Legislature(2021 - 2022)BARNES 124
03/01/2022 01:00 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| HB322 | |
| HB352 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 366 | TELECONFERENCED | |
| += | HB 322 | TELECONFERENCED | |
| *+ | HB 352 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 322-AK MARINE HWY SYSTEM VESSEL REPL. FUND
1:06:00 PM
CHAIR HOPKINS announced that the first order of business would
be HB 322, "An Act relating to the Alaska marine highway system
fund; relating to the Alaska marine highway system vessel
replacement fund; relating to the Alaska higher education
investment fund; and providing for an effective date." [Before
the committee, adopted as a working document on 2/24/22, was the
proposed committee substitute (CS) for HB 322, Version 32-
LS1501\B, Marx, 2/23/22, ("Version B").]
1:06:34 PM
KERRY CROCKER, Staff, Representative Louise Stutes, Alaska State
Legislature, on behalf of Representative Stutes, prime sponsor,
explained that HB 322, Version B, would move the Alaska Marine
Highway System (AMHS) fund and the vessel replacement fund from
the general fund to the state treasury. By doing this, he
explained, under Article IX, Section 17(d) of the Constitution
of the State of Alaska, the funds will not be subject to the
constitutional sweep. He stated that funds subject to the sweep
must be both available for appropriations and reside in the
general fund. He noted that the proposed legislation would not
create dedicated funds, as the legislature still maintains the
ability to prorate these funds in any manner. He maintained
that it is also critical for AMHS to maintain the endowment of
money every year for continuity within the system and not suffer
the destabilizing effect of a constitutional sweep.
1:07:40 PM
CHAIR HOPKINS suggested this would deal with money going into a
fund, not necessarily how the money would be used in the future.
MR. CROCKER responded in the affirmative. He stated that the
two funds would be moved from the general fund to the treasury,
and then the AMHS fund would collect receipts from the marine
highway.
1:08:06 PM
REPRESENTATIVE MCCABE stated that he objects to the use of the
terms "designated" and "dedicated." He argued that the verbs
are transitive and "mean exactly the same thing," and, because
this has not been reviewed by the court system, a "big chance"
would be taken. He referred to the memorandum ("memo") dated
March 17, 2020, from Legislative Council which defines
"designated fund" as revenue for a specific purpose; however, it
could be appropriated for any purpose. He argued that while the
fund would be taken out of the sweep by changing the name from
"designated" to "dedicated," it would be left open for the
legislature to reappropriate it for any purpose. He questioned
whether his understanding was correct.
1:09:11 PM
CHAIR HOPKINS noted that the memo from March 17, 2020, has not
been posted on the legislature's Bill Action & Status Inquiry
System (BASIS); therefore, it is not available to all committee
members. He requested that Legislative Legal Services address
Representative McCabe's question.
1:09:38 PM
CHAIR HOPKINS, responding to a request from Representative
Hannan, confirmed the referenced memo will be distributed to the
committee and posted on BASIS.
REPRESENTATIVE MCCABE apologized to the committee and stated
that the memo had been part of his independent research.
1:10:25 PM
MEGAN WALLACE, Director, Legislative Legal and Research
Services, Legislative Affairs Agency, concurred with the general
description of the difference between "designated" and
"dedicated" funds. She explained that a designated fund would
have an established policy for its intended use. She continued
that the designation of a fund would not create a dedicated
fund, to the extent that money is required to be used by law for
these purposes, and its annual budgeting process the legislature
would independently determine whether to continue to use these
funds for the designated purposes. In other words, concerning
the proposed legislation, the legislature would have the power
to decide whether to use these funds as originally intended, or
for other appropriate purposes. She advised that the general
structure of the designated fund would not change under the
proposed legislation.
1:12:13 PM
CHAIR HOPKINS interjected that the use of "designated" and
"dedicated" would only concern the distribution of revenue. He
expressed the understanding that the fund created by the
proposed legislation would be outside of the general fund, and
appropriations from ferry earnings and sales would be put there;
however, the purpose for the money is not being specifically
laid out. He suggested that the fund would not be "designated"
or "dedicated" but simply a fund outside of the treasury.
MS. WALLACE responded in agreement, as Version B would move the
existing funds out of the general fund into a separate fund
within the state treasury, and no provision in the bill would
modify its designated usage.
1:14:34 PM
CHAIR HOPKINS directed attention to the memo in the committee
packet from Legislative Legal Services, dated February 11, 2020.
He suggested that this memo could be discussed while the other
memo is being copied and passed to the committee.
1:15:15 PM
REPRESENTATIVE MCCABE provided that "dedicate" means to set to a
definite use, while "designate" means to set apart for a
specific purpose. He reiterated the argument that the two words
are the same, and he pointed out there have been two lawsuits in
the state on this topic. Concerning the [March 17 and February
11] memos, he said Legislative Legal Services indicated "it is
possible" the court may find the AMHS replacement fund not
subject to the sweep. In other words, he argued that "it is
possible" the fund would be subject to the sweep. He questioned
why the legislature would do this. He expressed agreement with
putting aside money for the vessel replacement fund; however, he
expressed disagreement with the legislation because it is trying
"to dance around" the fact the legislature cannot
constitutionally dedicate funds. He suggested the court could
become involved, costing the state money. He pointed out that
the legislature has done this twice, winning one case and losing
one case. He urged the committee not to go down this "road."
He expressed the concern that Version B has no sectional
analysis, no sponsor statement, and no fiscal note. He
suggested this is being rushed, and the bill should be tabled
until the discussion is settled, possibly with an outside legal
opinion. He said, "It seems to me in both of these letters the
legal opinion is not what we think it is."
1:17:47 PM
CHAIR HOPKINS commented that legal opinions are often in
"legalese." In regard to the fiscal note and the full legal
analysis, he suggested the bill be moved to the House Finance
Standing Committee where it will get a "hefty vetting," as it
deals more with finance policy than transportation specific
policy.
1:18:11 PM
REPRESENTATIVE HANNAN commented that the language used in law is
connotative and different from "plain" English, and transitive
verbs could have a different meaning in reference to law. She
explained this often happens in the practice of accounting. She
argued that memos written in 2020 would not reflect the two
legal cases Representative McCabe referenced. She continued
that legal cases concerning "dedicated" versus "designated" may
go back further in Alaska case law, and the line is not as
bright as asserted. She described the committee as "non-
lawyers" debating what the law says.
1:19:43 PM
REPRESENTATIVE MCCABE noted his experience in negotiations and
responded that lawyers often use the "plain language" meaning.
He argued that the language would not necessarily have a
different meaning just because it is written by a lawyer. He
asserted that the line is not bright, rather it is blurry, and
"we are dancing on the wrong side of it."
1:20:21 PM
CHAIR HOPKINS expressed the importance of understanding the
intent behind the language used in negotiations. He argued that
the intent in Version B is to make these funds not subject to a
constitutional sweep, and this has been agreed upon and clear.
He suggested this argument is not about the intent, rather the
legalese. He continued that putting the intent clearly on the
record in the discussion will help with future discussions.
1:20:57 PM
REPRESENTATIVE STUTES concurred with Chair Hopkins, as she has
read the March 17 memo. She restated the memo's descriptions of
"dedicated" and "designated" funds. She expressed the opinion
that the appropriations from the fund would be determined by
precedence; however, this is not the issue. The issue is to
simply move the funds from one place to another.
1:22:01 PM
REPRESENTATIVE MCCABE argued this goes back to the original
question, which needs to be "hammered out." He maintained that
because the designated funds may be appropriated for any
purpose, a future legislature could use the money for "a bridge
to nowhere."
1:22:52 PM
CHAIR HOPKINS deferred to the Legislative Finance Division.
1:22:58 PM
ALEXEI PAINTER, Director, Legislative Finance Division,
Legislative Affairs Agency, stated that a designated fund could
be appropriated for any purpose.
1:23:20 PM
MS. WALLACE, not having a copy of the March 17 memo, referenced
the legal opinion in the February 11 memo. She stated that
recent litigation related to the sweep had not been concerned
about whether funds were dedicated or designated, rather the
issues were centered on whether the funds were available for
appropriation and whether the funds were in the general fund.
In respect to dedicated funds, she pointed out in recent
litigation the Alaska Supreme Court discussed whether the
permanent fund dividend was part of a dedicated or designated
fund.
1:25:06 PM
REPRESENTATIVE HANNAN requested the administration speak to
this.
1:25:30 PM
ANDY MILLS, Legislative Liaison, Department of Transportation
and Public Facilities, commented that in an early February
conference the governor's chief of staff referred to this type
of legislation as "conceptual." He expressed the understanding
that "from a conceptual standpoint, the administration does wish
to provide stability to the Alaska Marine Highway." He added
that, conceptually speaking, having these funds not subject to
the sweep, would support stability. In response to Chair
Hopkins, he expressed uncertainty concerning the issue's
progress.
1:26:43 PM
CHAIR HOPKINS noted that the March 17 memo was handed out to
committee members. He pointed out it relates that a dedicated
fund is a revenue source which is dedicated by law for a
specific purpose. Concurring with Ms. Wallace and Mr. Painter,
he stated that this would be a structure for placing money.
1:28:07 PM
CHAIR HOPKINS opened public testimony on HB 322, Version B.
After ascertaining there was no one who wished to testify, he
closed public testimony.
1:28:35 PM
REPRESENTATIVE HANNAN moved to report HB 322, Version 32-
LS1501\B, Marx, 2/23/22, out of committee with individual
recommendations and the accompanying fiscal notes.
1:28:53 PM
REPRESENTATIVE MCCABE objected.
1:29:01 PM
The committee took a brief at ease at 1:29 p.m.
1:29:32 PM
A roll call vote was taken. Representatives Drummond, Hannan,
Stutes, and Hopkins voted in favor of the motion to move CSHB
322, Version 32-LS1501\B, Marx, 2/23/22, out of committee with
individual recommendations and the attached fiscal notes.
Representatives McKay, McCabe, and Cronk voted against it.
Therefore, CSHB 322(TRA) was reported out of the House
Transportation Standing Committee by a vote of 4-3.