04/02/1997 01:07 PM House JUD

SSHB 132 - MUNICIPAL TAXATION OF ALCOHOL                                       
                                                                               
Number 050                                                                     
                                                                               
CHAIRMAN GREEN announced the first order of business was SSHB 132,             
"An Act relating to municipal taxation of alcoholic beverages."                
                                                                               
REPRESENTATIVE GARY DAVIS, Prime Sponsor, explained that SSHB 132              
was a relatively simple bill as far as what it would accomplish.               
The expected impact was benefits to municipalities, but also to                
address alcohol related problems in municipalities around the                  
state.  He advised members that current law restricts                          
municipalities on the amount of tax they can place on alcoholic                
beverages.  They are restricted to the same rate of sales tax                  
imposed on other goods by a municipality, if a tax is imposed by               
the municipality.  Representative Davis explained that SSHB 132                
would remove that restriction and allow municipalities to tax                  
alcohol at whatever level they deem necessary.                                 
                                                                               
REPRESENTATIVE DAVIS advised members that one of the key reasons he            
agreed to submit the proposed legislation was because of the amount            
of past legislation that impacted the municipalities in the form of            
what might be considered mandates, such as stricter laws relating              
to the use of alcohol and DWI arrests that impact a municipalities'            
police departments, hospitals, jail facilities and the court                   
system.  Because those laws did not provide additional revenues to             
support themselves, SSHB 132 would reduce the restriction on the               
amount of taxes that could be imposed on the sale of alcohol by the            
municipality.                                                                  
                                                                               
REPRESENTATIVE DAVIS advised members that HB 132 was strictly a                
permissive bill and did not create or impose any new taxes, but                
allows the municipalities to consider the impacts of alcohol                   
related problems in their communities and provides the ammunition              
to deal with those problems as they see fit.                                   
                                                                               
REPRESENTATIVE DAVIS pointed out a concern had been raised in a                
previous committee.  If a municipality did impose a higher tax on              
alcohol and generated additional revenue, how would one know if                
those revenues were being spent on alcohol services?                           
Representative Davis agreed that that was a valid concern and that             
his intent was for those additional revenues to go towards alcohol             
related services.  Representative Davis expressed that he had                  
prepared an amendment for members to consider that would add a new             
section to the bill; \E.2, Ford, 3/28/97.  He explained that that              
language would dedicate those additional revenues to alcohol                   
related services to the degree possible.                                       
                                                                               
CHAIRMAN GREEN expressed that the committee would not take                     
testimony on the bill at this hearing; however, it was scheduled to            
be considered at the next committee hearing.                                   
                                                                               
Number 322                                                                     
                                                                               
REPRESENTATIVE JEANNETTE JAMES referred to the proposed amendment              
and asked what binding agreement the intent language had on a                  
municipality.                                                                  
                                                                               
REPRESENTATIVE DAVIS advised members that the language was somewhat            
vague in that regard because there was some question as to whether             
municipalities could dedicate funds.                                           
                                                                               
REPRESENTATIVE JAMES agreed, and that was a concern she had because            
she did not know if it would be very effective.                                
                                                                               
REPRESENTATIVE DAVIS expressed that it was his belief that it would            
send a message to the voters, and if the voters passed it with that            
intent, he thought it would behoove the elected officials to follow            
the intent of the electorate.                                                  
                                                                               
CHAIRMAN GREEN reiterated that the bill would be before the                    
committee on Friday, April 4, 1997, and questions could be raised              
and responded to at that hearing.                                              
                                                                               
REPRESENTATIVE DAVIS recognized the concern expressed, and advised             
members that prior to the next hearing he would conduct some legal             
research and, hopefully, have some opinions, or additional language            
that might be somewhat stronger that would address that concern.               
                                                                               
Number 470                                                                     
                                                                               
REPRESENTATIVE CON BUNDE pointed out that there were two amendments            
in his bill packet and asked for clarification as to which one they            
were discussing.                                                               
                                                                               
REPRESENTATIVE DAVIS explained that the Amendment labeled E\1.,                
3/10/97 was no longer current, and members should be looking at                
Version E\2. Ford, 03/28/97.                                                   
                                                                               
CHAIRMAN GREEN asked if anyone in the audience was from the Alaska             
Municipal League (AML), and if there was a member who intended to              
make comments at today's hearing.                                              
                                                                               
REPRESENTATIVE DAVIS expressed that no one from the AML would be               
testifying today with the understanding testimony would be taken at            
a later date.                                                                  
                                                                               
Number 540                                                                     
                                                                               
REPRESENTATIVE ERIC CROFT responded to Representative James'                   
concern regarding the intent language in the proposed amendment                
relating to the dedication of additional revenues for alcohol-                 
related services.  He said it was probably not binding, but such               
statements were normally adhered to, and it would be a brave                   
municipal assembly that would violate it.