Legislature(2023 - 2024)GRUENBERG 120
02/27/2023 01:30 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HJR2 | |
| HB38 | |
| HB66 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HJR 2 | TELECONFERENCED | |
| += | HB 38 | TELECONFERENCED | |
| *+ | HB 66 | TELECONFERENCED | |
| + | TELECONFERENCED |
HJR 2-CONST. AM: APPROP LIMIT
1:32:11 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."
1:32:47 PM
BERNARD AOTO, Staff, Representative Will Stapp, Alaska State
Legislature, responded to unanswered questions from the previous
hearing on HJR 2, on behalf of Representative Stapp, prime
sponsor. In response to a hypothetical scenario involving the
federal bureau stopping economic analysis on gross domestic
product (GDP), he indicated that the bill sponsor would welcome
an amendment proposing a different way to gather GDP data other
than the federal bureau, so as not to tie the Constitution of
the State of Alaska to a specific entity. He continued by
correcting a misstatement, clarifying that inflation was tied to
the current proposal. He explained that GDP was a holistic
calculation from several economic drivers, including inflation;
therefore, adjustments to inflation would impact GDP. In
response to a question regarding the timeline of GDP
transmittal, he relayed that the current timeframe, as proposed
in HJR 2, would make it difficult for the Office of the Governor
and the Legislative Finance Division (LFD), [Legislative Affairs
Agency (LAA)], to make the appropriate calculations. For that
reason, he suggested changing the current language from "fiscal
years" to "calendar years," making it "the five previous fiscal
years." Responding to a question about capital projects, he
clarified that capital spending was included under the proposed
spending cap. The only exceptions on capital spending, he said,
was on items with a federal match or those paid with general
obligation (GO) bonds. In response to questions regarding
allowable spending via bonding, he cited a court case referenced
in a document that had been distributed to committee members.
CHAIR VANCE passed the gavel to Vice Chair Allard.
1:36:54 PM
REPRESENTATIVE VANCE moved to adopt Amendment 1 to HJR 2,
[labeled 33-LS0294\A.7, Marx, 2/25/23], which read:
Page 1, line 16, through page 2, line 1:
Delete "federal bureau responsible for economic
analysis according to federal"
Insert "state government as prescribed by"
REPRESENTATIVE EASTMAN objected for the purpose of discussion.
1:37:10 PM
REPRESENTATIVE VANCE explained that Amendment 1 would provide
autonomy to the state by removing references to the federal
government in the state constitution. Specifically, the
proposed amendment would remove the language referencing
"federal bureau" on page 1, line 16, through page 2, line 1, of
HJR 2, and replace it with "state government as prescribed by".
VICE CHAIR ALLARD asked whether the bill sponsor considered this
a friendly amendment.
MR. AOTO answered yes.
1:37:50 PM
REPRESENTATIVE EASTMAN removed his objection. There being no
further objection, Amendment 1 to HJR 2 was adopted.
1:38:16 PM
The committee took a brief at-ease.
1:38:58 PM
REPRESENTATIVE VANCE moved to adopt Amendment 2 to HJR 2,
[labeled 33-LS0294\A.8, Marx, 2/25/23], which read:
Page 2, line 2:
Delete the first occurrence of "fiscal"
Insert "calendar"
REPRESENTATIVE EASTMAN objected for the purpose of discussion.
1:39:05 PM
REPRESENTATIVE VANCE stated that Amendment 2 would change
"fiscal" to "calendar" on page 2, line 2, of HJR 2 in response
to the concern regarding the timeliness of the GDP data
transmittal to both the legislature and the governor for
consideration of the spending cap. This change would make it so
the calculation would be available during the crafting of the
budget.
VICE CHAIR ALLARD asked whether the bill sponsor considered this
a friendly amendment.
MR. AOTO answered yes.
1:40:21 PM
REPRESENTATIVE EASTMAN asked how much time the legislature would
have to craft the budget upon receiving the GDP data, should
Amendment 2 pass.
1:41:20 PM
ROB CARPENTER, Deputy Director, LFD, LAA, considered the FY 24
budget as an example. He explained that should Amendment 2
pass, the calendar year before the prior fiscal year would be
2021, so the relevant data would be from years 2017 to 2021,
which was readily available to both the governor and the
legislature through the entirety of session.
REPRESENTATIVE GRAY asked whether Amendment 2 addressed LFD's
unanswered questions about the bill.
MR. CARPENTER confirmed that it would clarify the intent of the
bill and allow the division to make firm calculations.
1:43:36 PM
REPRESENTATIVE EASTMAN removed his objection. There being no
further objection, Amendment 2 to HJR 2 was adopted.
1:43:49 PM
The committee took a brief at-ease.
[Vice Chair Allard returned the gavel to Chair Vance.]
1:44:20 PM
CHAIR VANCE invited final comments on HJR 2, as amended.
1:45:05 PM
REPRESENTATIVE GROH applauded the bill sponsor's desire for
stability; however, he pointed out that reforming the
constitutional spending cap would require amending the state
constitution. For that reason, he urged the legislature to
exercise caution, as the consequences of getting it wrong could
be disastrous. He shared his understanding that provided
testimony had indicated that HJR 2 was not the right reform. He
recalled that the University of Alaska Anchorage (UAA) professor
of economics, Kevin Barry, had stated that a GDP-based spending
cap would be an economic trap during times of prolonged downturn
and prevent the state from recovering. Further, he stated that
the proposed legislation did not adequately address the two
items that history had shown to increase the most when revenue
spikes occurred: capital spending and permanent fund dividend
(PFD) appropriations. Additionally, he opined that forging
ahead with the spending cap would be counterproductive to the
recommendations from the Fiscal Policy Working Group. He
advised the committee not to mistake his comments as opposition
to spending cap reform, as he would be in favor of
constitutionalizing the percent of market value (POMV) formula
or creating a revised formula based on population and inflation.
For those reasons, he said he would be offering a recommendation
of "do not pass" unless substantially amended on HJR 2.
REPRESENTATIVE EASTMAN suspected that the proposed formula may
not account for changes to inflation that could occur during
"the five previous calendar years." Nonetheless, he
acknowledged that the existing constitutional spending limit was
not designed to be functional. He argued that the political
pressure to spend what was available would always be present,
adding that it was appropriate to implement checks and balances
against that pressure to limit spending to a reasonable amount.
He opined that HJR 2 did not adequately account for inflation
and cautioned against making changes to the constitution that
may not work.
1:50:32 PM
REPRESENTATIVE CARPENTER pointed out that this was only the
first step in the committee process for the proposed
legislation.
CHAIR VANCE added that she had intentionally avoided considering
the fiscal impacts of HJR 2 in the House Judiciary Standing
Committee, as that was the focus of other committees of referral
in which anticipated further dialogue on the proposed
legislation.
1:51:24 PM
REPRESENTATIVE ALLARD moved to report HJR 2, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHJR 2(JUD) was
reported out of the House Judiciary Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR 2 - Amendment 1 (A.7).pdf |
HJUD 2/27/2023 1:30:00 PM |
HJR 2 |
| HJR 2 - Amendment 2 (A.8).pdf |
HJUD 2/27/2023 1:30:00 PM |
HJR 2 |
| HB 38 - Amendment 1 (A.6).pdf |
HJUD 2/27/2023 1:30:00 PM |
HB 38 |
| Weiss v. State 939 P.2d 380 (Alaska 1997).pdf |
HJUD 2/27/2023 1:30:00 PM |
|
| Forrer v. State 471 P.3d 569 (Alaska 2020).pdf |
HJUD 2/27/2023 1:30:00 PM |
|
| Response to Judiciary Committee.pdf |
HJUD 2/27/2023 1:30:00 PM |
|
| Alaska Dept. of Health Drug Facts (07-25-22).pdf |
HJUD 2/27/2023 1:30:00 PM |
|
| HB 66 - Transmittal Letter.pdf |
HJUD 2/27/2023 1:30:00 PM |
HB 66 |
| HB 66 - v.A.PDF |
HJUD 2/27/2023 1:30:00 PM |
HB 66 |
| HB 66 - Sectional Analysis.pdf |
HJUD 2/27/2023 1:30:00 PM |
HB 66 |
| HB 66 - Highlights Document.pdf |
HJUD 2/27/2023 1:30:00 PM |
HB 66 |