SB 221-CHANGING RPL PROCESS  4:37:32 PM CHAIR SHOWER announced the consideration of SENATE BILL NO. 221 "An Act relating to appropriations of federal receipts; and relating to an increase of an appropriation based on additional federal receipts." He noted that this was the first hearing and there was a committee substitute (CS) for the committee to consider after the introduction. 4:37:52 PM SENATOR BILL WIELECHOWSKI, Alaska State Legislature, Juneau, Alaska, sponsor of SB 221, stated that this legislation seeks to change the way appropriations are handled when the legislature is not in session. Art. IX, sec. 13 of the Constitution of the State of Alaska clearly states that the legislature is the appropriating body. However, a statute called the revised program legislative (RPL) delegates the power of appropriation to the executive branch when the legislature is not in session. He suggested that this law is unconstitutional. He reported that a lawsuit on this issue last year went to the superior court but the legislature reconvened before the court ruled on that particular issue. SENATOR WIELECHOWSKI questioned the wisdom of giving one individual the sole authority to decide where hundreds of millions of dollars should go, particularly with little to no public process or legislative oversight. SB 221 seeks to restore the legislature's constitutional role in budgeting and to streamline the process to address the situation of unexpected revenue. He summarized that SB 221 is about protecting the budgeting process, restoring balance between the legislative and executive branches, and giving the public more say in how state money is spent. CHAIR SHOWER asked the members if they had any questions. 4:40:31 PM SENATOR REINBOLD stated appreciation for the bill and relayed her frustration with the RPL process. CHAIR SHOWER solicited a motion to adopt the committee substitute (CS) for SB 221. 4:41:13 PM SENATOR REINBOLD moved to adopt CSSB 221, work order 32- LS1472\I, as the working document. CHAIR SHOWER objected for discussion purposes. 4:41:43 PM SENATOR COSTELLO observed that the CS probably will require a title change because it brings up AS 24.05.100 related to special session. She asked the sponsor to respond. 4:42:00 PM SENATOR WIELECHOWSKI thanked her for pointing that out and acknowledged that a title change may be required. He noted that making the change in committee would require just a majority vote. SENATOR COSTELLO expressed her preference to ask for a new title so it reflects everything in the bill. CHAIR SHOWER asked if she wanted to offer the motion. SENATOR COSTELLO replied not now. 4:42:56 PM CHAIR SHOWER removed his objection. Finding no further objection, version I was adopted as the working document. He asked Ms. Kawasaki to introduce the committee substitute. 4:43:32 PM SONJA KAWASAKI, Staff, Senator Bill Wielechowski, Alaska State Legislature, Juneau, Alaska, introduced SB 221, version I, on behalf of the sponsor by paraphrasing the sponsor statement for version I that read as follows: SB 221 reforms the statutory revised program legislative (RPL) process that arguably render it unconstitutional. I believe that the current RPL law is unconstitutional both on its face and in practice. The legislature is the constitutionally authorized appropriating body; this means that, under the Alaska Constitution, the legislature possesses both the power and the duty of appropriations. The governor cannot overstep this legislative authority, and the legislature cannot avoid its duty. Current law unconstitutionally delegates the power and the duty of appropriations to the governor. When the legislature is not meeting in session, AS 37.07.080(h) permits the governor to expend additional revenue received by the Statewith the governor acting as the appropriating authority, setting state funding priorities. Facially, the law expressly assigns the governor the ability to determine spending of "federal and other program receipts" when the funds were "not specifically appropriated by the full legislature." These provisions enable impermissible actions; they appear to allow the governor to spend not only federal dollars but also, potentially, other funds like general fund surplus dollars that would yet be available for appropriation during the next regular session, while explicitly acknowledging that the full legislature has never appropriated the funds. Procedurally, to the extent that the Legislative Budget & Audit Committee (LB&A) is given an oversight role over the governor's RPL submissionsthis too is an unconstitutional delegation of authority. LB&A may not stand in place of the full legislature, but under current law, LB&A can approve the RPL spending to occur in less than 45 days after submission. Moreover, the law allows the governor to spend the funds unilaterally after 45 days, regardless of whether LB&A ever takes up the matter in committee or even if it actually disapproves itso long as in the governor's sole discretion, the governor "determines to authorize the expenditure." I believe this process violates the constitution by its express provisions as well as in separation of powers and checks and balances principles. SB 221 rectifies these defects while still enabling a mechanism for spending federal dollars when the legislature is not meeting in session. The bill eliminates the governor's ability to use the RPL process for revenue generated from sources that are not federal. It provides a process that empowers the legislature to appropriate the federal funds by establishing increased amounts in an enacted appropriations bill to be spent on budget items when federal revenue exceeds State forecasts, but only when the legislature has specifically identified those items and set permissible increase limits. The limits may be provided for by percent increases, which would allow the legislature to thoughtfully consider the amounts of potential increases to budget items relative to their base appropriations and to one another. Under SB 221, the governor may submit RPLs to LB&A for confirmation that spending proposals are maintained within budget items and limits restricted by the legislature in an enacted appropriations bill. LB&A may also make other recommendations for the spending. Finally, under SB 221, the governor may not spend the funds until 45 days have elapsed from the date of the LB&A confirmation, unless LB&A recommends the expenditures are made earlier. Concerns over the constitutionality of the RPL process notably arose in 2020 when the legislature recessed the regular session due to the Covid-19 pandemic, and the State received large sums of federal dollars that could be spent to address the public health disaster. In particular, the State was given $1.25 billion in Coronavirus Relief Funds that could be expended in a relatively discretionary manner, on "necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID19)." The governor purportedly exercised his authority under the current RPL process, including attempting to expend: $569 million for direct municipal relief, and $290 million for small business grants, but only $10 million on relief to individual Alaskans to prevent homelessness. A Juneau resident sued the State, arguing the governor's spending was unconstitutional. The lawsuit prompted the legislature to return to the Capitol to "ratify" the governor's RPL expenditures before the final day of the regular session. The superior court decided the ratification remedied any failure to appropriate the funds. The ruling was not appealed, so there is no final precedent on the issue. There are only two types of bills contemplated by the Alaska Constitution: (1) substantive bills, like those establishing or changing laws, and (2) bills for appropriations. Because no appropriation bill was passed addressing the governor's RPL spending, to this day I contend that the governor's unconstitutional act could not simply be "ratified." We should avoid a repeat of what happened with RPL spending in 2020. Please join me in fixing the defective RPL process and ensuring the legislature retains its control over its discretionary appropriations authority as mandated by the Alaska Constitution. CHAIR SHOWER found no questions and asked Ms. Kawasaki to proceed with the sectional analysis. 4:47:35 PM MS. KAWASAKI provided the sectional analysis for SB 221, version I. It read as follows: Section 1 Governor May Call Special Session in Less  than 30 Days Section 1 provides an express exception to allow the governor to call a special session in less than 30 days to address appropriations of additional federal receipts in excess of those accounted for under the amendments of this legislation. Section 2 Amending the RPL Process  Section 2 amends the revised program legislative (RPL) process to provide that, for the State to expend additional funds it receives above the appropriations made in an appropriation bill, the funds may only be federal funds and may only be spent in accordance with the following procedure: In an appropriation bill, the legislature may provide for an amount that is a specific maximum increase of an appropriation item above the amount actually appropriated by the appropriation bill; the specific maximum increase may be provided as a percentage of an appropriation item, and (1) The governor may submit a proposal for spending the additional federal funds via a "revised program" to the Legislative Budget and Audit Committee for review; (2) The Legislative Budget and Audit Committee reviews the governor's revised program proposal and may recommend alternative funding amounts or distributions among multiple items, not to exceed any specific maximum increases previously provided by an appropriation bill; (3) The governor may submit a corrected or changed revised program proposal to the Legislative Budget and Audit Committee for review; (4) Once the governor submits a final revised program proposal, the Legislative Budget and Audit Committee confirms the proposal does not exceed any specific maximum increases previously provided by an appropriation bill; and (5) Revised program amounts confirmed by the Legislative Budget and Audit Committee may be expended after 45 days, unless the committee recommends an earlier date of the expenditures. 4:49:49 PM Section 3 Calling a Special Session to Spend Amounts  Above Permissible RPL Subjects To expend amounts exceeding those permissible under the RPL process, including applying funds to other items not previously addressed with a specific maximum increase in an appropriation bill, the governor must call a special session. Section 4 Limiting Applicability of the Effective  Date of the Bill This section establishes that the new RPL process would not apply to items funded under the previous RPL provisions as they read and were applicable before the effective date of the act. CHAIR SHOWER asked if she had any comment on the fiscal note. MS. KAWASAKI replied the bill doesn't have a fiscal note. 4:50:43 PM SENATOR REINBOLD offered her view of special sessions in Juneau and posed the possibility of an amendment. CHAIR SHOWER asked the sponsor if he had any comments. SENATOR WIELECHOWSKI replied he had no comment. 4:51:25 PM CHAIR SHOWER asked if he had seen the governor's bill SB 241, "An Act making appropriations for the operating expenses of state government and certain programs; making capital appropriations and supplemental appropriations; capitalizing funds; and providing for an effective date." CHAIR SHOWER said none of the senators he'd asked had seen the bill and it's an example of legislators not having a chance to look at where the money goes even though it's important to be able to offer that kind of input. The amount of money is almost irrelevant, he said. It's the process that's important and it should follow the constitution. He expressed frustration at being cut out of the loop even inside the legislative branch. He continued to comment: This is after the subcommittee process, by the way, it's all closed out and now here we go and we're going to hand almost a billion dollars to the Senate Finance co-chairs to come up with a plan, and the governor, and I'm going 'Where are we in the process?' He expressed appreciation for SB 221. He emphasized that the constitution should be followed, the statute should be changed so it's correct, and every legislator should have a chance to have input. 4:54:13 PM SENATOR COSTELLO stated that it is fundamentally wrong to hand off the constitutional power of the legislature to a single committee when the legislature is not in session. She expressed appreciation for SB 221 and posited that it will resolve much of the conflict with the RPL process. 4:55:10 PM SENATOR WIELECHOWSKI commented that it is even more shocking that even the committee that the legislature defers its power to during the interim doesn't have the ability to stop the governor. SENATOR COSTELLO said the sponsor statement does a good job of outlining that point. The balance of power is important and the current process undermines the power of the legislature. She said she has no problem with the legislature returning to address such issues. CHAIR SHOWER mentioned the possibility of amending the bill to address what he has experienced in the RPL process. He reiterated that an important part of the process is to give individual legislators an opportunity to give input and talk about the needs in their districts. It should not fall to just the governor or a handful of legislators. SENATOR REINBOLD emphasized that the current RPL process is entirely unacceptable. 4:57:38 PM SENATOR WIELECHOWSKI said he was pleased to see so much interest in the bill but suggested that while the committee was interested in other areas, SB 221 deals solely with RPLs and the process. Adding more may make its progress through this and the other body more difficult. 4:58:45 PM CHAIR SHOWER opened public testimony on SB 221; finding none, he closed public testimony. CHAIR SHOWER held SB 212 in committee.