02/15/2023 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HJR2 | |
| HB38|| HJR2 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 2 | TELECONFERENCED | |
| += | HB 38 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
February 15, 2023
1:00 p.m.
DRAFT
MEMBERS PRESENT
Representative Sarah Vance, Chair
Representative Jamie Allard, Vice Chair
Representative Ben Carpenter
Representative Craig Johnson
Representative David Eastman
Representative Andrew Gray
Representative Cliff Groh
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 2
Proposing amendments to the Constitution of the State of Alaska
relating to an appropriation limit.
- HEARD & HELD
HOUSE BILL NO. 38
"An Act relating to an appropriation limit; relating to the
budget responsibilities of the governor; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HJR 2
SHORT TITLE: CONST. AM: APPROP LIMIT
SPONSOR(s): REPRESENTATIVE(s) STAPP
01/23/23 (H) READ THE FIRST TIME - REFERRALS
01/23/23 (H) W&M, FIN
01/30/23 (H) JUD REFERRAL ADDED BEFORE W&M
01/30/23 (H) BILL REPRINTED
02/15/23 (H) JUD AT 1:00 PM GRUENBERG 120
BILL: HB 38
SHORT TITLE: APPROPRIATION LIMIT; GOV BUDGET
SPONSOR(s): REPRESENTATIVE(s) STAPP
01/19/23 (H) READ THE FIRST TIME - REFERRALS
01/19/23 (H) JUD, W&M, FIN
01/27/23 (H) JUD AT 1:00 PM GRUENBERG 120
01/27/23 (H) Heard & Held
01/27/23 (H) MINUTE(JUD)
02/15/23 (H) JUD AT 1:00 PM GRUENBERG 120
WITNESS REGISTER
REPRESENTATIVE WILL STAPP
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Offered information on HJR 2, as the prime
sponsor.
BERNARD AOTO, Staff
Representative Will Stapp
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
HJR 2, on behalf of Representative Stapp, prime sponsor.
MARIE MARX, Attorney
Legislative Legal Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
HJR 2.
ROB CARPENTER, Deputy Director
Legislative Finance Division
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
HJR 2.
KEVIN BERRY
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HJR 2.
KATIE CAPOZZI, President
Alaska Chamber
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HJR 2.
REPRESENTATIVE WILL STAPP
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Offered information during the hearing on
HB 38, as the prime sponsor.
BERNARD AOTO, Staff
Representative Will Stapp
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
38, on behalf of Representative Stapp, prime sponsor.
MARIE MARX, Attorney
Legislative Legal Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
38.
ACTION NARRATIVE
1:00:27 PM
CHAIR SARAH VANCE called the House Judiciary Standing Committee
meeting to order at 1:00 p.m. Representatives C. Johnson, Gray,
Groh, and Vance were present at the call to order.
Representatives Carpenter, Eastman, and Allard arrived as the
meeting was in progress.
HJR 2-CONST. AM: APPROP LIMIT
1:01:21 PM
CHAIR VANCE announced that the first order of business would be
HOUSE JOINT RESOLUTION NO. 2, Proposing amendments to the
Constitution of the State of Alaska relating to an appropriation
limit.
1:01:52 PM
REPRESENTATIVE WILL STAPP, Alaska State Legislature, prime
sponsor, provided introductory remarks on HJR 2. He noted that
HJR 2 was the companion resolution to HB 38, adding that the
resolution before the committee was the constitutional amendment
proposal for a refined appropriation limit. He explained that
the spending cap would be based on gross domestic product [GDP]
and aimed to bring stability to Alaska's economy through long-
term fiscal discipline. He deferred to his staff, Mr. Aoto.
1:03:21 PM
BERNARD AOTO, Staff, Representative Will Stapp, Alaska State
Legislature, on behalf of Representative Stapp, prime sponsor,
explained that HJR 2 would limit appropriations to 14 percent of
a five-year trailing average of real GDP.
CHAIR VANCE invited questions from members of the committee.
1:04:40 PM
REPRESENTATIVE GROH expressed concern about the possibility of a
"double whammy" economic downturn if both the public and private
sectors were unable to produce simultaneously. He asked whether
the bill sponsor had considered this potential implication.
REPRESENTATIVE STAPP said he had considered the possibility of a
long-term economic depression, in which case, he argued that the
largest limiting factor would be revenue, not spending.
REPRESENTATIVE GROH contended that if the proposed spending cap
was constitutionalized, the ability to revive the economy from a
prolonged recession would be limited.
REPRESENTATIVE STAPP highlighted the five-year trailing average
as a way to protect against one year of economic downturn. He
pointed out that positive GDP growth would increase the spending
cap, whereas several years of massive GDP decline would create
issues.
REPRESENTATIVE GROH asked whether any academic studies had
looked at GDP-based spending caps.
REPRESENTATIVE STAPP said GDP was a standard metric that was
studied at most major universities with a macroeconomics
program.
REPRESENTATIVE GROH asserted that there was no academic research
on GDP-based spending limits.
REPRESENTATIVE STAPP suggested that the effects of such a
spending cap could be inferred.
CHAIR VANCE asked why the GDP-based model was selected by the
bill sponsor.
REPRESENTATIVE STAPP conveyed that his intent was to tie private
sector performance to statewide spending. He expressed a desire
for Alaskans in the private sector to have a strong connection
to state government. The concept behind utilizing private
sector GDP, he said, was to create a mechanism that encouraged
state leaders to be mindful of their constituents.
1:10:48 PM
REPRESENTATIVE GRAY referenced testimony from Mr. Gastin during
a previous hearing, in which he indicated that all spending
should be included in an effective spending cap. For that
reason, he asked whether the permanent fund dividend (PFD)
should be included in the constitutional spending cap.
REPRESENTATIVE STAPP referenced a memorandum ("memo") and
deferred to Legislative Legal Services, [Legislative Affairs
Agency (LAA)].
1:11:51 PM
The committee took a brief at-ease.
1:12:13 PM
MARIE MARX, Attorney, Legislative Legal Services, LAA, explained
that the memo [from Legislative Legal Services] spoke to
whether, in addition to the appropriation limit, constitutional
provisions could be changed in HJR 2, which was a separate issue
from the question posed by Representative Gray.
REPRESENTATIVE GRAY restated his question, asking whether the
spending cap could apply to all state spending, including the
PFD.
MS. MARX stated that the decision to exclude or include specific
allocations under the proposed spending cap would be a policy
call not a legal question.
1:14:47 PM
REPRESENTATIVE CARPENTER inquired about the provisions related
to public enterprises and public corporations. He asked whether
the existing language pertaining to revenues from public
corporations of the state that issued revenue bonds should be
excluded.
REPRESENTATIVE STAPP shared his understanding that existing
state-owned enterprises (SOEs) were excluded from the Executive
Budget Act [AS 37.07]. He suspected that SOE's could be
utilized for bonding capacity. He explained that the bond
rating agencies only allowed Alaska to bond $1.5 billion in
capital projects, which spoke to the need for a revised
appropriation limit to give the state a cornerstone for long-
term fiscal stability.
1:16:35 PM
REPRESENTATIVE GRAY asked for the definition of "general
obligation (GO) bond".
REPRESENTATIVE STAPP deferred to Mr. Carpenter.
1:17:23 PM
ROB CARPENTER, Deputy Director, Legislative Finance Division,
LAA, defined a GO bond as a bond backed by "the full faith and
credit of the State of Alaska." He explained that authorizing
required passage through the legislature and a vote of the
people, making it the most secure form of debt issued by the
state.
REPRESENTATIVE GRAY asked whether a bond consisted of borrowed
money that required repayment.
MR. CARPENTER confirmed that to bond money, [the state] would
issue notes of debt and then borrow the money from a public
market. The bond proceeds from the public market would then be
spent on capital projects and repaid over time.
REPRESENTATIVE GRAY asked how the interest rate was determined.
MR. CARPENTER stated that the interest rate was determined by
the market and Alaska's credit rating.
REPRESENTATIVE GRAY asked whether the state's credit rating
would be impacted if the amount of debt increased over time.
MR. CARPENTER answered yes, credit rating was impacted by the
amount of debt "on the books." He explained that if the state
continued to stack debt, the bond market would determine
Alaska's overall credit worthiness based on the capacity to
issue further debt, existing debt, and the state's overall
revenue picture.
REPRESENTATIVE GRAY asked whether GO bond payments would be
outside the proposed spending cap.
MR. AOTO answered yes.
REPRESENTATIVE GRAY considered a scenario in which the state
bonded more items and, ultimately, negated the appropriation
limit via increased spending. In this scenario, Alaska's credit
rating could decline resulting in higher interest rates. He
asked whether that was a possibility.
MR. AOTO said it was possible; however, he reminded
Representative Gray that GO bonds required a vote of the people.
1:21:45 PM
REPRESENTATIVE ALLARD asked the bill sponsor to expound on the
decision to exclude GO bonds from the spending cap.
REPRESENTATIVE STAPP indicated that ultimately, the decision [to
approve the bonds] would be up to the voters.
CHAIR VANCE asked why HJR 2 was put was put forward, as opposed
to adjusting the dollar value of the existing appropriation
limit.
REPRESENTATIVE STAPP explained that in addition to setting a new
appropriation limit, the goal was to measure private sector
growth. He opined that the best way to satisfy the
legislature's constitutional obligation to the state was to
prioritize individual Alaskans by ensuring economic opportunity
for a brighter future.
1:24:30 PM
REPRESENTATIVE GRAY pointed out that the legislature had a
constitutional obligation to maintain education. He asked
whether the bill sponsor would consider excluding education
funding from the spending cap.
REPRESENTATIVE STAPP agreed that education was incredibly
valuable. He said, "Money is money is money," opining that
prioritizing operational and capital spending was the key to an
effective appropriation limit.
REPRESENTATIVE GRAY cited Article 7, Section 1, of the Alaska
State Constitution and expressed concern that the proposed
spending cap could prevent the legislature from carrying out its
constitutional duty to establish and maintain a system of public
schools open to all children of the state.
REPRESENTATIVE STAPP suggested that Representative Gray propose
a constitutional funding formula for education.
1:26:40 PM
REPRESENTATIVE EASTMAN inquired about the timing of the
calculation. He directed attention to the language on page 2,
line 2, and asked whether the year preceding the prior fiscal
year would be 2020.
REPRESENTATIVE STAPP shared his understanding that
Representative Eastman was correct.
REPRESENTATIVE EASTMAN asked how Representative Stapp would
describe the current inflationary environment.
REPRESENTATIVE STAPP described the current inflationary pressure
as far above the historic average of 2.5 percent.
REPRESENTATIVE EASTMAN asked how that contrasted with the
inflationary environment of FY 20.
REPRESENTATIVE STAPP believed that the current inflationary
pressure was much higher than that of FY 20.
REPRESENTATIVE EASTMAN sought to confirm that future changes in
inflationary pressure would need to be forecasted or
anticipated, as that data was not readily available.
REPRESENTATIVE STAPP clarified that inflation as a metric was
not included in HJR 2. He asked Representative Eastman to
elaborate.
REPRESENTATIVE EASTMAN asked whether it seemed reckless to
remove the existing inflationary adjustment from the state
spending cap and hope that inflation wouldn't increase in the
future.
REPRESENTATIVE STAPP contended that it was not reckless. He
argued that a state government that burned through $10 billion
in revenue and $16 billion in savings over a 12-year timeframe
was reckless. He expressed concern that if Alaska did not begin
to lay strong fiscal foundations, inflation would be the least
of its worries, as available revenues would cease to meet
existing operating expenses.
REPRESENTATIVE EASTMAN asked why HJR 2 would not maintain some
kind of adjustment for inflation given that future inflationary
pressures were unknown. He expressed concern about
constitutionalizing a spending cap for which the nominal value
was too low.
REPRESENTATIVE STAPP pointed out that voters could choose to
accept or reject the proposed spending cap.
1:33:14 PM
REPRESENTATIVE GROH pointed out that HJR 2 made an exception for
capital improvements, as opposed to operational spending, such
as K-12 funding or SNAP benefits, which many constituents were
concerned about. He added that capital spending had "exploded"
during the boom-and-bust periods referenced by the bill sponsor
and asked Representative Stapp to speak to that.
REPRESENTATIVE STAPP pointed out that levels of operational
spending could decrease based on the priority of future
legislators. He challenged Representative Groh to propose a
constitutional formula for education spending.
REPRESENTATIVE GROH asked whether the exception for capital
spending would create a bias over operational spending in future
years if HJR 2 were to pass.
REPRESENTATIVE STAPP stated that capital spending was a proven
indicator of private sector growth and GDP development. He
opined that Alaska required significant infrastructure
development, adding that most residents would welcome relief in
energy and fuel bills in the event that the state invested in
infrastructure to facilitate commerce.
1:36:42 PM
REPRESENTATIVE GRAY asked whether the governor's current [FY 24]
budget proposal would fall underneath the constitutional
spending cap proposed in HJR 2.
REPRESENTATIVE STAPP said the current budget would fall
underneath the constitutional limit. He further noted that
should HJR 2 pass, the constitutional limit would not be
effective in FY 24, making it irrelevant to the governor's
proposed budget.
REPRESENTATIVE GRAY restated his question, asking whether the
governor's FY 24 budget proposal would fall underneath the
constitutional spending cap.
MR. AOTO shared his understanding that the governor's proposed
budget would not breach the constitutional limit proposal in HJR
2.
1:38:52 PM
REPRESENTATIVE ALLARD inquired about the relevance of
hypothetical scenarios.
REPRESENTATIVE STAPP said he was happy to entertain all
questions. He reiterated that ultimately, the Alaskan voters
would get to determine whether the constitutional amendment
should advance.
1:39:58 PM
REPRESENTATIVE EASTMAN asked whether the governor's FY 24 budget
proposal was close to exceeding the constitutional limit.
REPRESENTATIVE STAPP deferred to Mr. Carpenter.
MR. CARPENTER said based on preliminary calculations, the 14
percent spending cap would equate to approximately $6.2 billion.
He estimated that the appropriations within the governor's
budget that were germane to the constitutional cap amounted to
approximately $5.4 billion roughly $800 million under the
constitutional limit.
REPRESENTATIVE EASTMAN asked how the supplementary
appropriations were calculated underneath the spending cap, as
proposed. Specifically, he asked whether the recent $393
million supplemental budget request would be put on the "tab"
for FY 23 or FY 24.
1:42:00 PM
REPRESENTATIVE STAPP deferred to Mr. Carpenter.
MR. CARPENTER indicated that the proposed statutory spending
limit applied to appropriations "in" a fiscal year, whereas the
constitutional limit applied to appropriations "for" a fiscal
year. He added that he would need further clarification from
the bill sponsor as to whether the supplemental appropriations
would be "in" or "for" the fiscal year.
REPRESENTATIVE EASTMAN questioned how GDP would be determined
for the purpose of the spending cap.
REPRESENTATIVE STAPP indicated that the process by which GDP was
determined and transmitted to the legislature would be similar
to that of inflation for the existing appropriation limit.
REPRESENTATIVE EASTMAN asked when GDP would be transmitted to
the legislature and how much time the body would have to craft a
budget that fell underneath the GDP-based cap.
MR. AOTO offered to follow up with the requested information.
1:47:04 PM
CHAIR VANCE asked whether a transmittal date would be determined
and inserted on page 2, lines 3-4.
REPRESENTATIVE STAPP was unsure whether that would be the proper
place in the language. He deferred to Ms. Marx.
MS. MARX explained that typically, constitutional provisions
were drafted with broader language, whereas the specific nuances
of the law were placed into statute. She expounded that based
on HJR 2, the legislature could establish additional provisions
and procedures in statute that were necessary to implement the
constitutional requirement.
CHAIR VANCE directed attention to page 1, line 16 and inquired
about the implications of referencing federal law in the state
constitution.
MS. MARX said she did not understand the question. She conveyed
that the data on GDP would come from the federal government,
which explained the reference to the federal bureau and federal
law on page 1, line 16.
REPRESENTATIVE VANCE asked what would happen if the federal
bureau stopped providing economic analyses on GDP.
MS. MARX acknowledged that the point highlighted by Chair Vance
was a downside to having specific language in the Alaska State
Constitution.
1:51:48 PM
REPRESENTATIVE EASTMAN pondered to what extent the data provided
by the federal government was susceptible to political pressure.
REPRESENTATIVE STAPP pointed out that the same argument could be
made for the census data used in the existing appropriation
limit.
REPRESENTATIVE EASTMAN considered a scenario in which the new
formula enshrined in the constitution, per HJR 2, "[wasn't]
working for some reason." He asked how much time it would take
to roll back the constitutional amendment and fix the
hypothetical error.
MS. MARX outlined the following process for amending the
constitution: firstly, a resolution would need to pass from the
legislature with a two-thirds vote; secondly, the resolution
would appear on the ballot at the next general election to be
voted on by the public.
1:55:05 PM
REPRESENTATIVE EASTMAN considered a scenario in which HJR 2
passed from the legislature tomorrow. He asked how long until
the resolution would be effective and constitutionally binding.
MS. MARX noted that the next general election was 2024. She
reported that per Article 13, Section 1, of the Alaska State
Constitution, unless otherwise provided, the constitutional
amendment would become effective 30 days after the certification
of the election returns by the lieutenant governor.
1:56:02 PM
REPRESENTATIVE VANCE opened public testimony on HJR 2.
1:56:29 PM
KEVIN BERRY informed the committee that he was an associate
professor of economics at the University of Alaska Anchorage
(UAA). He pointed out that HJR was prototypical, meaning that
spending would increase when GDP was higher, which would
exacerbate business cycles in Alaska. He said the government
had two different ways of making economic policy to influence
growth: monetary policy and fiscal policy. The federal
government can do both; however, Alaska's economy was often
counter-cyclical to the rest of the country, he said, adding
that monetary policy could not be utilized at the state level.
For that reason, he opined that HJR 2 would tie the state's
hands, making it harder to craft fiscal policy to counter
federal policy that was not beneficial to Alaska. He provided
an example. He argued that exacerbation of the business cycle
could cause more people to leave the state, further
destabilizing the population and workforce. He concluded by
emphasizing the importance of utilizing accurate inflation
measures when considering the spending cap.
1:59:29 PM
KATIE CAPOZZI, President, Alaska Chamber, stated her support for
a meaningful spending cap. She remarked that the existing state
spending cap was outdated and did not restrict spending in a
"serious" way. She explained that when revenues failed to meet
budgeted expenses, the business community would be targeted for
increased taxes, fines, and fees to fill the deficit. She
stressed the need for stability and predictability for
businesses to grow, invest in the state, and hire employees.
She emphasized that the constant looming threat of needing to
bail out a state government that periodically overspends was a
disincentive to invest in Alaska. She opined that a meaningful
cap would go a long way in showing Alaskans that government
could be trusted to spend wisely, and provide a safety net of
core government services during years of revenue shortfalls. As
state leaders ask Alaskans to contribute to state revenue with
increased or new taxes, she requested assurances that dramatic
overspending would not occur once more money was available. She
cited an annual public opinion survey conducted by the Alaska
Chamber, indicating that Alaskans supported a constitutional
spending cap by over 60 percent. In closing she noted that the
chamber had not taken an official position on any legislation
related to an appropriation limit; nonetheless, the Alaska
Chamber strongly supported the policy in general.
2:03:08 PM
CHAIR VANCE closed public testimony on HJR 2. She announced
that the resolution would be held over.
HB 38-APPROPRIATION LIMIT; GOV BUDGET
HJR 2-CONST. AM: APPROP LIMIT
2:03:39 PM
CHAIR VANCE announced that the final order of business would be
HOUSE BILL NO. 38, "An Act relating to an appropriation limit;
relating to the budget responsibilities of the governor; and
providing for an effective date" and HOUSE JOINT RESOLUTION NO.
2, Proposing amendments to the Constitution of the State of
Alaska relating to an appropriation limit.
2:03:56 PM
The committee took an at-ease from 2:03 p.m. to 2:07 p.m.
2:07:04 PM
CHAIR VANCE asked the bill sponsor to highlight key differences
between HB 38 and HJR 2.
2:07:40 PM
REPRESENTATIVE WILL STAPP, Alaska State Legislature, prime
sponsor of HB 38, indicated that the main structural difference
between the two proposals was the percentages, adding that the
statutory limit was set at 11.5 percent. Further, conditional
language was included in HB 38, which tied it to HJR 2,
effectively making it so one could not properly function without
the other.
2:08:58 PM
REPRESENTATIVE EASTMAN asked the bill sponsor to contrast the
constitutional limit against the statutory limit of 11.5
percent.
REPRESENTATIVE STAPP responded that the constitutional limit, as
proposed, was 14 percent.
REPRESENTATIVE EASTMAN asked why the statutory limit was set at
11.5 percent, as opposed to keeping it consistent with the
constitutional limit of 14 percent.
REPRESENTATIVE STAPP deferred to his staff, Mr. Aoto.
2:09:32 PM
BERNARD AOTO, Staff, Representative Will Stapp, Alaska State
Legislature, said the 11.5 percent was calculated based on
spending habits as exhibited by the legislature in the late
1970s prior to the oil boom of the 1980s and the constitutional
cap, as provided in 1983.
REPRESENTATIVE EASTMAN asked whether the governor's [FY 24]
budget proposal would fall underneath the statutory limit
proposed in HB 38.
MR. AOTO stated that the governor's proposed budget would breach
the statutory limit. He added that the legislature would have
the ability breach the statutory limit, as long as
appropriations remained underneath the constitutional limit. He
noted that neither HB 38 nor HJR 2 would impact the FY 24
budget, as both were intertwined, and the constitutional
provision required a vote of the people to go into effect.
REPRESENTATIVE EASTMAN considered a scenario in which HB 38
passed the legislature sooner than HJR 2. He sought to confirm
that the statutory limit would not go into effect until the
constitutional provision was enacted.
MR. AOTO answered yes.
2:11:35 PM
REPRESENTATIVE GROH asked whether the statutory limit included
exceptions related to the Alaska Mental Health Trust Authority
(AMHTA).
MR. AOTO acknowledged that the exceptions differed between HJR 2
and HB 38; however, he shared his belief that the exceptions
"were supposed to match." He remarked, "the mental health
funds, as an exception in one, are meant to keep it in line with
the other."
REPRESENTATIVE GROH requested a more extensive explanation.
2:12:49 PM
REPRESENTATIVE GRAY inquired about the vote threshold required
to surpass the statutory spending cap.
MR. AOTO shared his understanding that a two-thirds vote of the
legislative body was needed to override the statutory limit. He
reiterated that because HB 38 was tied to the constitutional
limit provided in HJR 2, the statutory limit would not be
effective until the constitutional provision was voted on by
Alaskans and subsequently enacted.
REPRESENTATIVE GRAY questioned why the statutory limit was tied
to the constitutional limit.
MR. AOTO stated that the constitutional limit served as an
enforcement mechanism, as the legislature had the ability to
override the statutory spending limit with a two-thirds vote.
REPRESENTATIVE GRAY expressed confusion as to the vote threshold
required to surpass the proposed statutory spending limit.
MR. AOTO deferred to Ms. Marx.
2:16:10 PM
REPRESENTATIVE STAPP asked Representative Gray to rephrase the
question.
REPRESENTATIVE GRAY inquired about the vote count required to
surpass the statutory limit. Additionally, he asked whether the
constitutional limit could be surpassed with a vote of the
legislature.
MR. AOTO shared his understanding that the constitutional
[limit] could not be surpassed by the legislature.
REPRESENTATIVE GRAY remarked:
Correct me if I'm wrong, if we just had the statutory
11.5 percent we would just need 21 votes to
override, but if we put the constitutional amendment
in place, there's language that states that we would
need two-thirds to override that 11.5 percent. We
can't go above 14 percent but we could go above 11.5
percent with a two-thirds vote; however, without that
constitutional amendment, we could override that 11.5
percent with 21 [votes].
REPRESENTATIVE GRAY asked whether that was correct.
REPRESENTATIVE STAPP clarified that Representative Gray's
summation was not entirely accurate. He reminded the committee
that if HJR 2 did not pass, the statutory limit would cease to
exist due to the conditional language in the bill.
CHAIR VANCE asked Ms. Marx to speak to the vote thresholds
required to surpass a statutory spending limit and a
constitutional spending limit.
2:18:54 PM
MARIE MARX, Attorney, Legislative Legal Services, LAA, clarified
that the legislature could not exceed the constitutional limit,
as the state constitution was binding on all the people of
Alaska, including the legislature.
CHAIR VANCE inquired about the repercussions for exceeding the
constitutional limit.
MS. MARX speculated that the action would be subject to
litigation and resolved through the courts.
CHAIR VANCE asked whether there had been instances of historical
action against the legislature for similar scenarios.
MS. MARX did not know that answer with regard to the
appropriation limit. She referenced the 2020 lawsuit pertaining
to the RPL process [Eric Forrer v. State of Alaska], in which a
citizen asserted that using RPLs to allocate certain federal
funds was unconstitutional and could only be done with an act of
the legislature. She added that there were other recent
instances, in addition to the aforementioned case, of citizens
suing the legislature for unconstitutional actions.
2:21:53 PM
REPRESENTATIVE CARPENTER asked how the courts had responded in
the past to the violation of an appropriation statute.
MS. MARX stated that the statutory limit was not binding in
regard to legislative spending. She stressed that, per the
state constitution, the legislature had the absolute power of
appropriation, which could not be limited by statutory
authority. She reiterated that constitutionally, the
legislature was not bound by statutory appropriation limits.
REPRESENTATIVE CARPENTER inferred that the courts would likely
rule in the legislature's favor if a citizen were to sue the
state for violating the statutory appropriation limit.
2:24:21 PM
REPRESENTATIVE EASTMAN inquired about the two-thirds vote that
Mr. Aoto had referenced earlier. He questioned the mechanism by
which the legislature could violate statute with a two-thirds
vote.
MR. AOTO stated that he had misspoken.
2:24:49 PM
REPRESENTATIVE GROH pointed out that there was a provision in
HJR 2 that allowed for an affirmative vote of two-thirds of each
legislative body to appropriate an additional amount for capitol
improvements. He asked whether that had been the point of
confusion.
MR. AOTO remarked, "In all honesty, the entire line of
questioning was very confusing."
2:25:37 PM
REPRESENTATIVE EASTMAN shared his understanding that unless the
legislature could come up with an affirmative two-thirds vote of
both bodies to pass a constitutional amendment, any spending
limit would not be enforced by the courts against the
legislature. Effectively, the legislature could spend as much
as it wanted, he surmised. He asked whether that was correct.
REPRESENTATIVE STAPP remarked, "All the more reason to have a
constitutional spending limit to have some sort of restraint on
individuals."
MR. AOTO confirmed that Representative Eastman's summation was
accurate. He pointed out that the legislature had breached the
existing statutory spending limit several times in recent years;
however, the current constitutional limit had not been
surpassed.
REPRESENTATIVE EASTMAN pointed out that it would be extremely
difficult to breach the existing constitutional spending limit.
2:27:23 PM
CHAIR VANCE opened public testimony on HB 38; after ascertaining
that no one wished to testify online or in person, she closed
public testimony. She announced that HB 38 and HJR 2 would be
held over.
2:28:38 PM
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 2:28 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR 2 - Sponsor Statement.pdf |
HJUD 2/15/2023 1:00:00 PM |
HJR 2 |
| HJR 2 - v.A.PDF |
HJUD 2/15/2023 1:00:00 PM |
HJR 2 |
| HJR 2 - Fiscal Note - DOE.pdf |
HJUD 2/15/2023 1:00:00 PM |
HJR 2 |
| HB 38 - Leg Memo FPWG.pdf |
HJUD 2/15/2023 1:00:00 PM |
HB 38 |
| HB 38 - Leg Memo PFD.pdf |
HJUD 2/15/2023 1:00:00 PM |
HB 38 |
| HB 38 - Fiscal Note - OMB.pdf |
HJUD 2/15/2023 1:00:00 PM |
HB 38 |
| HB 38 - HJR 2 Presentation 1.25.23.pdf |
HJUD 1/27/2023 1:00:00 PM HJUD 2/15/2023 1:00:00 PM |
HB 38 HJR 2 |
| HB 38 - HJR 2 Research Appropriation Limit Data.pdf |
HJUD 1/27/2023 1:00:00 PM HJUD 2/15/2023 1:00:00 PM |
HB 38 HJR 2 |
| HB 38 - HJR 2 Research GDP information 1.25.23.pdf |
HJUD 1/27/2023 1:00:00 PM HJUD 2/15/2023 1:00:00 PM |
HB 38 HJR 2 |
| HB 38 - HJR 2 Reserach AG Opinion from 1983 1.25.23.pdf |
HJUD 1/27/2023 1:00:00 PM HJUD 2/15/2023 1:00:00 PM |
HB 38 HJR 2 |