Legislature(1993 - 1994)
02/22/1993 01:40 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATOR TAYLOR introduced SB 56 (ADMINISTRATION OF BUDGET RESERVE FUND) and invited REPRESENTATIVE KAY BROWN and SENATOR RANDY PHILLIPS to review the bill. Number 318 REPRESENTATIVE BROWN explained her work on the legislation, which would address what money should go into the Constitutional Budget Reserve Fund. She said the legislation was approved by the voters in 1990, but she said there had been a struggle to interpret the term, "administrative proceeding." REPRESENTATIVE BROWN reviewed Section 1 in the State Affairs committee substitute, which deals with what happens when there is termination of an administrative proceeding for purposes of deciding where money should go into the fund. REPRESENTATIVE BROWN referred the committee to page 2, subsection (b), which deals with money that would arrive in the future as the result of a proceeding and would provide for an agreement administering money in the future - and would not be captured by the reserves. REPRESENTATIVE BROWN explained under what conditions money could be spent from the reserves, and addressed in language beginning on page 2, line 7. She said the same sources would be examined in one year to determine what would be available for appropriation, and she explained the language specifies that "Available for Appropriation" does not include federal funds, money in the earnings reserve of the permanent fund, or money held in trust for a particular purpose. REPRESENTATIVE BROWN quoted the bill as to how money available for appropriation for the current fiscal year is money in the general fund, including money from lapsed appropriations, that has not been appropriated during a previous fiscal year during any fiscal year or to any special fund or account. REPRESENTATIVE BROWN discussed the provisions under which money from the Budget Reserve Account could be spent and the current attorney general's opinion, which would prevent capture of specific funds in the account. Number 373 SENATOR PHILLIPS gave some history of the constitution amendment passed on the floor of the House in 1990, and he stressed there was plenty of public records and legislative intent that indicated all money from back taxes from oil and gas should be placed in the Constitutional Budget Reserve Fund. He said the vote was 70% in favor of the constitutional amendment, and was clearly the intent that all the back taxes should be placed in the Constitutional Budget Reserve Fund - not by the interpretation of the attorney general. SENATOR PHILLIPS explained how and why SB 113 would place the money from the latest settlement money in the Constitutional Budget Reserve Fund. SENATOR HALFORD questioned whether the bill dealt with the existing $680 million settlement. Number 408 REPRESENTATIVE BROWN claimed there was more money at stake, listed some other settlements, and expressed her frustration at their inability to get a clear understanding from the administration as to how much money received should be in the Constitutional Budget Reserve Fund. REPRESENTATIVE BROWN outlined a problem with conflicting numbers between the Legislative Budget and Audit Committee, with the administration giving a much lower number. She explained this was in addition to new money to come, and she suggested the legislation, if made retroactively, could capture a great deal more money in the account. Number 452 SENATOR HALFORD said it was difficult to make an ideological argument, and delay the effective date. REPRESENTATIVE BROWN said it was a practical argument in light of the position by the administration not to put any of the settlement money in the budget reserve account, and she discussed their efforts to reinstate the interpretation by the legislature. SENATOR PHILLIPS differed from REPRESENTATIVE BROWN in that he wanted to make the legislation retroactive as mentioned by SENATOR HALFORD. He said REPRESENTATIVE BROWN had asked for an audit, which the Budget and Audit Committee had granted, to find out how much money is in the account. SENATOR TAYLOR led a discussion with SENATOR HALFORD and SENATOR PHILLIPS on the retroactive effective date, filing a suit, vetoing the bill, statute law, Catch 22, and a possible Superior Court decision. SENATOR HALFORD outlined a scenario that could put the legislature on the wrong side of the argument and might precipitate a special session as accomplices in the wrong. SENATOR PHILLIPS suggested passing a resolution directing Legislative Budget and Audit to pursue a lawsuit, and SENATOR TAYLOR gave some options that might deny the money to the administration. TAPE 93-17, SIDE A Number 001 SENATOR TAYLOR thought they might be able to persuade the governor through resolutions, legislation such as SB 56, over-riding possible vetoes, or bring litigation. He gave his preference as the retroactive clause, and expressed some concern at the generalized meaning of the words "past due," on page 1, line 10 and 13. REPRESENTATIVE BROWN explained, under present statute, taxes are due when the assessment notice is sent, with a 60 day period where conferences can be requested, and she explained possible litigation for past due taxes. SENATOR TAYLOR expressed concern that sending out a notice of the amount of taxes due is an executive function, a function abused in the past because there hasn't been proper auditing. Number 064 REPRESENTATIVE BROWN agreed the auditors have a great deal of control over the whole process, but she said the legislature was barely staying ahead of the Statue of Limitations in the tax collection function, and she suggested a way to become more current on the audits. SENATOR TAYLOR suggested ways to motivate the administration by changing the Statute of Limitations. REPRESENTATIVE BROWN suggested a course of action for the coming year, but SENATOR HALFORD objected to the definition of "available for appropriation," because it is implied in the constitution. SENATOR TAYLOR thought the only alternative would be to go to the Supreme Court to ask for some definition. REPRESENTATIVE BROWN had some problems with an opinion from the Legislative Counsel limiting access to the Constitutional Budget Reserve Fund. SENATOR TAYLOR noted representation from the Attorney General's office, and asked ATTORNEY GENERAL JAMES BALDWIN if he wanted to testify for the record, since there presently was not a quorum. Number 171 MR. BALDWIN wanted to testify on a couple of points, and he gave his view of past legislative history, including the House being unhappy with the interpretation from the Department of Law. He said they had agreed to arrive at a legislative definition, based on some research from the California Supreme Court placing heavy weight on statutes interpreting a constitutional amendment there. He offered to provide the committee citations from two cases from California, which allows constitutional provisions by the legislature to legislate in a particular area. In this case, he thought there needed to be a sharper definition for some of the fuzzier concepts in the amendment. MR. BALDWIN said they were attempting to work with the Legislative Budget and Audit Committee to come up with an approach to the definitions. He claimed their opinion was correct in the interpretation of "administrative proceedings," and expressed pleasure at the effective date as a compromise, which was clouded by the British Petroleum compromise. MR. BALDWIN reviewed the procedures for putting money into the account and taking it out. He expressed his preference for working on how the legislature take the money out of the account, and he noted the key language on page 2, lines 8 through 16 and lines 11 through 14. He spoke of possible accommodations in working with REPRESENTATIVE BROWN. He criticized the bill for considering what isn't available for appropriations, as a way of defining what is available for appropriation. MR. BALDWIN expressed some fears in relation to the Mental Health Trust Funds, and SENATOR HALFORD asked about the Science and Technology Endowment. He said their approach was not to deplete the statutory funds before having access to the budget reserve fund, but he claimed they had a more positive approach. Number 261 MR. BALDWIN discussed research material from media reports and voter information, and he promised the committee some wording to assist in changing lines 11 through 14 of page 2. SENATOR TAYLOR said he had no further schedule on the bill, but would like to have MR. BALDWIN'S amendments before the end of the week to be circulated to the two prime sponsors. He promised to bring the bill to committee for further work, and he wanted an amendment on the effective date. He expressed appreciation to MR. BALDWIN for his work. SENATOR HALFORD reviewed the interpretation and suggested there was more room in defining "revenue available for appropriation." He approved of the most conservative view of the legislation.
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