01/12/1994 01:35 PM House FIN

  HB 58     An  Act  relating  to   the  budget  reserve  fund                 
            established under  art. IX, sec.  17, Constitution                 
            of the State of Alaska.                                            
                                                                               
            HB   58   was   placed  into   Subcommittee   with                 
            Representative Hanley  as Chair  and with  members                 
            Representative Brown and Representative Larson.                    
  HOUSE BILL 58                                                                
                                                                               
       "An Act relating to the budget reserve fund established                 
       under art. IX,  sec. 17, Constitution  of the State  of                 
       Alaska."                                                                
                                                                               
  Co-Chair  Larson  referenced  the  two  HB  58  work  drafts                 
  included in Committee members packets  provided by the House                 
  Judiciary Committee and the House Finance Committee.                         
                                                                               
  JAMES  L. BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF                 
  LAW,  referenced  work  draft #8-LS0188\K,  CS  HB  58 (FIN)                 
  commenting  that the  purpose  of  that  draft would  be  to                 
  address issues  needing clarification  regarding the  Budget                 
  Reserve Fund.  The amendment  establishing the fund explains                 
  the specific terms  available while  the work draft  defines                 
  the source of money going into that fund.                                    
                                                                               
  Mr.  Baldwin  pointed  out,  currently, there  are  disputes                 
  regarding   the   provisions   and   definitions   of    the                 
  appropriations.   He  suggested establishing  a  statute  to                 
  define  the terms of the legislation as a way to address the                 
  interpretive concerns.                                                       
                                                                               
  Co-Chair Larson MOVED to  adopte work draft CS HB  58 (FIN),                 
  for  purposes  of  discussion.   She  asked  the differences                 
  between the proposed work draft and CS HB 58 (JUD).                          
                                                                               
  JOHN BITNEY, STAFF TO REPRESENTATIVE LARSON, explained  that                 
  the work draft changes pertain only  to Page 2, Lines 10-29,                 
  and  deal with appropriation language.  Representative Brown                 
  felt that CS HB  58 (JUD) language would address  the intent                 
  of the Committee more precisely.                                             
                                                                               
  JOE   THOMAS,  STATE   ACCOUNTANT,   DIVISION  OF   FINANCE,                 
  DEPARTMENT OF ADMINISTRATION, explained  the classifications                 
  of the  fixed tax  accounts which  are a  standard body  for                 
  accounting  principles used  in government.   Representative                 
  Brown  asked if  federal  funds  would  be excluded  in  the                 
  proposed language.   Mr. Baldwin assured the  Committee that                 
  the  proposed  language  would  not  exclude federal  funds.                 
  Representative  Navarre  stressed   concern  over   possible                 
                                                                               
                                2                                              
                                                                               
                                                                               
  litigation and abuse with the current language.                              
                                                                               
  Mr. Baldwin reiterated that access to the funds would not be                 
  restricted.   He felt  the  public had  not been  adequately                 
  advised  of   possible  consequences   resulting  from   the                 
  amendment.                                                                   
                                                                               
                                                                               
  (Tape Change, HFC 94-1, Side 2).                                             
                                                                               
  Committee members proceeded to discuss versions of  spending                 
  limit language within the Budget Reserve.  All House Finance                 
  Committee members agreed the language should be written more                 
  clearly, defining what is precisely available.                               
                                                                               
  Mr. Baldwin felt  caution should be  used in not making  the                 
  language too  specific as  proposed in  the House  Judiciary                 
  Committee  version.    Representative   Parnell  recommended                 
  limiting  the  interpretive  language to  a  specified  time                 
  frame.    Discussion followed  regarding the gap between the                 
  terms for "administrative proceedings" and "amount available                 
  for  appropriation".    Mr.  Baldwin  explained that  HB  58                 
  provides  evidence  of  the  interpretive  meaning   of  the                 
  Constitution and that it would carry weight in a court since                 
  it would provide direction by the Legislature.                               
                                                                               
  Co-Chair Larson placed HB 58 into a Subcommittee for further                 
  review with Representative Hanley as  Chair and with members                 
  Representative Brown and Representative Larson.                              
                                                                               
  Co-Chair Larson MOVED TO  WITHDRAW the MOTION that CS  HB 58                 
  (FIN) by the version  before the Committee.  There  being NO                 
  OBJECTION, it was so ordered.                                                
                                                                               
  Representative Brown asked  if the  Permanent Fund  Earnings                 
  Reserve Account would  be available for appropriation.   Mr.                 
  Baldwin explained  that  the statute  which establishes  the                 
  Permanent  Fund Earnings  Reserve Account  in the  Permanent                 
  Fund  is  a  "sinking  fund" for  the  purpose  of inflation                 
  proofing and  paying the dividend.  He  emphasized that fund                 
  would not be  available.  Representative Martin  added, that                 
  there  currently  is  a legal  opinion  from  Legal Services                 
  supporting the fact  that the account is  not a part  of the                 
  General Fund.                                                                
                                                                               
  HB 58 was HELD in Committee for further consideration.