Legislature(2003 - 2004)

06/24/2004 02:05 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 1001                                                                                                          
                                                                                                                                
     An  Act relating  to  taxes  on cigarettes  and  tobacco                                                                   
     products, to tax stamps on  cigarettes, to forfeiture of                                                                   
     cigarettes  and  of property  used  in the  manufacture,                                                                   
     transportation,   possession,  or   sale  of   unstamped                                                                   
     cigarettes,  to accounting  for and use  of part  of the                                                                   
     proceeds  of  the  additional   cigarette  tax,  and  to                                                                   
     licenses  and licensees  under  the  Cigarette Tax  Act;                                                                   
     relating  to unfair cigarette  sales; and providing  for                                                                   
     an effective date.                                                                                                         
                                                                                                                                
Co-Chair  Harris  MOVED  to  ADOPT SB  1001  as  the  working                                                                   
document. There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
Co-Chair  Harris MOVED  to ADOPT  23-GS2116\W  [HCS CSSB  368                                                                   
(FIN)] as a committee substitute  for SB 1001. There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Representative  Chenault  MOVED  to ADOPT  Amendment  1:  23-                                                                   
GS2115\IA.1, dated 5/9/04. He  explained that adoption of the                                                                   
tobacco  stamp legislation,  adopted  in 2002,  inadvertently                                                                   
disallowed the  sellers to ship  cigarettes to  an individual                                                                   
in  rural Alaska  or  other areas  in  Alaska. The  amendment                                                                   
would  allow  these  businesses  to continue  to  ship  taxed                                                                   
cigarettes to individuals in rural and other areas.                                                                             
                                                                                                                                
Representative  Joule  noted  the  need to  assure  that  the                                                                   
individual [receiving the cigarettes] is an adult.                                                                              
                                                                                                                                
Representative Chenault  agreed and MOVED to  AMEND Amendment                                                                   
1: insert  "19 years of age  or older" after  "individual" on                                                                   
page 1, line 15; and on line 3,  page 3, change the effective                                                                   
date to  July 1, 2004. He  explained that the  2004 effective                                                                   
date would  allow business,  which have  not been allowed  to                                                                   
continue  the  business  of shipping  cigarettes,  to  resume                                                                   
their business.                                                                                                                 
                                                                                                                                
JOHANA  BALES, PROGRAM  MANAGER, CIGARETTE  AND TOBACCO  TAX,                                                                   
TAX DIVISION,  DEPARTMENT OF REVENUE, explained  that section                                                                   
35 would  provide for an  immediate effective date  and noted                                                                   
that section 36 would not apply.                                                                                                
                                                                                                                                
In response to a question by Representative  Croft, Ms. Bales                                                                   
felt  that   a  delayed   date  of   January  1,  2005   [for                                                                   
implementation of the tax increase] would be appropriate.                                                                       
                                                                                                                                
Representative  Chenault  MOVED  to AMEND  the  Amendment-to-                                                                   
Amendment 1 to  delete section 36. There being  NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
There being  NO OBJECTION, the  amendment to Amendment  1 was                                                                   
adopted as amended:  insert "19 years of age  or older" after                                                                   
"individual"  on page 1,  line 15; and  delete section  36 on                                                                   
page 3, line 3. There being NO  OBJECTION, the main motion to                                                                   
adopt Amendment 1 was carried.                                                                                                  
                                                                                                                                
Representative  Croft  questioned the  appropriate  effective                                                                   
date and  suggested that  it should be  January 1,  2005. Ms.                                                                   
Bales agreed.                                                                                                                   
                                                                                                                                
Co-Chair  Harris  MOVED  to ADOPT  Amendment  2:  change  the                                                                   
effective date on  page 15, line 3 of the  previously adopted                                                                   
committee  substitute  to January  1,  2005.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Representative Foster  MOVED to ADOPT Amendment  3.  Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
REPRESENTATIVE  NORM  ROKEBERG,  spoke  to  Amendment  3.  He                                                                   
explained   that  Amendment   3   would  prohibit   municipal                                                                   
governments  and other political  subdivisions from  enacting                                                                   
additional  taxes  on  tobacco   products.  Communities  that                                                                   
currently  have   a  tobacco   tax  (Anchorage,   Juneau  and                                                                   
Fairbanks) could retain the tax.  State government would have                                                                   
the sole  authority to  make adjustments  in the taxation  of                                                                   
tobacco  products.  Representative Rokeberg  maintained  that                                                                   
this  would leave  the authority  for  taxation within  state                                                                   
government  and  discourage differences  in  pricing  between                                                                   
political subdivisions.                                                                                                         
                                                                                                                                
Co-Chair Williams spoke against the amendment.                                                                                  
                                                                                                                                
Vice-Chair  Meyer spoke  against  the amendment.  He did  not                                                                   
think  the amendment  would be  beneficial  to Anchorage  and                                                                   
noted that it would be a state mandate.                                                                                         
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Foster                                                                                                                
OPPOSED:  Hawker,   Joule,  Meyer,  Moses,   Stoltze,  Croft,                                                                   
          Harris, Williams                                                                                                      
                                                                                                                                
Representative Chenault was absent from the vote.                                                                               
                                                                                                                                
The MOTION FAILED (1-9).                                                                                                        
                                                                                                                                
Representative Foster MOVED to report CSSB 1001 out of                                                                          
Committee with the accompanying zero fiscal notes.                                                                              
                                                                                                                                
HCS CS SB 1001 (FIN) was REPORTED out of Committee with "no                                                                     
recommendation" and with a zero fiscal note by the House                                                                        
Finance Committee.                                                                                                              

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