Legislature(1997 - 1998)
05/05/1998 07:30 PM House FIN
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SENATE BILL NO. 347
"An Act relating to the increase of an appropriation
item based on additional federal or other program
receipts."
DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND
BUDGET (OMB), OFFICE OF THE GOVERNOR, explained that SB 347
would change the "45 day rule" to a six month rule
depending on the Legislative Budget and Audit Committee
(LBA) approving the program. According to current statute,
from the time that OMB sends an appropriation to LBA, there
is 45 days for the Committee to review it for expenditures.
Mr. Spencer emphasized that the current system works well.
Mr. Spencer made reference to historical cases in which
that created a problem.
1. Sitka Airport;
2. Department of Fish & Game test fisheries
receipts;
3. Alaska Seafood Marketing Institute (ASMI)
expenditures;
4. Payment of low taxes; and the
5. Homer spit timing issue.
Mr. Spencer referenced the memo from Mike Greany,
Legislative Fiscal Analyst, in regards to the Legislature
becoming involved with the option to change the RPL "45 Day
Rule". He noted that the memo states that by moving a bill
midway through the Legislative Session, would give the
Legislature the authority to "disappropriate". Mr. Spencer
reiterated that the legislation would not be advantageous
to the State.
Representative Martin interjected that the legislation
would provide a safety value for the Legislature to have
better control of the total expenditures throughout any
year. Mr. Spencer pointed out that there are no general
fund program receipts, as the Legislature has restricted it
to federal receipts, designated receipts and EVOCS
receipts. Last year in Conference Committee, the EVOCS
receipts were inadvertently left out of the House version
and were then added back in the Senate version to
accommodate the situation. The Administration has stressed
that nothing contrary to the Legislature's intent is
occuring.
Representative Martin spoke to the controversy with the
EVOC receipts in which $50 to $100 million dollars existed
outside the Legislative Session for the Legislative Budget
and Audit Committee to spend. He pointed out that with
passage of the proposed legislation, LBA would be required
to come before the full legislature in order to fill
funding needs.
Mr. Spencer stated that the debate preceded the approval of
the appropriation. The Legislature knew that the
appropriation was happening with regards to the EVOC
concern. Representative J. Davies added that an agreement
was made between the federal government, the Legislature
and the Administration regarding how the Legislature should
be involved and the Legislature agreed that the legislative
involvement should be through the LBA Committee.
Representative J. Davies agreed that some of those
appropriations have been controversial, but that the
process should not be discarded.
Representative J. Davies commented that LBA deals with less
than 200 situations per year, and that less than 1% go
through the proposed process. He pointed out that the
process does work and that LBA's oversight has caused the
Administration to change course on a routine basis.
Representative G. Davis agreed that there did not appear to
be a problem with LBA unauthorized spending. He added that
if there were a problem, who ever created it would end up
paying if it were unacceptable to the Legislature.
(Tape Change HFC 98-156, Side 2).
JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, recounted the history of Section AS 37.07.080(h).
This section comes from a dispute that Governor Hammond had
with the Legislature over how to handle the spending of
anticipated federal receipts and other custodial and trust
receipts which the Governor believed was not part of the
State Treasury.
In 1975, the Legislature passed a statute which required
LBA approval for interim-type spending decisions. A long
discussion began between the Governor and the Legislature
which culminated in a lawsuit, Kelley versus Hammond. That
case went before Judge Stewart to address the issues in
dispute:
1. Whether federal receipts had to be appropriated
or not;
2. Whether the Legislature could delegate certain
lawmaking powers to the LBA Committee; and
3. Transfer between appropriations.
Mr. Baldwin continued, a stalemate was reached in the
Supreme Court. The Administration won on the ability to
delegate to the LBA Committee lawmaking powers to approve
budget revisions and the ability to approve transfers to
appropriations. The Legislature responded by taking away
the power to make appropriations. The Administration did
not accept a role for the LBA Committee to approve budget
revisions during the interim or the approval of
unanticipated federal or other custodial trust receipts.
At that time, the Governor and the Legislature agreed that
there must be a way to work out the problem. The Governor
agreed to wait while the Legislature passed a
constitutional amendment. The resolution was turned down
by a vote of the people. The resolution would have allowed
the Legislature to give lawmaking powers to the LBA
Committee to exercise during the interim. At that time
the Legislature became dissatisfied having no role for the
LBA Committee, and discussions continued as to whether the
case should be appealed. That decision resulted in the
statute currently before the Committee.
SB 347 was HELD in Committee for further consideration.
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