Legislature(2003 - 2004)

02/24/2004 01:54 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JOINT RESOLUTION NO. 20                                                                                                 
                                                                                                                                
     Proposing amendments to the Constitution of the State                                                                      
     of Alaska repealing the prohibition on dedicated funds.                                                                    
                                                                                                                                
REPRESENTATIVE BEVERLY MASEK explained  that HJR 20 would add                                                                   
a  new  section  #18  to  Article  IX  of  the  Constitution.                                                                   
Specifically,  if passed  and  adopted at  the November  2004                                                                   
general  election,  a  dedicated fund  would  be  established                                                                   
requiring  all  taxes generated  through  the  sale of  motor                                                                   
fuels to  be placed in  the fund for  the express  purpose of                                                                   
maintaining  Alaska's roads  and  highways.   She added  that                                                                   
Alaska's Constitution  prohibits  dedicated funds except  for                                                                   
the Permanent Fund, Constitutional  Budget Reserve (CBR) Fund                                                                   
and those dedicated funds in existence prior to statehood.                                                                      
                                                                                                                                
She added that  motor fuel taxes in all states  are dedicated                                                                   
in   some  fashion   for   road  and   highway   maintenance.                                                                   
Currently,  in Alaska, motor  fuel taxes  are deposited  in a                                                                   
special highway fuel  tax account in the general  fund, which                                                                   
allows them to be appropriated for any budget expense.                                                                          
                                                                                                                                
Representative  Masek  urged  members  to pass  HJR  20  from                                                                   
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Harris inquired  if the  gas tax  was currently  at                                                                   
eight cents per gallon.  Representative  Masek replied it is.                                                                   
                                                                                                                                
Co-Chair Harris  asked if  it had  been proposed to  increase                                                                   
that tax  by twelve cents, making  it total twenty  cents per                                                                   
gallon.   Representative  Masek  noted that  is the  proposed                                                                   
increase indicated in the Governor's bill.                                                                                      
                                                                                                                                
Co-Chair  Harris  stated that  the  proposed  intent for  the                                                                   
legislation would place before  the voters a decision whether                                                                   
or not a  dedicated fund be  created for all gas  tax revenue                                                                   
placing  it in  the dedicated  fund  for highway  maintenance                                                                   
use.  Representative Masek acknowledged  that was correct and                                                                   
that  the  money  would  be used  to  maintain  highways  and                                                                   
infrastructure.      She   stated  that   in   the   previous                                                                   
Administration, the funding had  been cut and some Department                                                                   
of Transportation  & Public  Facilities workers  were removed                                                                   
from the Willow Maintenance station  and the Kenai Peninsula.                                                                   
She  indicated  that  when Governor  Murkowski  took  office,                                                                   
those workers were  placed back into those stations.   During                                                                   
the winter months, the workforce  must be available.  Passing                                                                   
the  resolution  would  help  eliminate  problems  that  have                                                                   
occurred in the past.                                                                                                           
                                                                                                                                
Co-Chair   Harris   inquired   why  the   founders   of   the                                                                   
Constitution  had  a  prohibition  against  dedicated  funds.                                                                   
Representative   Masek  did  not   know.    Co-Chair   Harris                                                                   
understood  that it was  so the  Legislature would  have full                                                                   
authority of monies available year to year.                                                                                     
                                                                                                                                
Representative  Croft acknowledged  that was  true and  added                                                                   
that at the time the Alaskan Constitution  was written, other                                                                   
states were declaring  bankruptcy because they  had all their                                                                   
revenue sources dedicated to specific places.                                                                                   
                                                                                                                                
Representative  Fate  mentioned  that  with  passage  of  the                                                                   
                                                    st                                                                          
legislation,  revenues  received  after  December  1,   2004,                                                                   
would  be used  to  fund  that fund.    He asked  the  amount                                                                   
anticipated  and  what  additional  money would  need  to  be                                                                   
placed into the  fund so that from the inception  date, there                                                                   
would be enough.                                                                                                                
                                                                                                                                
Representative  Masek responded  that would  be premature  to                                                                   
calculate.  The resolution would  only bring it to the people                                                                   
for a  vote.   She did not  know the  fate of the  Governor's                                                                   
motor  fuel tax  bill.   She reiterated  that currently,  the                                                                   
State collects  eight cents  a gallon and  it is  placed back                                                                   
into the general fund.                                                                                                          
                                                                                                                                
Representative  Fate voiced concern  that the fund  would not                                                                   
have enough  capital to  undertake projects  that the  voters                                                                   
anticipate but the  State would be "locked in".   He asked if                                                                   
the  reference  to  highways  and  roads  would  include  the                                                                   
railroad.  Representative Masek responded it would not.                                                                         
                                                                                                                                
Representative  Stoltze questioned  if the legislation  would                                                                   
help promote  passage of the  gas tax.  Representative  Masek                                                                   
advised that  this legislation  has been proposed  because of                                                                   
the Governor's twelve-cent increase gas tax bill.                                                                               
                                                                                                                                
Representative Stoltze clarified  that Representative Masek's                                                                   
intent  was anticipating  that the  tax would  pass and  this                                                                   
legislation  would then guarantee  that it  was used  for the                                                                   
intended  purpose.   Representative  Masek acknowledged  that                                                                   
was correct.                                                                                                                    
                                                                                                                                
Co-Chair Harris  asked how much  general fund money  has been                                                                   
spent yearly  on highway maintenance.   Representative Foster                                                                   
replied $97 million dollars.                                                                                                    
                                                                                                                                
Co-Chair Harris asked  how much the State generates  from the                                                                   
eight cents per gallon tax.  Representative  Foster responded                                                                   
that it  amounted to  between $50-$60  million dollars.   Co-                                                                   
Chair Harris pointed out given  that amount, the State spends                                                                   
nearly   $30  to  $40   million  dollars   more  on   highway                                                                   
maintenance  then   is  generated.    Representative   Foster                                                                   
commented  that number  would  result from  twenty cents  per                                                                   
gallon.  At eight-cents per gallon,  the amount would be much                                                                   
less.                                                                                                                           
                                                                                                                                
PETE   ECKLUND,   STAFF,   REPRESENTATIVE    BILL   WILLIAMS,                                                                   
interjected that at eight-cents  per gallon, the number would                                                                   
generated would be approximately $37 million dollars.                                                                           
                                                                                                                                
Co-Chair  Harris   declared  that  the  State   is  currently                                                                   
spending  approximately   $80  million  dollars   on  highway                                                                   
maintenance  from  the general  funds.    He stated  that  it                                                                   
appears  that  all money  brought  into  the State  from  the                                                                   
current   gas   tax   has  been   "dedicated"   for   highway                                                                   
maintenance.     Co-Chair  Harris   commented  that   he  was                                                                   
attempting  "to get  a handle"  on how much  money was  being                                                                   
spent from the  general fund outside of the  amount generated                                                                   
from the gas tax.                                                                                                               
                                                                                                                                
Representative Hawker  noted that there are a  few funds that                                                                   
have  been "grandfathered"  in.   He  asked if  one of  those                                                                   
funds was a highway maintenance fund.                                                                                           
                                                                                                                                
Representative  Masek responded  that there  is one  specific                                                                   
fund  called the  King Salmon  Stamp that  places money  back                                                                   
into habitat restoration  projects.  She noted  that there is                                                                   
not a  highway-dedicated fund  at this time.   Representative                                                                   
Foster mentioned  that there might be a marine  highway fund.                                                                   
Co-Chair Harris remarked that  there is a marine highway fund                                                                   
but  that he  did not  believe  it was  dedicated.   Co-Chair                                                                   
Williams interjected that it is not a dedicated fund.                                                                           
                                                                                                                                
Co-Chair  Harris  stated  that   HJR  20  would  be  HELD  in                                                                   
Committee for further consideration.                                                                                            
                                                                                                                                
Co-Chair  Williams   indicated  that   he  would   work  with                                                                   
Representative Masek's office on the proposed legislation.                                                                      
                                                                                                                                
HJR 20 was HELD in Committee for further consideration.                                                                         

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