Legislature(1997 - 1998)
04/15/1997 08:05 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 78 - AMEND DEFINITION OF "PROGRAM RECEIPTS" The next order of business to come before the House State Affairs Standing Committee was HB 78, "An Act relating to the definition of certain state receipts; and providing for an effective date." CHAIR JAMES explained there was a committee substitute (0-GH0049/E, Utermohle, 4/10/97). The change was on page 3, line 14, "expressly approved by the legislature by law;" The language would not give carte blanche authority for agencies to include any kind of gift, grant, or bequest contract for a program receipt that had not received legislative approval and authorization. She did not want to give the agencies too much leeway to collect money to pay their way without legislative approval. CHAIR JAMES called for a motion to adopt the committee substitute. Number 1096 REPRESENTATIVE BERKOWITZ moved that the committee substitute (0- GH0049/E, Utermohle, 4/10/97) be adopted. There was no objection, the committee substitute was adopted. Number 1118 REPRESENTATIVE VEZEY asked why this was needed? CHAIR JAMES replied, "I don't have the answer to that." She disagreed that it was needed, but she had been requested to move the bill from the committee by the Majority - the Speaker of the House. Number 1147 REPRESENTATIVE BERKOWITZ stated, if someone wanted to give the state something and dedicate it to a particular program, it should not be the responsibility of the legislature to determine if that was acceptable. CHAIR JAMES replied accepting the money was not the issue. The issue was how it would be spent. The bill designated the money, but she believed that the designation should be done by the legislature which was why the language was added to page 3, line 14. She cited an example of a big company giving $100,000 to the Department of Natural Resources to hire additional people to expedite the permitting process was possible because it would be considered a designated receipt. This was a real problem. Parameters were needed. She did not want carte blanche authority for the agencies similar to the concept of "open for business". Number 1257 REPRESENTATIVE BERKOWITZ responded that he understood what Chair James was saying. What about somebody that had $10,000 who wanted the money to go to the hunter safety program, for example, as a personal gift. Nothing would be expected in return. It would be a problem, however, if the state or legislature said it did not want the money. Number 1279 CHAIR JAMES replied she understood the concerns of Representative Berkowitz. She was not sure how it had been treated before the bill. She did not think it would be treated any differently after the bill, however. Number 1297 REPRESENTATIVE ELTON commented the language said approval "by law" which meant that the Legislative Budget and Audit Committee could not approve it. CHAIR JAMES stated that was what it meant. REPRESENTATIVE ELTON further commented that it seemed we were trying to establish a system that would make it very difficult for a donor to donate money. He could support the committee substitute if the language "by law" was deleted. Why couldn't the Legislative Budget and Audit Committee determine what was an acceptable gift to an agency? he asked. Number 1344 CHAIR JAMES stated last year we struggled and struggled with the increased airport fee issue in the Legislative Budget and Audit Committee which took up a lot of time and discussion. She could see the process for a small donation; but, if it was allowed it would open up the door for larger and more intensive incursions on the public. She would feel more comfortable if it was done by law. A bill could be written to provide for approval by the Legislative Budget and Audit Committee for certain types of gifts and bequests for specific purposes, but it was not possible in HB 78. Number 1414 REPRESENTATIVE VEZEY stated he agreed with a lot of what Chair James said, but her comments were misleading to indicate that the bill addressed gifts. There were provisions in state law that controlled how funds from gifts were used. The change addressed grants, bequests, contracts, and federal receipts. The provision included a plethora of program receipts; it was much broader than the concept of a gift. He reiterated statutes were written strictly to cover how gifts could be used for the public good. Number 1457 REPRESENTATIVE BERKOWITZ stated there would be a problem if there was a conflict between the law and a judicial interpretation of the statute. The court would look at the most recent statement made by the legislature which would be HB 78. Therefore, the statement on gifts would supersede any preceding legislation if or when there was a conflict between the laws. Number 1480 REPRESENTATIVE VEZEY stated he disagreed because there were entire statutes to cover non-profit corporations and charities, for example. There were separate statutes to govern how money could be used for public purposes. This statute addressed money that came into the state treasure subject to appropriation by the legislature. Granted, the other programs did not do that; but, the provision was totally unnecessarily because we already had vehicles whereby a philanthropist could affect a public purpose and take full advantage of the tax situation. Number 1521 CHAIR JAMES explained the purpose of the bill was for budgeting, according to her understanding. The intent was to suggest that the receipts were "designated program receipts" rather than "General Fund program receipts" or "other funds". It appeared to be an end- run around the current budget process. It was already available by simply making an additional column to identify them so that it would be clear in a reduction that we were also reducing incoming funds. Number 1570 GUY BELL, Director, Division of Administrative Services, Department of Commerce and Economic Development (DCED), was the first person to testify in Juneau. The DCED had a number of programs that would be in the category of "designated program receipts" as defined by the bill. He cited the Division of Occupational Licensing, the Division of Insurance, the contract with the Alaska Visitors Association, the receipts of the Alaska Seafood Marketing Institute, and a number of smaller ones. He called HB 78 a "definitional" bill. The bill tried to address an issue that had been raised over the past several years about money in the budget when reduced did not change the fiscal gap because there was a corresponding reduction in revenue. All of the funds were subject to appropriation and legislative review already, therefore, it was a definitional bill. Agencies would not be able to spend money without an appropriation. It defined what category, for budgeting purposes, was not considered General Fund receipts. Number 1651 CHAIR JAMES explained she did not want an agency to set up a contract or a gift that was part of a designated receipt without legislative approval which was why the language was added. Number 1679 MR. BELL replied whether the language was there or not the receipts would still be subject to legislative appropriation. The Constitution of the State of Alaska required that agencies needed the authority from the legislature before spending money either through a budget request, a supplemental request, or the Legislative Budget and Audit Committee, for example. Number 1707 CHAIR JAMES said she understood that part. It would be political suicide not to designate the money accordingly. However, she did not want the agencies to enter into a contract with the public to help supplant their budgets. She wanted the legislature to have the authority to identify the designated receipts: Where did the money come from and for what purpose could it be used for? She understood the appropriation process once the money was in the pot and understood that if the legislature did not designated it accordingly it would be in dire circumstances. Number 1773 REPRESENTATIVE ELTON moved that HB 78, as amended, move from the committee with individual recommendations and the attached fiscal note(s). Number 1802 REPRESENTATIVE VEZEY objected. A roll call vote was taken. Representatives James, Berkowitz, Dyson and Elton voted in favor of the motion. Representative Vezey voted against the motion. The CSHB 78(STA) was so moved from the House State Affairs Standing Committee.
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