02/03/2004 01:36 PM House FIN

          HOUSE BILL NO. 413                                                                                                  
                                                                                                                                
          Representative  Croft explained  that the Legislature  owes a                                                         
          debt  to  the  Constitutional  Budget  Reserve  (CBR)  [under                                                         
          section 17(d), which  requires leftover general fund balances                                                         
          to  be swept  into the  CBR at  the end  of the  fiscal year.                                                         
          These funds are generally  restored by a ¾ vote under section                                                         
          17(c) of the CBR provisions].  He explained that HB 413 would                                                         
          simply reverse  the sweep, and  noted that it's  usual in the                                                         
          CBR  negotiations  that  the  legislature restore  the  small                                                         
          funds.   Representative  Croft   discussed  the   "CBR  Sweep                                                         
          Summary-DRAFT"  (copy on  file.)   He observed  that  the $88                                                         
          million restoration  affects the State  Forestation Fund, the                                                         
          Oil  and Hazardous  Substance Release  Accounts,  the Tobacco                                                         
          Education/Cessation     Fund,    the    Alcohol/Drug    Abuse                                                         
          Treatment/Prevention  Fund, and the Railbelt  Energy Fund. He                                                         
          explained that  because the CBR negotiations  failed to reach                                                         
          agreement  last  year,  these  sub-accounts  were  swept.  He                                                         
          observed that  although the sweep hasn't  had a direct impact                                                         
          on  government yet,  it's becoming  more critical  that these                                                         
          funds be  restored. Representative Croft offered  HB 413 as a                                                         
          goodwill  gesture.    He stated  that  the  bill expresses  a                                                         
          willingness  to put  monies back into  the general  fund sub-                                                         
          accounts  in the hope  of resolving  the larger issue  of the                                                         
          basic withdrawal of the CBR.                                                                                          
                                                                                                                                
     Co-Chair Harris presented conceptual Amendment 1:                                                                          
                                                                                                                                
               Amend section 1 by adding a new subsection to read:                                                              
                                                                                                                                
                    (b) The sum of $125,000 is appropriated from the                                                            
               budget  reserve fund (art. IX, sec.  17, Constitution of                                                         
               the  State  of Alaska)  to  the  Department of  Revenue,                                                         
               treasury  division, for the fiscal year  ending June 30,                                                         
               2004,  for  investment management  fees  for the  budget                                                         
     reserve fund (art. IX, sec. 17, Constitution of the                                                                        
     State of Alaska).                                                                                                          
                                                                                                                                
     Amend existing subsection (b) to read:                                                                                     
                                                                                                                                
          (c)(b) The appropriations in (a)and (b) of     this                                                           
     section are [IS] made under art. IX, sec. 17(c),                                                                       
     Constitution of the State of Alaska.                                                                                       
                                                                                                                                
MR.  DAVID  TEAL,  LEGISLATIVE  FISCAL  ANALYST,  LEGISLATIVE                                                                   
FINANCE confirmed  that the $125  thousand in  CBR management                                                                   
fees  to  Department  of  Revenue,   treasury  division,  was                                                                   
correct.                                                                                                                        
                                                                                                                                
Representative Croft did not object to the amendment, which                                                                     
is the standard amount paid for management of the CBR.                                                                          
                                                                                                                                
There being NO OBJECTION, the conceptual amendment was                                                                          
ADOPTED.                                                                                                                        
                                                                                                                                
HB 413 was heard and HELD in Committee for further                                                                              
consideration.