CS FOR HOUSE BILL NO. 222(FIN) "An Act relating to increases of appropriation items." 10:20:37 AM JULI LUCKY, STAFF, REPRESENTATIVE MIKE HAWKER, explained that the legislation aimed to protect the legislatures constitutional power of appropriation by allowing the legislature to now only decide what additional money was accepted during the interim, but more importantly, to specify what would not be accepted. She relayed that all appropriations had to be authorized by lay, meaning that they must be included in a budget that was voted on by the full body during legislative session. She said that for some appropriation items, the full amount was unknown during the budgetary process, which meant that additional funds could become available during the legislative interim. She related that in order for the Executive Branch to accept the additional funds, the legislature had codified the Revised Program Legislative (RPL) process, a two-step process that appropriated money contingent upon the governor following AS 37.37080. She elaborated on the RPL process. She explained that the spirit of the RPL process was to allow the Executive Branch to efficiently accept funds in a timely fashion when the legislature was not there to approve them, and if the process did not exist, all funds would be delayed until the next legislative session. She noted the RPL would not be considered new funds, but new programs could be added using an RPL if allowed by appropriation language approved in the budget. She related that the bill would allow language to be written into the budget that would expressly prohibit the use of the RPL process for a specific appropriation item. She furthered that items would need to come before the full legislature, either during a special session or the next budget cycle. She relayed that the bill would increase the waiting period from 45 to 90 days. She highlighted that the legislation would not change the legislative budget process. She asserted that the bill did not present a Constitutional problem because it would stop an appropriation before it occurred, rather than controlling the expenditure after the legislature had appropriated the money to the executive branch. 10:25:40 AM Senator Dunleavy asked whether the bill assumed that mandates would be attached to any accepted funds. Ms. Lucky understood that the legislation would not alter how RPLs were vetted. 10:27:05 AM Co-Chair MacKinnon invited David Teal, Director, Legislative Finance Division, to the table for further clarification. She offered her understanding of the RPL process. 10:27:21 AM DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION, clarified that the RPL process differed between the Capital and Operating Budgets. He said that because the legislature could not delegate its power of appropriation to a committee, any new capital project would be viewed as an independent appropriation; only existing capital projects that were already on the books could go before the Legislative Budget and Audit Committee for the RPL process. He explained that the appropriation for the Operating Budget were more broad, and were granted to an agency in order to meet its mission; as long as an RPL fell between the mission or responsibility of the agency, it could be for a brand new purpose. 10:28:40 AM Senator Dunleavy asked whether the bill would curb the encouragement, written into certain legislation, for departments to seek federal funds. Mr. Teal replied that he was not sure. He said that the primary language was, "unless expressly prohibited by the language of the appropriation", which he interpreted to mean that a department could prohibit certain programs or allocations from participating in the RPL process. He said that there could even be language in the annual appropriation bill that said that specific departments could not use the RPL process. 10:30:33 AM Senator Dunleavy spoke to the Department of Education and Early Development. He relayed that the Elementary and Secondary Education Act (ESEA) had been developed in 1965 because the federal government wanted to bypass legislatures, whom they believed were not implementing the Civil Rights Act. Mr. Teal responded that Alaska was one of several states that appropriated federal money. He siad that there were states where federal money went directly to education, and was not appropriated by the legislature, the legislature appropriated only General Funds. He contended that it did not work that way in Alaska; and agency could not accept federal dollars, and spend it, without legislative authority. He stressed that even if the federal government was trying to give the Alaska Department of Education and Early Development money to do something, the legislature retained control over whether the department could accept the funds. 10:33:11 AM Senator Dunleavy warned that it was "important to read the fine print" when the federal government offered Alaska money. Mr. Teal agreed that the Legislative Budget and Audit Committee would be responsible for paying attention to potential mandates attached to federal dollars. 10:33:58 AM Co-Chair MacKinnon noted that the bill addressed the RPL process of the whole legislature. She noted that there were other sections in statute that addressed how other funds were accepted. Ms. Lucky commented that the bill would allow the legislature to put a statement in the budget that restricted the use of the RPL process for particular programs. She noted that the legislature already possessed the power to restrict the RPL process by fund type; HB 222 would hone that restriction by specific appropriation level. 10:35:50 AM Senator Olson asked whether there were other states that had implemented similar restrictions. Ms. Lucky replied that information was still being gathered on what other states had implemented. 10:37:13 AM Senator Bishop hoped that the bill would not limit the governor's ability to accept federal funds in the event of an emergency. 10:38:01 AM Co-Chair MacKinnon explained that the bill would not change how often LB&A could convene. She believed that in the event of an emergency the committee could convene quickly and respond to an emergency. 10:38:11 AM Ms. Lucky remarked that the issue had been researched. She deferred further response to Mr. Teal. 10:39:15 AM Mr. Teal said that once the governor declared a disaster, LB&A would not be involved at all. 10:39:33 AM Senator Hoffman wondered whether the sponsor had discussed the legislation with members of the Executive Branch, specifically, the issue of the 90 day provisions. Ms. Lucky replied that the sponsor had not had a discussion with the Executive Branch. Co-Chair MacKinnon OPENED public testimony. Co-Chair MacKinnon CLOSED public testimony. Co-Chair MacKinnon announced that amendments were due at noon the following day. CSHB 222(FIN) was HEARD and HELD in committee for further consideration.