Legislature(2009 - 2010)CAPITOL 120
02/03/2010 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HJR8 | |
| HB146 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HJR 8 | TELECONFERENCED | |
| + | HB 146 | TELECONFERENCED | |
| + | TELECONFERENCED |
HJR 8 - CONST. AM: APPROP. LIMIT/MINERAL REVENUE
1:08:01 PM
CHAIR RAMRAS announced that the first order of business would be
HOUSE JOINT RESOLUTION NO. 8, Proposing amendments to the
Constitution of the State of Alaska limiting appropriations from
certain mineral revenue, relating to the balanced budget
account, and relating to an appropriation limit.
1:10:34 PM
REPRESENTATIVE MIKE KELLY, Alaska State Legislature, sponsor,
explained that [if voters approve HJR 8's proposed changes to
Article IX, Section 16, of the Alaska State Constitution, a
maximum of] a five-year average - of the amounts from the four
preceding years and the estimated amount for the current year -
of the revenue from [mineral lease rentals, royalties, royalty
sale proceeds, federal mineral revenue sharing payments and
bonuses, and every State tax on minerals, mineral production, or
mineral transportation] would be available in any given year for
appropriation via a simple majority vote; at the end of each
fiscal year, any of that revenue not so appropriated would go
into a proposed balanced budget account, and could then be
transferred to the general fund (GF) via a simple majority vote
in years when that revenue did not amount to the aforementioned
five-year average; and any amount in the proposed balanced
budget account in excess of the combined amounts so appropriated
for the current fiscal year and the preceding fiscal year would
be transferred to the constitutional budget reserve fund (CBRF).
The proposed balanced budget account would receive funds when
the State has what he called "excess revenues," and would
provide funds "when we are short, for balancing the budget," he
added.
1:13:47 PM
DEREK MILLER, Staff, Representative Mike Kelly, Alaska State
Legislature, on behalf of the sponsor, Representative Kelly,
added that [if HJR 8 is passed by the legislature and] its
proposed changes to the Alaska State Constitution are approved
by the voters in 2010, it would apply to appropriations made in
fiscal year 2012 (FY 12), and every year thereafter. Referring
to a PowerPoint presentation, he noted that under existing
Article IX, Section 16, of the Alaska State Constitution, the
appropriation limit is $2.5 billion plus adjustments for changes
in population and inflation; this was estimated to be
approximately $7.9 billion in FY 08, and approximately $8.3
billion in FY 09. These estimates are far higher than the
budgets that actually passed the legislature in those years. He
then offered his understanding that establishment of the CBRF
[Article IX, Section 17, of the Alaska State Constitution] was
another attempt to control State spending, and mentioned that
accessing the CBRF requires an affirmative three-fourths vote.
MR. MILLER referred to charts included in his PowerPoint
presentation that illustrated inflation-adjusted GF spending
from FY 90 through FY 09; inflation-adjusted GF spending from FY
90 through FY 09 compared with actual GF spending; inflation-
adjusted GF spending from FY 90 through FY 09 compared with
actual GF spending and total GF revenue including non-mineral-
related revenue; and inflation-adjusted GF spending from FY 00
through FY 10 compared with actual GF spending, total GF revenue
including non-mineral-related revenue, and the amounts that
would have been available for appropriation had HJR 8's proposed
changes to the Alaska State Constitution been in effect since
FY 00. He then, in part in response to questions, reiterated
points made by the sponsor during his explanation of the HJR 8,
and assured the committee that HJR 8's proposed changes to the
Alaska State Constitution would not affect the Alaska permanent
fund - either dividends, principal, or earnings - or [monies
related to the Amerada Hess litigation], and that the proposed
balanced budget account would not be subject to what he referred
to as the CBRF "sweep" [outlined in Article IX, Section 17(d),
of the Alaska State Constitution].
MR. MILLER then offered his understanding that a chart in his
PowerPoint presentation provides an estimate of what the
proposed five-year-averaged appropriation limit would have been
for FY 10 had HJR 8's proposed changes to the Alaska State
Constitution already been in effect. In response to a question,
he indicated that funds in the proposed balanced budget account
would not be limited with regard to what they could be
appropriated for.
REPRESENTATIVE KELLY concurred. In response to another
question, he indicated that HJR 8's proposed changes to the
Alaska State Constitution would not address any of the perceived
problems currently associated with the CBRF's appropriation
requirement of an affirmative three-fourths vote, though in some
years, the proposed changes might mitigate the need to
appropriate from the CBRF.
MR. MILLER, referring to his PowerPoint presentation, remarked
that HJR 8's proposed changes to the Alaska State Constitution
would encourage a better and simpler budgeting system than
exists now, would avoid problems with statutory appropriation
constraints, would allow the voters to weigh in on the issue,
and would accommodate any future approach that might be taken of
funding government with Alaska permanent fund earnings.
The committee took an at-ease from 1:27 p.m. to 1:28 p.m.
REPRESENTATIVE KELLY, in response to comments, reiterated points
he'd made earlier in explanation of HJR 8.
1:32:06 PM
TAMARA COOK, Director, Legislative Legal and Research Services,
Legislative Affairs Agency (LAA), in response to questions,
explained that the language on page 1, lines 8-9, of HJR 8 that
reads, "mineral lease rentals, royalties, royalty sale proceeds,
federal mineral revenue sharing payments and bonuses" can also
be found in Article IX, Section 15, of the Alaska State
Constitution pertaining to the Alaska permanent fund, and
surmised, therefore, that the Alaska Court System and the
executive branch already have some experience in construing that
language in terms of which sources are dedicated under that
constitutional provision. Language on page 1, lines 9-10, of
HJR 8 that reads, "every State tax on minerals, mineral
production, or mineral transportation" would be new and thus not
currently addressed by Article IX, Section 15, of the Alaska
State Constitution.
MS. COOK, in terms of potential constitutional problems, relayed
that although HJR 8 does satisfy the single subject rule as
upheld in Bess v. Ulmer - in terms of being just an amendment as
opposed to a revision - and probably satisfies the court's
stipulation that a proposed constitutional amendment be
relatively simple and easy to comprehend - regardless that HJR 8
is somewhat complex - there is a possibility that it would
violate the court's stipulation that a proposed constitutional
amendment not seriously alter a basic governmental function of
one of the major branches of government, since it would be hard
to argue that the power of appropriation is anything other than
a very basic power of the legislative branch of government.
Therefore, to the extent that HJR 8 would successfully restrict
the power of appropriation - and that being its actual goal, she
pointed out - the question then becomes whether the court, in
any ensuing challenge, would find that HJR 8 too painfully
erodes a fundamental power of the legislative branch of
government.
MS. COOK, in response to a question, said she is not in a
position to say whether HJR 8 would be overturned by the court;
instead, she is merely relaying that HJR 8 is susceptible to
challenge based on the notion that the power of the legislature
to appropriate money is such a significant power that it ought
not to be eroded via a constitutional amendment. She noted,
though, that there were several constitutional amendments
adopted before Bess which did radically erode the legislative
power of appropriation. These include the creation of the
Alaska permanent fund - which placed a great deal of money
outside of the appropriation process, indefinitely, forever, as
to the balance; the creation of the CBRF, which imposes a higher
vote level in order to reach the money in most situations; and
the existing constitutional appropriation limit, which some
purport to be ineffective because it's set too high.
MS. COOK said that although it could, perhaps, be argued that
those three examples are more dramatic, in monetary terms, than
HJR 8, she is unable to say that that fact, in and of itself,
could give a person a great deal of reassurance that HJR 8 would
not be looked at very carefully by the court, but, again, she is
not predicting that the court would necessarily overturn it.
Rather, there is a possibility that the court, as it partially
did in Bess, might simply slightly rewrite HJR 8 before it's
voted on by the people, though that might not be the case
either, and the court might instead just decide not to address
the question until after it's approved by the voters.
1:43:27 PM
DANA L. OLSON indicated a concern that HJR 8's language
regarding [mineral lease rentals, royalties, royalty sale
proceeds, federal mineral revenue sharing payments and bonuses,
and every State tax on minerals, mineral production, or mineral
transportation] might be interpreted in such a way that it would
affect whether she could sell the oil and gas that she owns.
CHAIR RAMRAS closed public testimony on HJR 8.
MS. COOK, in response to questions, provided comments regarding
the Alaska Permanent Fund Corporation (APFC), the Alaska
permanent fund, and the permanent fund dividend (PFD).
REPRESENTATIVE HERRON asked whether any attempt has been made to
set the provisions of HJR 8 out in statute rather than in the
Alaska State Constitution.
MR. MILLER said not that he's aware of, and indicated that he'd
have to research the issue further.
REPRESENTATIVE HOLMES asked whether the calculation outlined in
HJR 8 would be using fiscal years or calendar years.
MS. COOK said it would be using calendar years: specifically,
the calculation would be using the amounts received during the
four full calendar years immediately preceding the current
fiscal year - so amounts received during the portion of the past
calendar year that is part of the current fiscal year would not
be included - and the estimated amount expected to be received
during the calendar year that's part of the current fiscal year.
2:01:23 PM
DAVID TEAL, Legislative Fiscal Analyst, Legislative Finance
Division, Alaska State Legislature, in response to comments and
questions, explained that using calendar years in HJR 8's
proposed calculation is intended to provide the legislature with
as much accurate information as possible so that the legislature
can determine precisely what amount would be available for
appropriation. The purpose of HJR 8 is to smooth out
volatility, in that any peak-income years would be averaged out,
as would any low-income years; the legislature would not be
constrained in any given year by the amount of revenue received
in that particular year.
CHAIR RAMRAS offered his understanding that HJR 8 is also
intended to cap spending.
MR. MILLER concurred.
MR. TEAL pointed out, however, that HJR 8 would not have that
effect, because the legislature could still access the CBRF with
an affirmative three-fourths vote. House Joint Resolution 8
would limit spending but would not cap it; under HJR 8, spending
would be constrained by revenue - albeit revenue averaged over
several years - whereas currently, spending is constrained by
both revenue and the available balance. In theory, the proposed
balanced budget account would never have very much in it,
because funds would be placed in it in peak years, but then
taken out of it in lean years, and, over time, the legislature
would simply spend everything that's available to it from that
account. He characterized the current spending limit as an
arbitrary number unrelated to revenue or what's available, and
opined that if the goal is to have a balanced budget, then any
such limit must be related to the amount of revenue available to
the legislature.
REPRESENTATIVE GRUENBERG, in response to an earlier question,
referred to the language on page 2, lines 9-10, of HJR 8 that
reads, "Money may not be appropriated from the account", and
offered his understanding that such a limitation on the
legislature's appropriation power must come from the Alaska
State Constitution, not from statute.
MS. COOK concurred.
REPRESENTATIVE GRUENBERG observed that the language on page 2,
lines 12-13, of HJR 8 that reads, "Section 7 of the this article
does not apply to money deposited into, retained in, or
transferred from the balanced budget account" is similar to the
language contained in Article IX, Section 17(a), of the Alaska
State Constitution that reads, "Section 7 of the this article
does not apply to deposits made to the fund under this
subsection". However, there is no such similar language in
Article IX, Section 15, of the Alaska State Constitution
pertaining to the Alaska permanent fund. Article IX, Section 7,
of the Alaska State Constitution, he ventured, basically
prohibits dedicated funds. He questioned, therefore, whether an
amendment to Article IX, Section 15, of the Alaska State
Constitution - stipulating that Section 7 does not apply to
Section 15 - would be in order.
2:10:23 PM
MS. COOK explained that such an amendment would not be necessary
because Article IX, Section 7, of the Alaska State Constitution
contains language stating that it does not apply to Article IX,
Section 15. In response to comments, she relayed that as the
drafter of HJR 8, she chose not to add an amendment to Article
IX, Section 7, of the Alaska State Constitution stipulating that
it wouldn't apply to proposed Article IX, Section 16; she
instead chose to imbed the exemption from Section 7 directly
into proposed Section 16, whereas the person drafting the
language currently in Section 15 pertaining to the Alaska
permanent fund chose the other approach, that of amending
Section 7.
MR. TEAL and MS. COOK then briefly responded to questions
unrelated to HJR 8.
CHAIR RAMRAS offered his belief that HJR 8 complies with the
Alaska State Constitution.
2:18:01 PM
REPRESENTATIVE HOLMES relayed that she would like to know more
about HJR 8 before she would be comfortable moving it from
committee.
REPRESENTATIVE HERRON agreed with Chair Ramras, characterized
the proposed balanced budget account as merely a miniature CBRF,
and indicated that he would be amenable to moving HJR 8 from
committee.
REPRESENTATIVE GRUENBERG characterized HJR 8's proposed change
to the Alaska State Constitution as fairly serious.
REPRESENTATIVE HOLMES, in response to a question, reiterated
that she would like to know more about HJR 8 before moving it
from committee, and so would prefer that the bill be held over.
CHAIR RAMRAS relayed that HJR 8 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 HB 146 ver A.pdf |
HJUD 2/3/2010 1:00:00 PM HL&C 1/25/2010 3:15:00 PM |
HB 146 |
| 02 HB146 Sponsor Statement.pdf |
HJUD 2/3/2010 1:00:00 PM HL&C 1/25/2010 3:15:00 PM |
HB 146 |
| 03 HB146 Sectional Analysis.pdf |
HJUD 2/3/2010 1:00:00 PM HL&C 1/25/2010 3:15:00 PM |
HB 146 |
| 04 HB146 Public Testimony(1).pdf |
HJUD 2/3/2010 1:00:00 PM HL&C 1/25/2010 3:15:00 PM |
HB 146 |
| 05 HB146 Fiscal Note Dept of Law.pdf |
HJUD 2/3/2010 1:00:00 PM HL&C 1/25/2010 3:15:00 PM |
HB 146 |
| 01 Sponsor Statement HJR 8.pdf |
HJUD 2/3/2010 1:00:00 PM |
|
| 02 HJR8 v A.pdf |
HJUD 2/3/2010 1:00:00 PM |
|
| 03 HJR008-1-1-040709-GOV-Y.pdf |
HJUD 2/3/2010 1:00:00 PM |
|
| 04 State Affairs QA.pdf |
HJUD 2/3/2010 1:00:00 PM |
|
| 05 HJR 8 House State Affairs.pdf |
HJUD 2/3/2010 1:00:00 PM |
|
| 06 HJR 8 Backup.pdf |
HJUD 2/3/2010 1:00:00 PM |