Legislature(1993 - 1994)
03/02/1994 01:30 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 505 An Act making appropriations to and from the constitutional budget reserve fund under art. IX, sec. 17(c), Constitution of the State of Alaska, for operating and capital expenses of state government for fiscal year 1994; and providing for an effective date. HB 505 was HELD in Committee for further discussion. HOUSE BILL 505 "An Act making appropriations to and from the constitutional budget reserve fund under art. IX, sec. 17(c), Constitution of the State of Alaska, for operating and capital expenses of state government for 2 fiscal year 1994; and providing for an effective date." SHELBY STASTNY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, provided an overview of the Governor's position on HB 505. The Governor does not support the changes made by the House Judiciary Committee. Mr. Stastny explained the Administration's concerns with the Constitutional Budget Reserve Fund amendment which directs the amount necessary to be placed into that fund. He pointed out the history of prior action regarding the fund. Last Year the Attorney General was consulted and stated that informal settlements were not "administrative proceedings". The Attorney General added that those funds should be placed into the General Fund and not into the Constitutional Budget Reserve Fund. Mr. Stastny advised that the Governor accepted the opinion of the Attorney General. This decision was challenged in court. Mr. Stastny continued, that there has been a decision by the Supreme Court regarding the placement of the funds into the budget reserve fund. This decision has been upheld. Litigants recommended that an injunction be placed upon the Administration in order that the funds be placed into the Constitutional Budget Reserve Fund. The judge issued a supplemental opinion stating that the money should have been transferred into that fund. The judge observed that: 1. This was not only an Administration problem because the Legislature knew the money had been placed into the general fund and had appropriated from the general fund rather than placing the funds into the Constitutional Budget Reserve Fund; and that 2. The Legislature's involvement in appropriating the money was improper. HB 505 provides that the Legislature participate with the Administration in appropriating the money from the general fund into the Constitutional Budget Reserve Fund. The legislation would then appropriate that money out of the Budget Reserve Fund into the general fund in two increments. One amounting to $416 million dollars, the calculation of the necessary amount to the Budget Reserve Fund as appropriated last year. Co-Chair Larson inquired where settlement money received since May, 1993, is located. Mr. Stastny understood funds to be in the constitutional Budget Reserve Fund. (Tape Change, HFC 94-46, Side 2). 3 Mr. Stastny discussed the legal interpretation of transferring money from the Budget Reserve Fund for public purposes. He stated that the House Judiciary version of the legislation would create a legal problem for the State. Representative Brown asked which funds had been improperly placed in the General Fund in FY91. Mr. Stastny understood that when the attorney general's opinion was issued, the Department of Revenue returned the settlements received after the constitutional amendment's passage and then tried to conform the deposits into the appropriate account. Co- Chair Larson asked that a financial sheet be submitted to the Committee explaining which funds are available for distribution and where those funds are located. Mr. Stastny provided the Committee with a handout of FY94 fund sufficiency balances in the General Fund group dated 1/28/94. [Attachment #4]. Representative Brown questioned the status of the Governor's employment and fish tax legislation. Mr. Stastny replied that the employment tax will be introduced very soon, although the fisheries tax might not be introduced this year as a result of the current difficulties facing Alaskan fisheries. He added that passing a tax bill in an election year would be difficult. Co-Chair Larson opened for discussion the subject of repayment of a loan which had been forgiven by legislative action. The $441 million dollar loan originated to the Permanent Fund Corporation and was distributed. Representative Brown provided the Committee with an amendment to HB 505 (JUD) which would delete "findings". [Attachment #3]. She asked that the amendment be considered and incorporated into the House Finance Committee substitute version of the legislation. HB 505 was HELD in Committee for further consideration.