HJR 18 - DEDICATED FUNDS: RATE MAY BE CHANGED Number 1110 CHAIRMAN BUNDE announced the next item on the agenda was 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. Number 1120 REPRESENTATIVE IVAN IVAN, sponsor of HJR 18, read from the sponsor statement. He said the resolution proposes an amendment to Article IX, Section 7 of the state constitution. The current article allows for the dedication of funds for a specific purpose as long as it existed by April 24, 1956. This resolution would allow a changing of a rate of a tax or license of which the proceeds are dedicated to a special purpose. This proposed amendment would be placed before the voters at the next general election, if approved by the legislature. REPRESENTATIVE IVAN said he introduced this resolution because of the differing opinions represented by the attorney general's office and Legal Services in regards to the dedication of a tax increment to a specified purpose. In order to avoid litigation, especially if the proceeds of the tobacco tax are to be placed into the school fund or if the legislature changes any other tax rate or license fee, into which proceeds are to be placed into a dedicated fund, this resolution could be a solution to resolve that potential problem. REPRESENTATIVE IVAN said in the resolution's first committee of referral, House State Affairs Standing Committee, an amendment was adopted to make the amendment retroactive to October 1, 1997. This retroactivity coincides with the effective date of the tobacco tax as proposed by CSHB 1(STA). Number 1218 CHAIRMAN BUNDE asked what other dedicated funds would be impacted by HJR 18. Number 1225 REPRESENTATIVE IVAN said he did not have a list in front of him, but the other funds were discussed in the House State Affairs committee. He believed the fish and game fund would be impacted. Number 1242 TOM WRIGHT, Legislative Assistant to Representative Ivan, said the only funds he knew that were still in existence, which are considered dedicated, are the school fund and the fish and game fund. Number 1274 REPRESENTATIVE PORTER said the opinion that says we might not be able to raise the tobacco tax and put that money into a dedicated fund came from a 1959 attorney general's opinion. He asked if an opinion had been sought from the current attorney general. Number 1295 MR. WRIGHT said the 1956 opinion was the one that the attorney general's office referred to in the State Affairs committee, the Attorney General Opinion, Number 7. He said there have been Attorney General Opinions, Numbers 7, 9 and 14, which have all spoken to the same issue and said basically the same thing. Number 1314 REPRESENTATIVE PORTER clarified that the current attorney general agrees with the 1956 opinion. Number 1336 REPRESENTATIVE VEZEY said the fisherman's fund for the relief of injured fisherman is a fund that pre-existed statehood. Those were the only three funds of which he was aware. He expressed confusion as to why those funds that pre-existed statehood and still exist as a dedicated fund can't be found. Number 1350 CHAIRMAN BUNDE said HJR 18 would be held until next Tuesday, February 25, 1997, when it would be heard again.