HB 102-STATE INSUR. CATASTROPHE RESERVE ACCT.  3:25:58 PM CHAIR KREISS-TOMKINS announced that the next order of business would be HOUSE BILL NO. 102, "An Act relating to the state insurance catastrophe reserve account; and providing for an effective date." 3:26:59 PM CHAIR KREISS-TOMKINS opened public testimony. After ascertaining the no one wished to testify, he closed public testimony and invited questions from the committee. 3:27:15 PM REPRESENTATIVE EASTMAN asked whether the funds in the State Insurance Catastrophe Reserve Account were available for appropriation by the legislature. 3:27:37 PM PALOMA HARBOUR, Fiscal Management Analyst, Office of Management & Budget, Office of the Governor, answered yes. She said the legislature could appropriate this funding for any purpose, as there was no such thing as a dedicated fund. REPRESENTATIVE EASTMAN assumed that the funds were swept into the Constitutional Budget Reserve (CBR) at the end of the fiscal year. He asked if that was correct. MS. HARBOUR replied, "That is not correct." She stated that just because the funding could be appropriated did not mean it required further appropriation to spend. For that reason, it was not subject to the sweep, she said. REPRESENTATIVE EASTMAN questioned whether Legislative Legal Services was of the same opinion as Ms. Harbour. CHAIR KREISS-TOMKINS invited closing comments from committee members on HB 102. 3:29:28 PM REPRESENTATIVE TARR pointed out that if legislators could find additional bills like HB 102 that saved the state millions of dollars, their work would be easier. REPRESENTATIVE VANCE agreed. She believed that the proposed legislation exemplified the wise financial decisions that Alaskans had been waiting for. She added that she was happy to support this bill. REPRESENTATIVE CLAMAN agreed that there were many positive aspects of the bill and stated his support for it; however, he indicated that it would not come without risk because "when everyone self-insures, it only takes a couple of catastrophic losses for somebody to come back and say, 'what were you all thinking.'" He said he would be remiss not to recognize that the decision came with some degree of risk, but it would be a risk worth taking. REPRESENTATIVE STORY thanked the bill sponsoring for providing the 10-year history of [state property premiums and losses]. Additionally, she thanked Representative Claman for addressing the potential risk. REPRESENTATIVE EASTMAN appreciated the administration's effort in bringing down costs, as reflected in the proposed legislation. Nonetheless, he believed that per the Constitution of the State of Alaska, the money would be swept from the CBR, which would allow the legislature to "make proposals like this bill in the form of a permanent fund that isn't subject to that penalty." He said he would be inclined to create a dedicated fund for this purpose because it would make sense financially and legally; however, he said the legislature was "trying to have [its] cake and eat it too." For that reason, he stated that he would be hesitant to support the bill at this time. 3:33:26 PM REPRESENTATIVE KAUFMAN, in response to Representative Eastman, suggested amending the bill. CHAIR KREISS-TOMKINS echoed the initial comments. He characterized the bill as "terrific policy," and said he was very glad to see the administration bring it forward. He acknowledged the risk but believed the legislature would be paralyzed if it allowed the sweep to dictate its every decision. He pointed out that the sweep had almost always been reversed without fail. Further, he opined that failing to reverse the sweep did not serve a productive purpose. 3:35:28 PM REPRESENTATIVE CLAMAN moved to report HB 102 out of committee with individual recommendations and the accompanying fiscal notes. Without objection, HB 102 was moved from the House State Affairs Standing Committee.