Legislature(2003 - 2004)
03/26/2004 09:01 AM Senate FIN
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* first hearing in first committee of referral
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CS FOR SENATE JOINT RESOLUTION NO. 3(JUD)
Proposing an amendment to the Constitution of the State of
Alaska relating to an appropriation limit and a spending
limit.
This was the sixth hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this legislation would result in a
Constitutional spending limit.
Amendment #4: This amendment deletes language in the committee
substitute, Version 23-LS0296\B on page one, line two as follows.
, and to deposits into the budget reserve fund
In addition, this amendment deletes all language on page two, line
30 through page three, line four of the Version "B" committee
substitute. The language being deleted reads as follows.
Sec. 2. Article IX, sec. 17 (c), Constitution of the State of
Alaska, is amended to read:
(d) The [IF AN APPROPRIATION IS MADE FROM THE BUDGET
RESERVE FUND, UNTIL THE AMOUNT APPROPRIATED IS REPAID, THE]
amount of money in the general fund available for
appropriation at the end of each [SUCCEEDING] fiscal year
shall be deposited in the budget reserve fund. The legislature
shall implement this subsection by law.
New Text Underlined [DELETED TEXT BRACKETED}
Furthermore, the amendment deletes language on page three, lines
nine through eleven of the committee substitute, version "B" as
follows.
…The 2004 amendment relating to deposits to the budget reserve
fund (art. IX, sec. 17(d) first applies at the end of the
fiscal year 2005 and applies thereafter.
Senator Dyson, the bill's sponsor, moved to adopt Amendment #4. He
stated that this amendment is being offered in response to a
question from Senator Hoffman regarding whether this legislation
violates the single subject rule, by specifying "in this
Constitutional amendment legislation" where the money would be
deposited.
Co-Chair Wilken objected for further clarification.
Senator Dyson explained that this amendment would delete language
that specified, "where any excess monies above the limit would be
deposited." As a result, he continued, the original Constitutional
language that specifies that excess funds would be deposited into
an interest bearing account would be retained. The original
language, he continued, provides the Legislature with the
flexibility to deposit those funds wherever they decided, to
include the Constitutional Budget Reserve (CBR) and the Statutory
Budget Reserve.
LUCKY SCHULTZ, Staff to Senator Fred Dyson, noted that this
amendment would eliminate the section in the Version "B" committee
substitute that referenced the deposit of funds into the CBR. He
shared that in order to avoid violating the single rule order, "the
decision was made to not encumber the resolution" with this CBR
issue.
Co-Chair Wilken understood therefore that the affect of the
amendment would be to remove the requirement that any excess funds
must be deposited into the CBR. Continuing, he stated that the
removal of this language would provide the Legislature the option
of depositing funds either into the CBR or the budget reserve.
Mr. Shultz summarized that were this amendment adopted, the
original CBR language would be unchanged. Furthermore, he stated,
the requirement that any draw from the CBR fund must be repaid,
would continue.
Co-Chair Wilken removed his objection.
There being no further objection, Amendment 4 was ADOPTED.
Amendment #3: This amendment inserts "and except as provided in (d)
and (e) of this section" after "section" in Section 1, Section 16
on page one, line six of the Version "B" committee substitute.
Furthermore, this amendment deletes all material in Version "B",
Section 16, subsection (d) on page two, lines 23-29 and replaces it
with the following.
(d) An appropriation that exceeds the appropriation limit
under this section may be made for any public purpose
identified in a declaration of emergency that is issued by the
governor as prescribed by law.
(e) If the governor declares that an extraordinary
circumstance exists, upon the affirmative vote of at least
two-thirds of the members of each house, this legislature may
adopt an appropriation that exceeds the appropriation limit
under this section to address the extraordinary circumstance.
The declaration shall identify the specific extraordinary
circumstance, specify the amount of each appropriation the
governor requests, and identify the time period during which
expenditures under each appropriation will be made.
Senator Dyson moved to adopt Amendment #3, and objected for
explanation.
Mr. Shultz explained that during previous Committee hearings on
this bill, there was disagreement as to whether extraordinary
circumstances and emergencies "should be lumped together." Upon
further review, he continued, the determination was that the
Governor should be able to declare an emergency "as he does now
without the necessity of having to convene the Legislature" in
order to acquire a two-thirds approval. Therefore, he continued,
this amendment would serve to separate the extraordinary
circumstance language from the emergency language and thereby allow
the Governor to declare an emergency, as currently allowed under
law. Furthermore, he stated, the extraordinary circumstances
language has been retained in that the Governor could declare an
extraordinary circumstances with the requirement that its
appropriation must be approved by a two-thirds vote of the
Legislature. This action, he declared, would provide the Governor
and the Legislature "with broad latitude" to address whatever
extraordinary circumstance might develop.
Co-Chair Green asked whether the Committee would be addressing, for
the record, the definition of what would be recognized as an
extraordinary circumstance.
Mr. Shultz stated that rather than identifying what would
constitute an extraordinary circumstance in this legislation, the
sponsor desires to allow the Governor and the Legislature to make
that determination "at the time."
Co-Chair Green voiced objection to the amendment.
Co-Chair Green removed her objection.
Co-Chair Wilken acknowledged that there is concern about the
definition of extraordinary circumstance.
Co-Chair Green reminded the Committee that, approximately four
years prior, there had been "terrible difficulty" in arriving at
the definition of an emergency and the declaration of an emergency.
Therefore, she expressed her "concern that the term extraordinary
circumstances could be expanded to mean anything." She requested
that, before the Committee includes this language in any Statute,
further legal analysis be conducted, as there could be a variety of
interpretations. She asked whether other states' experiences in
this field could be provided.
Mr. Shultz noted that the State of Connecticut, which has similar
legislation in their Constitution, segregates emergencies and
extraordinary circumstances. Continuing, he identified the
limitations or "sidebars" that Connecticut has placed on
extraordinary circumstances, are limited to specifying that
"repayment of bonds, loans, or other forms of indebtedness" would
not be allowed under that definition.
Senator Dyson voiced that the amendment's language should be
included in the Legislation in order to allow the State to address
things "that are unforeseen at the present time:" to include "major
construction projects" that might be in the State's future that
might require the State to expand its infrastructure, train
craftsmen, and to expand the State's ability "to supervise and
regulate major projects." He stated that this amendment was
carefully drafted to separate the terms emergency and extraordinary
circumstances, in order for an emergency to be declared as
currently allowed, and in order to provide the Governor with the
ability to exceed the spending limit for an extraordinary
circumstances, provided the Legislature supports it with a two-
thirds vote.
Co-Chair Wilken stated that this language suggests that the
extraordinary circumstance determination must begin with the
Governor. He asked whether the Legislature could initiate it, and
in that case, how would the situation be coordinated with the
Governor, who may or may not support the Legislature's position.
Senator Bunde voiced the desire that both the Legislature and the
Governor could initiate the extraordinary circumstance action and
that both must agree before it advances. He reminded the Committee
of the unforeseen disruption caused by the Good Friday earthquake
in 1969 that required $900 million to address. Therefore, he
stated, substantial flexibility must be maintained in order to
continue the balance of power between the Governor and the
Legislature.
Co-Chair Wilken stated that such things as earthquakes and oil
spill disasters are not the concern being raised, as, he continued,
the concern arises "more from things that are probably less
important to the people but more important to the politics that
could get out of hand here."
Senator B. Stevens voiced agreement with the concept of providing a
mechanism for the Legislature to initiate extraordinary
circumstance action, and he declared that the Governor's ability to
veto Legislative action would provide the tool to agree or disagree
with that action. Therefore, he stated, the Governor's ability to
veto or support the Legislative initiative and the Legislature's
ability to approve or disapprove by way of the two-thirds vote
requirement would provide the balance of power.
Senator Dyson asked that thought be given to the mechanism through
which the Legislature could initiate extraordinary circumstance
action.
CHERYL FRASCA, Director, Office of Management and Budget, Office of
the Governor, observed that the Legislature would be able to
indicate their wishes regarding a Governor's extraordinary
circumstance initiative by their lack of or support by a two-thirds
vote.
Senator Dyson asked Ms. Frasca her opinion in regards to whether
the Legislature should be able to declare an extraordinary
circumstance.
Ms. Frasca responded that she would check with the Department of
Law; as she noted, an issue could result were the Legislature's
declaration in the form of a resolution, as the Governor is not
permitted to veto a resolution.
Senator Dyson understood therefore, that while Senator B. Stevens
would be correct in that the Legislature could initiate a
resolution declaring an extraordinary circumstance and appropriate
funds in support of that resolution, the Governor could veto the
appropriation.
Senator Dyson moved to withdraw Amendment #3.
There being no objection, Amendment #3 was WITHDRAWN from
consideration.
AT EASE 9:41 AM / 9:44 AM
Amendment #5: This amendment, drafted to Version "B" deletes the
word "Reconsideration" in Section 30, page three, line seven and
replaces it with "Repeal."
In addition, Amendment #5 deletes "and applies thereafter" in
Section 30, page three, line nine.
Furthermore, Amendment #5 deletes all material in Section 30 (b) on
page three, lines 12- 17 and replaces it with "(b) Section 16 of
Article IX (appropriation limit) is repealed on July 1, 2009."
Senator Dyson explained that this amendment is offered for review
purposes only as it would result, if adopted, in "a significant
policy change."
Co-Chair Wilken reiterated that this amendment is for review
purposes and that it might be formally offered at a later time.
Senator Dyson concurred. He explained that this amendment would
provide a termination date for this legislation, "four years out,"
unless the Legislature provides for another Constitutional
amendment on a State election ballot. He stated that this approach
would provide a four-year window to observe how the legislation
performs. He noted that the citizens of the State would be provided
the ability to support the legislation, or a modified version of
the legislation at that time were the Legislature to support its
being offered for continuation.
Senator Dyson opined that a spending limit would be supported by
those voters who might not understand some of the issues that might
be negatively affected in the future by a unforeseen situation.
Continuing, he noted that in four years time, there might be a need
to modify the spending limit legislation, and he noted that as the
resolution is now written, it would be automatically placed on the
ballot, without the requirement for modification. He declared that
spending caps are popular with the voting public. The decision
regarding whether the legislation might require some modification
before it is again placed on the ballot should be, he attested, a
policy call made in this Committee.
Amendment #6: This amendment, drafted to Version "B," deletes the
word "Reconsideration" in Section 30 on page three, line seven and
replaces it with "Repeal."
In addition, Amendment #6 deletes "and applies thereafter" in
Section 30, page three, line nine.
Furthermore, Amendment #6 deletes all material in Section 30 (b) on
page three, lines 12-17 and replaces it with the following
language.
(b) On July 1, 20009, Section 16 of Article IX (appropriation
limit) is repealed and readopted as it read on January 1,
2003.
Senator Dyson stated that Amendment #6 is presented for Committee
review, in the same manner as Amendment #5. This amendment, he
continued, would repeal the legislation but would reinstitute the
spending cap that was put into effect in approximately 1982, which
he stated, some argue to have been ineffective. He stated that this
language would leave the Legislature with nothing and require that
"one-third of the budget be expended on capital."
Senator Dyson asked the Members to review these amendments and the
subsequent policy calls they might present.
Senator Dyson stated that the Legislative Finance Division would be
forthcoming with an additional amendment, as they have determined
that language in the bill pertaining to an "average in the formula"
does not do what was intended.
Ms. Frasca also noted that there would be another Legislative
Finance amendment that would address a duplication in services
issue.
Senator Dyson commented that he is "frustrated by the process but
absolutely delighted by the product" that is being developed. He
noted that similar legislation with "similar conclusions" is being
addressed in the House of Representatives.
The bill was HELD in Committee.
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