Legislature(2003 - 2004)

05/08/2003 08:07 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HJR  9-CONST AM: APPROPRIATION/SPENDING LIMIT                                                                                 
[Contains discussion of HJR 26.]                                                                                                
Number 2720                                                                                                                     
CHAIR WEYHRAUCH announced that the next 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.                                                                                                     
CHAIR WEYHRAUCH noted that before  the committee is CSHJR 9(W&M).                                                               
He further  noted that  two amendments have  been offered  to the                                                               
REPRESENTATIVE SEATON  moved that  the committee  adopt Amendment                                                               
1, which read as follows:                                                                                                       
     Page 1, line 2, following "limit":                                                                                         
          Insert "and a spending limit"                                                                                     
     Page 2, add a new section to read:                                                                                         
          "(c) If appropriations for a fiscal year exceed                                                                     
     the amount that  may be appropriated under  (a) and (b)                                                                  
     of   this   section,    the   governor   shall   reduce                                                                  
     expenditures   by   the   executive  branch   for   its                                                                  
     operations and  administration to the  extent necessary                                                                  
     to  avoid spending  more than  the amount  that may  be                                                                  
     appropriated under (a) and (b) of this section."                                                                         
CHAIR WEYHRAUCH pointed out that  the first change encompassed in                                                               
Amendment 1 is a title change.                                                                                                  
REPRESENTATIVE GRUENBERG objected.                                                                                              
REPRESENTATIVE  SEATON  explained   that  this  resolution  would                                                               
implement a  constitutional spending  cap.  However,  the problem                                                               
is that  the legislature appropriates  and can,  and consistently                                                               
does  ignore  the  constitution   in  its  appropriations.    For                                                               
example, the legislature is supposed  to appropriate one-third of                                                               
all its  expenditures for capital  projects, but  the legislature                                                               
has consistently  ignored that.   Therefore, in  order to  have a                                                               
true  spending limit,  a mechanism  must be  built in.   The  new                                                               
subsection (c)  that Amendment 1  would add directs  the governor                                                               
to  use  the  line  item  veto  to  reduce  spending  within  the                                                               
administrative  branch in  order  to  maintain the  appropriation                                                               
cap.   This  language  merely  directs the  governor  to use  the                                                               
authority that he/she already has.                                                                                              
Number 2578                                                                                                                     
REPRESENTATIVE  HOLM  asked  whether  it's  appropriate  for  the                                                               
legislature to  demand, in statute,  that the governor  use power                                                               
that he already has and can use at his/her prerogative.                                                                         
REPRESENTATIVE SEATON related his  belief that it is appropriate.                                                               
He  explained  that  the  legislature isn't  saying  it  wants  a                                                               
spending cap,  it's the people of  the state who want  a spending                                                               
cap,  one  that  is  real   and  enforceable.    Therefore,  this                                                               
[resolution] would  require that the legislature  not appropriate                                                               
more than  a certain  amount of  money and if  it does,  then the                                                               
governor would be  directed to lower those  expenditures with the                                                               
line item veto power the governor already has.                                                                                  
REPRESENTATIVE HOLM noted his agreement  with the premise of [the                                                               
amendment].   He acknowledged that  this has grown from  the fact                                                               
that former  legislatures and governors  haven't lived up  to the                                                               
constitutional  mandates  of  balanced   budgets.    However,  he                                                               
questioned  why  one would  believe  it  would happen  by  merely                                                               
adding this provision to the constitution.                                                                                      
REPRESENTATIVE  SEATON explained  that the  requirement to  spend                                                               
one-third of the  budget on capital projects is  a requirement on                                                               
the legislature.  He said if  the people of Alaska want to direct                                                               
the  governor  to  exercise   authority,  that's  different  than                                                               
leaving  it  to the  governor  to  decide whether  he/she  should                                                               
override the  legislature when  the legislature  fails to  do its                                                               
Number 2434                                                                                                                     
CHAIR  WEYHRAUCH  pointed  out  that  there  is  clearly  tension                                                               
between  the legislative  and executive  branches,  which is  the                                                               
nature  of the  system.   Currently, the  legislature is  binding                                                               
itself to  appropriations.  Without proposed  subsection (c), the                                                               
governor would still  be able to exercise his/her  line item veto                                                               
prerogative   to    maintain   the    governor's   constitutional                                                               
responsibility  to uphold  the  constitution.   In  so doing  the                                                               
governor  could  specify  that  the   veto  is  mandated  by  the                                                               
restrictions   on  the   legislature   and  its   appropriations.                                                               
Therefore,  the proposed  subsection  (c)  wouldn't be  necessary                                                               
because [the line item veto]  would be inherent in the governor's                                                               
constitutional   responsibility   to   uphold  and   defend   the                                                               
REPRESENTATIVE SEATON  said that  the above  would mean  that the                                                               
governor  is  taking  over  and  the governor,  in  lieu  of  the                                                               
legislature,  is   going  to  be  the   appropriating  authority.                                                               
Representative  Seaton  highlighted  that this  resolution  deals                                                               
with appropriations  and it attempts  to create a  spending limit                                                               
on the legislature.   However, the governor has  the authority to                                                               
actually  make  expenditures.   Representative  Seaton  specified                                                               
that  he didn't  want  the governor  to have  to  delve into  the                                                               
appropriation business, which is  the section that the resolution                                                               
addresses.   The  intent,  he  related, is  to  specify that  the                                                               
governor  is  to  exercise his/her  spending  authority  to  stay                                                               
within the appropriation limit placed on the legislature.                                                                       
CHAIR  WEYHRAUCH  asked  whether Representative  Seaton  believes                                                               
Amendment  1 would  give  the governor  more  authority over  the                                                               
legislature than currently exists in the constitution.                                                                          
REPRESENTATIVE  SEATON  replied   no.    Although  Representative                                                               
Seaton acknowledged  that the governor  has line item  veto power                                                               
without  the  adoption of  Amendment  1,  he specified  that  the                                                               
governor  doesn't  have  direction  to  have  a  spending  limit.                                                               
Without Amendment  1, the governor  would have to  determine that                                                               
the legislature  violated its appropriation limit  and would have                                                               
to  enter  into  an  appropriations  process  rather  than  being                                                               
directed by the people to  exercise the governor's veto authority                                                               
to the extent a spending cap is desired.                                                                                        
CHAIR WEYHRAUCH  surmised that Representative Seaton  viewed [the                                                               
proposed subsection (c)] as the "hammer."                                                                                       
REPRESENTATIVE SEATON  agreed.  Without [the  proposed subsection                                                               
(c)],  the  legislature,  if  it  so  desires,  will  ignore  the                                                               
spending  cap.   With this  language, the  legislature will  know                                                               
that  it  will have  to  constrain  the appropriations  into  the                                                               
constitutional limit  put in place  or the governor will  use the                                                               
line item veto authority to [cap] spending.                                                                                     
Number 2225                                                                                                                     
GINGER BLAISDELL,  Staff to  Representative John  Stoltze, Alaska                                                               
State Legislature, spoke on behalf of  the sponsor of HJR 9.  Ms.                                                               
Blaisdell said she may be able  to provide a practical example in                                                               
which  the legislature  may intend  to keep  their appropriations                                                               
within  the appropriation  limit, but  when the  accountants read                                                               
the  language  and  interpret  how  the money  is  used,  it  may                                                               
actually exceed  the appropriation limit.   She pointed  out that                                                               
this happens  every year in  the difference between  the inactive                                                               
budget in the fiscal summary  and the authorized number, which is                                                               
typically the larger number.   In fiscal year (FY03), the enacted                                                               
budget  is  $3,399.4 million  while  the  FY03 actual  authorized                                                               
budget,  which is  done on  July  1st after  everything has  been                                                               
interpreted  and  balances of  funds  have  carried forward,  was                                                               
$3,495.9   million.     Therefore,  there   was  a   $90  million                                                               
difference.  The aforementioned may  be an instance in which this                                                               
instruction to adjust the appropriation would come into effect.                                                                 
REPRESENTATIVE  GRUENBERG remarked  that  the  difference in  the                                                               
amounts may  have been because  of previously  appropriated funds                                                               
that hadn't lapsed.                                                                                                             
MS.  BLAISDELL replied  no and  explained  that there  has to  be                                                               
specific  language in  each fiscal  year's appropriation  measure                                                               
that  would allow  lapsing money  to carry  forward, remain  in a                                                               
fund, or be deposited back into the general fund.                                                                               
REPRESENTATIVE  GRUENBERG interjected  that he  was referring  to                                                               
capital projects  that go  for five  years, which  may be  in the                                                               
[actual authorized budget] figure.                                                                                              
MS. BLAISDELL replied no and  explained that capital projects are                                                               
only accounted for  at the time of appropriation.   She said that                                                               
the $90 million difference could  be due to [anti-lapse] language                                                               
in the bill.                                                                                                                    
Number 2080                                                                                                                     
REPRESENTATIVE GRUENBERG returned to  [Amendment 1] with which he                                                               
saw two different problems.  As  written, this might be read by a                                                               
court to give  the governor the authority  to unilaterally reduce                                                               
[the budget]  without the  legislature being  able to  override a                                                               
line item veto.   Therefore, in order to preserve  the balance of                                                               
power, Representative Gruenberg said  [Amendment 1] would have to                                                               
be  amended to  state that  "using his  line item  veto he  shall                                                               
reduce".   Without the  aforementioned language,  the legislature                                                               
would have no right to  override [the governor's line item veto].                                                               
Furthermore,   these    constitutional   provisions    are   read                                                               
differently than  statute; constitutional provisions  are written                                                               
very  sparingly.   Representative  Gruenberg  recommended that  a                                                               
letter   of   intent   from  the   legislature   specifying   the                                                               
legislature's intent  that specific language appear  in the voter                                                               
pamphlet would be appropriate because  it would become a key part                                                               
of the legislative history of  the constitutional amendment.  The                                                               
courts almost  always look  to the language  that's in  the voter                                                               
pamphlet  as the  main legislative  history  of a  constitutional                                                               
amendment.  He asked if  Representative Seaton would consider the                                                               
aforementioned approach.                                                                                                        
Number 1899                                                                                                                     
CHAIR WEYHRAUCH  inquired as to Representative  Seaton's thoughts                                                               
if subsection (c) read as follows:                                                                                              
     "(c)  If appropriations  for a  fiscal year  exceed the                                                                  
     amount that  may be appropriated  under (a) and  (b) of                                                                  
     this  section, the  governor shall  reduce expenditures                                                                  
     by line item veto."                                                                                                      
REPRESENTATIVE SEATON  said the  problem with the  above language                                                               
is that  [the legislature] doesn't  want to tell the  governor to                                                               
reduce the judiciary  or the legislative branch.   There could be                                                               
a problem with budgetary crossover  between the three branches of                                                               
CHAIR  WEYHRAUCH  pointed out,  "If  you  don't  want to  do  the                                                               
legislative  branch,   you're  binding  them  to   the  executive                                                               
REPRESENTATIVE SEATON  specified that it means  everything within                                                               
the state that's not in the executive or legislative branch.                                                                    
CHAIR  WEYHRAUCH  proposed  then  that  subsection  (c)  read  as                                                               
     "(c)  If appropriations  for a  fiscal year  exceed the                                                                  
     amount that  may be appropriated  under (a) and  (b) of                                                                  
     this  section, the  governor shall  reduce expenditures                                                                  
     in the executive branch by line item veto."                                                                              
REPRESENTATIVE  GRUENBERG remarked  that  he  believes this  will                                                               
cause more problems than it will solve.                                                                                         
Number 1820                                                                                                                     
MS.  BLAISDELL  recalled  this  being brought  up  in  the  House                                                               
Special  Committee on  Ways and  Means when  Tam Cook,  Director,                                                               
Legislative  Research   and  Services,  was  asked   whether  the                                                               
legislature  would maintain  the power  of veto.   Ms.  Cook said                                                               
that  this is  clearly direction  to  the governor  to not  spend                                                               
money  that  hasn't been  appropriated.    Therefore, she  didn't                                                               
believe this would be interpreted as a veto issue.                                                                              
REPRESENTATIVE GRUENBERG  noted agreement,  and related  that the                                                               
way  [Amendment   1]  is  written   now,  it  would   divest  the                                                               
legislature of any right to override.                                                                                           
MS. BLAISDELL  corrected Representative Gruenberg by  saying that                                                               
was the  response to  adding this language  back.   Ms. Blaisdell                                                               
recalled that Ms.  Cook had suggested that if HJR  9 or a version                                                               
of  it  were to  pass,  the  legislature  may need  to  introduce                                                               
statutory language  setting legislative standards with  regard to                                                               
how the governor would reduce spending.                                                                                         
Number 1735                                                                                                                     
REPRESENTATIVE  DAHLSTROM  asked  if  Representative  Stoltze  is                                                               
comfortable with Amendment 1.                                                                                                   
MS. BLAISDELL replied yes.                                                                                                      
REPRESENTATIVE  GRUENBERG   recalled  that  Ms.  Cook   said  the                                                               
legislature would  set the standards.   However, Ms.  Cook didn't                                                               
directly say  whether the legislature,  under this,  would retain                                                               
any authority  to veto.   Representative  Gruenberg said  that he                                                               
didn't  believe the  legislature  would retain  any authority  to                                                               
veto.  If the legislature doesn't  have any authority to veto, he                                                               
noted  that  he  would  have serious  legal  questions  regarding                                                               
whether  the   legislature  would  have  any   authority  to  set                                                               
Number 1639                                                                                                                     
REPRESENTATIVE  SEATON  announced  that  he would  accept,  as  a                                                               
friendly amendment, Chair  Weyhrauch's suggestion that subsection                                                               
(c) read as follows:                                                                                                            
     "(c)  If appropriations  for a  fiscal year  exceed the                                                                  
     amount that  may be appropriated  under (a) and  (b) of                                                                  
     this  section, the  governor shall  reduce expenditures                                                                  
     by the executive branch by line item veto."                                                                              
REPRESENTATIVE LYNN  related his understanding that  the governor                                                               
could do a line item veto for anything.                                                                                         
CHAIR  WEYHRAUCH  agreed  and  pointed   out  that  the  proposed                                                               
subsection (c) eliminates a lot of language.                                                                                    
REPRESENTATIVE SEATON interjected that  with the approval of this                                                               
[constitutional] amendment  the people would direct  the governor                                                               
to use the line item veto to keep within the spending limit.                                                                    
Number 1516                                                                                                                     
REPRESENTATIVE  GRUENBERG  continued  to  urge  that  the  intent                                                               
[expressed in  Chair Weyhrauch's  friendly amendment]  be related                                                               
in  a  letter  of  intent.    Politically,  if  this  is  in  the                                                               
constitution, those who don't like  the [friendly] amendment will                                                               
seize on this  portion.  These folks will make  the argument that                                                               
this  language will  insulate the  [legislature] from  charges of                                                               
excessive  spending.    Under  current  constitutional  law,  the                                                               
governor can  veto some legislative expenditures  if the governor                                                               
feels  the  legislature is  spending  too  much.   However,  this                                                               
[friendly  amendment]  wouldn't  allow   the  governor  to  [veto                                                               
those].  On  the one hand, one doesn't want  to upset the balance                                                               
of power,  but on  the other  hand one doesn't  want to  leave it                                                               
open for  the argument that  the legislature has  exempted itself                                                               
REPRESENTATIVE HOLM  surmised that this [resolution]  attempts to                                                               
solve  the difference  between an  enacted  versus an  authorized                                                               
budget.  He  asked if this directive to the  governor helps solve                                                               
MS. BLAISDELL  pointed out that  with the friendly  amendment the                                                               
language  referring  to  spending  is eliminated.    Spending  is                                                               
different  than  appropriating, she  noted.    For example,  with                                                               
Medicaid spending  the governor  has been allowed  to spend  at a                                                               
rate greater  than the administration knows  it has appropriation                                                               
authority  and  thus supplemental  spending  is  requested.   The                                                               
aforementioned is  a spending  issue and has  nothing to  do with                                                               
legislative appropriations.  Ms.  Blaisdell also pointed out that                                                               
two different directives are given  depending upon which language                                                               
is used from [the friendly amendments].                                                                                         
REPRESENTATIVE  HOLM related  that he  is interested  in ensuring                                                               
that  when  appropriations  are made  the  spending  matches  the                                                               
appropriation.  Representative Holm  remarked that he didn't know                                                               
what  language   is  necessary  to  make   this  constitutionally                                                               
CHAIR   WEYHRAUCH   said   [this   resolution]   is   making   it                                                               
constitutionally mandated.                                                                                                      
REPRESENTATIVE  HOLM  pointed  out  that  the  constitution  also                                                               
mandates that there should be  a balanced budget, but that hasn't                                                               
been done.                                                                                                                      
REPRESENTATIVE GRUENBERG informed the  committee that he has been                                                               
researching this  matter and  has been  told that  Alaska doesn't                                                               
have a  constitutional balanced budget amendment,  although there                                                               
is a statute that requires it.                                                                                                  
REPRESENTATIVE   SEATON  reminded   members  that   there  is   a                                                               
constitutionally mandated capital  expenditure provision that has                                                               
been consistently ignored.                                                                                                      
REPRESENTATIVE GRUENBERG acknowledged that,  but pointed out that                                                               
the constitutionally mandated capital expenditure is too high.                                                                  
REPRESENTATIVE SEATON reminded everyone  that this only occurs if                                                               
the   legislature's  budget   increases  by   2  percent   twice.                                                               
Hopefully, this year's budget will decrease.                                                                                    
MS.  BLAISDELL mentioned  that even  with all  the decreases  and                                                               
reductions there is  an increase of $124 million  [in this year's                                                               
CHAIR  WEYHRAUCH reminded  the committee  that before  it is  the                                                               
earlier mentioned friendly amendment to Amendment 1.                                                                            
REPRESENTATIVE DAHLSTROM objected.                                                                                              
REPRESENTATIVE SEATON  asked if  printing the intent  language in                                                               
the  voter pamphlet  would suffice  in instructing  the executive                                                               
Number 0999                                                                                                                     
CHAIR WEYHRAUCH pointed  out that the court always  looks to what                                                               
the constitution  says as well  as the legislative history.   The                                                               
first  interpreter  will  be the  attorney  general  when  he/she                                                               
advises the  governor.  If the  matter is challenged by  a court,                                                               
then the court  will probably review what the  legislature did in                                                               
adopting the  language.   If the legislature  adopts a  letter to                                                               
accompany  this  resolution  and  indicates  the  intent  of  the                                                               
legislature,  it  would,  he believes,  have  great  weight  with                                                               
respect to the court's ultimate decision.                                                                                       
REPRESENTATIVE  HOLM remarked  that without  an elected  attorney                                                               
general  it  becomes  a  "sticky  wicket"  because  an  appointed                                                               
attorney general is  being asked by the  individual who appointed                                                               
him/her to render a decision.                                                                                                   
CHAIR WEYHRAUCH  commented that folks  have to  be intellectually                                                               
honest.   Furthermore, there is  always the court system  and the                                                               
legislature can sue the governor as well.                                                                                       
Number 0912                                                                                                                     
REPRESENTATIVE   GRUENBERG    highlighted   that   constitutional                                                               
amendments are voted  on by the people,  and therefore ultimately                                                               
the  court reviews  the  wording  of the  constitution.   In  the                                                               
aforementioned it becomes  a legislature of the  number of people                                                               
who vote.   The court  would say that  the people were  voting on                                                               
the  amendment as  it  was specifically  presented  in the  voter                                                               
pamphlet.  Therefore,  Representative Gruenberg again recommended                                                               
passing a letter of intent along with the resolution.                                                                           
REPRESENTATIVE  SEATON requested  that  Chair Weyhrauch  withdraw                                                               
his friendly amendment to Amendment 1.                                                                                          
CHAIR WEYHRAUCH withdrew his friendly amendment to Amendment 1.                                                                 
REPRESENTATIVE  SEATON   clarified  the  friendly   amendment  to                                                               
Amendment 1.                                                                                                                    
     "(c)  If appropriations  for a  fiscal year  exceed the                                                                  
     amount that  may be appropriated  under (a) and  (b) of                                                                  
     this  section, the  governor shall  reduce expenditures                                                                  
     by  line item  veto  to avoid  spending  more than  the                                                                  
     amount that  may be appropriated  under (a) and  (b) of                                                                  
     this section."                                                                                                           
REPRESENTATIVE  DAHLSTROM   inquired  as  to  why   the  language                                                               
"operation and administration" need to be left out.                                                                             
REPRESENTATIVE SEATON answered:                                                                                                 
     It's just words.   What we're doing is  also taking out                                                                    
     "the  executive branch"  because once  we put  in "line                                                                    
     item veto"  that gets us  out of this problem  ... that                                                                    
     we're  going to  get beat  up because  we're insulating                                                                    
     ourselves and putting it off  on somebody else.  But we                                                                    
     could  always   come  back  into  special   session  to                                                                    
     override line item vetoes.   ... This means that he has                                                                    
     the  same  authority  he does  for  appropriating  that                                                                    
     reduction between legislative,  judicial, and executive                                                                    
     branch.  And most of it's  going to be in the executive                                                                    
     branch because that's what he controls.                                                                                    
REPRESENTATIVE DAHLSTROM  inquired as to how  the legislature can                                                               
come  back   into  session  without  the   governor  calling  the                                                               
legislature back.                                                                                                               
CHAIR WEYHRAUCH  explained that the  legislature can  call itself                                                               
back.  He posed the following scenario:                                                                                         
     If    the   legislature    exceeds   the    amount   of                                                                    
     appropriations  under [subsections]  (a)  and (b),  the                                                                    
     governor  exercises  the  line  item veto  to  get  ...                                                                    
     appropriations  below [subsections]  (a)  and (b),  the                                                                    
     legislature doesn't  like what  the governor  did, [the                                                                    
     legislature] comes  back into session to  override line                                                                    
     item  vetoes, puts  it back  above  the spending  limit                                                                    
     (indisc. -  coughing) never ending  thing.  So,  what I                                                                    
     suppose  is ...  we'll  have to  decide it  politically                                                                    
     where we're deciding to cut  and where to spend because                                                                    
     the governor  said I'm going  to keep doing  this until                                                                    
     we reach  the limit.  ...  And we'll just be  back here                                                                    
     for  special  session  after  special  session  arguing                                                                    
     about where the line item veto should or shouldn't be.                                                                     
MS. BLAISDELL  remarked that she  believes the  above possibility                                                               
is why there  was the recommendation to enact  statute that would                                                               
instruct the governor on how to reduce spending.                                                                                
Number 0522                                                                                                                     
REPRESENTATIVE GRUENBERG clarified that  the legislature can come                                                               
back into [special] session by  the governor calling it back into                                                               
session, which  is the most  common matter.  The  legislature can                                                               
call itself back  into [special] session if the  majority of each                                                               
house so desires, which is rare.                                                                                                
CHAIR WEYHRAUCH referred Representative  Dahlstrom to Article II,                                                               
Section 9, which specifies the parameters of special sessions.                                                                  
REPRESENTATIVE GRUENBERG  interjected that an override  of a line                                                               
item veto requires  a three-quarters vote.  In  the past, leaders                                                               
have been polled.                                                                                                               
REPRESENTATIVE  SEATON  reminded  everyone that  a  three-quarter                                                               
vote must  be obtained  in order  to tap  that second  2 percent.                                                               
Therefore,  this is  a  high bar  because  [the legislature]  has                                                               
difficulty in  controlling spending.   He  pointed out  that just                                                               
acting on appropriations and not on spending is problematic.                                                                    
Number 0335                                                                                                                     
REPRESENTATIVE DAHLSTROM recalled that  certain items didn't need                                                               
to be mentioned  because clarification was provided  in the voter                                                               
pamphlet.  Therefore,  she asked if anything a  candidate says in                                                               
the voter pamphlet would hold up in court.                                                                                      
CHAIR WEYHRAUCH responded that it  was probably different because                                                               
when one is voting on a  person, one isn't binding anyone to what                                                               
the candidate says, save the  candidate.  Candidate's comments in                                                               
the   voter  pamphlet   are  different   than  a   constitutional                                                               
[amendment] or  statute [in which  the pamphlet] is  treated like                                                               
legislative history.                                                                                                            
REPRESENTATIVE GRUENBERG  clarified that  what he has  said holds                                                               
true  to initiatives  or referendums.   However,  because it's  a                                                               
collective statement  that goes  to all the  voters, it  would be                                                               
more carefully reviewed than a candidate's statements.                                                                          
CHAIR  WEYHRAUCH   referred  to  Article  II,   Section  16,  and                                                               
highlighted the following language:   "Bills to raise revenue and                                                               
appropriation  bills or  items,  although vetoed,  become law  by                                                               
affirmative  vote  of  three-fourths  of the  membership  of  the                                                               
legislature. Other  vetoed bills  become law by  affirmative vote                                                               
of two-thirds of the membership of the legislature."                                                                            
CHAIR  WEYHRAUCH  reminded  the   committee  that  there  was  no                                                               
objection  to  Representative   Seaton's  friendly  amendment  to                                                               
Amendment 1.   There being  no objection, the  friendly amendment                                                               
to Amendment 1 was adopted.   After the adoption of this friendly                                                               
amendment to Amendment 1, Amendment 1 as amended read:                                                                          
     Page 1, line 2, following, "limit":                                                                                        
          Insert "and a spending limit"                                                                                     
     Page 2, add a new section to read:                                                                                         
          "(c) If appropriations for a fiscal year exceed                                                                     
     the amount that  may be appropriated under  (a) and (b)                                                                  
     of   this   section,    the   governor   shall   reduce                                                                  
     expenditures by  line item veto to  avoid spending more                                                                  
     than the amount that may  be appropriated under (a) and                                                                  
     (b) of this section."                                                                                                    
CHAIR  WEYHRAUCH clarified  that now  Amendment 1  as amended  is                                                               
before the committee.                                                                                                           
REPRESENTATIVE GRUENBERG objected.                                                                                              
TAPE 03-58, SIDE A                                                                                                            
Number 0031                                                                                                                     
MS. BLAISDELL, in response to  Representative Holm, said that she                                                               
didn't have an opinion on  the friendly amendment to Amendment 1.                                                               
Including "spending" [on page 1,  line 2] does support the change                                                           
in the title.   Therefore, she said she believes  [Amendment 1 as                                                               
amended]  is  fine.   In  response  to Representative  Lynn,  Ms.                                                               
Blaisdell agreed  that she sees  no problem with Amendment  1 [as                                                               
REPRESENTATIVE   SEATON   added   that   he   has   spoken   with                                                               
Representative Stoltze who  is in favor of  Amendment 1, although                                                               
he hadn't spoken with him regarding Amendment 1 as amended.                                                                     
A  roll  call vote  was  taken.   Representatives  Holm,  Seaton,                                                               
Dahlstrom, and  Lynn voted in  favor of Amendment 1,  as amended.                                                               
Representatives  Gruenberg   and  Weyhrauch  voted   against  it.                                                               
Therefore, Amendment 1,  as amended, was adopted by a  vote of 4-                                                               
Number 0240                                                                                                                     
CHAIR WEYHRAUCH,  in explanation  of his  vote on  the amendment,                                                               
directed  attention   to  Article   IX,  Section  16,   which  he                                                               
characterized as  one of the  most obtuse, confusing,  and poorly                                                               
worded amendments he  has ever read.  He expressed  his desire to                                                               
keep  Alaska's  constitution as  clean  and  simple as  possible.                                                               
Although he is  going to err on the side  of simplicity, he noted                                                               
that he  reserved the  right to  change his  vote on  this matter                                                               
Number 0395                                                                                                                     
REPRESENTATIVE   DAHLSTROM  moved   that   the  committee   adopt                                                               
Amendment 2, which read:                                                                                                        
     Page 2, beginning on line 19 (changes as follows):                                                                         
          Section 30. Application, [Repeal] Reconsideration                                                                 
     of  Appropriation  and  Spending Limit.  (a)  The  2004                                                                
     amendment relating  to an appropriation  limit (art.IX,                                                                    
     sec.  16)  first  applies to  appropriations  made  for                                                                    
     fiscal  year  2006  and   applies  [each  fiscal  year]                                                                    
     thereafter [until fiscal year 2013].                                                                                       
          (b) [Section 16 of Article IX is repealed July 1,                                                                     
     2012] The  lieutenant governor  shall place  the ballot                                                                
     title and  proposition for the 2004  amendment relating                                                                
     to an  appropriation and spending limit  (art. IX, Sec.                                                                
     16)  on the  ballot again  at the  general election  in                                                                
     2010  and  every  six years  thereafter  unless  it  is                                                                
     rejected.   If  the  majority of  those  voting on  the                                                                
     proposition  rejects  the   amendment,  Section  16  of                                                                
     Article  IX is  repealed on  the date  the election  is                                                                
REPRESENTATIVE GRUENBERG objected for purposes of discussion.                                                                   
Number 0510                                                                                                                     
MS. BLAISDELL explained  that under the current  language [in the                                                               
resolution] the  constitutional appropriation and  spending limit                                                               
would be repealed after six  years, with no further consideration                                                               
required.   Amendment 2  removes the  language "Repeal"  and asks                                                               
for reconsideration.   She  informed the  committee that  she had                                                               
assumed  that   Amendment  1  would   pass,  and   therefore  she                                                               
reinserted the language "and spending"  as well as Representative                                                               
Stoltze's   original    language   that   would    instruct   the                                                               
constitutional appropriation  spending limit to be  placed on the                                                               
ballot  every six  years.   Therefore, the  public would  vote on                                                               
whether it wanted  to continue it as is, or  choose to change it,                                                               
or repeal it.                                                                                                                   
REPRESENTATIVE SEATON  related his understanding  that [Amendment                                                               
2] would mean that this  constitutional provision would be placed                                                               
on the ballot every six years for reconfirmation.                                                                               
MS. BLAISDELL highlighted  that page 14 of  her handout entitled,                                                               
"HJR   9  Constitutional   Appropriation  and   Spending  Limit,"                                                               
provides a simplified  explanation of Amendment 2.   If Amendment                                                               
2 isn't adopted, the  constitutional appropriation spending limit                                                               
would be repealed at the end  of 2012, at which point there would                                                               
be no limit.                                                                                                                    
Number 0699                                                                                                                     
REPRESENTATIVE  HOLM  said  that  he  has  a  real  problem  with                                                               
[Amendment 2] because theoretically,  the constitution is already                                                               
revisited every 10 years.   Representative Holm remarked that the                                                               
reliance  on  the  constitution  is at  a  different  level  than                                                               
statutes.  He  asked Ms. Blaisdell if any  other constitution has                                                               
a proviso similar to the one being proposed here.                                                                               
MS. BLAISDELL noted that she  worked with the National Conference                                                               
of State Legislatures (NCSL) on this  and found that there are no                                                               
other states or territories that  have any type of constitutional                                                               
sunset clause.   Therefore,  were this to  pass, Alaska  would be                                                               
the first.  Ms. Blaisdell related  that the intent of this sunset                                                               
clause  is  so  that  [the   appropriation  cap]  doesn't  become                                                               
exponentially out  of control  as is the  case with  the original                                                               
constitutional appropriation  limit.  This [sunset  clause] would                                                               
probably  mean that  reviewing  the constitutional  appropriation                                                               
limit would become a priority.                                                                                                  
REPRESENTATIVE HOLM  said that he  thinks of the  constitution in                                                               
terms of being  almost unchangeable versus the  volatility of the                                                               
statutes.  Therefore, he viewed this notion as problematic.                                                                     
REPRESENTATIVE SEATON  noted that he  didn't view Amendment  2 or                                                               
Sections 2 and 3 as being  necessary.  If [the appropriation cap]                                                               
isn't working, the  legislature has the ability to  propose a new                                                               
constitutional  amendment at  any time.    He said  he wasn't  in                                                               
favor of [Amendment 2].                                                                                                         
Number 0989                                                                                                                     
MS. BLAISDELL, in response  to Representative Dahlstrom, answered                                                               
that Representative Stoltze isn't in  favor of a repeal clause in                                                               
which  the appropriation  limit  would go  away.   Ms.  Blaisdell                                                               
mentioned that timing  of an appropriation and  spending limit is                                                               
critical.  If the Arctic  National Wildlife Refuge (ANWR) were to                                                               
open and  the [appropriation] limit  ended in eight  years, there                                                               
would  be an  enormous spike  [in  spending] similar  to that  in                                                               
1980,  which  caused  some  of  the failure  in  1985  and  1986.                                                               
Therefore,  Ms. Blaisdell  didn't believe  Representative Stoltze                                                               
would  be  in  favor  of the  appropriation  limit  merely  being                                                               
repealed.     However,  Representative  Stoltze  might   be  more                                                               
favorable  to the  removal of  the entire  section, although  she                                                               
recalled that he was in favor of the sunset provision.                                                                          
REPRESENTATIVE  GRUENBERG recalled  his prior  experience in  the                                                               
legislature when there was more money.   At that time, money that                                                               
isn't  available today  was available  for operating  capital and                                                               
social projects.   As a result, when that money  was available it                                                               
benefited the  state, a state that  needs to develop itself.   If                                                               
ANWR and a  gas pipeline were in  place, Representative Gruenberg                                                               
said he  wouldn't want to  have to  amend the constitution  to do                                                               
what is necessary.                                                                                                              
CHAIR WEYHRAUCH directed the committee's  attention to the motion                                                               
to adopt Amendment 2.                                                                                                           
REPRESENTATIVE  GRUENBERG maintained  his objection  to Amendment                                                               
A roll call  vote was taken.  Representative Lynn  voted in favor                                                               
of  Amendment  2.     Representatives  Seaton,  Gruenberg,  Holm,                                                               
Dahlstrom, and Weyhrauch voted against  it.  Therefore, Amendment                                                               
2 failed by a vote of 1-5.                                                                                                      
REPRESENTATIVE LYNN remarked that when  the state is flushed with                                                               
money, perhaps  that is  the time  when the  coffers of  the bank                                                               
should be filled.                                                                                                               
REPRESENTATIVE GRUENBERG pointed  out that the state  does have a                                                               
spending  limit  of  sorts  in the  permanent  fund  because  the                                                               
[state]  is prohibited  from spending  all  of the  money and  at                                                               
least 25 percent has to be placed in the permanent fund.                                                                        
Number 1440                                                                                                                     
REPRESENTATIVE SEATON  moved that the committee  adopt Conceptual                                                               
Amendment 3, as follows:                                                                                                        
     Page 2:                                                                                                                    
          Delete lines 17-23.                                                                                                   
REPRESENTATIVE GRUENBERG objected.                                                                                              
REPRESENTATIVE  SEATON said  that  this automatic  repeal of  the                                                               
appropriation   limit   seems   inappropriate  because   if   the                                                               
constitutional  amendment  doesn't  have  any more  term  than  a                                                               
statute,  it   isn't  worth  it.     Therefore,   he  recommended                                                               
implementing  the  constitutional  amendment and  if  it  doesn't                                                               
work, the matter can be revisited.                                                                                              
REPRESENTATIVE  GRUENBERG   pointed  out  that   the  legislature                                                               
doesn't know  the state  of the  economy in  2012.   He explained                                                               
that [Section 2] basically says  that if the [legislature] wishes                                                               
to continue with this spending limit  it should be put before the                                                               
voters  in or  before 2012.   Therefore,  there would  be another                                                               
review of  the matter by  the voters.   He reiterated that  he is                                                               
opposed to Conceptual Amendment 3.                                                                                              
Number 1610                                                                                                                     
CHAIR WEYHRAUCH announced that  he supported Conceptual Amendment                                                               
3  simply because  this should  look more  like a  constitutional                                                               
amendment than  a statute.   As a  body, the legislature  has the                                                               
ability to  [call itself]  into session and  the people  have the                                                               
ability to petition  to call the legislature back  in to session.                                                               
Furthermore,   this  is   making  a   policy  decision   and  the                                                               
legislature ought to live with it or not adopt it.                                                                              
REPRESENTATIVE GRUENBERG  pointed out that currently  there is an                                                               
unintelligible,    unenforceable    spending   limit    in    the                                                               
constitution, Article IX,  Section 16.  "If we had  had this kind                                                               
of thing in, we might have amended it before now," he remarked.                                                                 
MS.  BLAISDELL  informed  the committee  that  if  Representative                                                               
Seaton's  amendment doesn't  pass,  a  small technical  amendment                                                               
changing the title of Section  30 to "Repeal of Appropriation and                                                               
Spending Limit" would be required.                                                                                              
Number 1700                                                                                                                     
A roll  call vote  was taken.   Representatives  Dahlstrom, Holm,                                                               
Seaton, and Weyhrauch  voted in favor of  Conceptual Amendment 3.                                                               
Representatives Lynn and Gruenberg  voted against it.  Therefore,                                                               
Conceptual Amendment 3 passed by a vote of 4-2.                                                                                 
CHAIR  WEYHRAUCH directed  attention  to page  1,  line 6,  which                                                               
encompasses a 10-point spending plan.   He asked if paragraph (2)                                                               
could be deleted.                                                                                                               
MS. BLAISDELL directed  the committee to page 10  of her handout,                                                               
which  specifies that  paragraph (1)  refers to  an appropriation                                                               
into the Alaska  Permanent Fund.  There have been  times in which                                                               
revenues  were  above  the  25 percent  or  50  percent  mandated                                                               
deposit  and thus,  at those  times, more  money has  been placed                                                               
into the  principle of  the fund.   She explained  that paragraph                                                               
(2) refers to expenditures out of the Alaska Permanent Fund.                                                                    
Number 1840                                                                                                                     
CHAIR  WEYHRAUCH   pointed  out  that   under  HJR  26   and  the                                                               
accompanying statutory scheme  there would be a 60:40  split.  He                                                               
inquired  as to  the synergy  between  HJR 26  and the  statutory                                                               
scheme implementing it and paragraphs (1) and (2) of HJR 9.                                                                     
MS. BLAISDELL  explained that HJR  9 instructs how the  base will                                                               
be calculated  for the  2 percent growth  while HJR  26 instructs                                                               
the  use  of  permanent  fund   money  to  become  available  for                                                               
expenditure.   Therefore, it's the  difference between  a revenue                                                               
source  and  an  expenditure  source.    If  the  permanent  fund                                                               
appropriations  or  deposits  aren't   excluded  from  the  base,                                                               
fluctuations in  the permanent fund  may not be reflective  of an                                                               
appropriation limit.  For example,  if the permanent fund dropped                                                               
this year to  $500, it could adjust the base  spending limit by a                                                               
little over  $750 million.   She pointed out  that HJR 26  is the                                                               
revenue stream and HJR 9 is the appropriation limit.                                                                            
REPRESENTATIVE GRUENBERG  posed a  situation in  which HJR  9 and                                                               
HJR  26  go before  the  voters.   He  pointed  out  that HJR  26                                                               
eliminates  the difference  between principle  and income  in the                                                               
permanent fund.  Therefore, the  concept of income from the fund,                                                               
particularly  with  the  possibility  of  HB  298,  is  going  to                                                               
potentially change to include unrealized  income.  He related his                                                               
belief that  [HJR 9] may  have to be  drafted such that  it would                                                               
accommodate the  passage or failure  of HJR 26.   Furthermore, if                                                               
there  is a  balanced  budget constitutional  amendment, it  will                                                               
interplay with HJR 9  as well.  He indicated that  there may be a                                                               
time at  which there will  have to  be a decision  made regarding                                                               
whether to combine some of  these amendments into a single ballot                                                               
Number 2069                                                                                                                     
REPRESENTATIVE SEATON  posed a scenario  in which the  percent of                                                               
market value (POMV)  proposal goes into effect and  60 percent of                                                               
that is  used for state  funds.  He asked  if that is  covered in                                                               
paragraph (2)  of CSHJR  9(W&M).   He also  asked if  the section                                                               
dealing with government is included in paragraph (1).                                                                           
MS.  BLAISDELL  clarified that  HJR  26  isn't incorporated  into                                                               
either of  these two scenarios.   One is a specific  deposit into                                                               
the permanent fund  while the other is a specific  payment out of                                                               
the permanent fund or a dividend to the people.                                                                                 
REPRESENTATIVE SEATON surmised then  that any other appropriation                                                               
out of the permanent fund, on  a POMV basis, for state government                                                               
would [be calculated in the base].                                                                                              
MS. BLAISDELL agreed.                                                                                                           
REPRESENTATIVE  GRUENBERG  inquired  as   to  how  to  deal  with                                                               
inflation as well as unforeseen crises that aren't "disasters".                                                                 
CHAIR WEYHRAUCH  remarked that he  wanted those to be  dealt with                                                               
in  the  House Judiciary  Standing  Committee.   He  then  turned                                                               
attention to page  2, lines 11-16, of  CSHJR 9(W&M), particularly                                                               
the language  excluding the appropriations listed  in (a)(1)-(10)                                                               
and  pointed out  that paragraph  (8) is  a reappropriation.   He                                                               
asked if the  language on page 2, lines 11-16,  should also refer                                                               
to reappropriation.                                                                                                             
MS.   BLAISDELL  informed   the   committee   that  currently   a                                                               
reappropriation hasn't  been counted  in the fiscal  summary, but                                                               
is basically shown as a  zero appropriation amount because it was                                                               
accounted for in a prior fiscal year.                                                                                           
CHAIR  WEYHRAUCH   inquired  as  to  why   this  [constitutional]                                                               
amendment even needs reappropriation addressed at all.                                                                          
MS.  BLAISDELL answered,  clarification, because  technically the                                                               
legislature is appropriating that money.                                                                                        
CHAIR   WEYHRAUCH   asked   if  the   language   specified   that                                                               
appropriations  and   reappropriations  are  being   excluded  in                                                               
(a)(1)-(10) would provide more clarity.                                                                                         
MS.   BLAISDELL   replied   no   because   reappropriations   are                                                               
appropriated each  year.  She  related her  belief that it's   an                                                               
issue of semantics.                                                                                                             
CHAIR WEYHRAUCH  suggested moving  the language in  paragraph (8)                                                               
to after "to" on  page 1, line 9, to be  followed by the language                                                               
"and  to an  appropriation" and  then list  the paragraphs.   The                                                               
paragraphs would  no longer need  to say "an appropriation".   He                                                               
explained that  he was  seeking to  wordsmith this  resolution to                                                               
make it as simple as possible.                                                                                                  
MS. BLAISDELL said that would make total sense.                                                                                 
CHAIR  WEYHRAUCH  moved  that   the  committee  adopt  Conceptual                                                               
Amendment 4, which  would on page 1, line 9,  after "to", insert,                                                               
"a  reappropriation  of  money   already  appropriated  under  an                                                               
unobligated appropriation  that is not  void under Section  13 of                                                               
this article and  to an appropriation" and on page  1, lines 10 -                                                               
page 2,  line 7,  delete "an appropriation"  at the  beginning of                                                               
paragraphs  (1)-(10).    There  being  no  objection,  Conceptual                                                               
Amendment 4 was adopted.                                                                                                        
Number 2507                                                                                                                     
REPRESENTATIVE   GRUENBERG  moved   that   the  committee   adopt                                                               
Conceptual Amendment 5 as follows:                                                                                              
         Page 1, line 7 and page 2, line 14, after "two                                                                         
          Insert "(excluding inflation)"                                                                                        
REPRESENTATIVE SEATON objected.                                                                                                 
REPRESENTATIVE GRUENBERG explained that he  is trying to say that                                                               
there is  a concept of  inflation, but no  one knows how  much it                                                               
will be in  any year.  However, the  inflation could considerably                                                               
reduce the 2  percent and thus there would be  no ability to even                                                               
keep pace with  inflation.  Therefore, he wanted to  be sure that                                                               
if there is inflation that it's considered.                                                                                     
REPRESENTATIVE HOLM  offered a  friendly amendment  to Conceptual                                                               
Amendment  5 such  that it  would insert  "(including inflation)"                                                               
rather  than  "(excluding  inflation)".   He  explained  that  he                                                               
believes this [resolution]  attempts to formulate a  way in which                                                               
to limit  the growth  of government.   He  indicated that  he was                                                               
trying  to [accomplish  what Representative  Gruenberg described]                                                               
while keeping the lid down on  the ability of government to grow.                                                               
He pointed  out that 2  percent plus  5 percent inflation  sums 7                                                               
percent growth.   However, 2  percent, including  inflation means                                                               
that it  can be  5 percent  and maintain 2  percent as  the upper                                                               
CHAIR  WEYHRAUCH announced  that  he was  going  to vote  against                                                               
Conceptual Amendment 5  because he believes it  should be brought                                                               
up in  the House Finance  Committee where the  full ramifications                                                               
can be considered.                                                                                                              
REPRESENTATIVE GRUENBERG withdrew Conceptual Amendment 5.                                                                       
[The friendly amendment to Conceptual  Amendment 5 was considered                                                               
REPRESENTATIVE  HOLM moved  to report  CSHJR 9(W&M),  as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying  fiscal  notes.   There  being  no objection,  CSHJR
9(STA)  was  reported  from  the  House  State  Affairs  Standing                                                               

Document Name Date/Time Subjects