Legislature(1997 - 1998)
04/04/1997 06:25 PM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 13 INCREASE TOBACCO TAXES
COCHAIR SHARP noted Amendment #2 had been adopted
previously, but a "cleaned up" version from Legal
Services was in members' files. Amendment #1 was
before the committee. SENATOR TORGERSON MOVED
Amendment #1. COCHAIR PEARCE objected. Amendment #1
FAILED by a 2-4 vote. SENATOR ADAMS MOVED to rescind
previous action in adopting Amendment #2. Without
objection, Amendment #2 was RESCINDED. SENATOR
PHILLIPS MOVED the "cleaned up" version of Amendment #2
from Legal Services. Without objection, Amendment #2
was ADOPTED. SENATOR WILKEN addressed the committee
regarding Section 4 of the HESS CS. COCHAIR PEARCE
MOVED CSSB 13(FIN) from committee, then WITHDREW her
motion. SENATOR PHILLIPS MOVED Amendment #3. COCHAIR
PEARCE objected. Amendment #3 failed by a 1-5 vote.
COCHAIR PEARCE MOVED CSSB 13(FIN) from committee with
individual recommendations and appropriate fiscal
notes. Without objection, CSSB 13(FIN) was REPORTED
OUT with a forthcoming fiscal note from the Department
of Revenue.
SENATE BILL NO. 13
"An Act relating to taxes on cigarettes and tobacco
products, and to the use of the proceeds of those taxes; and
providing for an effective date."
COCHAIR SHARP recapped the previous action on SB 13. He
brought attention to Amendment #2, which had been adopted.
A new "cleaned up" version of the amendment was in committee
files for consideration.
SENATOR TORGERSON MOVED Amendment #1. COCHAIR PEARCE
objected. SENATOR TORGERSON explained that the amendment
puts a question before the voters for approval in the 1998
election. Section 11 refers to the tax reverting back to
the general fund if a court challenge were successful
regarding dedication of the tax for education. If
challenged, the money may be put in escrow, making it
unavailable until after the court hearing. This placed it
before the voters in a ballot proposition and removed the
legal questions in trying to dedicate it. There were
opposing opinions regarding the constitutionality of
dedicating the tax and this was a third option. In response
to a question from SENATOR PHILLIPS, he explained that if
the amendment were adopted, there wouldn't be a need for
much of the language in Section 11.
A roll call vote was taken on the MOTION to adopt Amendment
IN FAVOR: Torgerson, Parnell
OPPOSED: Phillips, Adams, Pearce, Sharp
Amendment #1 FAILED by a 2 to 4 vote.
SENATOR ADAMS MOVED to rescind previous action in adopting
Amendment #2. Without objection, Amendment #2 was
RESCINDED.
SENATOR PHILLIPS MOVED Amendment #2, version LS0159/Q.1.
Without objection, Amendment #2 was ADOPTED.
SENATOR WILKEN addressed the committee. He commented that
the Senate Health, Education and Social Services Committee
proposed a school construction savings account. Should the
tax law be judged unconstitutional, the money would go
directly into the general fund. The proposal would be a
safety net. It would remove the immediate drop into the
general fund and it would address the temporary nature of
the tax. If the tax was successful, it would eventually
drop to zero. If the money were put into a school savings
account, there would be an endowment to construct public
schools. He encouraged the committee to consider
reinstating the proposal into SB 13.
COCHAIR PEARCE MOVED the bill from committee with individual
recommendations. SENATOR PHILLIPS questioned SENATOR WILKEN
about the proposal. COCHAIR SHARP pointed out that the
Finance Committee version removed the automatic CPI
escalators. COCHAIR PEARCE withdrew her MOTION.
SENATOR PHILLIPS MOVED the section containing the school
construction savings fund for discussion purposes, which
would be Amendment #4. COCHAIR PEARCE objected. SENATOR
ADAMS requested testimony from Jack Chenoweth regarding the
constitutionality of dedicating the fund.
JACK CHENOWETH, Legislative Legal Counsel, Legislative
Affairs Agency, explained the provisions referred to by
Senator Wilken. He further explained that the way the
Finance Committee CS was drafted, the proceeds of the
increase in the cigarette tax would be directly paid into
the school fund, a dedicated fund that existed before
statehood. If a challenge were entered based on the loss of
the dedication because of the increase in the rate of the
tax, the increase would go to a non-dedicated fund.
COCHAIR SHARP clarified that there was also the ramification
that the money going into that account would accumulate,
called for inflation proofing, and only the amount left over
would be available to spend. MR. CHENOWETH confirmed that.
COCHAIR PEARCE appreciated the concerns expressed and
supported the tobacco tax, but didn't feel it was necessary
to develop a special fund to set aside the money. There was
more state money being spent per year to combat the effects
of tobacco products than the tax would ever bring in. She
didn't believe the legislature should tie its hands more
than necessary in terms of how they make spending decisions
and did not see a need to include that section in the bill.
SENATOR PHILLIPS wanted to make sure that in voting for the
tax it went for something other than general funds. He
reiterated his motion to adopt Amendment #3. COCHAIR SHARP
believed the original dedication would hold up and be used
for school construction and maintenance. He stated his
opposition to the amendment based on the fact that the money
would still be subject to legislative appropriation. There
was additional discussion and clarification about the effect
of the amendment.
A roll call vote was taken on the MOTION to adopt Amendment
IN FAVOR: Phillips
OPPOSED: Parnell, Adams, Torgerson, Pearce, Sharp
Amendment #3 FAILED by a 1 to 5 vote.
COCHAIR PEARCE MOVED the bill from committee with individual
recommendations. Without objection, CSSB 13(FIN) was
REPORTED OUT with a forthcoming fiscal note from the
Department of Revenue (41.5).
| Document Name | Date/Time | Subjects |
|---|