Legislature(2003 - 2004)
06/24/2004 02:05 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
June 24, 2004
2:05 P.M.
TAPE HFC 04 - 2, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 2:05 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Hugh Fate
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
MEMBERS ABSENT
None
ALSO PRESENT
Representative Ethan Berkowitz; Representative Les Gara;
Representative Carl Gatto; Representative Kelly Wolf;
Representative Ralph Samuels; Representative Nancy
Dahlstrom; Representative Paul Seaton; Representative David
Guttenberg; Cheryl Frasca, Director, Division of Management
& Budget, Office of the Governor; Karleen Jackson, Deputy
Commissioner, Department of Health and Social Services;
Johana Bales, Revenue Auditor, Tax Division, Department of
Revenue; Joel Gilbertson, Commissioner, Department of Health
& Social Services;
PRESENT VIA TELECONFERENCE
None
SUMMARY
SB 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.
HCS CS SB 1001 (FIN) was REPORTED out of Committee
with a "no recommendation" and with a zero fiscal
note by the House Finance Committee.
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.
ADJOURNMENT
The meeting was adjourned at 2:36 PM
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