02/20/1997 03:04 PM House HES

 HJR 18 - DEDICATED FUNDS: RATE MAY BE CHANGED                               
                                                                               
 Number 1110                                                                   
                                                                               
 CHAIRMAN BUNDE announced the next item on the agenda was HJR 18,              
 Proposing an amendment to the Constitution of the State of Alaska             
 relating to changing the rate of a tax or license that supports a             
 dedication of its proceeds.                                                   
                                                                               
 Number 1120                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN, sponsor of HJR 18, read from the sponsor            
 statement.  He said the resolution proposes an amendment to Article           
 IX, Section 7 of the state constitution.  The current article                 
 allows for the dedication of funds for a specific purpose as long             
 as it existed by April 24, 1956.  This resolution would allow a               
 changing of a rate of a tax or license of which the proceeds are              
 dedicated to a special purpose.  This proposed amendment would be             
 placed before the voters at the next general election, if approved            
 by the legislature.                                                           
                                                                               
 REPRESENTATIVE IVAN said he introduced this resolution because of             
 the differing opinions represented by the attorney general's office           
 and Legal Services in regards to the dedication of a tax increment            
 to a specified purpose.  In order to avoid litigation, especially             
 if the proceeds of the tobacco tax are to be placed into the school           
 fund or if the legislature changes any other tax rate or license              
 fee, into which proceeds are to be placed into a dedicated fund,              
 this resolution could be a solution to resolve that potential                 
 problem.                                                                      
                                                                               
 REPRESENTATIVE IVAN said in the resolution's first committee of               
 referral, House State Affairs Standing Committee, an amendment was            
 adopted to make the amendment retroactive to October 1, 1997.  This           
 retroactivity coincides with the effective date of the tobacco tax            
 as proposed by CSHB 1(STA).                                                   
                                                                               
 Number 1218                                                                   
                                                                               
 CHAIRMAN BUNDE asked what other dedicated funds would be impacted             
 by HJR 18.                                                                    
                                                                               
 Number 1225                                                                   
                                                                               
 REPRESENTATIVE IVAN said he did not have a list in front of him,              
 but the other funds were discussed in the House State Affairs                 
 committee.  He believed the fish and game fund would be impacted.             
                                                                               
 Number 1242                                                                   
                                                                               
 TOM WRIGHT, Legislative Assistant to Representative Ivan, said the            
 only funds he knew that were still in existence, which are                    
 considered dedicated, are the school fund and the fish and game               
 fund.                                                                         
                                                                               
 Number 1274                                                                   
                                                                               
 REPRESENTATIVE PORTER said the opinion that says we might not be              
 able to raise the tobacco tax and put that money into a dedicated             
 fund came from a 1959 attorney general's opinion.  He asked if an             
 opinion had been sought from the current attorney general.                    
                                                                               
 Number 1295                                                                   
                                                                               
 MR. WRIGHT said the 1956 opinion was the one that the attorney                
 general's office referred to in the State Affairs committee, the              
 Attorney General Opinion, Number 7.  He said there have been                  
 Attorney General Opinions, Numbers 7, 9 and 14, which have all                
 spoken to the same issue and said basically the same thing.                   
                                                                               
 Number 1314                                                                   
                                                                               
 REPRESENTATIVE PORTER clarified that the current attorney general             
 agrees with the 1956 opinion.                                                 
                                                                               
 Number 1336                                                                   
                                                                               
 REPRESENTATIVE VEZEY said the fisherman's fund for the relief of              
 injured fisherman is a fund that pre-existed statehood.  Those were           
 the only three funds of which he was aware.  He expressed confusion           
 as to why those funds that pre-existed statehood and still exist as           
 a dedicated fund can't be found.                                              
                                                                               
 Number 1350                                                                   
                                                                               
 CHAIRMAN BUNDE said HJR 18 would be held until next Tuesday,                  
 February 25, 1997, when it would be heard again.