Legislature(2021 - 2022)BUTROVICH 205
05/07/2021 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB109 | |
| SJR7 | |
| SJR5 | |
| SB39 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 109 | TELECONFERENCED | |
| += | SJR 6 | TELECONFERENCED | |
| += | SJR 5 | TELECONFERENCED | |
| += | SJR 7 | TELECONFERENCED | |
| + | SB 39 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SJR 7-CONST. AM: STATE TAX; VOTER APPROVAL
1:52:10 PM
CHAIR HOLLAND announced the consideration of SENATE JOINT
RESOLUTION NO. 7, Proposing amendments to the Constitution of
the State of Alaska relating to prohibiting the establishment of
a state tax without the approval of the voters of the state; and
relating to the initiative process.
[This is the third hearing on SJR 7. Previous hearings were held
on 4/30/21 and 5/3/21. Public testimony was opened and closed on
4/30/21.]
1:53:01 PM
SENATOR MYERS moved to adopt Amendment 1, [work order 32-
GS1711\A.1]:
32-GS1711\A.1
Nauman
5/3/21
AMENDMENT 1
OFFERED IN THE SENATE BY SENATOR MYERS
TO: SJR 7
Page 1, line 2, following "state;":
Insert "requiring a two-thirds vote in each house
of the legislature to change the rate of an existing
state tax;"
Page 2, following line 13:
Insert a new subsection to read:
"(d) Notwithstanding Section 14 of Article II,
the rate of an existing state tax may be changed by
the legislature only upon affirmative vote of two-
thirds of the members of each house of the
legislature. Nothing in this subsection alters the
ability of the people to change the rate of an
existing state tax by initiative or to reject a change
in the rate of an existing state tax made by the
legislature by referendum."
CHAIR HOLLAND objected for discussion purposes.
1:53:06 PM
SENATOR MYERS explained Amendment 1 will address a concern that
Senator Hughes raised. The public might approve a 2 percent
statewide sales tax in one year but the next year the
legislature could raise that tax to 10 percent. Since it would
not be establishing a new tax, it would not be subject to a vote
of the people. He recalled that the City of North Pole initially
enacted a sales tax of 3 percent but the tax is now 5 percent.
Since it would be cumbersome to go back to the voters each time,
Amendment 1 raises a higher bar by requiring a two-thirds vote
in each house of the legislature to change the rate of an
existing state tax, which he thought was a reasonable
compromise.
1:54:44 PM
SENATOR KIEHL asked if Amendment 1 was intended to affect the
base rates or the effective rates.
SENATOR MYERS responded that Amendment 1 would apply to the base
rate. He said his point was not to require a two-thirds vote by
the legislature unless the base rate of a tax was raised.
SENATOR KIEHL recalled that former colleague Representative Gara
once introduced a bill to delete the gross value reduction for
Alaska's oil taxes. That would not have changed the rate, but
the government's share would have significantly increased. He
asked if Amendment 1 would require a supermajority or two-thirds
vote.
SENATOR MYERS said he was unsure.
SENATOR KIEHL noted that if an existing tax type had a negative
adjustment applied to the basis, it would not change the base
rate. Although this would significantly increase the state's
take, it would not be impacted by Amendment 1.
SENATOR MYERS asked for clarification if he referred to a
negative change in the rate.
SENATOR KIEHL explained that his scenario relates to a negative
change in the basis. He said it would be the same as if the
legislature deleted the gross value reduction. Thus, it would
increase the value to be taxed by some legislatively determined
number, such that it would effectively increase the tax but not
touch the rate.
1:56:56 PM
SENATOR MYERS asked if this would be similar to property tax
exemptions, such that residents can reduce their property tax
liability from $20,000 to $10,000.
SENATOR KIEHL answered that the scenario he described would
effectively change the tax liability for those receiving the tax
exemption.
SENATOR MYERS responded that the scenario he described would not
take a two-thirds vote under Amendment 1.
CHAIR HOLLAND removed his objection. There being no further
objection, Amendment 1 was adopted.
1:58:08 PM
SENATOR MYERS moved to adopt Amendment 2, [work order 32-
GS1711\A.2]:
32-GS1711\A.2
Nauman
5/4/21
AMENDMENT 2
OFFERED IN THE SENATE BY SENATOR MYERS
TO: SJR 7
Page 2, line 8:
Delete "by a majority vote in joint session"
SENATOR HOLLAND objected for discussion purposes.
1:58:23 PM
SENATOR MYERS explained Amendment 2. If the voters approved a
tax through the initiative process, Amendment 2 would require
the legislature to approve it by resolution. However, the
legislature would not need to approve the resolution in joint
session. He acknowledged that it could be cumbersome to require
a joint session since one presiding officer could block the
session.
CHAIR HOLLAND asked if the administration had any comments.
1:59:47 PM
MIKE BARNHILL, Deputy Commissioner, Department of Revenue,
Juneau, Alaska, responded that the administration has no opinion
on Amendment 2. He related his understanding that for the
legislature to approve an initiated tax under Amendment 2 would
require a simple majority of 21 votes in the House and 11 votes
in the Senate.
2:00:16 PM
SENATOR KIEHL asked if the requirement to approve the resolution
in joint session is removed, whether the legislature could
choose to approve the resolution in joint session rather than in
regular sessions.
SENATOR MYERS suggested that Legislative Legal Services could
confirm whether the legislature could do so. He said it seemed
unlikely the legislature would call a joint session for any
matter it is not required to do so. He said that joint sessions
are used for specific purposes.
2:01:25 PM"
SENATOR HUGHES asked Mr. Milks if the committee deleted the
language "in joint session" whether it would give the
legislature either option.
2:01:53 PM
WILLIAM MILKS, Senior Assistant Attorney General, Legislation &
Regulations Section, Civil Division, Department of Law, Juneau,
Alaska, stated that the proposed bill includes the language "by
a majority vote in joint session." If the committee removes that
language, it will change the voting requirement since a majority
vote in joint session differs from a majority vote of each body.
He did not think the legislature could take a majority vote in
joint session because it would be contrary to Amendment 2. He
referred to page 2, lines 7 to 8 of Amendment 2, which reads,
"to not take effect unless the legislature by resolution
approves the initiated law before the adjournment of the next
regular session." He said the legislative history would show the
initial requirement for joint session was removed. As Mr.
Barnhill stated, it would mean each House was acting by majority
vote, he said.
2:04:08 PM
SENATOR HUGHES asked for clarification whether the legislature
would have the option to approve the resolution in joint session
or in regular session under Amendment 2.
MR. MILKS responded that because the legislature acts in each
House by majority vote except for a few rare circumstances,
there would be a question about the ability to take this action
in a joint session. He highlighted that the Alaska Constitution
indicates meeting and acting by a majority vote in joint session
for approval of appointments.
2:05:34 PM
SENATOR HUGHES acknowledged that politics could arise since each
body may be controlled by different parties. Therefore, meeting
in joint session rather than approving the resolution in each
body could change the outcome. She asked the administration why
the bill required a joint session for approval.
MR. BARNHILL offered his view that the language represents
parity in drafting with other provisions in the Alaska
Constitution.
2:06:56 PM
SENATOR KIEHL offered his view that it was unlikely the
legislature could refer a resolution to a joint session under
the Uniform Rules. He expressed concern that it would remove a
governor's opportunity to convene a joint session. He
highlighted that under Amendment 2, any committee chair could
stop the resolution from being heard. He argued that having the
joint session option would allow a governor to make the case
that the people have voted and the resolution should be
considered. The governor can convene a joint session. While SJR
7 has troubling components, this amendment will allow the
governor the opportunity to put legislators on the record if
they go against what the voters decide. He suggested that
Amendment 2 is likely the wrong direction to go.
2:09:03 PM
SENATOR MYERS recalled Senator Kiehl previously raised the issue
that a committee chair could block the resolution. However, the
legislature could use Rule 48 to discharge the resolution from
committee, he said. He cautioned that if the legislature must
approve the resolution in joint session, a presiding officer
could block the joint session. He related his understanding that
the governor could call the legislature into special session,
but he was not aware that the governor could call the
legislature into a joint session.
SENATOR KIEHL referred to Article 3, Section 17, which read,
"Whenever the governor considers it in the public interest, he
may convene the legislature, either house or the two houses in
joint session."
SENATOR MYERS said he stands corrected.
2:10:30 PM
CHAIR HOLLAND said he tended to favor the original language in
the bill.
SENATOR MYERS withdrew Amendment 2.
2:11:38 PM
SENATOR KIEHL stated his objection to SJR 7. He offered his
belief that SJR 7 was anti-democratic and anti-republican. In
essence, SJR 7 does not provide a philosophy of government or a
philosophy of how government should function. Instead, it would
make any attempt to institute taxes more difficult. It is not a
relationship between the people and the government representing
them but a means to put something into the foundational
document. He said he will object to moving SJR 7.
2:13:21 PM
SENATOR HUGHES remarked that it is rare for taxes to go down,
but it is common for them to go up over time. She offered her
view that government doesn't produce its own wealth but it
relies on the private sector to do so. She said she preferred to
make it more difficult to institute taxes and add checks and
balances. She expressed concern that Alaska's spending per
capita is so high. She recalled that research has shown Alaska's
spending per capita is higher than other states since the state
provides services in rural Alaska. Although she has some little
mixed feelings about SJR 7, she said she likes the checks and
balances it provides. She acknowledged she is willing to make
tough decisions so she is willing to move SJR 7 forward.
2:14:51 PM
SENATOR SHOWER offered his view that the committee should
carefully deliberate on constitutional amendments to avoid
unintended consequences. While he doesn't want to limit the
legislature's ability to do its job, he also recognizes the
initiative process is cumbersome and expensive. He cited the
legislature's inability to protect and provide the permanent
fund dividend (PFD) in the past six years as an example of the
legislature not following the people's will. He viewed SJR 7 as
giving the people more voice in the process. He agreed that SJR
7 should be carefully vetted. He offered his support for SJR 7.
2:16:37 PM
SENATOR MYERS referred to the Alaska Constitution's structure.
He said that policy decisions are written in the Alaska
Constitution, beginning with Article 1, which establishes the
rights of the people. Articles 2 through 4 provide for
government structure and the balance of powers. The remaining
articles pertain to policy calls on taxation, managing natural
resources, and education. He offered his view that occasionally
constitutional amendments are needed to address policy changes.
Ultimately, the policy call in SJR 7 identifies that perhaps
government, in particular the legislature, has become too
powerful and needs to be restrained a little. He characterized
SJR 7 as relating to trust and whether the people trust the
legislature. SJR 7 is one means of showing that the legislature
is worthy of that trust, he said.
2:18:28 PM
SENATOR SHOWER moved to report SJR 7, as amended, from committee
with individual recommendations and attached fiscal note(s).
SENATOR KIEHL maintained his objection.
2:18:43 PM
A roll call vote was taken. Senators Myers, Hughes, Shower and
Holland voted in favor of moving SJR 7, as amended, from
committee and Senator Kiehl voted against it. Therefore, CSSJR
7(JUD) was reported from committee by a 4:1 vote.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR7_A.2.pdf |
SJUD 5/7/2021 1:30:00 PM |
SJR 7 |
| SJR7_A.1.pdf |
SJUD 5/7/2021 1:30:00 PM |
SJR 7 |
| SJR 5 Amendment Package (SJUD).pdf |
SJUD 5/7/2021 1:30:00 PM |
SJR 5 |
| SJR 5 Legal memo.pdf |
SJUD 5/7/2021 1:30:00 PM |
SJR 5 |
| SJR 7 Attorney General Opinion.pdf |
SJUD 5/7/2021 1:30:00 PM |
SJR 7 |
| SJR 5 Amendment 7.pdf |
SJUD 5/7/2021 1:30:00 PM |
SJR 5 |
| SJR 7 legal opinion.pdf |
SJUD 5/7/2021 1:30:00 PM |
SJR 7 |
| SJR 5 Legal Memo 2.pdf |
SJUD 5/7/2021 1:30:00 PM |
SJR 5 |