00 SENATE BILL NO. 75 01 "An Act relating to the duties of the legislative finance division; relating to an 02 appropriation limit; relating to the budget responsibilities of the governor; and 03 providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 24.20.231 is amended to read: 06 Sec. 24.20.231. Duties. The legislative finance division shall 07 (1) analyze the budget and appropriation requests of each department, 08 institution, bureau, board, commission, or other agency of state government; 09 (2) analyze the revenue requirements of the state; 10 (3) provide the finance committees of the legislature with 11 comprehensive budget review and fiscal analysis services; 12 (4) cooperate with the office of management and budget in establishing 13 a comprehensive system for state budgeting and financial management as set out in 14 AS 37.07 (Executive Budget Act); 01 (5) complete studies and prepare reports, memoranda, or other 02 materials as directed by the Legislative Budget and Audit Committee; 03 (6) with the governor's permission, designate the legislative fiscal 04 analyst to serve ex officio on the governor's budget review committee; 05 (7) identify the actual reduction in state expenditures in the first fiscal 06 year following a review under AS 44.66.040 resulting from that review and inform the 07 Legislative Budget and Audit Committee of the amount of the reduction; [AND] 08 (8) not later than the first legislative day of each first regular session of 09 each legislature, conduct a review in accordance with AS 24.20.235 of the report 10 provided to the division under AS 43.05.095; and 11 (9) analyze the appropriation limit and prepare a report in 12 accordance with AS 24.20.236. 13 * Sec. 2. AS 24.20 is amended by adding a new section to read: 14 Sec. 24.20.236. Appropriation limit review. Every three years, not later than 15 the first legislative day of the regular session, the legislative finance division shall 16 deliver to the chair of the finance committee in each house of the legislature a report 17 analyzing the appropriation limit under AS 37.05.545 and the growth rate of the limit. 18 * Sec. 3. AS 37.05.540(a) is amended to read: 19 (a) There is established as a separate fund in the state treasury the budget 20 reserve fund. The budget reserve fund consists of appropriations to the fund. 21 [MONEY RECEIVED BY THE STATE THAT IS SUBJECT TO THE 22 APPROPRIATION LIMIT UNDER (b) OF THIS SECTION AND THAT EXCEEDS 23 THAT LIMIT, MAY BE APPROPRIATED TO THE BUDGET RESERVE FUND.] 24 * Sec. 4. AS 37.05 is amended by adding a new section to read: 25 Sec. 37.05.545. Appropriation limit. (a) Except as provided in (c) of this 26 section, unrestricted general fund appropriations made for a fiscal year may not exceed 27 $6,000,000,000 by more than the sum of $6,000,000,000 multiplied by 75 percent of 28 the cumulative change in inflation and $6,000,000,000 multiplied by 25 percent of the 29 cumulative change in the estimated population of the state. In this subsection, 30 (1) "cumulative change in inflation" means the difference between the 31 average Consumer Price Index for Urban Alaska prepared by the United States Bureau 01 of Labor Statistics for the previous five fiscal years and 220.401, divided by 220.401; 02 220.401 is the average Consumer Price Index for Urban Alaska prepared by the 03 United States Bureau of Labor Statistics for the period beginning July 1, 2015, and 04 ending June 30, 2020; 05 (2) "cumulative change in the estimated population of the state" means 06 the difference between the most recent annual estimate of population by the 07 Department of Labor and Workforce Development and population of the base year, 08 divided by the population of the base year; "population of the base year" means the 09 estimate of the population by the Department of Labor and Workforce Development 10 for July 2020. 11 (b) The appropriation limit in (a) of this section does not apply to an 12 appropriation 13 (1) to the principal of the Alaska permanent fund; 14 (2) required to pay debt obligations of the state, including general 15 obligation and revenue bonds; 16 (3) to meet a state of disaster declared by the governor as prescribed by 17 law; or 18 (4) of money to a state savings account or fund that requires a 19 subsequent appropriation from that account or fund. 20 (c) The legislature may appropriate an additional amount in excess of the 21 appropriation limit under (a) of this section for capital improvements, except that the 22 amount for capital improvements made in excess of the appropriation limit in a fiscal 23 year may not exceed five percent of the total appropriation limit for that fiscal year. 24 (d) In this section, 25 (1) "debt obligation" does not include a state pension liability or an 26 appropriation for school bond debt reimbursement under AS 14.11.100; 27 (2) "program receipts" has the meaning given in AS 37.05.146; 28 (3) "unrestricted general fund" means money deposited in the state 29 treasury that has not been dedicated or designated for use by the Constitution of the 30 State of Alaska or by law; "unrestricted general fund" does not include program 31 receipts or reappropriations. 01 * Sec. 5. AS 37.07.020 is amended by adding a new subsection to read: 02 (f) In addition to the budget and bills submitted under (a) of this section and 03 the fiscal plan submitted under (b) of this section, the governor shall submit a report 04 with a calculation of appropriations made in the budget prepared under (a) of this 05 section as applied to the appropriation limit under AS 37.05.545. The governor shall 06 update the report upon submission of the governor's supplemental appropriation bills 07 and the governor's budget amendments under the time limits prescribed in 08 AS 37.07.070. 09 * Sec. 6. AS 37.05.540(b), 37.05.540(c), and 37.05.540(e) are repealed. 10 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 APPLICABILITY. Sections 4 and 5 of this Act apply to appropriations that take effect 13 in the fiscal year ending June 30, 2022. 14 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 TRANSITION: LEGISLATIVE FINANCE DIVISION REPORT. Notwithstanding 17 AS 24.20.236, added by sec. 2 of this Act, the first legislative finance division review and 18 report required under AS 24.20.236 is due not later than the first legislative day of the 2024 19 regular session. 20 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 TRANSITION: CALCULATION OF APPROPRIATION LIMIT. Notwithstanding 23 AS 37.05.545(a), added by sec. 4 of this Act, unrestricted general fund appropriations made 24 for the fiscal year ending June 30, 2022, may not exceed $6,000,000,000, excluding 25 appropriations under AS 37.05.545(b) and (c), added by sec. 4 of this Act. 26 * Sec. 10. This Act takes effect July 1, 2021.