HOUSE JOINT RESOLUTION NO. 20 Proposing amendments to the Constitution of the State of Alaska repealing the prohibition on dedicated funds. REPRESENTATIVE BEVERLY MASEK explained that HJR 20 would add a new section #18 to Article IX of the Constitution. Specifically, if passed and adopted at the November 2004 general election, a dedicated fund would be established requiring all taxes generated through the sale of motor fuels to be placed in the fund for the express purpose of maintaining Alaska's roads and highways. She added that Alaska's Constitution prohibits dedicated funds except for the Permanent Fund, Constitutional Budget Reserve (CBR) Fund and those dedicated funds in existence prior to statehood. She added that motor fuel taxes in all states are dedicated in some fashion for road and highway maintenance. Currently, in Alaska, motor fuel taxes are deposited in a special highway fuel tax account in the general fund, which allows them to be appropriated for any budget expense. Representative Masek urged members to pass HJR 20 from Committee. Co-Chair Harris inquired if the gas tax was currently at eight cents per gallon. Representative Masek replied it is. Co-Chair Harris asked if it had been proposed to increase that tax by twelve cents, making it total twenty cents per gallon. Representative Masek noted that is the proposed increase indicated in the Governor's bill. Co-Chair Harris stated that the proposed intent for the legislation would place before the voters a decision whether or not a dedicated fund be created for all gas tax revenue placing it in the dedicated fund for highway maintenance use. Representative Masek acknowledged that was correct and that the money would be used to maintain highways and infrastructure. She stated that in the previous Administration, the funding had been cut and some Department of Transportation & Public Facilities workers were removed from the Willow Maintenance station and the Kenai Peninsula. She indicated that when Governor Murkowski took office, those workers were placed back into those stations. During the winter months, the workforce must be available. Passing the resolution would help eliminate problems that have occurred in the past. Co-Chair Harris inquired why the founders of the Constitution had a prohibition against dedicated funds. Representative Masek did not know. Co-Chair Harris understood that it was so the Legislature would have full authority of monies available year to year. Representative Croft acknowledged that was true and added that at the time the Alaskan Constitution was written, other states were declaring bankruptcy because they had all their revenue sources dedicated to specific places. Representative Fate mentioned that with passage of the st legislation, revenues received after December 1, 2004, would be used to fund that fund. He asked the amount anticipated and what additional money would need to be placed into the fund so that from the inception date, there would be enough. Representative Masek responded that would be premature to calculate. The resolution would only bring it to the people for a vote. She did not know the fate of the Governor's motor fuel tax bill. She reiterated that currently, the State collects eight cents a gallon and it is placed back into the general fund. Representative Fate voiced concern that the fund would not have enough capital to undertake projects that the voters anticipate but the State would be "locked in". He asked if the reference to highways and roads would include the railroad. Representative Masek responded it would not. Representative Stoltze questioned if the legislation would help promote passage of the gas tax. Representative Masek advised that this legislation has been proposed because of the Governor's twelve-cent increase gas tax bill. Representative Stoltze clarified that Representative Masek's intent was anticipating that the tax would pass and this legislation would then guarantee that it was used for the intended purpose. Representative Masek acknowledged that was correct. Co-Chair Harris asked how much general fund money has been spent yearly on highway maintenance. Representative Foster replied $97 million dollars. Co-Chair Harris asked how much the State generates from the eight cents per gallon tax. Representative Foster responded that it amounted to between $50-$60 million dollars. Co- Chair Harris pointed out given that amount, the State spends nearly $30 to $40 million dollars more on highway maintenance then is generated. Representative Foster commented that number would result from twenty cents per gallon. At eight-cents per gallon, the amount would be much less. PETE ECKLUND, STAFF, REPRESENTATIVE BILL WILLIAMS, interjected that at eight-cents per gallon, the number would generated would be approximately $37 million dollars. Co-Chair Harris declared that the State is currently spending approximately $80 million dollars on highway maintenance from the general funds. He stated that it appears that all money brought into the State from the current gas tax has been "dedicated" for highway maintenance. Co-Chair Harris commented that he was attempting "to get a handle" on how much money was being spent from the general fund outside of the amount generated from the gas tax. Representative Hawker noted that there are a few funds that have been "grandfathered" in. He asked if one of those funds was a highway maintenance fund. Representative Masek responded that there is one specific fund called the King Salmon Stamp that places money back into habitat restoration projects. She noted that there is not a highway-dedicated fund at this time. Representative Foster mentioned that there might be a marine highway fund. Co-Chair Harris remarked that there is a marine highway fund but that he did not believe it was dedicated. Co-Chair Williams interjected that it is not a dedicated fund. Co-Chair Harris stated that HJR 20 would be HELD in Committee for further consideration. Co-Chair Williams indicated that he would work with Representative Masek's office on the proposed legislation. HJR 20 was HELD in Committee for further consideration.