SENATOR GEORGE JACKO, prime sponsor of SB 42, explained that                 
  the  legislation  will  provide  local  municipalities   the                 
  ability  to tax above the level of other commodities subject                 
  to  sales  tax.   Local  voters  would have  to  approve the                 
  measure  before   implementation  could  take  place.     If                 
  approved, it would be up to  the local governments to decide                 
  how  they  want to  spend  the revenues  generated  from the                 
  increased tax.                                                               
                                                                               
  Senator  Jacko  said he  views  the legislation  as creating                 
  another  revenue  tool  for  local  governments  to increase                 
  revenues.   Not all  communities may decide  to utilize  the                 
                                                                               
                                                                               
  higher alcohol beverage sales tax, but it would be available                 
  to those who decide it is needed.                                            
                                                                               
  Senator Jacko noted  that many  communities in his  district                 
  are supportive of the legislation.                                           
                                                                               
  Number 050                                                                   
                                                                               
  KENT SWISHER,  Executive Director, Alaska  Municipal League,                 
  voiced their support for  SB 42.  He agreed  the legislation                 
  would  be  another  revenue  source  for  local governments,                 
  especially in the smaller communities.                                       
                                                                               
  Mr. Swisher  suggested the bill  might be amended  to create                 
  the  ability to  impose  a tax  on  this particular  product                 
  whether or not there is a sales tax on other items.                          
                                                                               
  Number 080                                                                   
                                                                               
  PAUL DICK,  Income &  Excise Audit  Division, Department  of                 
  Revenue, stated he was present to respond to questions.                      
                                                                               
  Number 085                                                                   
                                                                               
  LENNIE GORSUCH, representing the Miller Brewing Co.,  stated                 
  the  company's opposition  to  SB 42,  which she  said would                 
  allow   municipalities  to  isolate  one  industry  and  one                 
  commodity to tax disproportionately.                                         
                                                                               
  Ms.  Gorsuch said that  the majority of  beer drinkers enjoy                 
  the beverage responsibly.   Most beer  drinkers in the  U.S.                 
  and  Alaska are  low to  middle income citizens,  and taxing                 
  them  at  a  higher  rate   would  decrease  the  amount  of                 
  discretionary funding  that they  would  have available  for                 
  other purchases.                                                             
                                                                               
  Ms.  Gorsuch   reiterated  the   Miller  Brewing   Company's                 
  opposition  to SB 42, saying they do  not believe it is good                 
  public  policy  to  isolate  just   this  one  industry  for                 
  taxation.                                                                    
                                                                               
  Number 115                                                                   
                                                                               
  RICK   URION,  representing  the   Alaska  Wine   &  Spirits                 
  Wholesalers Association,  stated their opposition to  SB 42,                 
  which, in essence, would repeal the law that the legislature                 
  passed in  1985.   He noted  that law  has been  challenged,                 
  taken to the State Supreme Court and upheld.                                 
                                                                               
  Mr. Urion said  the issue is one of equity.   Alcohol should                 
  be taxed at the same rate that anything else is taxed.                       
                                                                               
  There being  no further witnesses  present to testify  on SB                 
  42,  CHAIRMAN RANDY PHILLIPS  stated it would  be held until                 
                                                                               
                                                                               
  there was a quorum present.