Legislature(2019 - 2020)BELTZ 105 (TSBldg)

04/01/2019 01:30 PM JUDICIARY

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01:30:40 PM Start
01:30:59 PM SJR6
08:30:55 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 35 CRIMES;SEX CRIMES;SENTENCING; PAROLE TELECONFERENCED
<Bill Hearing Canceled>
-- Testimony <Invitation Only> --
+ SJR 4 CONST. AM: STATE TAX; INTIATIVE TELECONFERENCED
Scheduled but Not Heard
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SJR 6 CONST AM:APPROP. LIMIT; RESERVE FUND TELECONFERENCED
Moved CSSJR 6(JUD) Out of Committee
-Will Recess Until 6:00 for Public Testimony-
-- Public Testimony Starting at 6:00 p.m. --
<Time Limit May Be Set>
           SJR 6-CONST AM:APPROP. LIMIT; RESERVE FUND                                                                       
                                                                                                                                
1:30:59 PM                                                                                                                    
CHAIR HUGHES announced that the  first order of business would be                                                               
SENATE  JOINT  RESOLUTION  NO. 6,  Proposing  amendments  to  the                                                               
Constitution of the State of  Alaska relating to an appropriation                                                               
limit; relating to  the budget reserve fund  and establishing the                                                               
savings reserve fund; and relating to the permanent fund.                                                                       
                                                                                                                                
CHAIR HUGHES reviewed  the calendar items and action on  SJR 6 to                                                               
date.                                                                                                                           
                                                                                                                                
1:32:19 PM                                                                                                                    
SENATOR  KIEHL  said  he  read  the legal  memo  [from  Megan  A.                                                               
Wallace,  Director,   Legal  Services,  Division  of   Legal  and                                                               
Research  Services, Legislative  Affairs Agency  dated March  29,                                                               
2019]. He  said he was  satisfied with  the memo. He  wondered if                                                               
the committee would  hear from Ms. Wallace and  the Department of                                                               
Law on the legal issues.                                                                                                        
                                                                                                                                
CHAIR  HUGHES   remarked  that  the  Senate   Judiciary  Standing                                                               
Committee  has   responsibility  for  the   constitutionality  of                                                               
matters that  come before it.  She indicated that  the Department                                                               
of  Law indicated  it felt  confident  that it  could defend  the                                                               
constitutionality of  the constitutional amendment in  SJR 6. She                                                               
directed attention to  Ms. Wallace's memo of March  29, 2019, and                                                               
to page 2.  She said that Ms. Wallace brought  up the preliminary                                                               
opinion, which does  give some insight. However,  what matters is                                                               
the  final  decision  since the  final  opinion  sets  precedent.                                                               
Although the  preliminary opinion mentioned the  Florida factors,                                                               
the final  decision did  not use  them, she  said. She  asked for                                                               
further clarification  on whether  the preliminary  opinion would                                                               
set precedent.                                                                                                                  
                                                                                                                                
1:34:22 PM                                                                                                                    
MEGAN WALLACE, Director,  Legislative Legal Services, Legislative                                                               
Affairs  Agency,  Juneau,  stated that  the  preliminary  opinion                                                               
gives the  parties insight in terms  of the court ruling  and the                                                               
grounds  it is  using  for that  ruling. In  Bess  v. Ulmer,  the                                                               
[Alaska Supreme  Court] issued a  preliminary opinion.  The final                                                               
opinion issued by  the court reaffirms that  prior opinion. Thus,                                                               
the preliminary  opinion is included  in totality along  with the                                                               
final opinion  that was rendered by  the court, she said.  As she                                                               
articulated in the  follow-up memo on members'  desks, her office                                                               
has historically  included the  Florida analysis  as part  of the                                                               
quantitative analysis  as to  whether a  constitutional amendment                                                               
before the  legislature amounts  to a  revision or  an amendment.                                                               
Those factors  are part of  the balance between  the quantitative                                                               
and  qualitative analysis.  That  is the  reason  her agency  has                                                               
continued to  look to that case  and the factors used  in Bess v.                                                               
Ulmer to  determine the quantitative  part of the  court's hybrid                                                               
analysis.                                                                                                                       
                                                                                                                                
1:36:05 PM                                                                                                                    
CHAIR HUGHES said that she  appreciated that Ms. Wallace's job is                                                               
to bring  these things  to light. She  reminded members  that "we                                                               
were  read from  that final  opinion that  they did  not use  the                                                               
factors, that  they referred to  California's way of doing  it in                                                               
that final opinion."                                                                                                            
                                                                                                                                
She directed  members' attention to page  3 of the memo  from Ms.                                                               
Wallace dated  March 29,  2019. She  explained that  she reviewed                                                               
each  item  separately  to  be  certain that  SJR  6  would  pass                                                               
constitutional muster.  She shared  her response  to each  of the                                                               
five items listed  in paragraph two of the memo.  She referred to                                                               
item  (1), which  read, "renaming  it"  and responded  that is  a                                                               
minor change. She  turned to item (2), which  read, "changing the                                                               
requirements for  deposits of the settlement  proceeds;" and said                                                               
that she  looked at the  [resolution] and it added  "directly" as                                                               
an adjective, which seemed pretty minor.                                                                                        
                                                                                                                                
CHAIR  HUGHES  turned to  item  (3),  which read,  "changing  the                                                               
withdrawal   requirements;"  and   responded  that   the  current                                                               
Constitution   [of   the   State  of   Alaska]   has   withdrawal                                                               
requirements. She  paraphrased [Section 3  of SJR 4], "  ? cannot                                                               
exceed  the amount  of the  previous year's  appropriations." She                                                               
said [SJR  6] would  change this language  to "cannot  exceed the                                                               
gap  up to  the  spending  limit." That  did  not seem  extremely                                                               
significant  to  her, although  she  agreed  someone might  argue                                                               
otherwise, she said.                                                                                                            
                                                                                                                                
She turned  to item (4),  which read, "repealing  and eliminating                                                               
the  provision authorizing  withdrawals  for  any public  purpose                                                               
with  a three-fourths  vote of  each house  of the  legislature;"                                                               
which  is  changed   to  a  simple  majority  [in   SJR  6].  She                                                               
acknowledged  that this  change has  some significance.  However,                                                               
the reality is  that in the Senate it would  be the difference of                                                               
four votes  and in the  House, it would  be a difference  of nine                                                               
votes.  She said  she  thought  of this  in  the  context of  the                                                               
reapportionment  case, in  which some  of the  executive branch's                                                               
power  was  assigned  to  the   legislative  branch  through  the                                                               
appointment of  the reapportionment  board members. She  said she                                                               
concluded  that  was  much more  significant  than  changing  the                                                               
number of  votes. Yet, the  reapportionment case was found  to be                                                               
an amendment rather  than a revision [to the  Constitution of the                                                               
State  of Alaska],  she said.  She said  that she  considered the                                                               
totality of  the changes in SJR  6, as listed in  the memo, which                                                               
initially seemed  like a lot.  However, when she  considered each                                                               
change separately, the changes did not  seem to rise to the level                                                               
of major changes.                                                                                                               
                                                                                                                                
1:39:09 PM                                                                                                                    
CHAIR  HUGHES said  the  memo  went on  to  say, "This  mandatory                                                               
deposit   is   especially   restrictive  of   the   legislature's                                                               
appropriation  power since  the legislature  may not  appropriate                                                               
from  the  principal of  the  Alaska  permanent  fund and  SJR  6                                                               
provides limited  access to the  savings reserve fund."  She said                                                               
that  Ms. Wallace  pointed  out  that SJR  6  is restricting  the                                                               
legislative  power  of  appropriation.   However,  she  said  she                                                               
realized that  is what a  spending cap or an  appropriation limit                                                               
does. It does restrict the  appropriation ability to some extent.                                                               
This is  already in  the [Constitution of  the State  of Alaska],                                                               
she   said.  The   restriction  of   the  legislative   power  of                                                               
appropriation occurred when  the language was added  in 1982. Now                                                               
the  legislature  is  making  some  adjustments,  she  said.  She                                                               
offered her  belief that the  legislature is not "all  of sudden"                                                               
changing  that restriction.  Instead, the  legislature is  making                                                               
some adjustments and "moving some levers."                                                                                      
                                                                                                                                
CHAIR HUGHES  said she tried to  read Ms. Wallace's memo  with an                                                               
open  mind. If  [SJR  6] were  to be  challenged,  she wanted  to                                                               
ensure   that  the   committee  had   reviewed  everything.   She                                                               
reiterated  that on  the surface,  someone might  think a  lot of                                                               
changes were being made, but when  the language is parsed, and in                                                               
her review of the original  amendment [to the Constitution of the                                                               
State of Alaska] adopted in  1982, she felt quite comfortable. In                                                               
addition, the Department of Law  has remained confident that [SJR
6]  would be  upheld in  court.  This has  given her  a level  of                                                               
confidence, she said.                                                                                                           
                                                                                                                                
1:40:55 PM                                                                                                                    
CHAIR HUGHES acknowledged that some  adjustments would be made to                                                               
SJR 6. She said  she has some concerns that if  the growth is too                                                               
flat,  the  state   might  have  trouble  meeting   some  of  its                                                               
constitutional  obligations. However,  she reviewed  the analysis                                                               
in the memo and SJR 6, in  terms of the overall structure and the                                                               
parts,  and  in  her  view  the   changes  in  SJR  6  "would  be                                                               
constitutional." She  wanted the record to  reflect her reasoning                                                               
and  process.  She acknowledged  that  someone  else may  have  a                                                               
different opinion than hers.                                                                                                    
                                                                                                                                
1:41:48 PM                                                                                                                    
SENATOR  KIEHL said  that to  inform his  opinion, he  has a  few                                                               
questions.  He noted  that the  Alaska  Supreme Court's  decision                                                               
referenced a  hybrid test. He  said that the  California [Supreme                                                               
Court] looked at the qualitative  and quantitative change and the                                                               
Alaska Supreme  Court mentioned  a hybrid.  He asked  for further                                                               
clarification  on whether  this  was a  hybrid  of California  on                                                               
quantity and Florida on quality, or what else is hybridized.                                                                    
                                                                                                                                
MS.  WALLACE interpreted  the  test to  mean  the Alaska  Supreme                                                               
Court (ASC) took a hybrid  approach. The ASC considered the court                                                               
cases from  Florida and the  series of cases that  the California                                                               
Supreme Court  has used to analyze  constitutional amendments and                                                               
took a hybrid approach. She offered  her belief that the ASC took                                                               
these  factors and  reviewed  the  Florida analysis  specifically                                                               
with  respect   to  the  quantitative  analysis.   The  ASC  also                                                               
specifically looked  at the California  holdings and cited  a few                                                               
of  the  California  cases  and   went  through  the  process  of                                                               
analyzing each  of the three constitutional  amendments that came                                                               
before the  court and used  a hybrid approach.  She characterized                                                               
it  as a  hybrid of  this quantitative  and qualitative  analysis                                                               
from both the Florida and California cases.                                                                                     
                                                                                                                                
1:43:26 PM                                                                                                                    
SENATOR  KIEHL  said  it  was  useful  to  see  how  Florida  was                                                               
incorporated into the final decision  since he did not understand                                                               
what was being hybridized just  using the California approach. In                                                               
considering whether  this is an  amendment or a revision  [to the                                                               
Constitution of  the State of  Alaska], he related that  the 1982                                                               
appropriation  limit was  an amendment.  He asked  whether it  is                                                               
relevant  that the  constitutional budget  reserve (CBR)  did not                                                               
exist at the time.                                                                                                              
                                                                                                                                
MS.  WALLACE  answered that  this  is  certainly one  of  several                                                               
components that  a court would  look at when  determining whether                                                               
the proposal  the governor submitted,  [SJR 6], is a  revision or                                                               
an amendment.  She said that  in her  opinion it is  difficult to                                                               
only use the argument that  the appropriation limit is already in                                                               
the  constitution. She  said she  was not  aware that  the Alaska                                                               
Supreme  Court  (ASC)  has  ever   rendered  an  opinion  on  the                                                               
appropriation  limit  as  introduced   as  an  amendment  in  the                                                               
constitution.                                                                                                                   
                                                                                                                                
1:44:42 PM                                                                                                                    
MS. WALLACE said:                                                                                                               
                                                                                                                                
     So not only  do we only have one  supreme court ruling,                                                                    
     the Bess ruling, to give  us this guidance, but we kind                                                                    
     of have to  pull what we can from Bess  to give you the                                                                    
     analysis of  what we  think a court  might do  the next                                                                    
     time that  it has  to decide whether  a proposal  is an                                                                    
     amendment  or a  revision.  But the  court hasn't  ever                                                                    
     looked  at the  appropriation limit  itself and  made a                                                                    
     determination whether  that limit  as it went  into the                                                                    
     constitution had  an effect on the  legislature's power                                                                    
     over appropriation or whether it was so restrictive.                                                                       
                                                                                                                                
     Now,  with  that,  it's obvious,  and  the  reason  the                                                                    
     appropriation  limit  itself  is  before  you  is  that                                                                    
     regardless   of   whatever   intent   went   into   the                                                                    
     appropriation  limit,  there  is no  dispute  that  the                                                                    
     constitutional   appropriation   limit  is   not   very                                                                    
     restrictive  on  the  legislature  right  now,  or  not                                                                    
     restrictive   at  all   in  terms   of  the   way  that                                                                    
     inflation's been calculated  and their starting number.                                                                    
     But  what   is  left   to  be   decided  is   that  any                                                                    
     appropriation  limit, no  matter  how  flexible or  how                                                                    
     restrictive,  whether or  not  a court  would say  that                                                                    
     you're impinging too far  on that foundational inherent                                                                    
     power  of  the  legislature.  And  in  my  opinion,  my                                                                    
     concern  is  not  pointed  just  at  the  appropriation                                                                    
     limit.                                                                                                                     
                                                                                                                                
1:46:16 PM                                                                                                                    
     As I  note in a footnote  in my memo, the  real concern                                                                    
     in the  proposal in  SJR 6,  at least  why I  caution a                                                                    
     conservative review, is that  it has a very significant                                                                    
     change  in the  flow  of  revenue and  what  is in  the                                                                    
     general  fund. And  the changes  that are  proposed not                                                                    
     only  affect  the  cap  of  what  the  legislature  may                                                                    
     appropriate  each  year,  but  it  also  restricts  the                                                                    
     leftover funds  that are  available to  the legislature                                                                    
     and  to the  next legislature  to appropriate.  And the                                                                    
     provision itself  requires that  any revenue  left over                                                                    
     in  the general  fund at  the end  of the  fiscal year,                                                                    
     part  of  it goes  to  the  permanent fund,  which  the                                                                    
     legislature  cannot appropriate  from at  all. And  any                                                                    
     leftover funds,  part of  that may  go into  the budget                                                                    
     reserve fund  or what has  been renamed as  the savings                                                                    
     reserve fund.                                                                                                              
                                                                                                                                
     And  the   amendment  goes  on   to  then   change  the                                                                    
     legislature's ability to  appropriate from that savings                                                                    
     account. So right now,  the legislature can appropriate                                                                    
     from  the CBR  for  any public  purpose, regardless  of                                                                    
     what  appropriation limit  exists  in the  constitution                                                                    
     today.  And   by  removing  that  public   purpose,  or                                                                    
     repealing  the  public   purpose  -  the  appropriation                                                                    
     option,   you   are  significantly   constraining   the                                                                    
     appropriation  power as  it currently  exists today  in                                                                    
     our state  constitution. And the more  restriction that                                                                    
     you place  on a legislature, and  particularly a future                                                                    
     legislature's power  to appropriate funds  will require                                                                    
     that  you'd   have  that  more,   broad  look   at  the                                                                    
     constitution  and look  at how  many of  the provisions                                                                    
     that an amendment like this  may touch on, because it's                                                                    
     not  only the  appropriation  limit and  the CBR.  It's                                                                    
     also  the dedicated  fund provision,  which there's  an                                                                    
     exception  to that  within the  contents  of this.  And                                                                    
     when we adopted the  permanent fund amendment there was                                                                    
     a change to  Article IX, Sec. 7  to specifically exempt                                                                    
     the permanent  fund from the dedicated  fund provision.                                                                    
     And this  amendment takes a  little bit different  of a                                                                    
     drafting choice  and the exemption to  Article IX, Sec.                                                                    
     7 is within  the subsection itself. And so,  if we were                                                                    
     to  go back  and  amend the  dedicated fund  provision,                                                                    
     we're adding one more section  to the constitution that                                                                    
     we're amending to accomplish this.                                                                                         
                                                                                                                                
1:49:05 PM                                                                                                                    
SENATOR  KIEHL  said her  memo  mentions  a phrase  "foundational                                                               
power." He  said significant conversation  has occurred  with the                                                               
reapportionment or  redistricting amendment.  It seemed  that she                                                               
had  suggested  that the  analysis  is  about what  "foundational                                                               
power" is and he asked how to analyze what is foundational.                                                                     
                                                                                                                                
MS.  WALLACE recognized  that other  people might  have different                                                               
opinions.  She  clarified  that  other  opinions  are  not  wrong                                                               
opinions, but  her job  is to make  certain that  the legislature                                                               
has   both  perspectives   of  the   analysis.   She  said   that                                                               
reapportionment  or  redistricting  is   handled  by  each  state                                                               
differently.  It  is  not  an inherent  power  of  the  executive                                                               
branch, in  terms of the  inherent or foundational powers  of the                                                               
legislature. She said  that is the lawmaking power,  which is the                                                               
power   of   appropriation.    This   affects   the   cornerstone                                                               
foundational  power   of  the   legislature.  However,   not  all                                                               
constitutional   amendments  necessarily   require  such   strict                                                               
scrutiny or caution from the  legislature. She said that as legal                                                               
counsel  for  the  legislature,  she  wants  to  make  sure  that                                                               
legislators  understand   that  when   a  piece   of  legislation                                                               
restricts the legislature's inherent  or foundational power to an                                                               
extent  that   does  not  exist   today,  legislators   at  least                                                               
understand it before  moving forward. Ultimately, it  is a policy                                                               
choice. If  the legislature is comfortable  with that restriction                                                               
in power, it is a policy  decision that the legislature will make                                                               
going   forward.   She    summarized   that   redistricting   and                                                               
reapportionment  is  not a  foundational  power  of an  executive                                                               
branch, but  to the  contrary, appropriation  and lawmaking  is a                                                               
foundational power of the legislative branch of government.                                                                     
                                                                                                                                
1:51:54 PM                                                                                                                    
SENATOR REINBOLD said  she thinks the intent is  to cap spending.                                                               
She  offered  her  belief  that   for  at  least  a  decade,  the                                                               
legislatures have  not been spending  responsibly. She  said that                                                               
cleaning out the CBR, the  statutory budget reserve, and about $3                                                               
billion of  the earnings reserve  account would tie the  hands of                                                               
future  legislatures because  the money  is gone.  She said  that                                                               
will  impact future  generations. She  expressed concern  that it                                                               
already violates  the constitution when the  legislature does not                                                               
handle  things  appropriately.  She  said she  thinks  that  this                                                               
constitutional  amendment   is  very  important.   She  mentioned                                                               
several funding  programs that impact the  legislature, including                                                               
education,   health   care,   public  employee,   and   teachers'                                                               
retirement. She  asked whether all  of these things  restrict the                                                               
legislature's appropriation ability.                                                                                            
                                                                                                                                
MS. WALLACE answered that the  legislature does have some options                                                               
in  terms of  changing the  statutory calculations  for the  base                                                               
student  allocation  and  statutory   formulas.  She  agreed  the                                                               
legislature  has   a  constitutional  obligation   to  adequately                                                               
provide for education.                                                                                                          
                                                                                                                                
SENATOR REINBOLD remarked  that the Constitution of  the State of                                                               
Alaska only states  that the legislature has to keep  a system of                                                               
education open to  all children and not that  the legislature has                                                               
to do the BSA.                                                                                                                  
                                                                                                                                
1:54:42 PM                                                                                                                    
SENATOR SHOWER  appreciated the points that  Chair Hughes brought                                                               
up.  He appreciated  hearing the  attorneys'  arguments, too.  He                                                               
asked to read  a portion of Constitution of the  State of Alaska.                                                               
He read:                                                                                                                        
                                                                                                                                
     Section 2. Source of Government                                                                                            
                                                                                                                                
     All  political power  is inherent  in  the people.  All                                                                    
     government originates with the  people, is founded upon                                                                    
     their will only, and is  instituted solely for the good                                                                    
     of the people as a whole.                                                                                                  
                                                                                                                                
He  said that  although  legislators are  representatives of  the                                                               
people, part  of the process  involves the public,  including the                                                               
ability  to put  initiatives before  the people  for a  vote. The                                                               
people have voted on this issue  twice and the will of the people                                                               
is for  the state to  have a spending  limit. He argued  that the                                                               
will  of the  legislature was  executed because  they passed  the                                                               
resolutions.  He said  he has  often heard,  "If it  ain't broke,                                                               
don't  fix it."  He  offered  his belief  that  the  will of  the                                                               
people, as  per testimony he  has heard, is that  the legislature                                                               
needs to  have its hands  tied. He said  he refers to  the actual                                                               
language in  the Constitution  of the State  of Alaska  to remind                                                               
members  that the  government is  founded  upon the  will of  the                                                               
people and not by the  legislature or the governor. Collectively,                                                               
the citizens  want a spending  limit and currently want  one that                                                               
is  relevant.  He offered  his  belief  that the  committee  will                                                               
address some  of the  concerns that  people have  expressed about                                                               
spending   limits,  caps,   and   growth  to   ensure  that   the                                                               
constitutional limit  is more relevant.  He agreed that it  is an                                                               
important goal, yet it is  important not to tie the legislature's                                                               
hands.  He  remarked  that  three  members have  seen  SJR  in  a                                                               
previous committee, the Senate  State Affairs Standing Committee.                                                               
He offered  his belief that  this document, [the  Constitution of                                                               
the  State of  Alaska], is  critical. He  thinks that  the people                                                               
have already  spoken, and the court  has not spoken since  it was                                                               
not necessary.                                                                                                                  
                                                                                                                                
1:57:20 PM                                                                                                                    
CHAIR HUGHES  said that if the  power is derived from  the people                                                               
and they  vote for  the amendment  to restrict  the legislature's                                                               
power, they have the right to make that choice.                                                                                 
                                                                                                                                
1:58:16 PM                                                                                                                    
CORI MILLS,  Senior Assistant  Attorney General,  Civil Division,                                                               
Department of Law, Juneau, stated she  does not have much to add,                                                               
but as Ms. Wallace pointed  out differing legal opinions on legal                                                               
tests  occur. In  this instance,  only one  case from  the Alaska                                                               
Supreme  Court provides  guidance.  She said  that  in the  DOL's                                                               
review  of Bess  v. Ulmer,  it feels  very comfortable  defending                                                               
[SJR 6] if it is challenged  and it is the department's view that                                                               
the court is likely to uphold it as an amendment.                                                                               
                                                                                                                                
She said that  Bess v. Ulmer looked at  three different proposals                                                               
and only found  one to be a  revision. The ASC upheld  two out of                                                               
the three.  She acknowledged  that comparisons  can be  made, but                                                               
ultimately the  department believes that  the court will  look at                                                               
the Constitution  [of the  State of Alaska]  as it  stands today.                                                               
The constitution contains  an appropriation limit and  it has the                                                               
constitutional budget reserve (CBR), she  said. Both of these are                                                               
meant to  address spending  by the  legislature and  the governor                                                               
and to  try to provide some  type of mechanism to  make sure that                                                               
the state has savings in the future.                                                                                            
                                                                                                                                
1:59:35 PM                                                                                                                    
MS.  MILLS said  that  using  a high-level  analysis  of Bess  v.                                                               
Ulmer, the  department believes that considering  that framework,                                                               
which is  already in the  [Constitution of the State  of Alaska],                                                               
these  amendments  or  changes do  not  go  so  far  as to  be  a                                                               
foundational,   fundamental  change   to  the   constitution  and                                                               
therefore would be viewed as an amendment instead of a revision.                                                                
                                                                                                                                
2:00:00 PM                                                                                                                    
SENATOR KIEHL asked the record to  reflect that Bess v. Ulmer did                                                               
not  leave  two  constitutional amendments  untouched.  He  said,                                                               
"It's simply  not factual."  He gave  his high-level  analysis of                                                               
Bess  v. Ulmer.  In  fact,  the court  cut  one  of the  proposed                                                               
constitutional  amendments in  half because  the second  proposed                                                               
sentence was  so radical and  so far-reaching that it  would have                                                               
had consequences  that rippled  throughout the  constitution. The                                                               
court struck it.                                                                                                                
                                                                                                                                
He said he  did not find it  quite useful in the  analysis of the                                                               
three proposed  constitutional amendments the court  had in front                                                               
of it in Bess v. Ulmer to say  the court said, "Oh, these two are                                                               
great, no worries, we're only worried about the one."                                                                           
                                                                                                                                
2:01:10 PM                                                                                                                    
MS.  MILLS said  the Department  of  Law stands  by its  original                                                               
analysis.  She said  that in  reviewing  the marriage  amendment,                                                               
which is what  Senator Kiehl is referring to,  the Alaska Supreme                                                               
Court  did  strike the  last  sentence.  She  said that  all  the                                                               
parties  agreed  that  it  was  superfluous.  She  said  that  is                                                               
actually in  the discussion  in the  preliminary order.  She said                                                               
that is the reason the department did  not focus a lot on it, but                                                               
rather  focused  on  what  was   the  foundational  change  those                                                               
amendments were trying to make. In  that case, it was to define a                                                               
marriage between a man and a woman.  The court let that go to the                                                               
ballot, she said.                                                                                                               
                                                                                                                                
2:02:07 PM                                                                                                                    
SENATOR  SHOWER  moved  to  adopt Amendment  1,  work  order  31-                                                               
GS1068\A.4, Wallace, 3/30/19.                                                                                                   
                                                                                                                                
                                                      31-GS1068\A.4                                                             
                                                           Wallace                                                              
                                                           3/30/19                                                              
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                    BY SENATOR SHOWER                                                                 
     TO:  SJR 6                                                                                                                 
                                                                                                                                
     Page 1, lines 2 - 3:                                                                                                       
          Delete "and establishing the savings reserve                                                                        
     fund"                                                                                                                    
                                                                                                                                
     Page 2, line 12:                                                                                                           
          Delete "and"                                                                                                          
                                                                                                                                
     Page 2, line 14, following "law":                                                                                          
          Insert "; and                                                                                                         
               (9) for capital improvements, except that                                                                        
     the   total  amount   of  appropriations   for  capital                                                                    
     improvements  in a  fiscal year  shall  not exceed  ten                                                                    
     percent  of  the  total appropriation  limit  for  that                                                                    
     fiscal year"                                                                                                               
                                                                                                                                
     Page 2, line 21:                                                                                                           
          Delete "savings"                                                                                                      
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 2, line 22:                                                                                                           
          Delete "savings"                                                                                                      
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 2, lines 28 - 29:                                                                                                     
          Delete "savings [BUDGET]"                                                                                         
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 3, line 4:                                                                                                            
          Delete "savings [BUDGET]"                                                                                         
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 3, line 5:                                                                                                            
          Delete "savings [BUDGET]"                                                                                         
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 3, line 13:                                                                                                           
          Delete "savings [BUDGET]"                                                                                         
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 3, lines 19 - 20:                                                                                                     
          Delete "new sections"                                                                                                 
          Insert "a new section"                                                                                                
                                                                                                                                
     Page 3, line 26, through page 4, line 1:                                                                                   
          Delete all material.                                                                                                  
                                                                                                                                
CHAIR HUGHES objected.                                                                                                          
                                                                                                                                
SENATOR  SHOWER  related  one  concern that  was  raised  in  the                                                               
[Senate  State Affairs  Standing  Committee] was  whether it  was                                                               
necessary  to redefine  the [constitutional  budget reserve  fund                                                               
(CBR) to the  savings reserve fund (SRF).  After much discussion,                                                               
it was decided that it was  not necessary and adds confusion. The                                                               
first  part of  Amendment 1  would strike  the language  "savings                                                               
reserve fund" and  any reference to it. The effect  of this is to                                                               
retain the CBR, he said.                                                                                                        
                                                                                                                                
He  said that  the second  part of  Amendment 1  would relate  to                                                               
instances in  which excess  funding occurs.  For example,  in the                                                               
event that  oil prices  are high, or  the pipeline  produces more                                                               
oil than projected,  instead of spending the  excess revenue, the                                                               
appropriation  formula  would  allow  a  portion  of  the  excess                                                               
revenue to  be used for  capital improvements for one  year. This                                                               
would  also mean  the legislature  could obtain  matching federal                                                               
funds,  which   could  be  applied   to  some  of   the  deferred                                                               
maintenance.                                                                                                                    
                                                                                                                                
SENATOR SHOWER referred  to page 1, line 9 to  paragraph 9, which                                                               
read,  "(9)  for  capital improvements,  except  that  the  total                                                               
amount  of appropriations  for capital  improvements in  a fiscal                                                               
year  shall not  exceed ten  percent of  the total  appropriation                                                               
limit  for that  fiscal year."  In essence,  this means  that the                                                               
legislature  could  appropriate up  to  ten  percent outside  the                                                               
appropriation  spending  limit  and  use that  excess  money  for                                                               
capital improvement  projects, if it  chose to do so.  He offered                                                               
his belief  that trying  to fit  deferred maintenance  inside the                                                               
spending limit is very difficult.  He added that the PERS [Public                                                               
Employees'  Retirement  System]  and  TRS  [Teachers'  Retirement                                                               
System]  payments "gets  really tight  on that  growth curve"  so                                                               
Amendment  1  would  allow the  legislature  the  flexibility  to                                                               
provide funding without spending $3-5  billion, or drawing on the                                                               
earnings reserve account or the savings account, he said.                                                                       
                                                                                                                                
2:05:39 PM                                                                                                                    
CHAIR HUGHES acknowledged  that she had raised  the concern about                                                               
capital  improvement funding  at a  previous meeting,  so she  is                                                               
supportive of  this concept. She asked  for further clarification                                                               
on  the ten  percent figure  and if  it was  based on  historical                                                               
figures.                                                                                                                        
                                                                                                                                
SENATOR SHOWER said  he had examined a number  of percentages. He                                                               
said that ten  percent seemed reasonable after  reviewing the ebb                                                               
and flow  over time  since it  would provide  sufficient matching                                                               
funds.  He found  that by  using 15-20  percent the  figures grew                                                               
dramatically,  which  results  in  wild swings  in  spending.  In                                                               
further response,  he related a  scenario with a total  budget of                                                               
$5 billion,  with $4  billion in operating  funds and  $1 billion                                                               
for  capital  improvements  under the  appropriations  limit.  He                                                               
stated  that using  the calculation  of 10  percent of  the total                                                               
appropriations limit would yield  an additional $500 million that                                                               
could be spent on deferred  maintenance and other big projects in                                                               
a good year.                                                                                                                    
                                                                                                                                
2:08:02 PM                                                                                                                    
CHAIR HUGHES  asked whether the  Department of Law  would address                                                               
her question, whether ten percent would  be on top of any capital                                                               
spent under the limit.                                                                                                          
                                                                                                                                
MS. MILLS  referred to page 1,  lines 11-12, of SJR  6, and read,                                                               
"This subsection  does not  apply to  an appropriation"  and then                                                               
referred to  Amendment 1, which  read, in part, "(9)  for capital                                                               
improvements  ?."  When  read  together   it  would  read,  "This                                                               
subsection  does  not  apply  to  an  appropriation  for  capital                                                               
improvements." That  means that capital improvements  would never                                                               
be included  when calculating  the cap.  She continued  by saying                                                               
that  capital improvements  are outside  the cap  but "the  total                                                               
amount  of appropriations  for capital  improvements in  a fiscal                                                               
year  shall not  exceed ten  percent of  the total  appropriation                                                               
limit  for that  fiscal year."  She said  the way  she interprets                                                               
this is  that in any given  year "you're stuck with  ten percent"                                                               
because it is never inside the cap.                                                                                             
                                                                                                                                
CHAIR HUGHES asked whether that was the sponsor's intent.                                                                       
                                                                                                                                
SENATOR  SHOWER   asked  Commissioner  Tangeman  to   provide  an                                                               
opinion.                                                                                                                        
                                                                                                                                
2:09:47 PM                                                                                                                    
BRUCE  TANGEMAN, Commissioner  Designee,  Department of  Revenue,                                                               
Anchorage, said  this is exposing  the conversation  the governor                                                               
would  like to  avoid  with  it being  so  restrictive. He  said,                                                               
"We've  included capital  within  the spending  limit because  as                                                               
soon as you start making  exceptions, there's ways to work around                                                               
the  limit."  He said  he  certainly  understands the  intent  of                                                               
Amendment  1  and that  the  legislature  may  wish  to go  in  a                                                               
slightly different direction; however,  Governor Dunleavy is more                                                               
inclined to keep  everything under the limit  to avoid situations                                                               
like  this. He  deferred  to  the Department  of  Law  as to  the                                                               
technical  aspects;  however, the  bigger  picture  is that  this                                                               
would change the  governor's intent with respect  to the spending                                                               
limit.                                                                                                                          
                                                                                                                                
SENATOR  SHOWER  questioned  whether deferred  maintenance  could                                                               
ever  be addressed  given the  curve as  currently presented.  He                                                               
said  that the  reality is  that the  language [in  SJR 6]  is so                                                               
restrictive  that  it  would  not   be  possible  to  appropriate                                                               
sufficient  capital  improvement   funding  to  address  deferred                                                               
maintenance.                                                                                                                    
                                                                                                                                
2:11:52 PM                                                                                                                    
MS. WALLACE concurred  that Amendment 1 is drafted  to exempt all                                                               
capital  improvements from  the spending  cap, but  then cap  the                                                               
amount   of   appropriations  at   10   percent   of  the   total                                                               
appropriation limit.  She said that  if it  were the will  of the                                                               
committee,  it is  possible to  amend Amendment  1 to  state that                                                               
"capital  improvements are  exempt and  that to  the extent  that                                                               
capital  improvements go  over 10  percent  of the  appropriation                                                               
limit, then  those appropriations  count towards the  limit." She                                                               
acknowledged that other  avenues exist to address  and allow some                                                               
flexibility for the  legislature if it sees the  need for capital                                                               
improvements  to exceed  10 percent  of  the total  appropriation                                                               
limit.  She agreed  that  as drafted  it is  restricted  to a  10                                                               
percent cap for capital improvements in a single fiscal year.                                                                   
                                                                                                                                
CHAIR HUGHES  said that it would  be her preference to  have some                                                               
under  the cap  and limit  it to  ten percent  over the  cap. She                                                               
offered her belief that this might  be a little complicated to do                                                               
"on the fly."  She understood Senator Shower's  intent. She noted                                                               
that  the  legislature has  realized  a  lack of  willingness  to                                                               
reduce  the operating  budget. Further,  the  capital budget  has                                                               
been very  lean. One of  the legislature's  core responsibilities                                                               
is to  ensure sufficient infrastructure for  economic development                                                               
in the private sector. She said  this has been a concern of hers,                                                               
so  she supports  the concept.  She wondered  if the  legislature                                                               
should  never  spend  a  penny   more  than  10  percent  of  the                                                               
appropriation  limit  on  capital improvement  projects  if  room                                                               
exists  under  the  cap.  She said  that  she  feels  comfortable                                                               
putting some of that towards capital improvements.                                                                              
                                                                                                                                
2:14:04 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
2:19:51 PM                                                                                                                    
CHAIR   HUGHES   reconvened   the  meeting.   She   related   her                                                               
understanding  that Amendment  1  was not  meeting the  sponsor's                                                               
goal.                                                                                                                           
                                                                                                                                
SENATOR  SHOWER said  the intent  of Amendment  1 was  to have  a                                                               
spending limit that includes  operating and capital improvements,                                                               
and not  to exceed 10 percent  over that amount. This  has turned                                                               
into  something   slightly  different.   He  asked   for  further                                                               
clarification by the legislative legal attorney on Amendment 1.                                                                 
                                                                                                                                
MS.  WALLACE responded  that Amendment  1, as  currently drafted,                                                               
would exempt  all capital  appropriations from  the appropriation                                                               
limit, but  it sets a  hard cap  for capital appropriations  in a                                                               
fiscal  year, that  capital appropriations  may  never exceed  10                                                               
percent  of the  total appropriation  limit. During  the at-ease,                                                               
the  committee discussed  "going back  to the  drawing board"  to                                                               
modify that  language to allow  the legislature  more flexibility                                                               
to make  capital improvement  appropriations, but  still maintain                                                               
the exemption  for capital appropriations from  the appropriation                                                               
limit;  however,  if  the  legislature  exceeds  the  10  percent                                                               
appropriation  limit, all  additional  capital appropriations  in                                                               
that fiscal year  will count against the  appropriation limit and                                                               
would  be debated  alongside the  other  appropriations that  are                                                               
indeed subject to the appropriation limit.                                                                                      
                                                                                                                                
2:22:05 PM                                                                                                                    
SENATOR MICCICHE asked  whether it would be safe to  say that the                                                               
effect would be to withdraw this section.                                                                                       
                                                                                                                                
CHAIR  HUGHES explained  that  she wanted  to  highlight what  is                                                               
wrong  and the  remedy. She  said  Amendment 1  consisted of  two                                                               
parts, first  to rename  the fund, which  is fine.  Secondly, the                                                               
maker  of  Amendment 1  would  offer  a conceptual  amendment  to                                                               
remove the  problematic language  and submit  a new  amendment to                                                               
ensure that a hard cap of  ten percent on the total appropriation                                                               
limit for  capital improvements,  but appropriations  for capital                                                               
could be made if room exists  under the cap. She added that above                                                               
the cap, the legislature would have a 10 percent cap.                                                                           
                                                                                                                                
2:23:10 PM                                                                                                                    
SENATOR SHOWER  remarked that he  questioned rolling  both pieces                                                               
into one amendment.                                                                                                             
                                                                                                                                
SENATOR  SHOWER  moved  to  adopt   a  Conceptual  Amendment,  to                                                               
Amendment 1, referred  to as A.4, to strike lines  7-11 and leave                                                               
the rest of the language in Amendment 1 intact.                                                                                 
                                                                                                                                
There being  no objection, the Conceptual  Amendment to Amendment                                                               
1 was adopted.                                                                                                                  
                                                                                                                                
2:23:54 PM                                                                                                                    
CHAIR  HUGHES  brought  Amendment   1,  as  amended,  before  the                                                               
committee for further consideration.                                                                                            
                                                                                                                                
She explained that this would  rename the savings reserve fund to                                                               
the budget reserve fund as  currently in the [Constitution of the                                                               
State of  Alaska]. In  response to  Senator Micciche,  she agreed                                                               
that it keeps the name as currently in the constitution.                                                                        
                                                                                                                                
2:24:32 PM                                                                                                                    
SENATOR  REINBOLD  asked  whether   the  Department  of  Law  was                                                               
comfortable with the change.                                                                                                    
                                                                                                                                
MS. MILLS said she did not  see any legal issues with the change.                                                               
It does not destroy the rest of  the intent of Amendment 1 if the                                                               
purpose  is to  return  to  calling it  the  budget reserve  fund                                                               
instead  of the  savings  reserve fund.  In  further response  to                                                               
Senator Reinbold,  she said that  she cannot speak to  policy but                                                               
from a legal  standpoint reverting to the budget  reserve fund is                                                               
fine.                                                                                                                           
                                                                                                                                
2:25:35 PM                                                                                                                    
SENATOR REINBOLD  said that she  liked the  idea of naming  it "a                                                               
savings  reserve  fund"  and  has  a  problem  changing  it.  She                                                               
expressed concern  with the 10  percent [appropriation  above the                                                               
cap].  She said  she was  here  in FY  15,  when there  was a  $3                                                               
billion capital  budget. She  said that  every type  of operating                                                               
budget supplemental  [appropriation] was included in  the capital                                                               
budget.  She  said that  she  fundamentally  does not  trust  the                                                               
legislature to  have fiscal restraint.  She said that  she cannot                                                               
support  it at  this time.  She offered  her belief  that capital                                                               
projects can  be done  through the federal  government or  can be                                                               
accomplished  via   local  government.  She  said   that  in  the                                                               
Anchorage  area, residents  pay significant  property taxes.  She                                                               
said  that  fundamentally  she  did  not  want  to  see  the  cap                                                               
exceeded. She  said that  the public  wants more  restraint, that                                                               
the legislature spent $15 billion in the last five years.                                                                       
                                                                                                                                
CHAIR HUGHES stated  that the current discussion  is on retaining                                                               
the current  name of the fund  in the Constitution [of  the State                                                               
of  Alaska].   She  acknowledged  that  her   comments  would  be                                                               
appropriate when the proposed amendment is discussed.                                                                           
                                                                                                                                
SENATOR REINBOLD indicated  she wanted the record  to reflect her                                                               
remarks.                                                                                                                        
                                                                                                                                
2:26:56 PM                                                                                                                    
SENATOR  MICCICHE  said that  he  is  in  favor of  removing  the                                                               
language  on  the  savings  reserve fund  because  it  serves  no                                                               
purpose  other than  to rename  it. He  said that  the fund  is a                                                               
constitutional  budget  reserve and  actually  is  not a  savings                                                               
reserve  fund.  He  offered  his  support  for  Amendment  1,  as                                                               
amended.                                                                                                                        
                                                                                                                                
MS.  MILLS  directed  attention  to  page  2,  [lines  18-19]  of                                                               
Amendment 1, referred to as A.4, which read:                                                                                    
                                                                                                                                
     Page 3 lines 26, through page 4, line 1:                                                                                   
          Delete all material.                                                                                                  
                                                                                                                                
She said  that this relates  to the transition provision  for the                                                               
budget reserve fund. She said  she understood the reason for this                                                               
in terms of the savings reserve  fund, but the very last sentence                                                               
refers to  the repayment obligation of  the transition provision.                                                               
It  makes it  very clear  that there  is no  repayment obligation                                                               
because that is being repealed. She  said she was unsure if there                                                               
was an  intention or  whether it seemed  unnecessary since  it is                                                               
being repealed there would not be a repayment obligation.                                                                       
                                                                                                                                
SENATOR SHOWER offered  his belief that she  actually answered it                                                               
unless it would impact another section.                                                                                         
                                                                                                                                
MS.  MILLS clarified  that the  way  Amendment 1  is drafted,  it                                                               
would  delete Section  31. She  asked  for further  clarification                                                               
whether  any thought  was  given with  respect  to the  repayment                                                               
obligation. She asked whether it was  the intent to make sure the                                                               
repayment obligation is eliminated.                                                                                             
                                                                                                                                
2:29:20 PM                                                                                                                    
CHAIR  HUGHES  asked whether  the  repayment  provision is  found                                                               
elsewhere.                                                                                                                      
                                                                                                                                
MS.  MILLS explained  that the  repayment provision  is found  on                                                               
page 4, in proposed Sec. 5, line 2, which read:                                                                                 
                                                                                                                                
     *Sec. 5. Article IX, sec. 17 (c) and (d), Constitution                                                                     
     of the State of Alaska, is repealed.                                                                                       
                                                                                                                                
She  said that  sec.  17  (d) is  the  repayment obligation.  The                                                               
question relates  to the existing repayment  obligation of $10-11                                                               
billion.  She  explained  that  the  resolution  was  drafted  to                                                               
include specific language  to clarify that once  the provision is                                                               
repealed the repayment  obligation goes away, so  "you don't have                                                               
the sweep and  you don't have to repay the  fund." She reiterated                                                               
that  she  was  unsure  if  the intent  was  that  the  repayment                                                               
obligation did not need to occur.                                                                                               
                                                                                                                                
2:30:33 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
2:30:54 PM                                                                                                                    
CHAIR HUGHES reconvened the meeting.                                                                                            
                                                                                                                                
COMMISSIONER  DESIGNEE  TANGEMAN  offered   that  from  a  policy                                                               
perspective,   the  intent   is   to  do   away   with  the   CBR                                                               
[constitutional  budget reserve]  fund, the  three-quarters vote,                                                               
the repayment, and  the sweep options. The intent  of the savings                                                               
reserve fund  was to have  in place  a vehicle to  store revenues                                                               
for  the next  year's budget,  but  only for  that budget,  which                                                               
could be accessed with a simple  majority vote. In the event that                                                               
excess revenue  existed, an  amount would  be deposited  into the                                                               
savings  reserve  fund  to  cover the  next  year's  budget.  Any                                                               
additional revenues would go back  to the permanent fund to repay                                                               
half of  the permanent fund  dividend from the previous  year. If                                                               
excess reserves still existed, the  balance would be deposited to                                                               
the corpus  of the  permanent fund. Therefore,  the need  for the                                                               
CBR  would not  exist.  The savings  [reserve  fund] would  cover                                                               
enough for the next fiscal year  and that is all that is required                                                               
under [SJR 6].                                                                                                                  
                                                                                                                                
COMMISSIONER  DESIGNEE TANGEMAN  said  that if  the committee  is                                                               
going down a  different road, Ms. Mills just wanted  to point out                                                               
that  the  committee   would  be  changing  the   intent  of  the                                                               
governor's resolution, which the committee  has a right to do. He                                                               
said it  was important for  the record to reflect  the governor's                                                               
intent of  SJR 6. He agreed  that eliminating the CBR  is part of                                                               
the resolution.                                                                                                                 
                                                                                                                                
2:32:41 PM                                                                                                                    
SENATOR MICCICHE  said he was  unsure who did not  understand the                                                               
governor's purpose for [SJR 6],  but "that's what we're trying to                                                               
change. That's  the part that  borders on  being unconstitutional                                                               
and  likely gets  stricken down."  He said,  "I support  a strict                                                               
appropriation  limit that  includes tight  reins on  capital." He                                                               
characterized the rest as noise. He  said he thought that was the                                                               
purpose of  going back to the  CBR, but it seemed  as though more                                                               
discussions are needed.                                                                                                         
                                                                                                                                
2:33:22 PM                                                                                                                    
SENATOR SHOWER,  speaking as sponsor  of Amendment 1,  agreed. He                                                               
said two  things were  raised that  he did  not anticipate  so he                                                               
would like to  further review it. He highlighted  that his intent                                                               
was  to   limit  the  amount   of  changes  being  made   to  the                                                               
[Constitution  of  the  State of  Alaska].  As  Senator  Micciche                                                               
noted, the changes  are noise. He suggested that the  goal was to                                                               
limit the  potential issues while  still allowing a  safety valve                                                               
if the state  had a lot of excess revenue  available to allow the                                                               
legislature  to  spend  additional  funds  with  a  cap,  without                                                               
exceeding  or changing  the  intention of  the  amendment to  the                                                               
Constitution  [of  the  State of  Alaska],  which  establishes  a                                                               
strict spending limit  that the state desperately  needs. It just                                                               
needs to be relevant, he said.                                                                                                  
                                                                                                                                
2:34:47 PM                                                                                                                    
SENATOR  SHOWER said  he intended  to rewrite  the amendment  and                                                               
break it into two parts.                                                                                                        
                                                                                                                                
2:35:04 PM                                                                                                                    
SENATOR SHOWER withdrew Amendment 1.                                                                                            
                                                                                                                                
SENATOR MICCICHE objected, then withdrew his objection.                                                                         
                                                                                                                                
2:35:56 PM                                                                                                                    
SENATOR  MICCICHE moved  to  adopt Amendment  2,  work order  31-                                                               
GS1068\A.3, Wallace, 3/27/19.                                                                                                   
                                                      31-GS1068\A.3                                                             
                                                           Wallace                                                              
                                                           3/27/19                                                              
                          AMENDMENT 2                                                                                       
                                                                                                                                
     OFFERED IN THE SENATE                  BY SENATOR MICCICHE                                                                 
     TO:  SJR 6                                                                                                                 
                                                                                                                                
     Page 1, lines 9 - 10:                                                                                                      
          Delete "fifty percent of the cumulative change in                                                                     
        population and inflation since January 1 of the                                                                         
      previous calendar year, derived from federal indices                                                                      
       as prescribed by law, or two percent, whichever is                                                                       
     less."                                                                                                                     
          Insert "the average change in inflation in the                                                                        
     previous  five fiscal  years. In  this subsection,  the                                                                    
     change  in inflation  shall be  based  on the  Consumer                                                                    
     Price  Index for  Anchorage, Alaska,  as prescribed  by                                                                    
     law."                                                                                                                      
                                                                                                                                
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
SENATOR  MICCICHE  said  that  Amendment  2  would  delete  fifty                                                               
percent of the cumulative change  in population or two percent of                                                               
the  consumer price  index, whichever  is less.  He characterized                                                               
this as  a "five-year smooth  change in inflation  average" based                                                               
on  the  consumer  price  index for  Anchorage,  which  is  still                                                               
typically below  that range and  would avoid the spikes.  The old                                                               
limit  was 1.9  percent  below likely  real  inflation, which  he                                                               
suggested is  mathematically unattainable. He said  this presents                                                               
a more realistic curve, and he  had a diagram he could share with                                                               
members so they can see the small change.                                                                                       
                                                                                                                                
2:37:17 PM                                                                                                                    
SENATOR HUGHES  recalled the presentation  indicated that  as the                                                               
economy  grows   and  the  population  changes,   some  parts  of                                                               
government  might need  to grow.  She suggested  that this  might                                                               
mean more teachers or troopers  but probably not other employees.                                                               
She recalled  asking what percentage  of the government  needs to                                                               
grow. She was unsure if he  had a response. She expressed concern                                                               
that it might  be a little "flat" and asked  whether Mr. Tangeman                                                               
could speak to whether it was reasonable.                                                                                       
                                                                                                                                
COMMISSIONER  DESIGNEE TANGEMAN  said that  he did  not have  the                                                               
specific  percentages of  types of  employees in  the state,  but                                                               
certainly if population  is growing in the state,  the line would                                                               
be less flat.  He offered his belief  that it would be  up to the                                                               
legislature  and  the  administration   to  decide  the  type  of                                                               
employees  needed, and  if  it would  be  teachers, troopers,  or                                                               
others. He said that the  administration did not want to restrict                                                               
how  additional funds  should be  spent under  the cap.  He said,                                                               
"It's more just about the cap."                                                                                                 
                                                                                                                                
COMMISSIONER  DESIGNEE TANGEMAN,  speaking to  Amendment 2,  said                                                               
the  administration   does  not  object   to  it.  He   said  the                                                               
administration  understands  it  is   a  formula,  which  can  be                                                               
adjusted.  He   characterized  it  as  "fairly   flat"  from  the                                                               
department's perspective.  He said  that "giving a  little relief                                                               
under that  is certainly reasonable."  He said, "We  don't object                                                               
to the formula change."                                                                                                         
                                                                                                                                
2:39:57 PM                                                                                                                    
SENATOR REINBOLD  asked how  much more  this would  cost assuming                                                               
the total budget would be $10 billion.                                                                                          
                                                                                                                                
COMMISSIONER DESIGNEE  TANGEMAN said  that he  did not  have that                                                               
information.                                                                                                                    
                                                                                                                                
2:40:24 PM                                                                                                                    
ED  KING,  Chief  Economist, Office  of  Management  and  Budget,                                                               
Office  of  the  Governor,  Juneau,  said he  did  not  have  the                                                               
specific  figures with  him but  offered to  provide them  to the                                                               
committee.  Generally speaking,  he said  that Amendment  2 would                                                               
raise the  allowable growth rate  above the proposed rate  in the                                                               
original   resolution.  Given   the   existing  projections   for                                                               
inflation and population, the original  proposal allowed a growth                                                               
rate  of about  0.8 percent  over  time, he  said. The  five-year                                                               
average  real rate  of inflation  against the  three-year average                                                               
budget is closer  to 1.1 percent. Although the  rate in Amendment                                                               
2 is  more than the  original proposal,  it is not  excessive, he                                                               
said.                                                                                                                           
                                                                                                                                
2:41:41 PM                                                                                                                    
SENATOR REINBOLD said that this  would just increase the cap. She                                                               
expressed frustration at  the number of times that  she has heard                                                               
promises that  government will  be reduced,  or how  services are                                                               
needed to address  issues, but she has not seen  the outcome. She                                                               
would  like to  see  government reduced  without having  loophole                                                               
after loophole that allows government to grow.                                                                                  
                                                                                                                                
2:42:38 PM                                                                                                                    
CHAIR HUGHES  asked for further  clarification that  the original                                                               
proposal allows a 0.8 percent  growth rate and under Amendment 2,                                                               
it would be 1.1 percent growth rate.                                                                                            
                                                                                                                                
MR. KING answered that because  of the 2009-14 timeframe with low                                                               
inflation,  the  rolling  five-year  average will  be  about  1.5                                                               
percent  growth   rate.  He  anticipated  that   inflation  would                                                               
stabilize going  forward at 2.25  to 2.5 percent. He  stated that                                                               
the previous  5 years at  2.5 percent inflation would  be allowed                                                               
against the average of the previous  3 years, which would be less                                                               
and be  about 1.1 percent.  In response  to Chair Hughes  he said                                                               
the growth rate  in SJR 6 is 0.8 percent,  which increases to 1.1                                                               
percent under Amendment 2.                                                                                                      
                                                                                                                                
CHAIR HUGHES asked whether the  starting point is more important.                                                               
She  recalled from  the presentation  that the  problem with  the                                                               
1982 spending cap  was the starting point used. At  the time, the                                                               
amendment allowed for  full inflation and then  it ballooned, she                                                               
said. Thus, the starting point  is crucial, but the adjustment is                                                               
not as important.                                                                                                               
                                                                                                                                
COMMISSIONER DESIGNEE  TANGEMAN answered that the  starting point                                                               
in 1982  was a number that  was fairly accurate at  the time, but                                                               
it  was adding  full inflation  and full  population growth  year                                                               
after year. He said that it  was making the line too steep, which                                                               
is why it is currently at $10 billion.                                                                                          
                                                                                                                                
2:44:42 PM                                                                                                                    
MR.  KING  added  that  part  of reason  is  that  inflation  and                                                               
population factors  were applied  to the previous  spending limit                                                               
rather  than to  the  total expenditures.  He  suggested that  it                                                               
meant compounding  growth on money  that was not spent,  which is                                                               
how the state  got out of balance. The proposal  would reset that                                                               
every year by  using a three-year average of  actual spending. He                                                               
agreed it is more important to  adjust to actual spending than to                                                               
use the actual inflation or population figures.                                                                                 
                                                                                                                                
CHAIR HUGHES said  that the adjustment for growth  could use some                                                               
kind  of  calculation using  the  statewide  GDP [gross  domestic                                                               
product].  If so,  the cap  would  be based  on economic  growth,                                                               
which  would allow  for large  increases during  boom times.  She                                                               
questioned why  government growth  should correlate  with private                                                               
industry growth, which  she did not think should  occur. She said                                                               
that things  do not need  to grow proportionately.  She suggested                                                               
that the Senate Finance Committee  may wish to consider using the                                                               
GDP.  She wanted  the record  to  reflect concern  that the  fact                                                               
there is  more money  in the  private sector  does not  mean more                                                               
funding needs to be directed to government growth.                                                                              
                                                                                                                                
SENATOR  MICCICHE remarked  that Mr.  King indicated  that Alaska                                                               
does  not see  the same  correlation between  the budget  and the                                                               
GDP, which is  why the adjustment is set. He  clarified that this                                                               
does not set the base. His  goal is to reduce the budget wherever                                                               
possible. He said this base will  adjust every year. The more the                                                               
budget is reduced the more the base will be reduced, he said.                                                                   
                                                                                                                                
This amendment  reflects the  growth rate and  has nothing  to do                                                               
with  cutting the  budget, or  spending  outside of  the cap.  It                                                               
simply  would set  the  curve.  He offered  his  belief that  the                                                               
governor's curve is  unattainable. He said he does  not think any                                                               
economist in the  world would disagree. He said,  "It's not about                                                               
cutting." It  is about  what happens  to inflationary  growth and                                                               
spending after  that. He said, "If  you think you can  afford the                                                               
same apple  ten years  from now,  you can, but  only if  you keep                                                               
buying progressively smaller apples until  there is not much left                                                               
worth  eating."  He   said  he  would  like  to   hear  from  the                                                               
administration,  but he  said  the curve  is  more realistic  and                                                               
manageable going forward.                                                                                                       
                                                                                                                                
2:48:06 PM                                                                                                                    
COMMISSIONER DESIGNEE  TANGEMAN said he likes  the analogy, which                                                               
is  accurate.  The  administration  does not  disagree  with  the                                                               
amendment  to change  the formula  and address  it in  a slightly                                                               
different  manner since  is still  fairly constrictive,  which is                                                               
the  goal.  He  said,  "If  you  are  interested  in  restricting                                                               
spending, it  must be something  that is not  going to be  out of                                                               
line in five years." As Mr.  King pointed out very astutely, this                                                               
is  not being  compounded  off the  previous  year's cap  amount.                                                               
Instead it is  derived from the previous  year's spending amount.                                                               
Although it  may appear to  be a "flatter"  line, it is  based on                                                               
actual budgets from previous years, he reiterated.                                                                              
                                                                                                                                
2:49:13 PM                                                                                                                    
SENATOR  KIEHL said  that  he  appreciated Commissioner  Designee                                                               
Tangeman's  comment  that  it  should be  up  to  future  elected                                                               
officials  and  the  executive   branch  to  decide  on  spending                                                               
priorities. In  terms of this limit  and the five year  or three-                                                               
year  average, which  is  pegged  to prior  years  rather than  a                                                               
single fixed  point, he expressed  concern that Amendment  2 does                                                               
not have  an allowance  for population  growth. He  recalled that                                                               
U.S.  Senator  Sullivan campaigned  on  a  sustained 3.5  percent                                                               
economic  growth  for  long  periods  of  time.  He  related  his                                                               
understanding   that  the   40-year  growth   rate  in   Alaska's                                                               
population  is about  1.5 percent.  Allowing  only for  inflation                                                               
would put  the state  in a  difficult spot if  the state  built a                                                               
gasline or otherwise had significant  growth. He recalled Senator                                                               
Reinbold's desire  for restraint. He asked  whether the five-year                                                               
average to actual spending could  constrain spending below actual                                                               
population growth.                                                                                                              
                                                                                                                                
MR.  KING  answered  yes,  that  it  would  restrict  it  without                                                               
accounting for  population growth  and it does  not allow  for an                                                               
escalation for  population growth.  The question  becomes whether                                                               
the legislature  believes that  it is  necessary to  include both                                                               
the full inflation and the  full population growth escalation. He                                                               
said that  history has shown  that the  economy has been  able to                                                               
grow at  a faster rate than  that government has needed  to grow,                                                               
at least  in Alaska's  history. The  last time  the state  had an                                                               
economic  boom the  population more  than doubled  and government                                                               
spending did not.                                                                                                               
                                                                                                                                
This leads to  a question of why that is  the case. Academically,                                                               
one can see how technology,  productivity, and economies of scale                                                               
have  affected the  economy. For  example,  just because  student                                                               
population  increases by  10 percent  doesn't  mean that  schools                                                               
need ten percent more teachers.  And just because inflation grows                                                               
by 5 percent  does not necessarily mean everyone's  wages need to                                                               
increase by  5 percent because  technological and  other economic                                                               
factors are pushing down on prices.                                                                                             
                                                                                                                                
MR. KING  said that the current  law in the [Constitution  of the                                                               
State of Alaska] that allows  the full consideration of inflation                                                               
and population is  generous. The question for  the legislature is                                                               
what amount  less than  that is the  proper amount.  The governor                                                               
put forth a proposal that was  much more limiting [in SJR 6], and                                                               
under Amendment 2, it is a  little less restrictive. He said, "If                                                               
you  allowed zero  growth, I  would say  that at  some point  you                                                               
might  run into  a situation  where the  population would  not be                                                               
allowed  to  grow  because  services  would not  be  able  to  be                                                               
provided." However,  he did  not think that  is the  situation in                                                               
this case.                                                                                                                      
                                                                                                                                
2:53:05 PM                                                                                                                    
SENATOR KIEHL acknowledged  that is the reason  to use population                                                               
instead  of  economic growth  as  one  factor. However,  he  also                                                               
appreciated  knowing that  by floating  the period  used for  the                                                               
calculation of  the cap,  in the  sustained growth  timeframe, it                                                               
would not be  able to increase the size of  government as fast as                                                               
population and inflation increased. He  said he has a fundamental                                                               
disagreement  with Commissioner  Designee Tangeman  that it  is a                                                               
good idea to choose troopers  or teachers when the population and                                                               
the economy is growing.                                                                                                         
                                                                                                                                
He  said  the existing  language  only  lists "inflation,"  which                                                               
leaves it to the legislature  to define what inflationary measure                                                               
to  apply.  He  directed  attention  to [Page  1,  lines  6-7  of                                                               
Amendment  2, referred  to as  A.3], which  read, "?the  Consumer                                                               
Price  Index for  Anchorage, Alaska,  as prescribed  by law."  He                                                               
asked  for  further  clarification  on  the  reason  to  use  the                                                               
Consumer  Price Index  (CPI) for  Anchorage, but  then allow  the                                                               
legislature to "fiddle" with it.                                                                                                
                                                                                                                                
SENATOR MICCICHE  replied that  he did  not see  it that  way. He                                                               
said that  the CPI for  Anchorage is  prescribed by law.  That is                                                               
the  index  that would  be  used.  He considered  other  national                                                               
indexes but  did not believe  they were adequately  reflective of                                                               
the real cost of doing business  in Alaska. He offered his belief                                                               
that the CPI for Anchorage is the best one to use.                                                                              
                                                                                                                                
SENATOR KIEHL offered to follow-up  with Legal Services later. He                                                               
interprets this  to mean that  a future legislature  could direct                                                               
the Department of Labor &  Workforce Development to write its own                                                               
Consumer Price Index for Anchorage by law.                                                                                      
                                                                                                                                
SENATOR MICCICHE asked the Department of Law to respond.                                                                        
                                                                                                                                
2:55:34 PM                                                                                                                    
MS. MILLS  related her understanding that  the question surrounds                                                               
the  specific point  to the  language "Consumer  Price Index  for                                                               
Anchorage,  as prescribed  by law."  She said  that the  existing                                                               
amendment,  similar  to  the  governor's  proposal,  specifically                                                               
refers to [Page 1, lines 9 -  10 of SJR 6], "derived from federal                                                               
indices  as prescribed  by law,  ?" She  said that  [Amendment 2,                                                               
lines 6-7] reads, "the change in  inflation shall be based on the                                                               
Consumer  Price Index  for Anchorage,  Alaska, ?"  She said  that                                                               
points to  a specific index. It  goes on to read,  "as prescribed                                                               
by law" and she was unsure of  what would need to be clarified in                                                               
statute.                                                                                                                        
                                                                                                                                
2:56:42 PM                                                                                                                    
SENATOR  MICCICHE  responded  that  Amendment  2  refers  to  the                                                               
Consumer Price  Index for  Anchorage. He said  he thinks  that is                                                               
quite clear.  He said he understands  the concern, but he  is not                                                               
going  to waste  a lot  of time  on it.  He asked  the record  to                                                               
reflect  that  it   refers  to  the  Consumer   Price  Index  for                                                               
Anchorage.                                                                                                                      
                                                                                                                                
SENATOR  REINBOLD recalled  that Mr.  King had  said 0.8  and 1.1                                                               
would be  the difference.  She asked  whether inflation  has gone                                                               
over that historically.                                                                                                         
                                                                                                                                
MR.  KING  responded  that  other   than  in  times  of  economic                                                               
recession, inflation is typically above that rate.                                                                              
                                                                                                                                
SENATOR   REINBOLD  asked   whether  inflation   can  be   really                                                               
significant in other countries.                                                                                                 
                                                                                                                                
MR. KING  answered yes.  He stated  that several  countries print                                                               
money  to deal  with  debt  issues, which  can  result in  hyper-                                                               
inflationary periods. He  said that the State of  Alaska does not                                                               
have the  ability to print  money so the  state would not  be the                                                               
driving force for that type  of problem in Alaska. Theoretically,                                                               
the federal government could print money.                                                                                       
                                                                                                                                
SENATOR REINBOLD  asked whether this  has the potential  to raise                                                               
the appropriation limit.                                                                                                        
                                                                                                                                
MR.  KING  answered  yes, that  the  consideration  of  inflation                                                               
allows the budget to grow in  response to inflation. He related a                                                               
scenario in which periods of  high inflation happened, and the 5-                                                               
year averaging  would smooth it out.  If it only occurred  in one                                                               
year, it  would not be a  spike and a drop.  However, in response                                                               
to  rising  costs  of  services   the  government  provides,  the                                                               
legislature  would  have  the  ability  to  increase  its  budget                                                               
accordingly, he said.                                                                                                           
                                                                                                                                
2:59:31 PM                                                                                                                    
SENATOR REINBOLD  related her understanding  that as  the economy                                                               
grows, less government is needed.  She remarked that she does not                                                               
consider them  as services,  but rather  that people  become more                                                               
self-sufficient, that  they have  jobs, and  they "get  their act                                                               
together."  She suggested  that  more  infrastructure and  easier                                                               
ways to access  resources might also occur. She said  that if the                                                               
legislature is going  to propose changes to  the Constitution [of                                                               
the State  of Alaska], it  is important to  make sure that  it is                                                               
doing  the  right   thing  and  she  certainly   wants  to  limit                                                               
government, with as  few loopholes as possible  for government to                                                               
grow when economic growth occurs.                                                                                               
                                                                                                                                
3:00:19 PM                                                                                                                    
CHAIR  HUGHES  asked  when  inflation  has  risen,  historically,                                                               
whether  the smoothing  factor of  the five-year  averaging would                                                               
take care  of the spikes.  She related her understanding  that it                                                               
typically only lasts a few years.                                                                                               
                                                                                                                                
MR. KING  agreed that except for  a high inflation period  in the                                                               
late  70s, with  sustained  double-digit inflation,  it has  been                                                               
very rare to  have more than several years in  which inflation is                                                               
much  higher  than 2.5  percent.  In  further response  to  Chair                                                               
Hughes, he  recalled that it was  4 - 5 years,  although he would                                                               
need to double check.                                                                                                           
                                                                                                                                
CHAIR HUGHES  asked whether  he was  comfortable with  the change                                                               
and  that the  five-year  smoothing factor  would likely  address                                                               
Senator Reinbold's concerns.                                                                                                    
                                                                                                                                
3:01:24 PM                                                                                                                    
COMMISSIONER   DESIGNEE   TANGEMAN   answered   yes,   that   the                                                               
administration is comfortable with this formula.                                                                                
                                                                                                                                
3:01:29 PM                                                                                                                    
CHAIR HUGHES removed her objection.                                                                                             
                                                                                                                                
SENATOR REINBOLD objected.                                                                                                      
                                                                                                                                
3:01:48 PM                                                                                                                    
SENATOR MICCICHE  remarked that  loophole means that  there would                                                               
be some way out  of the spending limit or some  way around it. He                                                               
said  that the  legislature simply  needs to  cut and  reduce the                                                               
state's  spending  and many  of  us  believe this,  although  not                                                               
everyone does.  The appropriation  limit has  nothing to  do with                                                               
that because  as the budget is  cut, it resets the  baseline. The                                                               
approach [under Amendment 2] is  a more realistic curve. In fact,                                                               
reviewing the 10-year period from FY  03 - FY 19, the changes are                                                               
almost  exactly  the  same. He  related  his  understanding  that                                                               
[inflation] ranges about  one-tenth of a percent  every couple of                                                               
years. He  said that this  figure does not accelerate  over time,                                                               
that it  is steady and is  below the interest rate  and below the                                                               
Anchorage  CPI.  He  offered  his  belief that  this  is  a  more                                                               
realistic way of dealing with that increase.                                                                                    
                                                                                                                                
SENATOR REINBOLD clarified that what  she meant by loophole is it                                                               
provides just one more opportunity  to increase the appropriation                                                               
limit. She said it seems  as though the legislature is constantly                                                               
finding them. "I'm going to be a no vote," she said.                                                                            
                                                                                                                                
3:03:10 PM                                                                                                                    
A  roll  call vote  was  taken.  Senators Micciche,  Shower,  and                                                               
Hughes voted  in favor of  Amendment 2 and Senators  Reinbold and                                                               
Kiehl voted  against it. Therefore,  Amendment 2 passed by  a 3:2                                                               
vote.                                                                                                                           
                                                                                                                                
3:03:40 PM                                                                                                                    
CHAIR HUGHES  remarked on  the time  constraint before  taking up                                                               
Amendment 3, which members briefly discussed.                                                                                   
                                                                                                                                
3:04:58 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
3:06:25 PM                                                                                                                    
CHAIR HUGHES recessed the meeting.                                                                                              
                                                                                                                                
6:01:32 PM                                                                                                                    
CHAIR HUGHES reconvened  the meeting at 6:01 p.m.  Present at the                                                               
call to  order were Senators  Micciche, Reinbold,  Shower, Kiehl,                                                               
and Chair Hughes.                                                                                                               
                                                                                                                                
6:02:09 PM                                                                                                                    
CHAIR HUGHES remarked the committee  will continue to hear SJR 6.                                                               
She advised the public that  written testimony could be submitted                                                               
to senate.judiciary@akleg.gov.                                                                                                  
                                                                                                                                
6:03:37 PM                                                                                                                    
CHAIR HUGHES opened public testimony on SJR 6.                                                                                  
                                                                                                                                
6:04:01 PM                                                                                                                    
DEBORAH  HOLLAND, representing  herself, Anchorage,  testified in                                                               
support of SJR 6 because she  would like a sustainable budget and                                                               
wants the legislature to cut the budget.                                                                                        
                                                                                                                                
6:04:33 PM                                                                                                                    
ALLEN  HIPPLER,  representing  himself, Anchorage,  testified  in                                                               
support  of  SJR  6  because  the  state  needs  to  balance  its                                                               
spending,  revenues,  and  expenditures   and  still  retain  the                                                               
balance in the permanent fund.                                                                                                  
                                                                                                                                
6:04:49 PM                                                                                                                    
TIM  ROBINSON,   representing  himself,  Wasilla,   testified  in                                                               
opposition  to  SJR  6  and   the  governor's  budget  since  the                                                               
governor's  budget is  short sighted,  ill advised,  and sure  to                                                               
wreak  havoc on  Alaska. He  offered  his belief  that the  state                                                               
needs  a  progressive  income  tax  with a  credit  for  the  PFD                                                               
[permanent fund dividend]. He said  he sent written comments with                                                               
his specific suggestions.                                                                                                       
                                                                                                                                
6:06:08 PM                                                                                                                    
CHAIR HUGHES  remarked that the  committee was not  taking public                                                               
testimony on  the budget and that  this hearing was related  to a                                                               
constitutional  amendment  to  institute a  state  constitutional                                                               
spending cap.                                                                                                                   
                                                                                                                                
6:06:27 PM                                                                                                                    
LESLIE  HVAMASHAD,  representing  herself,  Houston  offered  her                                                               
support  for SJR  6, stating  that "real  Alaskans" will  vote in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:07:04 PM                                                                                                                    
JOHN MORIN, representing himself,  Soldotna, testified in support                                                               
of SJR 6 because he is tired of the liberals.                                                                                   
                                                                                                                                
6:07:26 PM                                                                                                                    
SAM  ALBANESE, representing  himself,  Eagle  River, offered  his                                                               
support for SJR  6 since the state needs a  cap to be responsible                                                               
about its spending. Alaska does not  have a revenue problem but a                                                               
spending problem, he said.                                                                                                      
                                                                                                                                
6:07:55 PM                                                                                                                    
CHARLES  SIMON, representing  himself, Hooper  Bay, testified  in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:08:27 PM                                                                                                                    
BARBARA  HANAY, representing  herself, North  Pole, testified  in                                                               
support of  SJR 6 and the  governor's package. She said  that she                                                               
is an economist who has lived in the state for 30 years.                                                                        
                                                                                                                                
6:08:57 PM                                                                                                                    
LYNN LOWRY, representing himself,  Wasilla, testified in favor of                                                               
the PFD and not for a cap.                                                                                                      
                                                                                                                                
6:09:49 PM                                                                                                                    
CAROLINE  MALSEED,  representing   herself,  Juneau,  stated  her                                                               
opposition to  SJR 6 because the  constitution provides long-term                                                               
stability to  the state. She  said that elected  officials should                                                               
make  shorter   term  fiscal  decisions   rather  than   to  have                                                               
appropriations imbedded in the  constitution. She emphasized that                                                               
the governor and the legislature  need to have the flexibility to                                                               
create  appropriation  standards in  response  to  the needs  and                                                               
values of the people in Alaska.                                                                                                 
                                                                                                                                
6:11:47 PM                                                                                                                    
SENATOR  SHOWER  asked  if  the Constitution  [of  the  State  of                                                               
Alaska] has  a spending limit  and whether this  resolution would                                                               
just tweak it.                                                                                                                  
                                                                                                                                
MS.  MALSEED   responded  that  she   did  not  think   that  the                                                               
Constitution [of  the State  of Alaska] needs  to be  tweaked. In                                                               
further response  to Senator  Shower she  said she  understands a                                                               
spending  limit currently  exists in  the constitution.  She said                                                               
she does not think it needs to be adapted.                                                                                      
                                                                                                                                
6:12:25 PM                                                                                                                    
BRIDGET  SMITH,   representing  herself,  Juneau,   testified  in                                                               
opposition  to   SJR  6  since   Alaska  has  one  of   the  best                                                               
constitutions in  the U.S. She  said that  SJR 6 would  limit the                                                               
legislature's  power to  appropriate, and  the people's  power to                                                               
influence the  decisions. She expressed concern  with Section 16.                                                               
She said that Judge Tom  Stewart brought constitutions from other                                                               
states  to  use as  models  for  our constitution.  Further,  the                                                               
current constitutional spending limit is  so generous that it has                                                               
never  been   used.  She  said   that  SJR  6  would   limit  the                                                               
legislature's  power to  appropriate and  limit the  people since                                                               
they elected their representatives.                                                                                             
                                                                                                                                
6:14:39 PM                                                                                                                    
KEN  FREDERICO,  representing   herself,  Wasilla,  testified  in                                                               
support of SJR 6 because the state needs to rein in spending.                                                                   
                                                                                                                                
6:15:53 PM                                                                                                                    
OLIVIA  FELLERS,  representing  herself,  Wasilla,  testified  in                                                               
support of SJR 6 to  rein in legislators, implement efficiencies,                                                               
and to leave the PFD alone.  She offered her belief that Governor                                                               
Dunleavy has the right plan in  mind and needs public support. In                                                               
response  to Senator  Micciche, she  responded that  she supports                                                               
SJR 6.                                                                                                                          
                                                                                                                                
6:17:02 PM                                                                                                                    
EDWARD  MORAN,   representing  himself,  Wasilla,   testified  in                                                               
support of  the governor's budget.  He said the state  needs more                                                               
discipline  in  government spending  and  must  reduce waste.  In                                                               
response to  Chair Hughes, he  offered his  support to SJR  6 and                                                               
the spending cap.                                                                                                               
                                                                                                                                
6:17:57 PM                                                                                                                    
KEN  BROWN, representing  himself, Soldotna,  voiced his  support                                                               
for  SJR 6  and  the  legislators who  support  it. He  expressed                                                               
opposition to legislators who oppose it.                                                                                        
                                                                                                                                
6:18:36 PM                                                                                                                    
CAROLYN  PORTER,  representing   herself,  Palmer,  testified  in                                                               
support of  SJR 6. She said  that tweaking the spending  cap is a                                                               
means  to  cut  spending  since the  legislature  has  been  over                                                               
appropriating.  She  urged  members   not  to  cut  dividends  or                                                               
implement taxes, but to reduce spending.                                                                                        
                                                                                                                                
6:19:28 PM                                                                                                                    
FRANK GOLDTHWAITE,  representing himself, Sterling,  testified in                                                               
support of  SJR 6. Government  should have a spending  limit just                                                               
as Alaskan households limit their  spending. He urged members not                                                               
to touch  the [corpus  of] the permanent  fund and  to distribute                                                               
earnings.  He supported  "getting something  in the  coffers" and                                                               
remarked that "spending is out of control."                                                                                     
                                                                                                                                
6:20:55 PM                                                                                                                    
MARILYN MENISHNUCHE,  representing herself, Petersburg,  said she                                                               
strongly  opposed  SJR  6  because   she  does  not  support  any                                                               
amendments to the Constitution of the State of Alaska.                                                                          
                                                                                                                                
6:21:20 PM                                                                                                                    
DARREN FIDLER,  representing himself,  Wasilla, stated  his total                                                               
support  for a  spending limit  [SJR 6].  After asking  whether a                                                               
sales tax  was under consideration in  SJR 6 and learning  it was                                                               
not, he offered his total support for the spending cap in SJR 6.                                                                
                                                                                                                                
6:22:24 PM                                                                                                                    
MARIETTA  DAVIS, representing  herself, Petersburg,  testified in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:22:52 PM                                                                                                                    
NORMAN  CLARK,  representing   himself,  Kotzebue,  testified  in                                                               
opposition  to SJR  6. He  said he  hopes Governor  Dunleavy will                                                               
change the  law to prevent  reducing the permanent  fund dividend                                                               
so Alaskans will  have more money. He expressed  concern that too                                                               
many  out of  state  people  come to  Alaska  and  apply for  the                                                               
permanent fund dividend.                                                                                                        
                                                                                                                                
6:23:43 PM                                                                                                                    
JOAN TRUITT,  representing herself,  Big Lake, testified  in full                                                               
support of SRJ 6 to reduce spending.                                                                                            
                                                                                                                                
6:23:55 PM                                                                                                                    
GREGORY  WHITE,  representing  himself, Anchorage,  testified  in                                                               
support  of  SJR   6  to  have  a  spending   limit  and  prevent                                                               
legislators from overspending.                                                                                                  
                                                                                                                                
6:24:31 PM                                                                                                                    
JACK  JOHNSON, representing  himself,  North  Pole, testified  in                                                               
support of SJR 6 to reduce spending.                                                                                            
                                                                                                                                
6:25:19 PM                                                                                                                    
EMILY   MESCH,  representing   herself,   Juneau,  testified   in                                                               
opposition to SJR 6 because it  will not have a short-term effect                                                               
and  would   limit  the  legislature's   ability  to   deal  with                                                               
unforeseeable  problems. She  characterized it  as a  solution in                                                               
search of a problem.                                                                                                            
                                                                                                                                
6:26:01 PM                                                                                                                    
LYNDA  MYERS,  representing   herself,  Anchorage,  testified  in                                                               
support of  SJR 6  due to  her concern  that the  legislature has                                                               
overspent to the  point it now wants to take  money set aside for                                                               
the  people when  the  permanent fund  was  established while  it                                                               
gives  itself raises.  She further  expressed  concern about  the                                                               
residency  requirements   to  qualify  for  the   permanent  fund                                                               
dividend.                                                                                                                       
                                                                                                                                
DAVE  DANEZINE,  representing   himself,  Kasilof,  testified  in                                                               
support  of SJR  6. He  said he  would like  legislative sessions                                                               
limited to 90 days, and the  state to stop using salt on highways                                                               
and bridges.                                                                                                                    
                                                                                                                                
6:28:46 PM                                                                                                                    
SHOSHANA  KUEN,  representing  herself, Fairbanks,  testified  in                                                               
opposition  to SJR  6 since  it would  be difficult  to remove  a                                                               
spending cap and it could adversely affect future generations.                                                                  
                                                                                                                                
6:29:21 PM                                                                                                                    
GREG GARRIS, representing himself,  Talkeetna, testified in favor                                                               
of SJR 6.                                                                                                                       
                                                                                                                                
6:29:46 PM                                                                                                                    
BRIDGETTE VAUGHN, representing herself,  North Pole, as a 30-year                                                               
resident, testified in support of  SJR to cap government spending                                                               
and ensure Alaska's great wealth  survives. She urged members not                                                               
to cut education first.                                                                                                         
                                                                                                                                
6:30:57 PM                                                                                                                    
TANYA LANGE,  representing herself,  Kenai, testified  in support                                                               
of SJR 6 because the state  needs to cut spending and get control                                                               
over  the  budget without  taking  the  people's [permanent  fund                                                               
dividend].                                                                                                                      
                                                                                                                                
6:32:11 PM                                                                                                                    
ARTIS  SELLIERE, representing  himself,  Big  Lake, testified  in                                                               
support of  SJR 6 because he  disagrees that a spending  cap will                                                               
tie the legislature's hands. He  said that government can do with                                                               
less, just as  people must cut their household  budgets when they                                                               
have less income.                                                                                                               
                                                                                                                                
6:33:07 PM                                                                                                                    
GUY  WHITNEY,  representing   himself,  Ketchikan,  testified  in                                                               
support  of SJR  6. He  echoed the  previous testifier  who urged                                                               
members to  cut the spending  just as  his family must  budget if                                                               
their income is reduced.                                                                                                        
                                                                                                                                
6:33:41 PM                                                                                                                    
TIM STATON, representing himself,  Fairbanks, offered his support                                                               
of SJR  6 because a spending  cap is long overdue  to protect the                                                               
permanent  fund  dividend  (PFD)  program. He  urged  members  to                                                               
return the PFD that Governor Walker cut.                                                                                        
                                                                                                                                
6:34:35 PM                                                                                                                    
COLLEEN  BAGOT,  representing  herself, Palmer,  as  a  life-long                                                               
Alaskan,  testified  in support  of  SJR  6  in order  to  [limit                                                               
government spending]  and prevent  government from  stealing from                                                               
the people.                                                                                                                     
                                                                                                                                
6:35:20 PM                                                                                                                    
LINN  MCCABE,  representing  herself,   Big  Lake,  testified  in                                                               
support of the  constitutional spending cap to give  the people a                                                               
vote  in  the next  general  election.  The current  spending  is                                                               
completely  irresponsible.  She  said  she  supports  a  balanced                                                               
budget. The  legislature has proven  over and over again  that it                                                               
cannot self-regulate.  She related her understanding  that if the                                                               
constitutional spending limit had  been implemented 12 years ago,                                                               
the  state would  have  $29  billion more  plus  interest in  the                                                               
permanent fund.                                                                                                                 
                                                                                                                                
6:36:37 PM                                                                                                                    
LARRY BEACH, representing himself,  Wasilla, testified in support                                                               
of SJR  6 and cautioned  that legislators  who do not  follow the                                                               
will of  the people  will not  be re-elected.  He noted  that the                                                               
hearing  last week  on SB  23 had  overwhelming support,  but the                                                               
legislature is not paying any attention.                                                                                        
                                                                                                                                
6:38:00 PM                                                                                                                    
JERRY  BAGNESCHI, representing  himself, Wasilla,  stated he  has                                                               
been an Alaska  resident since 1974. When the  permanent fund was                                                               
established the  state had  a "rainy day"  account and  an energy                                                               
account in  case of  "bad times." The  legislature spent  all the                                                               
money and now wants to take the people's money, he said.                                                                        
                                                                                                                                
6:38:47 PM                                                                                                                    
ROSEMARY  LEBOWITZ, representing  herself,  Hoonah, testified  in                                                               
support  of  SJR  6  because  it seems  wise  to  conserve  state                                                               
spending  and prevent  a state  tax that  would put  government's                                                               
hands right into our pockets.                                                                                                   
                                                                                                                                
Several senators made anecdotal comments.                                                                                       
                                                                                                                                
6:40:44 PM                                                                                                                    
MICHAEL  GERENDAY, representing  himself,  Wasilla, testified  in                                                               
support of  SJR 6 to  institute a spending  cap. He said  he does                                                               
not agree  with state  spending, and that  the permanent  fund is                                                               
the people's money. He stated that  his family is poor, that good                                                               
jobs  are not  available, and  he  relies on  the permanent  fund                                                               
dividend to survive.                                                                                                            
                                                                                                                                
6:41:41 PM                                                                                                                    
JARED  JORGENSEN, representing  himself,  Soldotna, testified  in                                                               
support of SJR 6 to provide a spending cap.                                                                                     
                                                                                                                                
6:42:46 PM                                                                                                                    
KATIE   BOTZ,   representing   herself,  Juneau,   testified   in                                                               
opposition  to SJR  6. She  said  that the  legislature needs  to                                                               
budget money wisely. She said that  the state needs an income tax                                                               
and  should reduce  the permanent  fund  dividend. She  expressed                                                               
concern about  seasonal workers who  take earnings out  of state.                                                               
In response to  Chair Hughes, she said she  currently opposes SJR
6, but hopes to see it back in the future.                                                                                      
                                                                                                                                
6:45:52 PM                                                                                                                    
ELIZABETH SWEET,  representing herself, North Pole,  testified in                                                               
support of SJR  6 to reduce spending. She said  she also supports                                                               
SB 23 and 24.                                                                                                                   
                                                                                                                                
6:46:34 PM                                                                                                                    
JOHN MILLER, representing himself,  Wasilla, testified in support                                                               
of  SJR 6  because he  supports the  financial plan  the governor                                                               
laid out  during his town hall  meeting. He said he  would like a                                                               
spending cap in the constitution.                                                                                               
                                                                                                                                
6:47:20 PM                                                                                                                    
STACEY SEEGERS,  representing herself, Eagle River,  testified in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:48:00 PM                                                                                                                    
JAMES SQUYERS, representing himself,  Rural Deltana, testified in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:48:20 PM                                                                                                                    
PAMELA GOODE,  representing herself, Rural Deltana,  testified in                                                               
support of  SJR 6.  She said  the problem  has always  been state                                                               
spending and this will remedy future state spending.                                                                            
                                                                                                                                
6:48:53 PM                                                                                                                    
FRANK WHITESIDES,  representing himself, Ketchikan,  testified in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:49:12 PM                                                                                                                    
DAVID AUSTIN, representing himself,  Hoonah, testified in support                                                               
of SJR 6.                                                                                                                       
                                                                                                                                
6:49:27 PM                                                                                                                    
RONALD  HOWARD,  representing  himself, Ketchikan,  testified  in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:49:55 PM                                                                                                                    
KIRSA HUGHES-SKANDIS, representing  herself, Juneau, testified in                                                               
opposition  to  SJR 6  because  she  opposes putting  legislative                                                               
choices in  the constitution.  She said it  was not  necessary 30                                                               
years  ago when  the income  tax  was repealed.  She offered  her                                                               
belief that SJR  6 would limit the state from  being flexible and                                                               
adaptable  when  it  needs to  address  unknown  economic  future                                                               
events.                                                                                                                         
                                                                                                                                
6:50:23 PM                                                                                                                    
GAIL LIMBAUGH-MOORE, representing  herself, Soldotna testified in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:50:49 PM                                                                                                                    
KAREN PERRY,  representing herself, Wasilla, speaking  as a state                                                               
resident  since 1982,  testified in  support of  SJR 6.  She said                                                               
that her family is Dunleavy strong.                                                                                             
                                                                                                                                
6:52:04 PM                                                                                                                    
JUDITH CLARK,  representing herself, Hoonah,  offered conditional                                                               
support of SJR 6 if it  would prevent taxes since the prospect of                                                               
income or  sales taxes  is an untenable  option, with  a possible                                                               
annual review if conditions change.  She acknowledged that no one                                                               
likes the proposed cuts.                                                                                                        
                                                                                                                                
6:52:34 PM                                                                                                                    
JASON DUNN,  representing himself,  Wasilla testified  in support                                                               
of  SJR 6  and  the  governor's plan.  He  suggested that  before                                                               
legislators  "steal  the  people's  money," they  should  cut  10                                                               
percent of their income. He  added that disabled veterans rely on                                                               
the PFD.                                                                                                                        
                                                                                                                                
6:54:05 PM                                                                                                                    
RALPH  VERNACHIO,  representing  himself, Chugiak,  testified  in                                                               
support of SJR 6.                                                                                                               
                                                                                                                                
6:54:42 PM                                                                                                                    
RON  GILLHAM,   representing  himself,  Soldotna,   testified  in                                                               
support of SJR 6 since the  spending cap will keep the government                                                               
in check.                                                                                                                       
                                                                                                                                
6:55:10 PM                                                                                                                    
DONNA AUSTIN, representing herself,  Hoonah, testified in support                                                               
of SJR 6.                                                                                                                       
                                                                                                                                
6:56:06 PM                                                                                                                    
DOUGLAS  LOWRY,  representing  himself, Fairbanks,  testified  in                                                               
support of SJR 6 to keep  spending within our means and to retain                                                               
the PFD, which rightfully belongs  to the citizens and should not                                                               
be used to fund government.                                                                                                     
                                                                                                                                
6:57:05 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
7:01:20 PM                                                                                                                    
CHAIR HUGHES reconvened the meeting.                                                                                            
                                                                                                                                
7:01:49 PM                                                                                                                    
SENATOR  MICCICHE moved  to  adopt Amendment  3,  work order  31-                                                               
GS1068\ A.1, Wallace, 3/22/19, which read as follows:                                                                           
                                                                                                                                
                                                      31-GS1068\A.1                                                             
                                                           Wallace                                                              
                                                           3/22/19                                                              
                          AMENDMENT 3                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                  BY SENATOR MICCICHE                                                                 
     TO:  SJR 6                                                                                                                 
                                                                                                                                
                                                                                                                                
     Page 2, lines 8 - 12:                                                                                                      
          Delete all material and insert:                                                                                       
               "(6)  from a non-State source in trust for a                                                                     
        specific purpose, including revenues of a public                                                                        
       enterprise or public corporation of the State that                                                                       
     issues revenue bonds; and"                                                                                                 
                                                                                                                                
     Renumber the following paragraph accordingly.                                                                              
                                                                                                                                
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
SENATOR  MICCICHE referred  to page  2, lines  8-12 of  SJR 6  to                                                               
Section 16(a)(6)-(7)  and stated  that Amendment 3  would combine                                                               
the two paragraphs.  It would still allow money held  in trust by                                                               
the  state  or  received  from   the  federal  government  for  a                                                               
particular  purpose, or  from a  source other  than the  state or                                                               
federal government  for a specific  purpose, such as  a donation.                                                               
However, Amendment 3  would allow other [funds]  from a non-state                                                               
source to be used. For example,  the public could decide to put a                                                               
project  on the  ballot  if they  wanted to  build  a bridge  and                                                               
establish a  toll on  the bridge. He  envisioned that  the Alaska                                                               
Marine Highway System (AMHS) could  decide it would like to cover                                                               
more  costs related  to coastal  communities.  Amendment 1  would                                                               
allow the  public to move  something forward that is  outside the                                                               
appropriation limit  established by  Article IX,  sec. 16  of the                                                               
Constitution  of the  State of  Alaska. This  language would  not                                                               
allow the legislature  to go outside of  the appropriation limit,                                                               
but it would  allow the public to  do so, which is  the intent of                                                               
Amendment 3.                                                                                                                    
                                                                                                                                
7:03:30 PM                                                                                                                    
SENATOR  KIEHL   asked  how  Amendment   3  would   restrain  the                                                               
legislature from  creating a  public corporation  to do  the same                                                               
activity the sponsor of Amendment 3 described.                                                                                  
                                                                                                                                
SENATOR MICCICHE responded  that it does not, since  the state is                                                               
already  included  in  paragraphs   (6)  and  (7).  However,  his                                                               
specific rationale  to add this  language is to allow  the public                                                               
to  create  a  public  corporation  or  enterprise  to  meet  the                                                               
public's need outside of the cap in proposed Section 16.                                                                        
                                                                                                                                
7:04:09 PM                                                                                                                    
SENATOR  KIEHL asked  for further  clarification on  the language                                                               
"in  trust"  [on   line  3  of  Amendment  3].   He  related  his                                                               
understanding  that in  trust has  a specific  legal meaning.  It                                                               
seemed as  though the  sponsor of  Amendment 3,  was using  it to                                                               
mean "money  that the  state holds for  a specific  purpose," but                                                               
not a  legal trust  with "lock up"  provisions. He  recalled that                                                               
private  sector  donations  for   a  specific  project  would  be                                                               
included in the "in trust" language.                                                                                            
                                                                                                                                
SENATOR  MICCICHE  answered that  existing  trusts,  such as  the                                                               
Alaska Mental Health Trust Authority  (AMHTA), the [Public School                                                               
Trust Fund],  and other  existing trusts  are already  outside of                                                               
the cap.  Amendment 3  would specifically  apply to  new projects                                                               
that might arise after the cap, if passed, is established.                                                                      
                                                                                                                                
7:05:28 PM                                                                                                                    
SENATOR  REINBOLD   asked  whether  Amendment  3   could  include                                                               
corporations such as the  [Alaska Gasline Development Corporation                                                               
(AGDC), the  Alaska Industrial  Development and  Export Authority                                                               
(AIDEA), the  Alaska Railroad Corporation  (ARRC), or  the Alaska                                                               
Energy  Authority's (AEA)  Power  Cost  Equalization (PCE)].  She                                                               
said this seemed like a "broad wide-open door."                                                                                 
                                                                                                                                
SENATOR  MICCICHE   answered  that  those  were   already  public                                                               
corporations,  which are  outside of  the spending  cap. He  said                                                               
this would not  open up anything additional, but  the language in                                                               
Amendment 3 would apply to a  new project that may arise that the                                                               
public supports.                                                                                                                
                                                                                                                                
7:06:07 PM                                                                                                                    
SENATOR  REINBOLD  asked  whether  the Department  of  Law  could                                                               
respond.  She  further asked  if  it  could  mean a  $40  billion                                                               
gasline.                                                                                                                        
                                                                                                                                
MS. MILLS  responded that  that this is  language that  exists in                                                               
the current constitutional appropriation limit.                                                                                 
                                                                                                                                
7:06:56 PM                                                                                                                    
SENATOR  REINBOLD  referred  to  paragraph  (6),  which  read  as                                                               
follows:                                                                                                                        
                                                                                                                                
     "(6)from  a non-State  source in  trust for  a specific                                                                    
     purpose, including  revenues of a public  enterprise or                                                                    
     public  corporation of  the  State  that issue  revenue                                                                    
     bond; and"                                                                                                                 
                                                                                                                                
She  said that  it sounds  like a  dedicated "non-State  source,"                                                               
"including   revenues   of   a  public   enterprise   or   public                                                               
corporation," which  sounds like  it is from  public corporations                                                               
like AIDEA, ARRC,  or the AGDC. It seemed to  her that this could                                                               
be "busting  through a cap"  if people were creative  enough. She                                                               
asked whether people could build a gasline.                                                                                     
                                                                                                                                
MS. MILLS  answered that the language  does not go a  lot broader                                                               
than  what it  is  replacing.  She said  that  revenue bonds  are                                                               
already   exempted.   She   explained    that   the   state   can                                                               
constitutionally issue revenue bonds  if revenues are anticipated                                                               
to cover  them. This language  does open  it up a  little broader                                                               
than the current two exceptions, but not by a whole lot.                                                                        
                                                                                                                                
SENATOR  REINBOLD   asked  for  further  clarification   on  what                                                               
Amendment 3 does and what it would allow.                                                                                       
                                                                                                                                
MS.  MILLS  said  that  the  amendment  would  encompass  federal                                                               
appropriations, which are  considered held in trust  by the state                                                               
to  use  for   a  specific  purpose.  It   would  also  encompass                                                               
donations, or a public private  partnership, in which the private                                                               
partnership  contributes some  funds.  The funds  cannot be  used                                                               
except for  the purpose the  private partner indicated.  She said                                                               
that  public  corporations issue  revenue  bonds  for a  specific                                                               
purpose.  In addition,  as Senator  Micciche  stated, the  normal                                                               
trusts are outside the cap.                                                                                                     
                                                                                                                                
7:09:07 PM                                                                                                                    
SENATOR  REINBOLD  related  her understanding  that  Amendment  3                                                               
would create a loophole and allow  a lot of federal money to come                                                               
in,  including  for Medicaid  expansion.  She  said it  seems  as                                                               
though this could undermine the spending cap.                                                                                   
                                                                                                                                
MS. MILLS  responded that  federal receipts  are outside  the cap                                                               
and [Amendment 3] would not change that aspect.                                                                                 
                                                                                                                                
SENATOR  REINBOLD  asked  whether  this would  make  Alaska  more                                                               
dependent on  federal funds. She  said that she could  not figure                                                               
out the specific reason.                                                                                                        
                                                                                                                                
7:10:13 PM                                                                                                                    
CHAIR HUGHES  related a scenario  in which the Knik  Arm crossing                                                               
was built as a toll road. Prior  to the project, the state was at                                                               
the  cap  for  plowing  the  Glenn Highway.  Using  the  toll  to                                                               
maintain  the  bridge  might  result in  funding  cuts  for  road                                                               
maintenance  for  plowing.  The  project would  need  to  support                                                               
itself. She said  she understands her concern, but  this does not                                                               
create a loophole. She related  that one thing the legislature is                                                               
considering is  to restructure  the ferry  system. It  might make                                                               
sense to create a public  corporation to partner with the private                                                               
sector and  the legislature  needs to allow  that to  happen. The                                                               
corporation  would  need  to  be able  to  function  outside  the                                                               
appropriation   limit.  She   said,   "So   I'm  supporting   the                                                               
amendment."                                                                                                                     
                                                                                                                                
7:11:50 PM                                                                                                                    
SENATOR  MICCICHE acknowledged  the examples  were good  ones. He                                                               
said,  "The thing  it  adds is  you either  trust  the people  of                                                               
Alaska or  you don't.  This isn't  about legislators.  It's about                                                               
people  of Alaska  deciding." When  the budget  is cut,  which is                                                               
separate from  SJR 6, it  will empower  the people of  Alaska. He                                                               
said, "They  would be  paying for it.  We wouldn't."  Amendment 3                                                               
would allow this to occur.                                                                                                      
                                                                                                                                
7:12:49 PM                                                                                                                    
SENATOR  REINBOLD  expressed  her   frustration.  She  asked  for                                                               
further clarification from  the Department of Law  on Amendment 3                                                               
and whether the governor supports it.                                                                                           
                                                                                                                                
7:13:18 PM                                                                                                                    
MS. MILLS deferred to Commissioner  Designee Tangeman to weigh in                                                               
on the administration's stance.  She said generally speaking that                                                               
Chair Hughes  and Senator Micciche  covers the DOL's view  on the                                                               
effect  of Amendment  3.  She clarified  any  state general  fund                                                               
appropriation that  subsidized a  public corporation  would still                                                               
be under the  appropriation limit. This would only  relate to any                                                               
revenue  a  public  corporation  would  receive  for  a  specific                                                               
purpose.                                                                                                                        
                                                                                                                                
7:14:03 PM                                                                                                                    
COMMISSIONER DESIGNEE  TANGEMAN said the administration  does not                                                               
see a problem with Amendment 3.                                                                                                 
                                                                                                                                
SENATOR REINBOLD  referred to  page 2, lines  8-12, and  read the                                                               
language  that  would  be  deleted  from SJR  6,  which  read  as                                                               
follows:                                                                                                                        
                                                                                                                                
      (6) of money held in trust by the State or received                                                                       
     from the federal government for a particular purpose;                                                                      
                                                                                                                                
     (7) of money received by  the State from a source other                                                                    
     than   the  State   or  federal   government  that   is                                                                    
     restricted to  a specific use  by the terms of  a gift,                                                                    
     grant, bequest, or contract;                                                                                               
                                                                                                                                
She  referred to  paragraph (6)  of  Amendment 3,  which read  as                                                               
follows:                                                                                                                        
                                                                                                                                
               "(6)  from a non-State source in trust for a                                                                     
        specific purpose, including revenues of a public                                                                        
       enterprise or public corporation of the State that                                                                       
     issues revenue bonds; and"                                                                                                 
                                                                                                                                
SENATOR  REINBOLD asked  whether  this language  would allow  for                                                               
bonding.                                                                                                                        
                                                                                                                                
MS. MILLS deferred to the sponsor  of Amendment 3 for the intent.                                                               
However,  this  is  meant  to cover  the  items  already  covered                                                               
outside the cap,  which are considered held in  trust because the                                                               
funds cannot be spent except for  the purpose for which they have                                                               
been  framed. She  offered her  belief  that this  would add  the                                                               
possibility for a  public corporation or enterprise to  take on a                                                               
large  project  or  some  other form  of  program  that  requires                                                               
specific revenues from a non-state source.                                                                                      
                                                                                                                                
7:15:57 PM                                                                                                                    
SENATOR MICCICHE  said that  one could argue  it was  included in                                                               
the language  in paragraphs  (6) and  (7). He  said he  wanted to                                                               
clarify that  the public corporation or  enterprise issuing bonds                                                               
would be outside of the cap.                                                                                                    
                                                                                                                                
7:16:26 PM                                                                                                                    
SENATOR KIEHL  stated that the  clarification of "held  in trust"                                                               
helped. He  referred to the  language "from a  non-State source."                                                               
As  Ms. Mills  and  Senator Micciche  stated,  the Alaska  Mental                                                               
Health Trust  Authority (AMHTA) and the  Public-School Trust Fund                                                               
(PSTF)  are  already not  subject  to  the  cap in  the  existing                                                               
[Constitution  of the  State  of Alaska].  He  asked for  further                                                               
clarification  on how  the  AMHTA and  Public  School Trust  Fund                                                               
could be considered  as a non-state source.  He acknowledged that                                                               
in  the origins  of the  AMHTA this  was so,  but in  the decades                                                               
since  then, the  AMHTA has  become  a state  entity, managed  by                                                               
state employees,  and it generates revenue  from investments made                                                               
by the state and through land sales.                                                                                            
                                                                                                                                
MS. MILLS replied  it is because of how  the entities originated.                                                               
She  explained [the  revenue] can  only  be used  for a  specific                                                               
purpose pursuant to  federal law. For example,  the whole purpose                                                               
of the  AMHTA and the  Public School Trust Fund  acquiring assets                                                               
was to  raise revenues, but it  is done so based  on the original                                                               
land grant. She said this would  be interpreted as being held for                                                               
a specific purpose  and that purpose came from  the original land                                                               
grant, not from the state.                                                                                                      
                                                                                                                                
SENATOR KIEHL  asked for further clarification  on the transition                                                               
point since the AMHTA is a  state entity. He pondered whether one                                                               
original dollar was a non-state  source, it is never considered a                                                               
state  source.  He  said  his  interest is  to  ensure  that  the                                                               
language has the described intent.                                                                                              
                                                                                                                                
7:19:02 PM                                                                                                                    
MS.  MILLS highlighted  the  purpose of  [the  resolution] is  to                                                               
determine how  the legislature  will calculate  the appropriation                                                               
limit and not  to set out new constitutional  guidelines by these                                                               
exceptions. It  is important to  determine what falls  within the                                                               
cap and  what falls outside  of the cap.  Just as "in  trust" can                                                               
have a very specific meaning  in certain contexts, she interprets                                                               
the language  to mean that  revenue would  be used for  a certain                                                               
purpose. Certainly, the state runs  up against the dedicated fund                                                               
clause. However, this is not  about the dedicated funds clause or                                                               
whether   it  would   be  considered   dedicated  from   a  legal                                                               
standpoint.  She   said  the  distinction  is   where  the  funds                                                               
originated from and in terms  of the consideration between a non-                                                               
state source  and a state source,  it would need to  be evaluated                                                               
on a  case-by-case basis.  She said  she could  not give  a clear                                                               
answer without reviewing  the specific set of  facts or reviewing                                                               
the Alaska Mental Health Trust Authority (AMHTA).                                                                               
                                                                                                                                
7:20:38 PM                                                                                                                    
SENATOR  KIEHL offered  his support  for Amendment  3 because  he                                                               
supports  the change  Senator Micciche  intends.  He referred  to                                                               
[page  1,] line  8 of  SJR 6  to the  first ten  words, which  is                                                               
clear. He suggested that as SJR  6 moves forward that it would be                                                               
worthwhile  to review  it further.  He  characterized the  change                                                               
intended in Amendment 3 as being good.                                                                                          
                                                                                                                                
7:21:21 PM                                                                                                                    
CHAIR HUGHES asked  whether the University of  Alaska] and Alaska                                                               
Marine  Highway  System,  as  currently  structured,  are  public                                                               
enterprises and  if the  tuition and fares  would be  outside the                                                               
cap.                                                                                                                            
                                                                                                                                
MS. MILLS recalled  hearing the question on  the university asked                                                               
previously. The  [Constitution of the State  of Alaska] describes                                                               
the  University of  Alaska as  a corporate  body. She  offered to                                                               
research the tuition question and  respond back to the committee.                                                               
In  terms  of  the  AMHS,  it   currently  is  a  division  of  a                                                               
department, so  it is not  a public  corporation and it  does not                                                               
have a separate legal identity.  She said public corporations are                                                               
state  instrumentalities, so  the  liability is  held within  the                                                               
public corporation and  does not open up the  state to liability.                                                               
The entities  can be sued on  their own. The AMHS  would not fall                                                               
under this currently, she said.                                                                                                 
                                                                                                                                
7:23:01 PM                                                                                                                    
SENATOR  SHOWER  said that  the  committee  is really  discussing                                                               
growing  the  operating  and  capital  budgets.  He  referred  to                                                               
Amendment 3  and asked whether  the legislature could  spend more                                                               
funds  with  its appropriations  for  the  operating and  capital                                                               
budgets under  this language.  He interpreted it  to mean  a non-                                                               
state source,  which is not  included in the  appropriation limit                                                               
since it is outside the cap.                                                                                                    
                                                                                                                                
MS. MILLS  answered that this would  be an exception so  it would                                                               
be outside the appropriation limit.                                                                                             
                                                                                                                                
SENATOR  SHOWER  asked  for   further  clarification  that  under                                                               
Amendment 3, the legislature would  not be spending more money in                                                               
the  operating and  capital budget  in the  year this  occurs. He                                                               
highlighted  the concern  with  the language  in  Amendment 3  is                                                               
related to  concerns about increased  spending. He  asked whether                                                               
[Amendment 3]  would allow  the state to  grow its  operating and                                                               
capital budget.                                                                                                                 
                                                                                                                                
MS.  MILLS  answered that  this  does  not require  any  specific                                                               
amount of spending. Instead, it  is all about the calculation. In                                                               
terms of  the operating  and capital budget  as it  stands today,                                                               
the exceptions  would be removed  from the cap, and  a three-year                                                               
average would be based on that,  but this does not create any new                                                               
spending or take it away.                                                                                                       
                                                                                                                                
SENATOR MICCICHE  related his  understanding that  essentially if                                                               
state dollars  were going to  be spent  on one of  these projects                                                               
that the  funds would be  under the  cap, whether the  funds were                                                               
operating or  capital budget  funds, and the  rest would  need to                                                               
come from some other financial source.                                                                                          
                                                                                                                                
MS. MILLS answered yes, that is correct.                                                                                        
                                                                                                                                
7:25:18 PM                                                                                                                    
SENATOR  REINBOLD  asked  whether   this  could  allow  a  public                                                               
corporation,  such  as  Alaska Railroad  Corporation  (ARRC),  to                                                               
spend significantly more, so long  as the public entity could get                                                               
funding  from  the federal  government.  She  asked whether  this                                                               
would allow  the opportunity for  spending to increase,  just not                                                               
with UGF  [unrestricted general fund] or  DGF [designated general                                                               
fund].                                                                                                                          
                                                                                                                                
7:25:57 PM                                                                                                                    
MR.  KING said  that  if  you create  a  public corporation  that                                                               
performs a function  and raises its own  revenues, those revenues                                                               
can  be layered  on top  of the  unrestricted general  fund [UGF]                                                               
spending. Amendment 3 would allow  a public corporation or public                                                               
enterprise  that  generates  its   own  revenues  to  "grow"  the                                                               
government. It would  not matter if the funding  was brought into                                                               
the state  via the  federal government or  the private  sector as                                                               
long as  it is  not from  a tax.  The appropriation  limit avoids                                                               
raising government spending through taxation, he said.                                                                          
                                                                                                                                
SENATOR  REINBOLD  expressed  concern when  she  recalled  former                                                               
Senator  Stoltz  had an  $80  million  item because  the  federal                                                               
government  wanted him  to  do something  related  to the  Alaska                                                               
Railroad. She expressed  further concern that "we  got stuck with                                                               
it our budget." She has  seen public corporations cost the state.                                                               
She acknowledged that  many Alaskans support a  gasline, but many                                                               
do not.  She said she views  this as just another  opportunity to                                                               
"bloat government."  She said she was  not comfortable supporting                                                               
[Amendment 3.]                                                                                                                  
                                                                                                                                
7:28:12 PM                                                                                                                    
CHAIR  HUGHES recalled  that  the  funding previously  mentioned,                                                               
perhaps  $80 million,  was  for positive  train  control and  the                                                               
state funding would have been under the cap.                                                                                    
                                                                                                                                
MR. KING added  for further clarification, that it  would also be                                                               
true for the  creation of a public corporation or  any trust. The                                                               
money that  goes to  capitalize that new  endeavor would  also be                                                               
subject to the cap.                                                                                                             
                                                                                                                                
7:28:41 PM                                                                                                                    
SENATOR MICCICHE said,  "It's only the money  from somewhere else                                                               
that  is  not under  the  cap,  whether  it's a  contribution,  a                                                               
donation, an assessment  or if there's a federal  program that is                                                               
outside  of it.  It's only  the money  outside of  state spending                                                               
that would  be out  of the  cap, so there  is not  a way  to grow                                                               
state  spending   because  you  would   be  capped  off   at  the                                                               
appropriation limit."                                                                                                           
                                                                                                                                
7:29:09 PM                                                                                                                    
CHAIR  HUGHES directed  attention to  [the Alaska  Marine Highway                                                               
System]. If  the AMHS  was restructured  as a  public corporation                                                               
and the  fares were used  to build smaller, more  efficient, cost                                                               
effective vessels,  such as catamarans,  the state would  want it                                                               
to do  so since it  would not fall under  the cap. She  said that                                                               
public  corporations have  a responsibility  to be  efficient and                                                               
effective.  She  would  hope  that they  would  raise  funds  for                                                               
purposes that would  be of benefit to Alaskans  and actually save                                                               
money.                                                                                                                          
                                                                                                                                
7:30:09 PM                                                                                                                    
SENATOR REINBOLD  said the  AMHS has had  opportunities to  do so                                                               
but she  has not  seen it happen;  instead, the  state subsidizes                                                               
the ferry. She  further recalled seeing subsidies  for the Alaska                                                               
Housing  Finance  Corporation  (AHFC). She  reiterated  that  she                                                               
views this  as a loophole. She  said she is not  comfortable with                                                               
Amendment 3.                                                                                                                    
                                                                                                                                
MR. KING clarified  that if a public corporation  is losing money                                                               
and obtains  a state subsidy,  that the subsidy would  fall under                                                               
the cap. It is only the revenue the public corporation generates                                                                
that would be excluded from the cap.                                                                                            
                                                                                                                                
7:31:29 PM                                                                                                                    
CHAIR HUGHES removed her objection.                                                                                             
                                                                                                                                
7:31:38 PM                                                                                                                    
SENATOR REINBOLD objected.                                                                                                      
                                                                                                                                
7:31:45 PM                                                                                                                    
A roll  call vote  was taken.  Senators Micciche,  Shower, Kiehl,                                                               
and Hughes  voted in  favor of Amendment  3 and  Senator Reinbold                                                               
voted against  it. Therefore, Amendment  3, was adopted by  a 4:1                                                               
vote.                                                                                                                           
                                                                                                                                
CHAIR HUGHES closed public testimony on SJR 6.                                                                                  
                                                                                                                                
7:32:18 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
7:39:27 PM                                                                                                                    
CHAIR HUGHES reconvened the meeting.                                                                                            
                                                                                                                                
7:39:34 PM                                                                                                                    
SENATOR SHOWER moved to adopt Amendment 4, work order 31-                                                                       
GS1068\A.5, Wallace, 4/1/19.                                                                                                    
                                                      31-GS1068\A.5                                                             
                                                           Wallace                                                              
                                                            4/1/19                                                              
                          AMENDMENT 4                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                    BY SENATOR SHOWER                                                                 
     TO:  SJR 6                                                                                                                 
                                                                                                                                
                                                                                                                                
     Page 1, lines 2 - 3:                                                                                                       
          Delete "and establishing the savings reserve                                                                        
     fund"                                                                                                                    
                                                                                                                                
     Page 2, line 21:                                                                                                           
          Delete "savings"                                                                                                      
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 2, line 22:                                                                                                           
          Delete "savings"                                                                                                      
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 2, lines 28 - 29:                                                                                                     
          Delete "savings [BUDGET]"                                                                                         
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 3, line 4:                                                                                                            
          Delete "savings [BUDGET]"                                                                                         
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 3, line 5:                                                                                                            
          Delete "savings [BUDGET]"                                                                                         
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 3, line 13:                                                                                                           
          Delete "savings [BUDGET]"                                                                                         
          Insert "budget"                                                                                                       
                                                                                                                                
     Page 3, line 26, through page 4, line 1:                                                                                   
          Delete all material and insert:                                                                                       
          "Section 31. Budget Reserve Fund Transition. The                                                                    
     repeal  of Section  17(d)  of Article  IX  in the  2020                                                                    
     amendments  eliminates  any  repayment  required  under                                                                    
     that   subsection  through   the  fiscal   year  ending                                                                    
     June 30, 2021."                                                                                                            
                                                                                                                                
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
SENATOR SHOWER  explained Amendment  4. As  previously discussed,                                                               
[Amendment  1,  which  was withdrawn],  contained  two  different                                                               
topics. This is the first  of two amendments. Amendment 4 removes                                                               
the name change from the savings  reserve fund and reverts to the                                                               
budget   reserve  fund,   commonly   referred  to   as  the   CBR                                                               
[constitutional   budget  reserve]   fund.   Throughout  SJR   6,                                                               
Amendment 4 prevents the name change.                                                                                           
                                                                                                                                
SENATOR SHOWER characterized this as a cleaner approach.                                                                        
                                                                                                                                
7:40:33 PM                                                                                                                    
CHAIR  HUGHES  removed  her objection.  There  being  no  further                                                               
objection, Amendment 4 was adopted.                                                                                             
                                                                                                                                
7:40:46 PM                                                                                                                    
SENATOR  SHOWER  moved  to  adopt Amendment  5,  work  order  31-                                                               
GS1068\A.6, Wallace, 4/1/19.                                                                                                    
                                                      31-GS1068\A.6                                                             
                                                           Wallace                                                              
                                                            4/1/19                                                              
                                                                                                                                
                          AMENDMENT 5                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                    BY SENATOR SHOWER                                                                 
     TO:  SJR 6                                                                                                                 
                                                                                                                                
                                                                                                                                
     Page 1, line 7:                                                                                                            
          Delete "Appropriations"                                                                                               
          Insert "Except as provided in (b) of this                                                                             
     section, appropriations"                                                                                                   
                                                                                                                                
     Page 2, following line 14:                                                                                                 
     Insert a new subsection to read:                                                                                           
          "(b)  The legislature may appropriate an                                                                              
     additional amount in excess  of the appropriation limit                                                                    
     under  (a) of  this section  for capital  improvements,                                                                    
     except that  the amount  for capital  improvements made                                                                    
     in excess of  the appropriation limit in  a fiscal year                                                                    
     shall   not   exceed   ten   percent   of   the   total                                                                    
     appropriation    limit    for   that    fiscal    year.                                                                    
     Appropriations  for  capital improvements  that  exceed                                                                    
     the   appropriation  limit   shall  not   be  used   in                                                                    
     calculating  the  appropriation   limit  in  subsequent                                                                    
     fiscal years."                                                                                                             
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 2, line 26:                                                                                                           
          Delete "(b)"                                                                                                          
          Insert "(c)"                                                                                                          
                                                                                                                                
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
SENATOR SHOWER  said that this  is the second part  of [Amendment                                                               
1,  which was  withdrawn]. He  said this  reverts to  the capital                                                               
budget  discussion. He  characterized it  as a  safety valve  for                                                               
"good years," when  revenue is high, and  the legislature chooses                                                               
to use it  for capital improvements. This would  not increase the                                                               
size of  government by increasing  the operating budget.  He read                                                               
lines 7 - 12, subsection (b) of Amendment 5.                                                                                    
                                                                                                                                
For example,  if the  total budget is  $3 billion,  the operating                                                               
and capital budget  falls inside the appropriation  limit. If the                                                               
legislature  chose  to  add  10 percent,  or  $300  million,  for                                                               
capital improvements, the  funding would be outside  the cap, and                                                               
must  be  used  that  year.   This  would  give  the  legislature                                                               
flexibility  going   forward  to  work  on   capital  improvement                                                               
projects it deems appropriate.                                                                                                  
                                                                                                                                
7:42:40 PM                                                                                                                    
CHAIR HUGHES  said she  appreciated the  distinction of  the term                                                               
"capital   improvements"   rather   than   the   capital   budget                                                               
terminology  since  the  practice  of  placing  programs  in  the                                                               
capital budget has previously occurred.                                                                                         
                                                                                                                                
7:43:02 PM                                                                                                                    
SENATOR REINBOLD  asked whether  this would  apply to  a one-time                                                               
capital improvement,  for example, related to  an earthquake. She                                                               
asked of  the total  budget was  $10 billion,  if that  meant the                                                               
state could spend $1 billion.                                                                                                   
                                                                                                                                
MR.  KING  answered  that  if   the  limit  is  $3  billion,  the                                                               
legislature  could only  exceed the  cap  by 10  percent or  $300                                                               
million. He  said to spend $1  billion, it would be  necessary to                                                               
back out $700 million from other operational costs.                                                                             
                                                                                                                                
SENATOR  REINBOLD  said that  the  state's  budget is  about  $10                                                               
billion.                                                                                                                        
                                                                                                                                
MR. KING  explained that the  appropriations limit  includes only                                                               
items  subject to  the limit.  He related  that using  the FY  19                                                               
budget, it would be about $4.6 billion.                                                                                         
                                                                                                                                
SENATOR REINBOLD said that the  state could spend $460 million on                                                               
a project,  such as earthquake  repair or bridges, but  it cannot                                                               
be used in the calculation for the following year.                                                                              
                                                                                                                                
MR. KING answered yes, that is correct.                                                                                         
                                                                                                                                
SENATOR REINBOLD asked whether the governor supports this.                                                                      
                                                                                                                                
7:45:11 PM                                                                                                                    
COMMISSIONER   DESIGNEE   TANGEMAN    said   the   administration                                                               
understands the purpose, but the  administration does not support                                                               
[Amendment 5] simply because it  does allow growth outside of the                                                               
intent of SJR 6.                                                                                                                
                                                                                                                                
SENATOR MICCICHE  said that he  intends on  supporting [Amendment                                                               
5] because it keeps the  capital improvement funding under a cap.                                                               
The reason  the amendment is  being offered in this  committee is                                                               
because  as it  moves through  the  process, others  will try  to                                                               
eliminate a  cap on capital  improvement. [Amendment  5] actually                                                               
states that the  most that can be spent  on capital improvements,                                                               
in  years   with  excess  revenue,   is  10  percent   above  the                                                               
appropriation limit. He  surmised that anything from  here on out                                                               
gets worse.  He offered  his belief  that Amendment  5 is  a good                                                               
line  to draw.  He  said, "If  someone  supports this  amendment,                                                               
they're saying it  should be limited to 10 percent."  In the past                                                               
the capital budget has not  been part of the appropriation limit.                                                               
He characterized the approach taken by  Amendment 5 as a bit of a                                                               
safety valve  since it would  allow some additional  spending but                                                               
not at the level the legislature has seen in the past.                                                                          
                                                                                                                                
7:46:50 PM                                                                                                                    
SENATOR KIEHL asked for further  clarification on Amendment 5. He                                                               
offered his  belief that  unlike the  earlier version,  this does                                                               
not  place  a   limit  on  the  amount   of  capital  improvement                                                               
appropriations.                                                                                                                 
                                                                                                                                
MR.  KING   answered  that  is  technically   correct,  that  the                                                               
amendment does  not make  any limitation on  the total  amount of                                                               
capital [improvement]  spending that  can be incurred  other than                                                               
the  legislature could  theoretically spend  the entire  cap plus                                                               
ten percent on capital improvements.                                                                                            
                                                                                                                                
SENATOR KIEHL acknowledged that would be pretty unlikely.                                                                       
                                                                                                                                
7:47:48 PM                                                                                                                    
SENATOR  KIEHL  turned  to  how  Amendment  5  would  affect  the                                                               
legislature's  ability  to  make  a  CBR  [constitutional  budget                                                               
reserve}  fund draw.  He related  his understanding  that if  the                                                               
legislature invoked this  provision that it could not  make a CBR                                                               
draw.                                                                                                                           
                                                                                                                                
MR. KING  answered that another provision  of SJR 6 does  allow a                                                               
CBR  draw  in order  to  generate  enough  revenue to  reach  the                                                               
appropriation   limit.  If   the  legislature   wanted  to   fund                                                               
government at the cap, but  insufficient revenues exist to do so,                                                               
it  could draw  funds from  the  CBR in  order to  fill the  gap.                                                               
However, the  legislature could  not reach into  the CBR  to fund                                                               
the additional ten percent for capital improvements.                                                                            
                                                                                                                                
7:49:01 PM                                                                                                                    
SENATOR  KIEHL  asked  whether  [Amendment  5]  would  allow  the                                                               
legislature to tap into the CBR at all.                                                                                         
                                                                                                                                
MR. KING answered  yes, but only to the extent  that the revenues                                                               
are short of the appropriation limit.                                                                                           
                                                                                                                                
7:49:46 PM                                                                                                                    
SENATOR KIEHL  acknowledged that  it is  complicated to  read "on                                                               
the  fly." He  asked  if  the effective  date  of the  additional                                                               
capital improvement spend could be  shifted back a fiscal year to                                                               
make a CBR  draw if the legislature  did not make a  CBR draw the                                                               
previous year.                                                                                                                  
                                                                                                                                
MR. KING replied that in his view,  the funds do not roll over so                                                               
the  funds cannot  be carried  forward to  a future  year if  the                                                               
legislature elects not to use them in one year.                                                                                 
                                                                                                                                
MS. MILLS  said that she  thinks that  is correct. The  way these                                                               
provisions function  together, the legislature can  only spend an                                                               
extra ten percent on capital  improvements if the excess revenues                                                               
are flowing into the general fund  (GF) to "get you there." If it                                                               
was  necessary for  the legislature  to  draw from  the CBR,  the                                                               
legislature would not have sufficient  revenues to get to the ten                                                               
percent.                                                                                                                        
                                                                                                                                
SENATOR KIEHL acknowledged that is  the intent, but he would like                                                               
to be certain that is the effect.                                                                                               
                                                                                                                                
7:51:32 PM                                                                                                                    
SENATOR SHOWER said  that he understood the concern  but asked to                                                               
focus on  the language in Amendment  5. He said that  Amendment 5                                                               
strictly  speaks   to  capital  improvement   appropriations.  He                                                               
reiterated the purpose,  that in good years,  with excess revenue                                                               
available,   the    legislature   can   limit    the   additional                                                               
appropriations  for  capital  improvements to  ten  percent.  The                                                               
structure of  SJR 6 is  different. The legislature would  use the                                                               
CBR structure  to [fill the  gap] to the appropriation  limit. He                                                               
said [Amendment 5] is separate.  There should be "no crossing the                                                               
streams here," he said.                                                                                                         
                                                                                                                                
7:52:54 PM                                                                                                                    
SENATOR KIEHL suggested  he would study it further.  He asked how                                                               
"capital improvement project" is defined.                                                                                       
                                                                                                                                
MS.  MILLS  answered  that   capital  improvements  were  defined                                                               
elsewhere  in Article  IX [of  the Constitution  of the  State of                                                               
Alaska] related  to government obligation (GO)  bonds for capital                                                               
improvements so that  term would be interpreted in  the same way.                                                               
"If  you could  do general  obligation  bonds to  fund a  capital                                                               
improvement, you  could use this  exception to spend  ten percent                                                               
of the appropriation limit on capital improvements," she said.                                                                  
                                                                                                                                
7:53:52 PM                                                                                                                    
SENATOR  KIEHL  asked  whether it  differs  materially  from  the                                                               
statutory definition.                                                                                                           
                                                                                                                                
MS.  MILLS offered  to  review it  since she  does  not have  the                                                               
statutory definition  before her, but  she would get back  to the                                                               
committee.  She added  that the  current  appropriation limit  in                                                               
Article IX  refers to "capital projects"  which could potentially                                                               
be   interpreted  differently.   However,  she   reiterated  that                                                               
"capital  improvements" would  be  viewed as  those projects  for                                                               
which the state can issue bonds.                                                                                                
                                                                                                                                
7:54:23 PM                                                                                                                    
SENATOR  KIEHL  stated  that  many   things  meet  the  statutory                                                               
definition of  capital improvements  that could range  far afield                                                               
from bricks, mortar, and asphalt.  He offered his belief that the                                                               
statutory  definition   comes  pretty   close  to  what   can  be                                                               
capitalized. He  argued that  most of  the Office  of Information                                                               
Technology,  including salaries  and telephone  systems meet  the                                                               
definition  of  a  capital improvement  project  in  statute.  He                                                               
envisioned situations  in which the state  has sufficient revenue                                                               
and uses this provision to get into trouble.                                                                                    
                                                                                                                                
7:55:25 PM                                                                                                                    
CHAIR HUGHES asked for further  clarification from the Department                                                               
of Law as  to whether the language in Amendment  5 would refer to                                                               
the  definition in  the Constitution  [of the  State of  Alaska],                                                               
which she believes it does, rather than in statute.                                                                             
                                                                                                                                
MS.  MILLS  agreed  that  is  correct.  She  explained  that  the                                                               
Department of Law  would look to what  the constitutional framers                                                               
meant by  capital improvements,  which is  the brick  and mortar,                                                               
and infrastructure  projects. She said that  unless the sponsor's                                                               
intent is  different, that  is how it  would be  interpreted. She                                                               
said it  is important  that the record  reflect what  is intended                                                               
because that will help to determine the legislative intent.                                                                     
                                                                                                                                
7:56:11 PM                                                                                                                    
SENATOR SHOWER asked  to make it crystal clear. He  said that his                                                               
intent is that  his amendment [Amendment 5] refers  to "brick and                                                               
mortar," including  buildings, bridges,  roads, and  other things                                                               
of that  type. He does not  mean ferry operations or  other types                                                               
of  things. He  emphasized that  "he means  building things."  He                                                               
asked to have Ms. Wallace speak to the definition.                                                                              
                                                                                                                                
MS. WALLACE replied  that she largely concurs  with the testimony                                                               
from Ms. Mills regarding the way  the term is used already in the                                                               
Constitution [of  the State  of Alaska].  She offered  her belief                                                               
that as  this language  is placed  into a  revised constitutional                                                               
amendment,  the intent  behind the  term as  it is  being drafted                                                               
will  be relevant  to the  conversation and  will be  captured by                                                               
that phrase.                                                                                                                    
                                                                                                                                
7:58:08 PM                                                                                                                    
SENATOR REINBOLD  expressed concern  with Amendment 5.  She leans                                                               
toward  voting for  it  because  of disasters  and  this has  the                                                               
potential to place  a real cap on  capital expenditures. However,                                                               
the reason she  is leaning not to support Amendment  5 is because                                                               
she has seen  so much deception in terms of  real budget numbers.                                                               
She  said she  has  observed supplemental  budget overruns  being                                                               
placed in  the capital  budget. She  said she  does not  want any                                                               
more  room  for government  to  grow.  She  said that  Alaska  is                                                               
spending three and  a half times per capita higher  than the rest                                                               
of the  states. She asked  whether the operating budget  could be                                                               
"stuffed," and this  amendment could be used to  fund the capital                                                               
budget with an additional ten percent funding.                                                                                  
                                                                                                                                
MS. WALLACE asked  to share a few thoughts that  may help clarify                                                               
the  amendment. With  respect  to disasters,  SJR  6 contains  an                                                               
exception for  disasters, so disaster  spending would  be outside                                                               
of  the cap.  The legislature  would  not be  restricted to  fund                                                               
those projects. She  concurs with the testimony by  Ms. Mills and                                                               
Mr. King in terms of borrowing  from the CBR and whether there is                                                               
any  "wiggle room."  She concurs  that SJR  6, as  drafted, would                                                               
limit borrowing  to fulfill the  deficit up to  the appropriation                                                               
limit. The  only exception  or only  potential "work  around" she                                                               
can envision  is to  borrow from  the CBR  [constitutional budget                                                               
reserve] and use  the ten percent additional  funding for capital                                                               
improvements by  using a revision  in proposed Section 3  [of SJR
6]. She  said that money "in  the general fund" and  the earnings                                                               
reserve account, which is available  for appropriation but is not                                                               
in the  general fund,  might be available  to the  legislature to                                                               
make  capital improvement  appropriations up  to the  ten percent                                                               
cap.                                                                                                                            
                                                                                                                                
8:01:57 PM                                                                                                                    
MS.  MILLS concurred  with Ms.  Wallace  that SJR  6 contains  an                                                               
exception  for  disaster  funding.   She  also  agreed  that  the                                                               
earnings reserve account would be the  only other source to go to                                                               
for  spending.  She  reiterated   the  funding  sources  are  the                                                               
earnings  reserve account  (ERA) the  general fund  (GF) and  the                                                               
constitutional budget reserve (CBR).                                                                                            
                                                                                                                                
SENATOR  SHOWER said  that if  the  legislature were  to take  an                                                               
unstructured  draw from  the earnings  reserve account,  it would                                                               
mean the legislature  was not following statutes  and is breaking                                                               
the law.  He said  Section 3 is  clear that the  CBR can  only be                                                               
used  to fund  up  to  the appropriation  limit.  He related  his                                                               
understanding that anything beyond  that would be an unstructured                                                               
draw.                                                                                                                           
                                                                                                                                
MS. MILLS  answered that he  is correct. However, if  a different                                                               
amount of  revenue was flowing  in, it could change  the picture.                                                               
The legislature could still take  a structured draw, but the draw                                                               
could bring the entire amount that  is available to above what is                                                               
needed to just do the cap. She asked whether that makes sense.                                                                  
                                                                                                                                
SENATOR SHOWER said that it does.                                                                                               
                                                                                                                                
8:03:34 PM                                                                                                                    
MR.  KING asked  to play  the  devil's advocate.  He offered  his                                                               
belief that there  might be something he might wish  to look more                                                               
closely at before he responds.                                                                                                  
                                                                                                                                
CHAIR HUGHES  acknowledged that this  is not the  final committee                                                               
of referral so additional opportunities exist.                                                                                  
                                                                                                                                
8:04:02 PM                                                                                                                    
SENATOR MICCICHE said  it does not seem that the  ERA becomes the                                                               
general fund (GF)  until the POMV [percent of  market value] draw                                                               
occurs and is moved into  the general fund. "The earnings reserve                                                               
account is not the general fund, is that correct?"                                                                              
                                                                                                                                
MS. MILLS answered that is correct.                                                                                             
                                                                                                                                
SENATOR MICCICHE related  a scenario in which the  budget is $4.6                                                               
billion, and  the combined  revenue and POMV  was $4  billion. If                                                               
the legislature needed to do a  CBR draw of $600 million to reach                                                               
the $4.6 billion, the legislature could  not go above the cap for                                                               
any capital. He asked whether that is correct.                                                                                  
                                                                                                                                
MS. MILLS answered that is correct.                                                                                             
                                                                                                                                
MR. KING said if he was referring  to a draw from the CBR that is                                                               
correct.  However,  he   pointed  out  that  there   is  not  any                                                               
limitation  in the  Constitution [of  the State  of Alaska]  that                                                               
prevents  an additional  draw from  the earnings  reserve account                                                               
(ERA).                                                                                                                          
                                                                                                                                
SENATOR  MICCICHE said  that it  would  not be  from the  general                                                               
fund. The POMV  is deposited to the general  fund. However, funds                                                               
from  the  earnings  reserve  fund do  not  become  general  fund                                                               
monies, unless the legislature decided to disregard all laws.                                                                   
                                                                                                                                
MS. MILLS answered  that is correct. It would  just be considered                                                               
part of what  is counted towards appropriations since  it will go                                                               
into the general fund, and then  have to leave, at which point it                                                               
would be considered under the appropriation limit.                                                                              
                                                                                                                                
SENATOR MICCICHE said  that without a CBR draw,  the revenue plus                                                               
POMV, which  he would simply  refer to as "general  fund revenue"                                                               
was  $4.61 billion,  suddenly a  little money  could be  spent on                                                               
excess capital, but to reach  the ten percent would require $5.06                                                               
billion of  "natural revenue" plus  POMV, before  the legislature                                                               
could use the ten percent. He  offered his belief that this could                                                               
only be used in high revenue years without a CBR draw.                                                                          
                                                                                                                                
MS.  MILLS  answered  yes,  that  is  how  the  department  would                                                               
interpret all of these provisions working together.                                                                             
                                                                                                                                
8:07:05 PM                                                                                                                    
SENATOR MICCICHE  asked whether there  is currently any  limit on                                                               
capital [improvements] with the  existing appropriation limit. He                                                               
further  asked  whether  [Amendment  5] is  the  first  limit  on                                                               
capital [improvements], which is much  stricter since it does not                                                               
allow the legislature to go above  the cap unless there is no CBR                                                               
draw. This provision would only apply to a high-revenue year.                                                                   
                                                                                                                                
MS.  MILLS answered  yes,  for  the most  part.  She agreed  that                                                               
[Amendment  5]   would  be   the  first   real  cap   on  capital                                                               
improvements.  Under  the  current appropriation  limit,  several                                                               
areas relate to capital improvements,  she said. First, it states                                                               
that as the legislature approaches  the limit, it is necessary to                                                               
spend  up  to  one-third  of   the  limit  on  capital  projects.                                                               
Therefore, it currently forces a  certain amount of capital spend                                                               
if "you get  up there to the  limit." The other thing  it does is                                                               
to allow  the legislature to  go to the  voters to spend  more on                                                               
capital projects, without any specific cap on that amount.                                                                      
                                                                                                                                
8:08:21 PM                                                                                                                    
SENATOR  REINBOLD indicated  her question  was not  answered. She                                                               
asked whether  the legislature has  an opportunity to  spend more                                                               
money  on  the operating  budget  and  use  ten percent  to  fund                                                               
capital improvements.                                                                                                           
                                                                                                                                
MS.  MILLS  answered  yes,  if  the  legislature  had  sufficient                                                               
revenues. She said  that the legislature could fill  the cap with                                                               
the  operating  budget  [appropriation]  and  then  use  the  ten                                                               
percent for capital improvements.                                                                                               
                                                                                                                                
SENATOR REINBOLD  offered her belief  that nothing  prohibits the                                                               
legislature  from  having  a federal  pass  through  directly  to                                                               
municipalities. She said she believes  in local control. She said                                                               
capital projects do  not have to go through the  state. She asked                                                               
whether  anything  prohibits  the municipalities  from  obtaining                                                               
funding for capital improvements.                                                                                               
                                                                                                                                
MS. MILLS answered there is not.                                                                                                
                                                                                                                                
8:09:58 PM                                                                                                                    
SENATOR KIEHL  asked whether  the money  in the  statutory budget                                                               
reserve account  is considered as  general fund, in terms  of the                                                               
CBR draw under subsection (b) of Amendment 5.                                                                                   
                                                                                                                                
MS. MILLS answered  yes, that would be considered  in the general                                                               
fund. She  said that basically,  her view  is that the  state has                                                               
the  general fund  and the  constitutional  funds, including  the                                                               
constitutional budget reserve (CBR), and the permanent fund.                                                                    
                                                                                                                                
MR. KING  explained that another provision  within the resolution                                                               
would prevent this money from  being held in the statutory budget                                                               
reserve. It indicates  that for excess funds  not appropriated at                                                               
year end, the funds will  be transferred to the principal account                                                               
of the  permanent fund  or to  the constitutional  budget reserve                                                               
(CBR).  If [SJR  6] were  to take  effect, this  would be  a moot                                                               
point because there would be no [savings reserve fund].                                                                         
                                                                                                                                
SENATOR KIEHL asked for the reference in SJR 6.                                                                                 
                                                                                                                                
MS. MILLS referred  to language on page 2,  lines 15-24], Section                                                               
16  (b), which  would become  subsection  (c) if  Amendment 5  is                                                               
adopted                                                                                                                         
                                                                                                                                
8:11:52 PM                                                                                                                    
SENATOR KIEHL asked when the  state sells general obligation (GO)                                                               
bonds, if project  managers can be funded from  the receipts from                                                               
the bond sales.                                                                                                                 
                                                                                                                                
MS. MILLS  said she  was not  familiar with  how this  works. She                                                               
offered to research it and report back to the committee.                                                                        
                                                                                                                                
8:12:37 PM                                                                                                                    
CHAIR HUGHES  offered her  support for Amendment  5. She  said as                                                               
Senator Micciche  indicated, there has  not been a cap.  She said                                                               
she thinks  a cap  is good,  especially since  Alaska is  still a                                                               
young  state that  lacks infrastructure.  The last  major highway                                                               
project was  the Parks Highway in  the 1970s, which is  nearly 50                                                               
years  ago. If  the legislature  wanted to  fund $300  million in                                                               
capital improvement  projects, it could  add $300 million  to the                                                               
operating budget under the cap.  She suggested the Senate Finance                                                               
[Standing Committee]  might wish  to consider a  percentage limit                                                               
within the cap for the  operating budget to avoid the legislature                                                               
using the  ten percent  provision to  grow the  operating budget.                                                               
However, she  supports SJR 6  because Alaska  still has a  lot of                                                               
roads to build over time. However,  she would prefer to have some                                                               
type of limit.                                                                                                                  
                                                                                                                                
8:14:48 PM                                                                                                                    
SENATOR REINBOLD remarked it was  obvious that roads to resources                                                               
need to  be built. However,  she favors local  government control                                                               
since the state  has repeatedly overspent. She said  she does not                                                               
support Amendment  5 because she envisions  the legislature would                                                               
use it  to "bloat" the operating  budget and use the  cap to fund                                                               
capital  improvement  projects.  She  said that  she  thinks  the                                                               
intention is good. However, she sees the potential for abuse.                                                                   
                                                                                                                                
8:16:01 PM                                                                                                                    
SENATOR  KIEHL referred  to the  language on  page 1,  line 7  of                                                               
Amendment 5,  which read "an  additional amount in excess  of the                                                               
appropriation limit  ?" He asked  whether this  language includes                                                               
all fund  sources or  if the amount  is limited  to  effectively"                                                               
general  fund amounts  as calculated  in  excess of  the cap.  He                                                               
further  asked if  the legislature  could bring  in another  "8-1                                                               
ratio" federal project  for $300 million no matter  what the fund                                                               
source.                                                                                                                         
                                                                                                                                
MS.  MILLS said  that she  thinks it  might be  helpful to  think                                                               
about  the  other  exceptions  that  exist.  Federal  monies  are                                                               
already outside  the cap. If the  project has a state  match, the                                                               
state matching  funds would fall under  the cap or would  need to                                                               
be in the ten percent of the total appropriation limit.                                                                         
                                                                                                                                
SENATOR  KIEHL  agreed  that  was   precisely  the  question.  He                                                               
referred to subsection (a), which  read, "Appropriations made for                                                               
a fiscal year shall not exceed  ?" It goes on to list exceptions,                                                               
but the  language in [Amendment  5 on  lines 7, (b)]  reads, "the                                                               
legislature  may appropriate  an additional  amount in  excess of                                                               
the  appropriation limit  under (a)?."  It does  not indicate  an                                                               
additional  amount  in  excess of  the  appropriation  limit  "as                                                               
calculated under  subsection (a)." He  asked how the  language in                                                               
Amendment 5 pertains to the  scenario of "$300 million cap, don't                                                               
care what the fund source is, that's what you got."                                                                             
                                                                                                                                
8:18:06 PM                                                                                                                    
MS. MILLS  responded that federal  receipts already  fall outside                                                               
the  limit. She  said she  did not  think this  would affect  the                                                               
amount of  federal funds and  that just  because it is  a capital                                                               
improvement project, that this would  create another cap. Rather,                                                               
this would  really restrict the  state funds because there  is no                                                               
other exception for that sort of spending.                                                                                      
                                                                                                                                
SENATOR KIEHL said  that is precisely what he is  driving at, but                                                               
that is not what the words in Amendment 5 read.                                                                                 
                                                                                                                                
MS. MILLS interjected  that it is necessary to  read the existing                                                               
exceptions  list  along  with  Amendment 5.  She  said  that  the                                                               
existing exceptions  allow federal funds for  a specific purpose.                                                               
She interpreted this to mean  that federal funds are allowed, but                                                               
Amendment   5    relates   to   [appropriations    for]   capital                                                               
improvements.  She  acknowledged that  it  would  be possible  to                                                               
specify "money  from the general  fund" as  a way to  clarify the                                                               
language.                                                                                                                       
                                                                                                                                
8:19:28 PM                                                                                                                    
CHAIR HUGHES offered her belief that the totality is important.                                                                 
                                                                                                                                
SENATOR KIEHL explained  that he was unsure of  that language. He                                                               
said he appreciated the desire  to read "amount" as specific, but                                                               
it is not. He said he was unsure at this point of what to do.                                                                   
                                                                                                                                
8:20:14 PM                                                                                                                    
SENATOR SHOWER  said that  he understood  what Senator  Kiehl was                                                               
saying, but  he believes  the language in  Amendment 5  "gives us                                                               
what we need." He explained that  part of his goal with Amendment                                                               
5 is to  allow the legislature to exceed the  cap in "good years"                                                               
to  access  federal  funding.  He echoed  the  same  concerns  as                                                               
Senators Reinbold  and Hughes  because he  wants to  reduce state                                                               
government. He  agreed that  if a  loophole exists,  someone will                                                               
find a way  to spend more money than the  state can afford, which                                                               
is  partly why  the  state is  at this  juncture.  He stated  his                                                               
intent  is  to  allow  the  safety  valve  on  "good  years"  for                                                               
infrastructure,  since infrastructure  is important.  He said  he                                                               
would  not  support this  if  he  thought  it  would be  used  to                                                               
increase the operating budget and  thereby the size of government                                                               
each  year.  However, he  said  he  thinks  Amendment 5  is  fine                                                               
because it  is limited to  capital improvements and only  for one                                                               
year. In  addition, it includes a  revised [appropriation] limit,                                                               
which  remains low  and does  not increase.  He said  he believes                                                               
this  works and  meets the  governor's  intent in  [SJR 6].  This                                                               
would eliminate extra  ways to spend money and  increase the size                                                               
of  government. He  offered his  belief that  the questions  have                                                               
been answered.                                                                                                                  
                                                                                                                                
8:22:05 PM                                                                                                                    
CHAIR HUGHES removed her objection.                                                                                             
                                                                                                                                
8:22:13 PM                                                                                                                    
SENATOR  REINBOLD  objected. She  said  that  she has  repeatedly                                                               
observed  supplemental budgets  added to  the capital  budget and                                                               
not  enough   parameters  are  in   place  to  prevent   it.  She                                                               
appreciated the sponsor's  intention, but every single  word in a                                                               
constitutional amendment matters. She said  that she would err on                                                               
the  side of  caution since  she  does not  trust legislators  to                                                               
follow it.  She said, "With  that, I'm going to  be a no  vote on                                                               
this."                                                                                                                          
                                                                                                                                
8:23:08 PM                                                                                                                    
A roll  call vote  was taken.  Senators Micciche,  Kiehl, Shower,                                                               
and Hughes  voted in  favor of Amendment  5 and  Senator Reinbold                                                               
voted against  it. Therefore,  Amendment 5 was  adopted by  a 4:1                                                               
vote.                                                                                                                           
                                                                                                                                
8:23:39 PM                                                                                                                    
SENATOR  MICCICHE  offered his  belief  that  the state  needs  a                                                               
dramatically  revised appropriation  limit.  He appreciated  what                                                               
the governor brought  forward. He thinks the  first interest rate                                                               
was unrealistic, but  he can support this  wholeheartedly, and it                                                               
would have avoided  tens of billions of dollars had  this been in                                                               
place 25 years  ago. He appreciated the committee's  hard work on                                                               
the amendments that he views as improvements to SJR 6.                                                                          
                                                                                                                                
8:25:10 PM                                                                                                                    
SENATOR REINBOLD  said she supports  local control since  not all                                                               
funding must pass through the  state for local projects. She said                                                               
she  is not  confident with  the  effects of  the amendments  the                                                               
committee   adopted,  but   she  supports   the  concept   of  an                                                               
appropriation limit and  the original version of  SJR 6. However,                                                               
she did not wish to hold up moving SJR 6.                                                                                       
                                                                                                                                
SENATOR  KIEHL  said that  he  appreciated  the committee's  work                                                               
because it  made a very  bad constitutional  amendment marginally                                                               
better. Ultimately,  he does not  believe that the state  needs a                                                               
revised constitutional spending limit  because the voters are the                                                               
"term limit"  and the "spending  limit." They send a  very strong                                                               
executive branch  and 60 very different  legislators to represent                                                               
them.                                                                                                                           
                                                                                                                                
He said it  is up to the legislature to  figure out the structure                                                               
in the Constitution [of the  State of Alaska]. Mr. King presented                                                               
numerous  charts with  three extended  periods  of reduced  state                                                               
spending that  demonstrates that the constitution  works. He said                                                               
voters  select their  legislators who  collectively complete  the                                                               
work. However, to place a  particular political philosophy in the                                                               
state's constitution  rather than looking  to the voters  to make                                                               
necessary changes  is not the  best way  to amend it.  He offered                                                               
his belief  that leaving aside  the arguments the  committee made                                                               
about  whether  SJR  6  is  an  amendment  or  a  revision,  this                                                               
resolution has  serious constitutional issues. He  reiterated his                                                               
belief  that it  is not  good constitutional  writing because  it                                                               
does not  put "faith in Alaskans  at the ballot box."  He said he                                                               
would not be supporting moving the bill.                                                                                        
                                                                                                                                
8:27:15 PM                                                                                                                    
CHAIR  HUGHES remarked  that this  committee has  focused on  the                                                               
constitutionality of the resolution.  She expressed concern about                                                               
the cascade, the waterfall, and  the amount in the constitutional                                                               
budget reserve  (CBR). Since the  next committee referral  is the                                                               
Senate  Finance Standing  Committee, she  hopes it  will consider                                                               
the appropriation amount to keep  on hand during volatile revenue                                                               
streams and if one year is  sufficient. She also would like to be                                                               
sure, in  terms of the  cascade or  waterfall, that funds  can be                                                               
deposited into the  CBR. If excess funds must  first be deposited                                                               
into  the  permanent fund,  perhaps  not  enough funds  would  be                                                               
available to deposit to the CBR.                                                                                                
                                                                                                                                
She  said that  she opposes  depositing  any of  the ten  percent                                                               
appropriation for  capital improvements outside the  cap into the                                                               
operating  budget  and  would  like   the  finance  committee  to                                                               
consider  ways   to  prevent   that  from   happening,  including                                                               
considering establishing percentages within  the cap. She offered                                                               
her belief  that the intention  of SJR 6  is not to  increase the                                                               
operating budget. She  said that recent polling has  shown a very                                                               
strong   majority,   62   percent,    of   Alaskans   support   a                                                               
constitutional spending  limit. In  addition, more  people within                                                               
each  political party  support it  than oppose  it. In  the past,                                                               
polling  indicated seven  percent of  Alaska unsure.  In closing,                                                               
she said  that Alaskans are  very interested in seeing  this move                                                               
forward.                                                                                                                        
                                                                                                                                
8:30:06 PM                                                                                                                    
SENATOR REINBOLD  moved to report  SJR 6, work  order 31-GS1068\A                                                               
as amended,  from committee  with individual  recommendations and                                                               
attached  fiscal note(s).  There  being no  objection, the  CSSJR
6(JUD)   was  reported   from  the   Senate  Judiciary   Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
8:30:30 PM                                                                                                                    
CHAIR  HUGHES   stated  that   the  committee   authorizes  Legal                                                               
Services,   the  Division   of  Legal   and  Research   Services,                                                               
Legislative  Affairs  Agency  to make  technical  and  conforming                                                               
changes to the amended resolution.                                                                                              

Document Name Date/Time Subjects
SJR4 Version U.pdf SJUD 4/1/2019 1:30:00 PM
SJUD 4/3/2019 1:30:00 PM
SJUD 4/3/2019 6:00:00 PM
SJUD 4/15/2019 1:30:00 PM
SJUD 4/17/2019 6:00:00 PM
SJUD 4/19/2019 1:30:00 PM
SJR 4
SJR4 Transmittal Letter.pdf SJUD 4/1/2019 1:30:00 PM
SJUD 4/3/2019 1:30:00 PM
SJUD 4/3/2019 6:00:00 PM
SJUD 4/17/2019 6:00:00 PM
SJUD 4/19/2019 1:30:00 PM
SJR 4
SJR4 Sectional Analysis Version U.pdf SJUD 4/1/2019 1:30:00 PM
SJUD 4/3/2019 1:30:00 PM
SJUD 4/3/2019 6:00:00 PM
SJUD 4/15/2019 1:30:00 PM
SJUD 4/17/2019 6:00:00 PM
SJR 4
SJR4 Explanation of Changes Version U.pdf SJUD 4/1/2019 1:30:00 PM
SJUD 4/3/2019 1:30:00 PM
SJUD 4/3/2019 6:00:00 PM
SJUD 4/17/2019 6:00:00 PM
SJUD 4/19/2019 1:30:00 PM
SJR 4
SJR4 Fiscal Note GOV-DOE.pdf SJUD 4/1/2019 1:30:00 PM
SJUD 4/17/2019 6:00:00 PM
SJR 4
SJR 6 Sponsor Statement.pdf SJUD 4/1/2019 1:30:00 PM
SSTA 3/21/2019 1:30:00 PM
SSTA 3/25/2019 5:00:00 PM
SJR 6
SJR006A.PDF SJUD 4/1/2019 1:30:00 PM
SSTA 3/21/2019 1:30:00 PM
SSTA 3/25/2019 5:00:00 PM
SSTA 3/26/2019 1:30:00 PM
SJR 6
SJR 6 - Slideshow Presentation.pdf SJUD 4/1/2019 1:30:00 PM
SJR 6
SJR 6 ver A Sectional 3.21.19.pdf SJUD 4/1/2019 1:30:00 PM
SSTA 3/21/2019 1:30:00 PM
SSTA 3/25/2019 5:00:00 PM
SSTA 3/26/2019 1:30:00 PM
SJR 6
SJR 6 Fiscal Note.PDF SJUD 4/1/2019 1:30:00 PM
SSTA 3/21/2019 1:30:00 PM
SSTA 3/25/2019 5:00:00 PM
SSTA 3/26/2019 1:30:00 PM
SJR 6
SJR 6 - Leg. Legal Memo.pdf SJUD 4/1/2019 1:30:00 PM
SSTA 3/25/2019 5:00:00 PM
SJR 6
SJR 6 - DOL Memo - re amendment vs. revision.pdf SJUD 4/1/2019 1:30:00 PM
SSTA 3/25/2019 5:00:00 PM
SJR 6
Legal Service Memo SJR 6 - 3.29.19.pdf SJUD 4/1/2019 1:30:00 PM
SJR 6