Legislature(2013 - 2014)BELTZ 105 (TSBldg)

03/31/2014 01:30 PM Senate JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 284 COMPACT FOR A BALANCED BUDGET TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
= HB 47 INJUNCTION SECURITY: INDUSTRIAL OPERATION
Moved CSHB 47(JUD) Out of Committee
              HB 284-COMPACT FOR A BALANCED BUDGET                                                                          
                                                                                                                                
1:55:12 PM                                                                                                                    
CHAIR   COGHILL  reconvened   the  meeting   and  announced   the                                                               
consideration  of  HB 284.  "An  Act  relating to  an  interstate                                                               
compact  on  a  balanced  federal budget."  This  was  the  first                                                               
hearing.                                                                                                                        
                                                                                                                                
1:56:00 PM                                                                                                                    
REPRESENTATIVE  WES  KELLER,  Alaska  State  Legislature  Juneau,                                                               
Alaska, sponsor  of HB 284,  introduced the bill. He  delivered a                                                               
short PowerPoint  to illustrate  how the bill  uses Article  V of                                                               
the U.S. Constitution  to propose an interstate  compact to amend                                                               
the  U.S.  Constitution to  require  a  balanced budget.  Article                                                               
provides two ways to amend  the constitution: whenever two-thirds                                                               
of both  houses deem  it necessary, or  when the  legislatures of                                                               
two  thirds   of  the  states   call  a  convention   to  propose                                                               
amendments. The  amendments are ratified  by the  legislatures of                                                               
three fourths of  the states, or by conventions  in three fourths                                                               
of the sates.                                                                                                                   
                                                                                                                                
He  noted  the  organizations  working   on  a  compact  include:                                                               
ConventionofStates.com,        Mr.        Vernon        Assembly,                                                               
citizensinitiative.com,  reaganproject.com,  and bba4usa.org.  He                                                               
highlighted   that  HB   284  includes   the  amendment   in  the                                                               
legislation, describing it as a  belts and suspenders approach to                                                               
the Convention of States.                                                                                                       
                                                                                                                                
REPRESENTATIVE KELLER discussed  the following sectional analysis                                                               
for HB 284:                                                                                                                     
                                                                                                                                
                                                                                                                                
     Section 1,  Article I: Declaration of  Policy, Purpose,                                                                  
     and Intent of Compact  for a Balanced Budget Amendment.                                                                    
     All states  adopting the compact  agree to be  bound by                                                                    
     its provisions.                                                                                                            
                                                                                                                                
     Article II, Sections 1-6: Definition of terms.                                                                           
                                                                                                                                
     Article II,  Section 7:  Provisions of  Balanced Budget                                                                  
     Amendment (BBA)                                                                                                          
     Section  1:  Total  government  outlays  cannot  exceed                                                                  
     total  government  receipts  except for  the  exclusive                                                                    
     debt financing option allowed in the BBA.                                                                                  
     Section 2: Authorized debt of  the United States cannot                                                                  
     exceed 105% of the  country's outstanding debt the date                                                                    
     the  BBA  is  enacted. Authorized  debt  cannot  exceed                                                                    
     established threshold except as provided in Section 3.                                                                     
     Section 3:  Congress may  only increase  the authorized                                                                  
     debt  (Sec.  2) only  upon  the  approval of  a  simple                                                                    
     majority  of  the  fifty states.  If  approval  is  not                                                                    
     achieved within  sixty days, the  Congressional request                                                                    
     is deemed  disapproved and the authorized  debt remains                                                                    
     unchanged. Explicitly prohibits  raising the debt limit                                                                    
     by a quid  pro quo trade of  increased federal spending                                                                    
     in the states.                                                                                                             
     Section  4: When  the outstanding  debt exceeds  98% of                                                                  
     the limit  established in Section  2, the  President of                                                                    
     the United States is required  to enforce the 105% debt                                                                    
     limit   by   designating  specific   expenditures   for                                                                    
     impoundment. Such  cuts become effective  within thirty                                                                    
     days unless Congress designates  other cuts of the same                                                                    
     or  greater amount.  Failure by  the  President of  the                                                                    
     United  States to  designate the  required  cuts is  an                                                                    
     impeachable  misdemeanor. Any  incurred or  issued debt                                                                    
     exceeding the Sec. 2 105% threshold is void.                                                                               
     Section 5: Congress may not  issue new or increased tax                                                                  
     revenue  without an  affirmative two-thirds  votes each                                                                    
     from  the House  of  Representatives  and Senate.  This                                                                    
     restriction does not apply to  enactment of a sales tax                                                                    
     provided that  1) the proposed tax  completely replaces                                                                    
     all existing  federal income taxes  or 2)  provides for                                                                    
     the   reduction  or   elimination   of  an   exemption,                                                                    
     deduction, or credit under  an existing general revenue                                                                    
     tax.                                                                                                                       
     Section   6:   Defines  "debt,"   "outstanding   debt,"                                                                  
     "authorized debt," "total outlays  of the government of                                                                    
     the United  States," total  receipts of  the government                                                                    
     of  the  United  States," "impoundment,"  and  "general                                                                    
     revenue tax."                                                                                                              
     Section 7:  The Balance  Budget Amendment  takes effect                                                                  
     immediately  upon  ratification.   Congress  may  enact                                                                    
     legislation needed to enforce the BBA.                                                                                     
                                                                                                                                
     Article III: Compact Membership and Withdrawal                                                                           
     Section  1: Member  states are  bound to  the Compact's                                                                  
     provisions to the fullest extent of the law.                                                                               
     Section 2: Member states agree  to perform and strictly                                                                  
     comply  with   the  Compact's  terms   and  conditions.                                                                    
     Compact is  contractually binding on each  member state                                                                    
     when  at least  two states  pass substantively  similar                                                                    
     legislation adopting the Compact for America.                                                                              
     Section 3: Outlines four  caveats to the "substantively                                                                  
     identical" legislation requirement.                                                                                        
     Section 4: States may withdraw  from Compact so long as                                                                  
     the three-fourths membership  threshold is not reached.                                                                    
     States  cannot withdraw  from the  Compact once  three-                                                                    
     fourths of the states are members.                                                                                         
                                                                                                                                
     Article    IV:   Compact    Commission   and    Compact                                                                  
     Administrator                                                                                                            
     Section  1:  Outlines  the powers  and  duties  of  the                                                                  
     Compact Commission.                                                                                                        
     Section 2: Outlines the Compact Commission membership.                                                                   
     Section 3:  Each commission member  is entitled  to one                                                                  
     vote, majority membership is required  in order to take                                                                    
     action, and number of meetings to be held.                                                                                 
     Section 4: First actions the Commission is to take.                                                                      
     Section 5: How the Commission is to be funded.                                                                           
     Section   6:  Powers   and   duties   of  the   Compact                                                                  
     Administrator.                                                                                                             
     Section  7: Specific  events the  Compact Administrator                                                                  
     is  required  to  send notice  to  all  Compact  Notice                                                                    
     Recipients (Article II, Sec. 5).                                                                                           
     Section 8:  The Commission, member states,  and Compact                                                                  
     Administrator  will   work  together  to   enforce  the                                                                    
     Balanced Budget Amendment Interstate Compact.                                                                              
     Section  9:  Article IV  requires  at  least to  member                                                                  
     states in order to take effect.                                                                                            
                                                                                                                                
     Article V: Resolution Applying for Convention                                                                            
     Section  1:  The  legislature of  each  Compact  member                                                                  
     state  applies (via  the Compact)  to  Congress for  an                                                                    
     Article V  Convention for the purpose  of proposing for                                                                    
     ratification the Balanced Budget Amendment.                                                                                
     Section 2:  Requests Congress to  refer the BBA  to the                                                                  
     States for ratification.                                                                                                   
     Section  3: Article  V requires  three-quarters of  the                                                                  
     state to join the Compact before taking effect.                                                                            
                                                                                                                                
     Article  VI:  Delegate   Appointment,  Limitations  and                                                                  
     Instructions                                                                                                             
     Section 1:  Each state is  entitled to one  delegate at                                                                  
     the Convention.                                                                                                            
     Section 2: The  governor of each state  is that state's                                                                  
     sole convention delegate.                                                                                                  
     Section 3: Outlines when  a state's convention delegate                                                                  
     may be recalled.                                                                                                           
     Section 4: The power and  authority of each delegate is                                                                  
     exercisable only after affirming  the oath and Congress                                                                    
     calling for the Convention.                                                                                                
     Section 5: Convention delegate term limits.                                                                              
     Sections  6-8:   Power  and  authority   of  convention                                                                  
     delegates.                                                                                                                 
     Section 9: The Convention's  first order of business is                                                                  
     to adopt the convention  rules outlined in the Compact.                                                                    
     Failure to do so requires  an immediate vacation of the                                                                    
     convention.                                                                                                                
     Section 10: Member states or  delegates who violate the                                                                  
     Compact's   provisions  forfeit   participate  in   the                                                                    
     Convention.                                                                                                                
     Section  11: Delegates  are  entitled to  reimbursement                                                                  
     for  reasonable expenses  incurred while  attending the                                                                    
     Convention.                                                                                                                
                                                                                                                                
     Article VII: Convention Rules                                                                                            
     Section  1:  Convention  is  organized  to  exclusively                                                                  
     represent interests of the member states.                                                                                  
     Section  2:   The  Convention's   sole  agenda   is  to                                                                  
     introduce, debate, and vote to  either accept or reject                                                                    
     the Balanced  Budget Amendment. Consideration  of other                                                                    
     matters is not permitted.                                                                                                  
     Section 3:  Provides the rules  for how  many delegates                                                                  
     member  and   non-member  states   may  have   and  the                                                                    
     credentials   they  are   required  to   provide  while                                                                    
     attending the Convention.                                                                                                  
     Section  4:  Outlines  the   voting  powers  of  states                                                                  
     attending the Convention.                                                                                                  
     Section 5: Quorum requirements for the Convention.                                                                       
     Section 6:  The Convention  is chaired by  the delegate                                                                  
     of the first  State to become a member  of the Compact.                                                                    
     Any  business conducted  by the  Convention requires  a                                                                    
     quorum   and   a   majority  vote   of   those   states                                                                    
     constituting the quorum.                                                                                                   
     Section 7:  Provides the  guidelines for  relocating or                                                                  
     rescheduling the Convention should the need arise.                                                                         
     Section 8:  Convention shall be conducted  according to                                                                  
     Robert's Rules  of Order and the  American Institute of                                                                    
     Parliamentarians   Standard   Code   of   Parliamentary                                                                    
     Procedure.                                                                                                                 
     Section  9:  Rules  for transmitting  the  Convention's                                                                  
     approval   of  the   Balanced   Budget  Amendment   and                                                                    
     requesting Congress to  refer the BBA to  the 50 states                                                                    
     for ratification.                                                                                                          
     Section   10:  Public   record  requirements   for  the                                                                  
     Convention.                                                                                                                
     Section  11: Convention  has  twenty-hours to  complete                                                                  
     its business and is required to adjourn thereafter.                                                                        
                                                                                                                                
     Article VIII: Prohibition on Ultra Vires Convention                                                                      
     Section   1:   Member   states  are   prohibited   from                                                                  
     participating  in  the  Convention unless  1)  Congress                                                                    
     passes   the  omnibus   resolution   calling  for   the                                                                    
     Convention and 2) the  Convention completes Article VI,                                                                    
     Sec. 9.                                                                                                                    
     Section  2: Any  proposal or  action by  the Convention                                                                  
     that violates  the Compact's rules, proposes  a mode of                                                                    
     ratification  not   permitted  in  Article  V   of  the                                                                    
     Constitution of the  United States, or tries  to form a                                                                    
     new government is void ab initio (from the beginning).                                                                     
     Section 3:  Member states are not  permitted to approve                                                                  
     any revision  to the Constitution of  the United States                                                                    
     other than the Balanced Budget Amendment.                                                                                  
                                                                                                                                
     Article  IX:  Resolution  Prospectively  Ratifying  the                                                                  
     Balanced Budget Amendment                                                                                                
     Sections 1-2: Provision in  Compact whereby each member                                                                  
     state  automatically adopts  and ratifies  the Balanced                                                                    
     Budget Amendment  following its  Article V  referral to                                                                    
     the  States   by  the   Congressional  resolution--thus                                                                    
     meeting the three-fourths ratification requirement.                                                                        
                                                                                                                                
     Article  X:   Construction,  Enforcement,   Venue,  and                                                                  
     Severability                                                                                                             
     Section  1: Member  states  agree to  be  bound to  the                                                                  
     Compact  to   the  fullest  extend  allowed   by  their                                                                    
     respective constitutions.                                                                                                  
     Section 2: Date and time of the Convention.                                                                              
     Section 3:  The Attorney General of  Alaska is required                                                                  
     to defend the Compact against any legal challenge.                                                                         
     Section 4:  The exclusive  venue for all  legal actions                                                                  
     relating to the  Compact shall be in  the United States                                                                    
     District Court  for the Northern  District of  Texas or                                                                    
     the courts  of the State  of Texas within  the District                                                                    
     Court's  boundaries. However,  the Attorney  General of                                                                    
     Alaska  may petition  the Compact  Commission to  waive                                                                    
     Article X,  Sec. 4  if a  different court  venue allows                                                                    
     for the better enforcement or defense of the Compact.                                                                      
     Section 5: Effective date of Compact.                                                                                    
     Section  6:  Article  VIII  of  this  Compact  is  non-                                                                  
     severable  prior to  the  Compact's  termination. If  a                                                                    
     phrase, clause,  sentence or  provision of  the Compact                                                                    
     is  ruled invalid  by  the courts,  it  may be  severed                                                                    
     without  affecting the  applicability of  the remaining                                                                    
     Compact. If  a court rules  the Compact to  be contrary                                                                    
     to  a member  state's  constitution  or otherwise  held                                                                    
     invalid, that state shall withdraw from the Compact.                                                                       
                                                                                                                                
     If  a court  rules the  Compact to  be in  violation of                                                                    
     Article,  1  Section 10,  of  the  Constitution of  the                                                                    
     United  States,  it is  to  be  construed and  enforced                                                                    
     solely   as  reciprocal   legislation.  This   language                                                                    
     ensures  that the  Compact  will not  be  stopped by  a                                                                    
     meritless adverse legal  determination that it violates                                                                    
     the  Compact  Clause. It  is  intended  to authorize  a                                                                    
     court to  sever from  the Compact  all of  the language                                                                    
     that makes  the bill  a "compact," leaving  behind only                                                                    
     the legislative elements, which  would then be regarded                                                                    
     as   reciprocal   legislation-i.e.   simply   identical                                                                    
     legislation  passed  in  the respective  member  state,                                                                    
     like  a  sort  of  "Uniform  Commercial  Code"  for  an                                                                    
     Article  V  convention  devoted to  a  Balanced  Budget                                                                    
     Amendment. Mechanically,  it would mean that  the Court                                                                    
     would strike from the  Compact all contractual language                                                                    
     ("offer," "accept," "agree," etc.)  and all elements of                                                                    
     the Compact that cannot exist  outside of a contractual                                                                    
     relationship, such  as the Compact  Commission (Article                                                                    
     IV in its entirety), much  of Article X, leaving behind                                                                    
     the balance as purely  legislative enactments which are                                                                    
     reciprocal to the Compact enactments of other states.                                                                      
     Section   7:   The    Compact   terminates   when   the                                                                  
     Constitution  of the  United States  is amended  by the                                                                    
     Balanced Budget  Amendment. However, if the  BBA is not                                                                    
     adopted within seven years of  the first state adopting                                                                    
     the Compact, the Compact Commission and Compact shall                                                                      
     be deemed terminated and void ab initio.                                                                                   
                                                                                                                                
     Revisor's Instruction                                                                                                    
                                                                                                                                
     the  use of  personal pronouns  in  HB 284  due to  the                                                                    
     requirement that  substantively similar  legislation be                                                                    
     passed by states adopting the Compact.                                                                                     
                                                                                                                                
2:09:22 PM                                                                                                                    
REPRESENTATIVE  KELLER said  this  bill is  very  clear that  any                                                               
state  may leave  the convention  up until  the 3/4  threshold is                                                               
met. He  noted that Alaska  was among  the first three  states to                                                               
consider taking this step.                                                                                                      
                                                                                                                                
CHAIR COGHILL  named the  people online  to answer  questions and                                                               
supplement the record.                                                                                                          
                                                                                                                                
2:10:44 PM                                                                                                                    
SENATOR WIELECHOWSKI  directed attention to page  3, lines 13-17,                                                               
and asked how  much the federal government would have  to cut the                                                               
first year.  He also asked  if there  was a stopgap  provision in                                                               
the event of a national emergency or war.                                                                                       
                                                                                                                                
REPRESENTATIVE KELLER explained that the  debt cap is 105 percent                                                               
of  the  debt that  exists  when  this becomes  a  constitutional                                                               
amendment;  when the  debt reaches  98  percent of  the cap,  the                                                               
president has  line item  veto power. With  regard to  the second                                                               
question,  he advised  that the  cap can  be raised  by a  simple                                                               
majority vote of the states.  He maintained that it wouldn't take                                                               
any longer  to get 26  states to agree to  raise the cap  than it                                                               
would to go through the conventional bonding process.                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI  questioned how much the  federal government                                                               
would have to be cut if this were enacted today.                                                                                
                                                                                                                                
CHAIR  COGHILL asked  the individuals  listening  online to  take                                                               
note of  the questions. He  asked Senator Wielechowski if  he had                                                               
additional questions.                                                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI directed attention  to page 14, lines 20-21,                                                               
and  asked  if  state  governments  would also  have  to  have  a                                                               
balanced budget amendment.                                                                                                      
                                                                                                                                
REPRESENTATIVE KELLER answered no, just the federal government.                                                                 
                                                                                                                                
SENATOR WIELECHOWSKI directed attention  to page 15, lines 14-18,                                                               
and asked if  there was a reason for selecting  the United States                                                               
District  Court  for  the  Northern  District  of  Texas  as  the                                                               
exclusive venue of all actions that arise under the Compact.                                                                    
                                                                                                                                
REPRESENTATIVE KELLER deferred the question.                                                                                    
                                                                                                                                
2:16:15 PM                                                                                                                    
NICK   DRANIAS,   Constitutional   Policy   Director,   Goldwater                                                               
Institute,  Phoenix,  Arizona,  advised that  a  venue  selection                                                               
clause is a  common feature of compacts in order  to minimize the                                                               
locations where a  member state can be taken to  court. Texas was                                                               
selected  as  a central  and  easily  accessed location  for  the                                                               
anticipated thirty eight  states that will join  the compact. The                                                               
venue  provision can  be  waived at  the request  of  one of  the                                                               
attorneys general of the three founding member states.                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI again asked  how much the federal government                                                               
would  have to  cut  this year  to keep  from  exceeding the  105                                                               
percent cap outlined on page 3, lines 13-17.                                                                                    
                                                                                                                                
MR. DRANIAS  calculated that under current  borrowing rates there                                                               
was a year  to a year and  one-half cushion to reach  the cap. He                                                               
stressed that the  makeup of the cuts wasn't the  focus; the idea                                                               
was to  strike at the  root cause of the  unlimited concentration                                                               
of borrowing  authority by bringing  in the states as  an outside                                                               
board  of directors.  Whatever shakes  out  at the  end of  three                                                               
years has to  be better than spending the debt  limit whenever it                                                               
seems inconvenient, he said.                                                                                                    
                                                                                                                                
2:21:28 PM                                                                                                                    
SENATOR   WIELECHOWSKI  questioned   whether  he   would  support                                                               
amendments  to protect  cuts to  Medicare,  Social Security,  and                                                               
national defense.                                                                                                               
                                                                                                                                
MR.  DRANIAS  urged  the committee  to  avoid  implanting  policy                                                               
choices and  instead treat it  as a  means of throttling  back on                                                               
debt.  He  noted that  every  component  of the  Balanced  Budget                                                               
Amendment  (BBA) had  been  polled and  had  received between  61                                                               
percent and 85 percent support.                                                                                                 
                                                                                                                                
SENATOR WIELECHOWSKI  asked if he  had polling data to  show that                                                               
Americans  support   cuts  to  Medicare,  Social   Security,  and                                                               
national  defense,  because  his  constituents  wouldn't  support                                                               
that.                                                                                                                           
                                                                                                                                
MR. DRANIAS  said he  agrees that  most Americans  wouldn't favor                                                               
cutting Social Security  first, but nothing in the  BBA compels a                                                               
policy  result  where any  particular  program  must be  cut.  He                                                               
offered to  share the  polling data  and highlighted  that nearly                                                               
equal numbers  of democrats and  republicans favor  spending cuts                                                               
before  tax  increases.  He reiterated  that  the  amendment  has                                                               
flexibility to allow for revenue increases if deemed necessary.                                                                 
                                                                                                                                
2:26:09 PM                                                                                                                    
CHIP  DEMOSS, President,  Compact  for  America, Houston,  Texas,                                                               
noted that he submitted written  testimony from a large number of                                                               
parties, polling  data, and reports.  [These may be found  in the                                                               
bill  file.] He  offered  to answer  questions  regarding any  of                                                               
these submissions.                                                                                                              
                                                                                                                                
2:28:35 PM                                                                                                                    
DAVID BOYLE,  Alaska Policy  Forum, Anchorage,  Alaska, described                                                               
the  federal debt  as a  threat  to the  future and  a burden  on                                                               
children and  grandchildren. He said  that each child  born today                                                               
is born with  a huge mortgage and the  mortgage currently amounts                                                               
to $58,600 per  person. This gives the U.S. the  rank of third in                                                               
the  world in  debt per  person, behind  only Ireland  and Japan.                                                               
Polling shows  that super majorities  of Americans  want Congress                                                               
to reduce the federal debt, but  nobody wants their ox gored. The                                                               
common  sense solution  is to  pass  the Compact  for a  Balanced                                                               
Budget,  which will  require Congress  to get  approval from  the                                                               
states before it can increase the federal debt.                                                                                 
                                                                                                                                
2:33:10 PM                                                                                                                    
CHAIR  COGHILL  announced  he  would  hold  HB  284  for  further                                                               
consideration.