis (copy on file):
Section 1:
Page 1 lines 5-9 amend AS 37.07.080(h) to clarify that
the RPL process is only available for additional funds
for existing programs or projects that have already
been funded by the Legislature.
Page 1 lines 10-11 amend AS 37.07.080(h)(1) with
conforming language.
Page 1 line 12-page 2 line 11 amend AS 37.07.080(h)(2)
to replace the current 45-day timeline for any RPL
with a stair-stepped timeline as follows:
? 45 days for RPLs up to $20 million;
? 90 days for RPLs up to $50 million;
? 180 days for RPLs up to $100 million; and
? 270 days for RPLs greater than $100 million.
Page 2, lines 12-19 amend AS 37.07.080(h)(3) with
conforming language.
Section 2:
Provides for an immediate effective date.
9:42:40 AM
Representative Josephson thanked Representative Tuck for
introducing the legislation and shared that he had a strong
interest in the subject. He stated it was natural for any
governor to want to protect their authority and power, and
similarly for the judiciary and legislature to feel the
same way. He understood that some balance needed to be
struck. He talked about two hypothetical scenarios that
caused him some concern. He elaborated that former Governor
Bill Walker had expanded Medicaid and had found the ability
to take the action unilaterally under Title 47. He detailed
that a judge had ultimately agreed with the move, although
the legislature had vigorously sued the governor. He
thought in retrospect there was relative calm over the fact
that Medicaid had been expanded. He noted that the action
had taken place in the summer of 2015. He asked how it
would have played out under the current bill.
Representative Tuck answered that Medicaid expansion had
involved between $200 million and $500 million. He
explained there were statutes that instructed the governor
to go after those type of funds. He detailed that under the
bill, LB&A's role would be to determine where the funds
were going and how they were used through the Department of
Health and Social Services. He elaborated that funds could
have been divided out into timeframes or applied. He
clarified that if the funds had been a lump sum, the
governor could not act unilaterally until after 270 days.
He furthered that [under the proposed bill] if no action
had been taken by the legislature, expansion would have
gone into effect after 270 days.
Representative Josephson asked whether RPLs must be adopted
by the legislature if it was in session. He asked for any
distinction between interim and session in the operation of
RPLs.
Representative Tuck replied that it did not matter if the
legislature was in or out of session, LB&A could adopt RPLs
around the full legislature.
Representative Josephson asked for verification that if
LB&A failed to adopt the RPLs, they would become law by
operation "after the clock ticks through."
9:46:21 AM
Representative Tuck made a distinction. He explained that
if the legislature did not establish law by setting up a
program through law and if it did not appropriate the
money, the governor could not act unilaterally on an RPL.
He elaborated that two things could happen when an RPL was
presented to LB&A. The committee could adopt the RPL
immediately to get the money distributed as necessary or it
could reject the RPL and the RPL would automatically go
into effect 45 days later.
Representative Josephson continued with the Medicaid
expansion example. He stated that the amount would be well
in excess of $100 million; therefore, the 270-day rule
would apply. He reasoned that the legislature would always
be in session for at least 90 days, meaning the governor
could not expand during interim. He explained that if the
governor had issued the RPL at adjournment in late May, it
would always spill into the next year. He stated his
understanding that Representative Tuck was saying that
notwithstanding the legislature's reconvening the next
year, the RPL clock would still tick, and the legislature
would have had to pass a law to stop expansion.
Representative Tuck answered that Representative
Josephson's understanding was correct related to the
specific case. He considered Medicaid expansion and small
business relief separately because the actions were
different. He explained that with Medicaid expansion,
because statute specified the governor shall go for the
funds, the only way the legislature could have prevented
expansion was to change the statute.
Representative Josephson highlighted the [federal]
Coronavirus Aid, Relief, and Economic Security (CARES) Act
that passed at the onset of the pandemic. He stated his
understanding that under the bill, the relief would not
have been deliverable until the legislature returned. He
recalled that RPLs had been issued in April/May of 2020 and
the legislature left on March 28 on a long recess or quasi-
adjournment. He asked for verification that if the
legislature had not adopted the RPLs, the governor could
not have distributed pandemic relief and there would have
been tremendous political pressure for the legislature to
meet to direct the RPLs to be delivered.
Representative Tuck replied that technically the
legislature had recessed; therefore, when the governor had
presented the RPLs they had been inappropriate and illegal
for the four reasons he had previously listed. He
elaborated that 48 hours after the RPLs had passed, a court
case had been filed. He had been surprised the lawsuit had
come from outside a government entity. He had thought a
community would have filed a suit because it saw the
community assistance program as unfair. He considered that
perhaps a community would have filed a lawsuit, but someone
else beat them to it.
Representative Tuck explained that the legislature did not
appropriate the money, a program had not been set up, and
the governor had unilaterally exercised authorities outside
the legislature. He emphasized it was clear the legislature
was the purse strings to the state budget. Additionally,
the legislature was responsible for setting programs
through legislation. He characterized the governor as the
arms and legs responsible for carrying out programs once
they were established by the legislature. He stated that in
the specific case, the governor had acted on his own and
everything had been done outside the legislature. He
elaborated that the legislature had reconvened for the
purpose of ratifying action taken by LB&A, not to take
appropriations or set programs. He stated it was still
questionable whether it was a legal activity. He argued
that it was not legal, because an RPL could not be amended.
He explained that the legislature would have had to adopt
or ratify what LB&A had done or the RPLs would have gone
into effect automatically [later on]. He stated that a true
appropriations bill could be amended by any legislator, but
an RPL was not a true appropriations bill.
9:52:34 AM
Representative Johnson surmised there was not a final
judgement on whether the action had been illegal. She asked
about the origin of the RPL process. She observed that even
if the legislature was in session for 90 days, 270 days
basically took away the governor's ability to even
contemplate the interim. She considered whether the
governor and legislature needed to be nimble or not during
the interim. She wondered if it was the reason the RPL had
been implemented in the first place.
Representative Tuck answered that the RPL process had been
in statute for a long time. He spoke to the original intent
of the process. He explained that the legislature
established programs and funded them through an
appropriations budget. When additional money came in [for a
program], the legislature was technically constitutionally
required to come back into session to appropriate the
money; however, the legislature had given powers to LB&A.
He stated that at one time the powers had been challenged
by the courts; therefore, LB&A had limited powers. He
stated there was clear distinction on the issue from
previous court cases. He explained that the RPL process had
gone beyond the previous court cases in the past several
years.
Representative Johnson stated she would have to look into
the reason the RPL process had been established. She
reasoned it must have come from a need. She considered
there must have been a reason to give the governor the
option [to use the RPL process] during the interim. She
wanted to understand the impetus for the process to avoid
reversing something that had been put in place for a
specific reason.
Representative Tuck answered that the need was efficiency.
The need had been to prevent the full legislature from
coming back if they were just bringing in more money to the
state. He elaborated that it mostly pertained to federal
receipts. He reminded the committee that the federal
budgeting cycle was different than Alaska's state cycle. He
expounded that once the legislature suspected money may be
coming in for something like education, the legislature
would set up a program for schools and appropriate the
money.
Representative Tuck noted there were several factors in the
legislature's ability to accept RPLs including whether
there was a program and whether the money was appropriated.
Additionally, there was language in the operating budget
that allowed the legislature to do so as well. If the
criteria were met, LB&A could receive money on behalf of
the full legislature. He clarified that the intent of the
process was not to set up programs. He explained that it
was not possible to use an appropriation to set up a
program; it was necessary to have separate legislation. He
stated that over the past several years, the situation had
turned into a mess. He argued that if the legislature had
properly appropriated the CARES funding, the money would
have gone out much quicker under the small business relief.
He stated that the legislature had approved the RPLs on
April 11 [2020] and they had not been released until the
end of August, which far exceeded the 45-day limit.
Co-Chair Merrick set an amendment deadline for March 5 at
noon.
HB 177 was HEARD and HELD in committee for further
consideration.
Co-Chair Merrick reviewed the schedule for the following
meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB166.OpposingLetters.51421.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 166 |
| HB166.SectionalAnalysis.VerA.5.14.21.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 166 |
| HB166.SponsorStmt.VerA.5.14.21.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 166 |
| HB166.SupportingLetters.51421.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 166 |
| HB166.SupportingLetters.2.28.22.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 166 |
| HB 177 Explanation of Changes Version B 02.24.2022.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 177 |
| HB 177 Research RPL History Summary.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 177 |
| HB 177 Research Legal Opinion 04.30.2020.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 177 |
| HB 177 Sectional Analysis Version B 02.24.2022.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 177 |
| HB 177 Sponsor Statement Version B 02.24.2022.pdf |
HFIN 3/2/2022 9:00:00 AM |
HB 177 |