Legislature(1997 - 1998)

02/25/1997 03:06 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HJR 18 - DEDICATED FUNDS: RATE MAY BE CHANGED                               
 Number 0980                                                                   
 CHAIRMAN BUNDE introduced the next item on the agenda, 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.  He indicated that CSHJR 18(STA) was              
 before the committee.                                                         
 Number 0990                                                                   
 REPRESENTATIVE IVAN IVAN deferred any questions to Mr. Wright.                
 Number 0992                                                                   
 TOM WRIGHT, Legislative Assistant to Representative Ivan, said he             
 received information from Brad Pierce, Office of Management and               
 Budget, which outlined seven different dedicated funds that are in            
 existence right now.  He referred to a memo outlining those funds,            
 the fiscal year balance and the funding source.  In response to               
 Representative Porter's question, he had a discussion with Jim                
 Baldwin and looked back at the record in the House State Affairs              
 Committee.  He said Mr. Baldwin stated that the attorney general's            
 office is still using the 1959 opinion as a basis.  However, in the           
 House State Affairs Committee, Mr. Chenoweth did say, a good faith            
 legal argument could be made, that raising the rate for a specific            
 tax or proceed does not constitute a violation of the dedicated               
 fund.  He said, upon further discussion with Mr.Chenoweth, this               
 statement was reiterated.                                                     
 Number 1059                                                                   
 CHAIRMAN BUNDE said there is not a current attorney general's                 
 opinion on this matter.  He noted that the next committee of                  
 referral is the House Judiciary Standing Committee and indicated              
 that this question could be addressed there and in fact encouraged            
 it to be addressed there.                                                     
 Number 1086                                                                   
 REPRESENTATIVE J. ALLEN KEMPLEN said he was curious that there is             
 no limit on the amount of money that could be placed in a dedicated           
 fund.  He understood that the intent of the drafters of the Alaska            
 State Constitution was that they wanted to retain maximum                     
 flexibility to the people and their representatives for the                   
 dispersement of public monies and were hesitant about seeing a lot            
 of money earmarked for special accounts.  This bill seems to allow            
 for any amount of money to be placed into these dedicated funds and           
 appears to run counter to the intent of the people who set up the             
 Alaska State Constitution.                                                    
 Number 1156                                                                   
 MR. WRIGHT said the attorney general in 1959 had this reasoning as            
 the basis of his opinion, that the tax or proceeds could not be               
 raised, they had to stay the same.  He said, the Chenoweth opinion            
 dated April 26, 1996 as well as some of the discussion that took              
 place during the constitutional convention part of the record, it             
 seemed to be a point that they didn't want to bind future                     
 legislatures to keeping the same rate in effect, that there might             
 be some changes in the future.  He said CSHJR 18(STA) does not                
 address the maximum amount portion.                                           
 Number 1204                                                                   
 CHAIRMAN BUNDE clarified that CSHJR 18(STA) talks about changing              
 the rate and asked if, in regards to the existing funds, there was            
 no prohibition as far as a maximum amount was concerned, if there             
 was just a rate at which money could accrue in these funds.                   
 Number 1217                                                                   
 MR. WRIGHT said he couldn't clearly answer those questions.  He               
 could look back at some of the conversations as well as the effort            
 to raise the rate on the highway fund.  He said it was decided that           
 they couldn't raise the rate based on this 1959 opinion.  By not              
 funding that particular dedicated fund, it nullified the fund.                
 Number 1250                                                                   
 CHAIRMAN BUNDE clarified that the fish and game fund is one of the            
 dedicated funds and it doesn't top out somewhere.  He thought the             
 question was if there was a maximum amount that can be put into a             
 dedicated fund.  He asked if the question regarded the rate and not           
 the total fund.                                                               
 REPRESENTATIVE KEMPLEN said he was interested in the maximum amount           
 and asked if there was a maximum limit.                                       
 Number 1275                                                                   
 CHAIRMAN BUNDE said there is not a maximum limit that exists                  
 Number 1283                                                                   
 REPRESENTATIVE PORTER said, regarding the constitution prohibiting            
 dedicated funds, the drafters of the constitution recognized this             
 fund as an exception to the general rule about dedication to funds.           
 He said Mr. Chenoweth's opinion cited conversations during the                
 construction of the constitution and added that it is amazing that            
 some attorney general in past years didn't think the rate could be            
 increased.  His understanding, of attorney general's opinions, is             
 that without subsequent statutory clarification they are the law              
 until a statute or a revision of the constitution addresses the               
 same issue and contradicts it.                                                
 Number 1331                                                                   
 REPRESENTATIVE AL VEZEY said an attorney general's opinion falls              
 under the category of case law and the longer case law stands,                
 without being overturned, the more precedent setting it becomes.              
 To overturn the 1959 opinion, at this time, would be equivalent to            
 the Supreme Court overturning a previous Supreme Court ruling.  It            
 can be done, but it shows disrespect for precedence.                          
 Number 1359                                                                   
 CHAIRMAN BUNDE said CSHJR 18(STA) does not impinge on an attorney             
 general's opinion being overturned or not, this bill would allow              
 changes to the rate that money is put into a dedicated fund.                  
 Number 1395                                                                   
 REPRESENTATIVE JOE GREEN said he is co-sponsor of CSHJR 18(STA).              
 CHAIRMAN BUNDE noted it for the record.                                       
 Number 1409                                                                   
 REPRESENTATIVE GREEN made a motion to move CSHJR 18(STA) out of               
 committee with individual recommendations and the attached fiscal             
 note of $3,000 in the out year.                                               
 Number 1423                                                                   
 REPRESENTATIVE VEZEY objected to the motion.                                  
 Number 1440                                                                   
 A roll call vote was taken on CSHJR 18(STA).  Representatives                 
 Porter, Dyson, Green and Bunde voted yea.  Representatives Vezey              
 and Kemplen voted nay.  Representative Brice was absent for the               
 vote.  CHAIRMAN BUNDE said that CSHJR 18(STA) was moved from the              
 House Health, Education and Social Services Committee.                        

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