HJR 9-CONST AM: APPROPRIATION/SPENDING LIMIT CO-CHAIR WHITAKER announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 9, Proposing amendments to the Constitution of the State of Alaska relating to an appropriation limit and a spending limit. Number 0037 REPRESENTATIVE CO-CHAIR HAWKER moved to adopt committee substitute (CS) for HJR 9, Version 23-LS0435\H, Cook, 4/29/03, as the working document. There being no objection, Version H was before the committee. [At this point there is a motion to adopt CSHJR 26, Version 23- LS1006\I, Cook, 4/29/03, as the working document. The discussion related to HJR 26 happens later, which is where the motion is noted.] CO-CHAIR WHITAKER said HJR 9 is a constitutional appropriation limit, which is one of the components of a long-term budget solution. He told the members his intent is to move HJR 9 [out of committee] tomorrow. Number 0346 REPRESENTATIVE ROKEBERG suggested an amendment to the [10] exemptions under subsection (a), Appropriation Limit, that would include appropriations for capital projects. He explained that there will be times when the legislature decides that investments in state infrastructure may be important. For example, the legislature may need to match abnormally high federal appropriations or use public works monies to help [recover from] an economic disaster. Having some flexibility with capital projects may be warranted, he said. CO-CHAIR WHITAKER announced that the committee will take action on amendments tomorrow. Number 0609 REPRESENTATIVE SAMUELS asked about the changes in Version H of HJR 9. CO-CHAIR WHITAKER said he would prefer to answer those questions tomorrow, giving committee members time to review the CS. CO-CHAIR HAWKER offered to summarize the differences between Version H of the committee substitute and the original bill. Number 0649 REPRESENTATIVE GRUENBERG asked if the committee will be discussing the differences between the 4/16/03, Version D, and the 4/29/03, Version H, committee substitutes. CO-CHAIR HAWKER recalled that the Version D draft was not adopted, although it was discussed. The substantive difference between the two versions is that in Version H on page 1, line 7, the option of a 2 percent increase in the base level of appropriations can be passed each year by a simple majority. Subsection (b) on page 2, starting on line 11, adds a second 2 percent [increase] that can be achieved with a two-thirds vote of each house; and the last 2 percent increment is subject to a three-quarters vote of each house of the legislature. REPRESENTATIVE ROKEBERG pointed out that the budget could grow a maximum of 6 percent in one year. CO-CHAIR WHITAKER suggested considering that increase in light of the presentation earlier today by Guy Bell, Director of Retirement and Benefits, Department of Administration. Given the rising costs of the Public Employees' Retirement System (PERS), the first 2 percent increase would have to absorb the increasing costs of the retirement fund. CO-CHAIR HAWKER noted that the hurdles to achieve 4 and 6 percent increments are substantial with a two-thirds and then a three-quarters vote of the members of each house of the legislature. Number 0847 REPRESENTATIVE GRUENBERG said on page 2, line 28, there appears to be a sunset in [FY] 2013. He added that there is a difference in language between the two proposed committee substitutes: on page 2, line 29 of Version H and on page 2, starting on line 28 in Version D. CO-CHAIR WHITAKER suggested delaying these questions until the next meeting. REPRESENTATIVE ROKEBERG said it might be helpful to compare the differences in the two committee substitutes with a chart or table. Number 1051 REPRESENTATIVE GRUENBERG echoed Representative Rokeberg's concern that the legislature retain some flexibility in the capital budget. However, he said he is not sure how to do it in the constitution. Number 1200 REPRESENTATIVE ROKEBERG asked if the legislature will be repealing the existing constitutional spending limit. CO-CHAIR WHITAKER replied yes, the intention is to repeal it; however, he is not certain that it is in this draft of the resolution. [HJR 9 was held over.]