Legislature(1993 - 1994)
04/26/1994 09:10 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE JOINT RESOLUTION NO. 52 Proposing amendments to the Constitution of the State of Alaska relating to the budget reserve fund. Co-chair Pearce directed that SJR 52 be brought on for discussion. She then explained that Jim Baldwin of the Dept. of Law worked with members on language for both SB 56 and SJR 52 to bring both pieces of legislation into compliance with the state argument presently before the supreme court. The Co-chair further advised that the House is working on similar legislation. (Senator Kerttula arrived at this time.) Co-chair Pearce next directed attention to a proposed Amendment No. 1 and asked that Mr. Baldwin speak to the amendment. JIM BALDWIN, Assistant Attorney General, Dept. of Law, explained that the amendment would remove reference to "funds" and insert "revenue of the state." The Dept. of Law argued in court that the amount referred to in 17(b) was "revenues of the state" and not an amount that was "accessible" to the legislature. Use of the words "revenue of the state" excludes federal funds which were not intended to be included in the mix. Mr. Baldwin suggested that the original resolution was deficient in one respect. The term "funds" appears nowhere else in the Constitution whereas the term "revenue" does and is better understood. The term "unrestricted revenue of the state" was also used since that terminology is used in the Dept. of Revenue revenue forecast. It is a familiar term and should be given the same meaning as applied by the department. Mr. Baldwin further advised: [I] also added the idea that . . . even though . . . it was general fund money that it not be considered to be held in trust upon receipt. And I think that this would pick up the mental health trust money which is subject to a first call trust under federal law . . . . "Unrestricted money of the state" means money in the general fund from state sources (the intent is to exclude federal funds) that is not held in trust or has not been appropriated for a particular purpose or to a separate fund or account established by law within the general fund. That would exclude special general fund account group funds. Rather than repeal the repayment obligation, Sec. 2 of the resolution is in line with the Dept. of Law argument before the court that the source of money for repayment was intended to be the general fund carry-forward. In terms of the annual financial report that means the "unreserved fund- designated balance of the general fund at year end." Carry- forward amounts for continuing appropriations, capital appropriations, etc. would not be included. The foregoing reflects language used in the annual financial report. The hope is that in construing this section, reliance will be placed upon use of terminology in that report. The report is required by law and issued by the Dept. of Administration. Senator Rieger asked if, under Sec. 1, the carry-forward balance would fall under the label "unrestricted revenue of the state." Mr. Baldwin responded affirmatively. Referring to proposed language for Sec. 2, Senator Rieger asked how it would tie into ongoing litigation. Mr. Baldwin noted a policy call by the legislature whether or not it wants to propose repeal. He explained that, in drafting amendment language, he was asked to "bring forward a bill that was consistent with the state's position." Proposed language highlights Dept. of Law arguments. He stressed that he was not attempting to talk the legislature out of repeal. Senator Rieger noted that House legislation mirrors the original Senate approach and continues to contain repeal language. Co-chair Frank asked how amendments proposed by the resolution would appear on the ballot. Mr. Baldwin responded, "That's a good question . . . . He further remarked, "I've never seen one quite like this, where just a word is being changed or a line is being deleted." He acknowledged that it would be difficult to present the issue to the voters and voiced his belief that voters concentrate on the ballot description--the ballot language put together by the Attorney General and Lt. Governor. Discussion followed between Mr. Baldwin and Co-chair Frank regarding the process involved in developing ballot language. Senator Rieger observed that the first portion of Amendment No. 1 contains a definition for "unrestricted revenue of the state." He then asked if there was need for definition of "undesignated balance" as well. Mr. Baldwin explained that the term is used by "generally acceptable government accountants." It is also used in the state financial report. He acknowledged that he struggled with the concept of attempting to use both terms in the same sense, but they are different. Mr. Baldwin explained that when viewing the general fund at the end of the fiscal year, there are "reservations" and "designations." They are not the same as an encumbrance or an obligation. Funding contained within capital appropriations which continues for two or three years is not obligated or encumbered. Those moneys are, however, designated balances for appropriations made by the legislature. They are thus not included in the year-end balance. Co-chair Frank asked if a constitutional amendment could include findings to further explain the issue on the ballot. Mr. Baldwin attested to limited duration transition provisions "in the back of the Constitution." Co-chair Frank voiced need to provide a brief description of what the legislature is attempting to do. He then expressed a preference for moving toward requiring the three-quarter vote and repealing repayment provisions. Senator Rieger concurred in need for clarification and simplification. Mr. Baldwin suggested that a simple fix for the problem might consist of a provision saying that "The legislature shall implement 17(b) by law." Trade-offs and other issues could then be dealt with next session. Co-chair Frank concurred in that approach. Co-chair Pearce suggested that SJR 52 be HELD in committee for development of simplified language that can be concurred in by the House.