Legislature(2003 - 2004)

2003-05-15 House Journal

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2003-05-15                     House Journal                      Page 1687
HB 325                                                                                            
HOUSE BILL NO. 325 by the House Rules Committee by request of                                       
the Governor, entitled:                                                                             
                                                                                                    
     "An Act relating to receipts of certain state agencies and the                                 
     accounting for and disposition of those receipts; and providing for                            
     an effective date."                                                                            
                                                                                                    
was read the first time and referred to the State Affairs, Labor &                                  
Commerce, and Finance Committees.                                                                   
                                                                                                    
The following fiscal note(s) apply:                                                                 
                                                                                                    
1.  Zero, Office of the Governor/All Depts.                                                         
                                                                                                    
The Governor's transmittal letter dated May 14, 2003, follows:                                      
                                                                                                    
"Dear Speaker Kott:                                                                                 
                                                                                                    
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am                          
transmitting a bill relating to the receipts of certain state agencies and                          
accounting for those receipts.  The bill would eliminate authority for                              
the segregation of and separate accounting for program receipts.                                    
These receipts are collected principally under AS 37.10.050 in the                                  
form of fees, licenses, taxes, or other money generated by state agency                             
activities.  If these receipts were not statutorily designated as "program                          
receipts", they would be considered assets of the unrestricted general                              
fund.  Under provisions of existing law, these receipts keep their                                  
identity even though they are deposited in the general fund of the state.                           
Separate accounts are kept within the general fund from which the                                   
legislature appropriates for purposes usually related to sources from                               
which the receipts are derived.                                                                     
                                                                                                    
This bill would repeal the authority for the separate accounting of                                 
program receipts.  The bill also would amend parts of the enabling                                  
statutes of state agencies that authorize separate accounting of specific                           
receipts.                                                                                           
                                                                                                    

2003-05-15                     House Journal                      Page 1688
Separate accounting has the effect of segregating these receipts from                               
other amounts in the general fund.  It also tends to place artificial                               
restrictions on the ability to expend from the general fund and is                                  
contrary to the spirit of the Alaska Constitution's prohibition against                             
dedicated funds.  The legislature retains the power to appropriate these                            
receipts for any public purpose and it is this power that distinguishes                             
the practice of designating program receipts from a legal dedication                                
for a specific purpose.  However, the designations made by law                                      
operate in the same manner as earmarking.  It is inefficient fiscal                                 
policy and I hope that this bill will serve as a basis for reconsidering                            
the treatment of these valuable state assets.                                                       
                                                                                                    
Finally, eliminating program receipts as a funding source in the                                    
various major appropriation bills would lead to a more easily                                       
understood and transparent budget.  Designated program receipts are                                 
general fund assets.  However, these receipts currently are declared to                             
be a funding source apart from the general fund for budgeting                                       
purposes.  By use of this device, funding sources in the budget bills                               
have shifted from the general fund to program receipts. If this practice                            
is eliminated, the public would have a full accounting of all the state's                           
revenue that is earned by the state and appropriated for public                                     
purposes.                                                                                           
                                                                                                    
To avoid disrupting the process for the fiscal year 2004 budgets, the                               
changes made by the bill would not take effect until July 1, 2004.                                  
                                                                                                    
I urge your favorable consideration of this bill.                                                   
                                                                                                    
                                Sincerely,                                                         
                                /s/                                                                 
                                Frank H. Murkowski                                                  
                                 Governor"