Legislature(2007 - 2008)HOUSE FINANCE 519
03/14/2007 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB125 | |
| HB77 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 77 | TELECONFERENCED | |
| + | HB 125 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 14, 2007
1:46 p.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:46:17 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas, Jr.
MEMBERS ABSENT
Representative Richard Foster
ALSO PRESENT
Marie Darlin, AARP; John Krenheider, Senior Analyst, Office
of Management and Budget; John Boucher, Senior Analyst,
Office of Budget and Management; Representative Beth
Kerttula
PRESENT VIA TELECONFERENCE
None
SUMMARY
HB 125 "An Act relating to budget planning and a long-
range fiscal plan for the State of Alaska."
CSHB 125 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with indeterminate
fiscal note # 1 by the Department of Revenue and
with fiscal note #2 by the Governor's Office.
HB 77 "An Act relating to marriage brokers and
advertisers and to dating and social referral
services."
CSHB 77 (L & C) was heard and HELD in Committee
for further consideration.
1:46:29 PM
HOUSE BILL NO. 125
"An Act relating to budget planning and a long-range
fiscal plan for the State of Alaska."
Representative Hawker, sponsor, spoke of the need for a
statewide, long-range fiscal plan of which the gas pipeline
is a large part. He recalled constituents wondering why
there is no fiscal plan. He emphasized that an on-going
planning process is really what is needed. He referred to
the Executive Budget Act (EBA), which contains duties of the
governor. One of the duties is to submit a six-year
financial plan. HB 125 changes the EBA so that the governor
is required to prepare an annual fiscal plan.
Representative Hawker explained that HB 125 has two
sections, the first states that a fiscal plan shall be
submitted that contains estimates of significant sources and
uses of funds for the next 10 years. The second part of the
bill reconciles those revenue projections with the uses of
funds. HB 125 was developed by the House Ways and Means
Committee.
1:55:26 PM
Representative Hawker pointed to the wording in Section 1 -
"must" versus "may". The distinction between the two is
very important. The fiscal plan must identify significant
sources and uses of funds, must balance sources and uses of
funds, and must include projected balances of significant
funds. He emphasized that the bill is de-politicized, an
academic exercise from which political discussion can grow.
Representative Hawker addressed policy calls such as in
subparagraph 4, page 2, which begins with "may". These are
items that are encouraged, but not required. The intent was
to avoid placing these issues into the work product required
of the governor. He explained that much of the remainder of
the bill is to clarify language to conform to the EBA.
2:00:45 PM
Representative Hawker pointed out that when a new executive
takes office, he or she would not be required to put forth a
long-range plan during the first year. He reported a
lengthy discussion in the House Ways and Means Committee
about the legislature's role in responding to the fiscal
plan. He related that this bill is a first step in
establishing a formalized fiscal planning process. There
was an attempt to keep the bill simple and not overburden
committees, especially in light of the pending 90 day
session. He referred to page 6 of the bill, legislative
review, which simply states that the legislature shall
consider the governor's proposed fiscal plan. The presiding
officer in each house may refer the fiscal plan to one or
more committees. He termed the bill a welcome step forward
in establishing policy.
2:04:46 PM
Co-Chair Meyer inquired about fiscal note #2 from the Office
of the Governor which requests $102,600 for additional staff
in OMB to work on the fiscal plan. He wondered if each
department's budget analyst could do a part of the long-
range analysis and turn it in to OMB. He suggested that
once the plan was in place it could be modified on a yearly
basis.
2:06:56 PM
Representative Hawker reported that he attempted to utilize
existing resources so as to not require a new fiscal note.
He opined that in order to implement the bill as it was
intended, the information could be readily obtained using
current resources. He summarized that the state can not
afford to not implement this plan.
Co-Chair Meyer asked if there has ever been a fiscal plan
developed as required in statute. Representative Hawker
thought it had not been done in recent years. Co-Chair
Meyer could not recall there ever being a fiscal plan.
Representative Hawker opined that establishing the initial
template would require the most work.
2:11:58 PM
Representative Stoltze inquired about the use of the word
"must". Representative Hawker reported that legislative
legal chose that wording for the bill. He related that it
separated the mandatory section from the permissive section
of the bill. Representative Stoltze asked if governmental
agencies or corporate entity assets would be included within
the fiscal plan. Representative Hawker said not in the
context raised. The desire was to make it a universal model
of state operations. He referred to item (A) in the
permissive section of the bill, page 2, line 14, which deals
with such entities. There is nothing that precludes or
excludes consideration of special-purpose entities. The
intent is to have the process be as comprehensive as the
executive would choose to make it.
2:16:23 PM
Representative Crawford spoke in support of HB 125. He
wondered how this legislation would change the governor's
and legislature's behavior, in light of not knowing oil
price projections. Representative Hawker observed that
Representative Crawford's comments have landed on the two
foundational purposes of the bill. There is agreement for
needing an on-going process to develop a fiscal plan. The
plan will be the vehicle that leads to policy debates. He
predicted that a refinement of the plan would develop over
time.
2:21:46 PM
Representative Joule complimented Representative Hawker on
the bill. He asked about the permissive language on page 6,
lines 29 - 31. Representative Hawker replied that there
were numerous discussions about this. The conclusion was
that this legislation should be undemanding, noninvasive,
and not require mandatory committee hearings. It is up to
the presiding officer of each house to refer the fiscal plan
to one or more committees. Representative Joule pointed out
that history has shown no action toward forming a fiscal
plan and he voiced concern that there would be no attention
paid to the plan in the future. He agreed that a proposed
fiscal plan probably would be referred to committees.
Representative Hawker said he shared Representative Joule's
concern and thought it might warrant separate legislation.
2:28:03 PM
Representative Gara voiced appreciation for the bill. He
referred to page 2, line 19, as a potential new revenue
source which would use the income of the permanent fund as a
percent of market value (POMV) fund. He inquired if that
was the only new revenue source identified in the bill.
Representative Hawker noted that all language in subsection
(4) was at the request of Representative Gruenberg.
Representative Hawker thought that item (C) was not
identifying a new revenue source, but rather is a policy
that would protect current revenue sources.
Representative Gara referred to line 20 as asking the
governor to take a look at using the income of the permanent
fund. Representative Hawker emphasized that there is
nothing in the bill that endorses or indicts POMV.
Protecting the permanent fund is a critical component of
future state fiscal policy. There is no specific new
revenue proposed. He quoted (D) as open for discussion
regarding any new source of revenue.
2:32:36 PM
Representative Gara agreed that the governor should look at
potential areas of revenue and spending cuts.
Representative Hawker referred to the "must" section, which
provides a means for the governor to propose a method to
balance the budget. He emphasized the intent to avoid
"politics", so the bill does not say that the governor must
raise taxes or identify specific tax sources. It creates a
structural framework.
2:35:00 PM
Representative Kelly spoke in support of the bill. He
related a personal story. He questioned the expectations of
the bill and if it would be effective in the future. He
opined that the bill seems to be optional and may or may not
be used. He surmised that it could be risky for a governor
to carry out the bill. He added that HJR 5, a spending
plan, would compliment this bill.
2:39:45 PM
Representative Hawker spoke to "expectations", an
appropriate word for HB 125. He stated that the wording in
the bill is powerful, practical, workable, and requires
compliance - it is an adequate burden on the executive
branch. The effectiveness depends on the legislature's
endorsement.
2:43:24 PM
Representative Joule referred to page 2, line 15, "develop
the state's natural resources". He suggested adding
"responsibly" to the idea. Representative Hawker reported
that the intent is to identify constitutional
responsibilities. He agreed with adding the language.
Representative Gara thought the fiscal planning document was
important and he hoped people would read it. He said a
concern is that oil should also be looked at as a major
source of revenue.
2:47:38 PM
MARIE DARLIN, AARP, reported that AARP has submitted a
letter of support for this legislation. She read, "AARP
believes that the state should provide localities with the
funding they need to meet their obligations. Passing
responsibilities down to lower levels of government should
be undertaken primarily to place services closer to the
people being served and to maximize administrative
efficiencies, not as a way to reduce costs." She reported
that AARP does not support placing unfunded mandates on
local governments. She concluded, "Hopefully, HB 125 will
help our elected officials and our citizens have a more
accurate reading of Alaska's fiscal status and what to
expect in the future." She suggested trying to educate
people to read the document in the future.
2:50:53 PM
JOHN KREINHEDER, SENIOR ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, responded to questions regarding fiscal note #2. He
acknowledged the desire to have the functions done by
existing staff, but pointed out that OMB staff has been
reduced and that two more positions are being reduced. He
noted that the legislation would require a formal fiscal
plan with a date certain. The intent would be to do more
than look at expenditures, which would require more effort
and time. He noted that it cost over $200,000 to provide a
study on the costs of Medicaid.
JOHN BOUCHER, SENIOR ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, agreed with comments by Mr. Kreinheder.
2:56:47 PM
In response to a question by Representative Joule, Mr.
Boucher stated that to be properly equipped the plan must be
flexible. He observed that there are many issues that would
have a significant impact on the plan.
Co-Chair Meyer agreed and pointed to the cruise ship
initiative.
2:58:57 PM
Co-Chair Meyer questioned if the sponsor would support
adding "but not limited to", on page 2, line 9.
Representative Hawker stated that he would support the
language.
Representative Hawker MOVED to ADOPT Amendment 1:
Page 3, lines 12-17,
Delete all material
Insert "(1) assist the governor in meeting the
requirements of AS 37.07.020 [THE PREPARATION AND
EXPLANATION OF THE PROPOSED COMPREHENSIVE PROGRAM AND
FINANCIAL PLAN], including the coordination and
analysis of state agency goals and objectives, plans,
and budget requests;
Page 5, line 1, following "financial plans"
Insert "prepared in accordance with AS 37.07.050"
Page 5, line 29, following "facility"
Delete "scheduled for the first three years of the
plan"
Page 7, lines 12-17
Delete all material
Insert "(a) [THE GOVERNOR SHALL, AT THE TIME THE
GOVERNOR SUBMITS THE PROPOSED COMPREHENSIVE OPERATING
AND CAPITAL IMPROVEMENTS PROGRAM, AND FINANCIAL PLAN
UNDER AS 37.07.060(B)] At the time the governor submits
the report required under AS 37.07.060(b), the governor
shall submit to the legislature a separate
appropriation bill limited to appropriations for the
state's integrated comprehensive mental health
program."
Co-Chair Meyer OBJECTED for discussion purposes.
Representative Hawker explained that Amendment 1 would
clarify the Executive Budget Act, which he indicated was
archaic. The first part of the amendment addresses the
responsibilities of the Office of Budget and Management.
The first responsibility would be to assist in meeting the
responsibilities placed on the Governor. The amendment
clarifies that page 5, line 1, refers to agency financial
plans. The amendment also deletes language relating to the
Department of Transportation and Public Facilities, which
contradicts the STIP. A reference to AS 37.07.060(b) was
also added to clarify that the Mental Health Program bill
would be submitted on the same schedule.
Co-Chair Meyer WITHDREW his OBJECTION.
There being NO OBJECTION, Amendment 1 was adopted.
3:06:17 PM
Representative Gara MOVED to ADOPT Amendment 2:
Page 2 line 31 insert:
"(5) must identify whether total state, federal and
local oil or gas tax rates are lower than the average
charged around the world, whether company profit
margins from those resources are higher than the
average generated around the world, and whether changes
in oil or gas laws are needed to promote production,
exploration and maximum long term revenue from these
resources."
Renumber accordingly.
Co-Chair Meyer OBJECTED.
Representative Hawker spoke against the amendment.
Representative Gara explained that the amendment would
address oil and gas revenue. It would not require the state
to change the status quo, but would require an assessment of
oil or gas taxes. He stressed that the intent of the
amendment is informational and would enhance policy
discussions.
3:08:59 PM
Co-Chair Meyer summarized that the intent of the amendment
is to promote production and questioned if the sponsor would
support adding a provision to allow a lowering of the tax
rate if the world average were higher. He also pointed out
that consultants charge as much as $500 an hour.
Co-Chair Chenault agreed and added that a determination
should also be made regarding prices in other areas of the
continental United States.
Representative Gara agreed to both suggestions.
3:11:25 PM
Co-Chair Meyer emphasized the fiscal cost in hiring
consultants and suggested that the advice would mirror the
desire of the requestor.
Representative Hawker spoke against the amendment. He
objected to the use of "must". He explained that the "must"
components of the bill were crafted carefully with consensus
within the Ways and Means Committee. He noted that the
permissive sections were targeted toward constitutionally
mandated undertakings.
3:15:18 PM
Representative Joule questioned if there was anything that
would prohibit the governor from pursuing the intent of the
amendment. Representative Hawker responded that the intent
was to not provide prohibitions, but to be inclusive.
Representative Stoltze agreed with Co-Chair Meyer's
comments. Representative Hawker concurred.
3:18:30 PM
Representative Crawford spoke in favor of Amendment 2, which
includes more oil revenue information.
Co-Chair Meyer pointed out that nothing prohibits the
governor from including this information.
Representative Gara related last year's statistics regarding
government take on oil revenue. He suggested a variety of
changes to address the concerns mentioned. He thought the
numbers would remain stable over the years.
3:21:35 PM
Co-Chair Meyer argued that the price of oil is not stable.
He maintained that it would have to be looked at yearly.
Representative Hawker suggested not including policy calls
within the process of fiscal planning. Representative Gara
thought it would be worth paying consultants.
Co-Chair Meyer MAINTAINED his objection.
A roll call vote was taken on the motion to adopt Amendment
2.
IN FAVOR: Gara, Joule, Nelson, Crawford
OPPOSED: Hawker, Kelly, Stoltze, Thomas, Chenault, Meyer
The MOTION FAILED 4-6.
Co-Chair Meyer MOVED to ADOPT Conceptual Amendment 3 to add
the words "included, but not limited to" after "accounts,"
on page 2, line 9.
Representative Hawker OBJECTED for discussion purposes. He
suggested "including, but not limited to".
Co-Chair Meyer agreed to that friendly amendment.
There being NO OBJECTION, it was so ordered.
Representative Joule moved Conceptual Amendment 4, on line
15, to add "responsibly" before "develop".
There being NO OBJECTION, it was so ordered.
3:27:12 PM
Co-Chair Meyer spoke against the added cost in fiscal note
#2. He suggested splitting the $102,600 between two years
for contract work on initiatives and for analyzing a fiscal
plan.
Representative Hawker and Vice-Chair Stoltz objected to that
idea.
Representative Hawker agreed with OMB's comment that "we get
what we pay for". He suggested a one-time FY 08 increment.
Co-Chair Meyer wondered if the head count would be kept in.
Representative Hawker suggested authorizing a contract for
professional services. Co-Chair Meyer agreed that the first
fiscal plan would be the hardest to draw up.
Mr. Krenheider voiced concern about having a contractual
position. He said that the suggestion to change to
FY 08 funding would work. He questioned if it is a good
idea to contract out the development of state policy.
Representative Kelly suggested shifting other work to a
contract person and using existing personnel to work on the
fiscal plan. Mr. Krenheider thought that would work.
3:33:16 PM
Co-Chair Meyer asked if $102,600 should be kept for a
contract person. Representative Hawker replied that the
amount requested is fair.
3:34:22 PM
Co-Chair Meyer moved to keep $102,600 for contractual
services and zero out years 2009-2013, with zero full-time
positions.
Representative Stoltze objected to the contractual part. He
thought the goal was important and the position should be
filled by an experienced person. The governor should have
latitude to hire and choose this person. Co-Chair Meyer
commented that this item could be revisited after one year.
3:36:15 PM
Representative Joule thought the request was important
enough to expend the money for the position. He spoke
against the Co-Chair Meyer's suggestion.
Representative Kelly thought that most of the information
already exists and this bill brings it all together. He
spoke against hiring a new person because the information is
already available.
3:38:56 PM
Representative Thomas echoed Representative Joule's
comments. He wanted to see OMB have a person who is
accountable. He spoke in favor of leaving the fiscal note
alone.
Co-Chair Meyer said he is being cautious. He withdrew his
motion to change the fiscal note.
3:40:54 PM
Representative Stoltze MOVED to REPORT CSHB 125 (FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 125 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with indeterminate fiscal note # 1
by the Department of Revenue and with fiscal note #2 by the
Governor's Office.
3:42:14 PM
HOUSE BILL NO. 77
"An Act relating to marriage brokers and advertisers
and to dating and social referral services."
REPRESENTATIVE BETH KERTTULA, sponsor, explained that HB 77
requires that marriage brokers provide information to
foreign nationals who are seeking to marry Americans. The
purpose it to overcome domestic violence issues related to
such marriages. Representative Kerttula reported that she
is working with the Department of Public Safety, the
Department of Law, and the Department of Commerce, Community
and Economic Development on this bill and a new CS is
forthcoming.
3:43:23 PM
Representative Stoltze noted problems on both sides of such
marriages. He spoke of potential for fraud. He wondered if
information should be required of the potential recruit.
Representative Kerttula said she knows of no fraud or abuse
cases like that, however, there are many documented cases of
domestic violence toward foreign nationals. She spoke of
limited jurisdiction, language issues, and lack of knowledge
about culture. Representative Stoltze maintained that there
are victims on both sides.
Representative Kerttula thought there might be a need to
look into that. Representative Stoltze spoke to traditional
matchmaking from various cultures. Representative Kerttula
reported that this bill addresses businesses and
corporations rather than religious traditions.
Representative Stoltze voiced concern about sanctioning
questionable matchmaking. Representative Kerttula wanted to
limit the bill to corporate issues.
3:49:49 PM
Co-Chair Chenault asked about fiscal note #1 from the
Department of Public Safety. He asked about a requirement
of educating each potential bride in their native language.
Representative Kerttula thought it would be written
information, the cost of which would be borne by the client.
She related that lawsuits regarding false information have
been based on contract law. She noted an attempt to get to
zero fiscal impact notes.
Co-Chair Chenault asked about obtaining fingerprints.
Representative Kerttula reported working satisfactorily with
DPS on that matter. Co-Chair Chenault asked about the
definition of "clients". Representative Kerttula replied
that clients are the Americans who go to the marriage
broker; mostly men. Co-Chair Chenault wondered if
background information would be requested from the foreign
nationals. Representative Kerttula explained jurisdictional
reach problems.
3:53:22 PM
HB 77 was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 3:53 PM.
| Document Name | Date/Time | Subjects |
|---|